Canadian Economic News, October 2022 Edition

This module provides a concise summary of selected Canadian economic events, as well as international and financial market developments by calendar month. It is intended to provide contextual information only to support users of the economic data published by Statistics Canada. In identifying major events or developments, Statistics Canada is not suggesting that these have a material impact on the published economic data in a particular reference month.

All information presented here is obtained from publicly available news and information sources, and does not reflect any protected information provided to Statistics Canada by survey respondents.

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  • Calgary-based Suncor Energy Inc. announced it had agreed to purchase an additional 21.3% working interest in the Fort Hills Project and associated sales and logistics agreements from Teck Resources Limited of Vancouver for $1.0 billion. Suncor said the transaction is anticipated to close in the first quarter of 2023, subject to customary closing conditions, including regulatory approval under the Competition Act.
  • Suncor Energy earlier announced it had reached an agreement to sell its wind and solar assets for $730 million to Calgary-based Canadian Utilities Limited in order to focus on areas of energy expansion, including hydrogen and renewable fuels. Suncor said the transaction is expected to close in the first quarter of 2023, subject to customary closing conditions.
  • Burnaby, British Columbia-based Interfor Corporation announced plans to reduce its lumber production output in the fourth quarter of 2022 by approximately 200 million board feet, or 17% of quarterly capacity, due to reduced lumber demand. Interfor said it expects to resume its normal operating schedule in January 2023.
  • The Government of Ontario announced it is supporting Ontario Power Generation's (OPG) continued operation of the Pickering Nuclear Generating Station and that further operation of Pickering beyond September 2026 would require a complete refurbishment. The Government said it had asked OPG to update its feasibility assessment for refurbishing Pickering "B" units at the Nuclear Generating Station as a due diligence measure to support future electricity planning decisions. The Government also said that OPG requires approval from the Canadian Nuclear Safety Commission (CNSC) for its revised schedule.
  • Hydro-Québec announced it had entered into an agreement to acquire Great River Hydro, LLC of Massachusetts, which owns 13 hydropower generating stations in the states of Vermont, New Hampshire, and Massachusetts for approximately USD $2 billion. Hydro-Québec said the transaction remains subject to customary closing conditions, including applicable regulatory approvals.

Transportation

  • Montreal-based Air Canada announced it was adding three new routes to Europe, resuming services to Japan, and increasing frequencies to key international destinations in the Atlantic, Pacific, and South America regions for summer 2023.
  • Air Canada later announced it had converted options for 15 Airbus A220-300 aircraft into firm orders, bringing to 60 the total number of the aircraft it will acquire for its fleet.
  • Montreal-based Canadian National Railway Company announced its 2022-2023 Winter Plan, which includes 500 additional new conductors graduating through the end of 2022, 57 high-horsepower locomotives, 800 new boxcars delivered in early 2023, and 500 hopper cars delivered during the 2022-2023 crop year, as well as increased rail capacity and velocity in key corridors.

Other news

  • On October 4th, the Government of Canada announced the creation of the Hurricane Fiona Recovery Fund, which will provide up to an additional $300 million over two years to help those impacted by the storm and to support long-term recovery efforts. The Government said the new fund will provide support for costs that may not be covered by existing federal programs, including the Disaster Financial Assistance Arrangements (DFFA).
  • On October 25th, the Government of Canada announced it had officially denied a request to permit the wholesale transfer of wireless spectrum licences from Shaw to Rogers. The Government also said that any new wireless licences acquired by Vidéotron would need to remain in its possession for at least 10 years and that it would expect to see prices for wireless services in Ontario and Western Canada comparable to what Vidéotron is currently offering in Quebec.
  • The Bank of Canada increased its target for the overnight rate by 50 basis points to 3.75%. The last change in the target for the overnight rate was a 75 basis points increase in September 2022.
  • On October 25th, the Government of Ontario introduced the More Homes Built Faster Act to address the housing crisis by building 1.5 million homes over the next 10 years. The Government said actions in the plan include:
    • Creating a new attainable housing program to drive the development of housing;
    • Increasing the Non-Resident Speculation Tax rate from 20% to 25% to deter non-resident investors from speculating on the province's housing market;
    • Freezing and reducing government charges to spur new home construction and reduce the costs of housing;
    • Building more density near transit, unlocking innovative approaches to design and construction, and removing red tape; and
    • Increasing consumer protection measures for home buyers and consulting on ways to help more renters become homeowners.
  • Ontario's minimum wage increased from $15.00 to $15.50 per hour on October 1st.
  • Newfoundland and Labrador's minimum wage increased from $13.20 to $13.70 per hour on October 1st.
  • Nova Scotia's minimum wage increased from $13.35 to $13.60 per hour on October 1st.
  • New Brunswick's minimum wage increased from $12.75 to $13.75 per hour on October 1st.
  • Manitoba's minimum wage increased from $11.95 to $13.50 per hour on October 1st.
  • Saskatchewan's minimum wage increased from $11.81 to $13.00 per hour on October 1st.
  • Toronto-based Brookfield Renewable Partners and Cameco Corporation of Saskatoon announced they were forming a strategic partnership to acquire Pennsylvania-based Westinghouse Electric Company for a total enterprise value of USD $7.875 billion. The companies said the transaction is expected to close in the second half of 2023, subject to shareholder and regulatory approvals and customary closing conditions.
  • Vancouver-based Westshore Terminals Investment Corporation announced that its wholly owned subsidiary Westshore Terminals Limited Partnership had reached an agreement with local 502 of the International Longshore and Warehouse Union on a new six-year agreement, subject to a ratification vote. The company said work resumed at the terminal on the afternoon of October 9th following a work stoppage that began at midnight on September 16th.

United States and other international news

  • U.S. President Joseph R. Biden, Jr. announced additional action to strengthen U.S energy security, encourage production, and lower costs, which includes:
    • The sale of 15 million barrels from the Strategic Petroleum Reserve (SPR) to be delivered in December, completing the 180-million-barrel drawdown announced in the spring, while also calling on the Department of Energy to be ready to move forward with additional significant SPR sales this winter if needed;
    • The intention to repurchase crude oil for the SPR when prices are at or below about $67-$72 per barrel; and
    • Calling on companies to pass through lower energy costs to consumers right away.
  • The European Central Bank (ECB) announced it had decided to raise the three key ECB interest rates by 75 basis points to 2.00% (main refinancing operations), 2.25% (marginal lending facility), and 1.50% (deposit facility). The last change in these rates was a 75 basis points increase in September 2022.
  • The Bank of Japan (BoJ) announced it will apply a negative interest rate of -0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ and that it will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
  • The Reserve Bank of Australia (RBA) increased the target for the cash rate by 25 basis points to 2.60%. The last change in the target for the cash rate was a 50 basis points increase in September 2022.
  • The Reserve Bank of New Zealand (RBNZ) increased the Official Cash Rate (OCR), its main policy rate, by 50 basis points to 3.5%. The last change in the OCR was a 50 basis points increase in August 2022.
  • OPEC and non-OPEC members announced they had decided to adjust downward the overall production by 2 million barrels per day, from the August 2022 required production levels, starting November 2022 for OPEC and Non-OPEC Participating Countries. Members also agreed to extend the duration of the Declaration of Cooperation until December 31, 2023.
  • Germany-based RWE AG announced it had signed a purchase agreement with Con Edison, Inc. of New York to acquire all the shares in Con Edison Clean Energy Businesses, Inc., an operator and developer of renewable energy plants in the United States, for an enterprise value of USD $6.8 billion. RWE said that closing of the transaction is expected to take place in the first half of 2023, subject to customary regulatory approvals.
  • Texas-based Archaea Energy Inc., a renewable natural gas company, announced it had agreed to be acquired by BP plc of the United Kingdom for a total enterprise value of approximately USD $4.1 billion. Archaea said the parties are targeting closing the acquisition by the end of 2022, subject to regulatory and shareholder approval.

Financial market news

  • West Texas Intermediate crude oil closed at USD $86.53 per barrel on October 31st, up from a closing value of USD $79.49 at the end of September. Western Canadian Select crude oil traded in the USD $60 to $72 per barrel range throughout October. The Canadian dollar closed at 73.27 cents U.S. on October 31st, up from 72.96 cents U.S. at the end of September. The S&P/TSX composite index closed at 19,426.14 on October 31st , up from 18,444.22 at the end of September.