Canadian Economic News, October 2024 Edition

Resources

• Calgary-based Canadian Natural Resources Limited announced it had entered into an agreement to acquire from Chevron Canada Limited its 20% interest in the Athabasca Oil Sands Project and Chevron's 70% operated working interest of light crude oil and liquids rich assets in the Duvernay play in Alberta for an aggregate consideration of USD $6.5 billion. The company said the effective date for these acquisitions is September 1, 2024 and are targeted to close in the fourth quarter of 2024, subject to regulatory approvals.
• Calgary-based Enbridge Inc. announced it will build, own, and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for the recently sanctioned Kaskida development, operated by BP Exploration & Production Company. Enbridge said that the Canyon Oil Pipeline System will have a capacity of 200,000 barrels per day and the Canyon Gathering System will have a capacity of 125 million cubic feet per day. Enbridge also said that the pipelines are expected to be operational by 2029 and that the cost of the pipelines will be approximately USD $700 million.
• Vancouver-based Western Forest Products Inc. announced that it plans to reduce lumber production in its British Columbia sawmills by approximately 30 million board feet during the period from October to December, 2024 due to a combination of market challenges including weaker lumber demand and higher U.S. softwood lumber duty rates, and factors relating to the B.C. operating environment creating a lack of available economic log supply at certain saw mills. The company said that for the full year of 2024, total lumber production will be reduced by approximately 90 million board feet.
• Illinois-based Coeur Mining, Inc. and SilverCrest Metals Inc. of Vancouver announced they had entered into a definitive agreement whereby, a wholly-owned subsidiary of Coeur will acquire all of the issued and outstanding shares of SilverCrest for a total implied equity value of approximately USD $1.7 billion. The companies said the transaction is expected to close late in the first quarter of 2025, subject to shareholder, court, and regulatory approvals.

Minimum wage

• Prince Edward Island's minimum wage increased from $15.40 to $16.00 per hour on October 1st.
• Ontario's minimum wage increased from $16.55 to $17.20 per hour on October 1st.
• Manitoba's minimum wage increased from $15.30 to $15.80 per hour on October 1st.
• Saskatchewan's minimum wage increased from $14.00 to $15.00 per hour on October 1st.

Economic and fiscal updates

• The Government of Ontario released its 2024 Ontario Economic Outlook and Fiscal Review on October 30th, which included providing a $200 taxpayer rebate early next year, proposing to further extend the temporary gas tax and fuel tax rate cuts until June 30, 2025, and expanding access for families who are seeking fertility treatment. The Government is projecting a $6.6 billion deficit in 2024-25 and real gross domestic product (GDP) growth of 0.9% in 2024 and 1.7% in 2025.
• The Government of Newfoundland and Labrador delivered its mid-year fiscal and economic update on October 30th. The Government forecasts a $218 million deficit in 2024-2025 and real GDP growth of 3.3% in 2024.

Other news

• The Bank of Canada reduced 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 25 basis points cut in September 2024. The Bank also said it is continuing its policy of balance sheet normalization.
• The Government of Canada announced reforms to one of the Temporary Foreign Worker (TFW) Program streams, and that effective November 8th, the starting hourly wage for workers coming into Canada through the high-wage stream will be increased to 20% higher than its current level. The Government said that as a result, a greater number of jobs are expected to be subject to the stricter rules of the low-wage stream.
• The Government of Canada announced the 2025-2027 Immigration Levels Plan, which includes controlled targets for temporary residents, specifically international students and foreign workers, as well as for permanent residents. The Government said the 2025–2027 Immigration Levels Plan is expected to result in a population decline of 0.2% in both 2025 and 2026, before returning to a population growth of 0.8% in 2027.
• The Government of Ontario announced it was introducing legislation, the Affordable energy Act, that would, if passed, enable the implementation of an integrated energy plan that would prioritize zero-emissions nuclear energy as the province's grid expands, support the government's expansion of energy efficiency programs, help get more electric vehicle (EV) chargers built and reduce "last-mile" connection costs for electricity infrastructure.
• TD Canada Trust, RBC Royal Bank of Canada (RBC), BMO Bank of Montreal, Canadian Imperial Bank of Commerce (CIBC), Scotiabank, and Laurentian Bank of Canada announced they were decreasing their Canadian dollar prime lending rates by 50 basis points from 6.45% to 5.95%, effective October 24th.
• The Port of Montreal announced on October 10th that a partial strike of indefinite duration in which longshoremen would not be working overtime as part of their duties had been initiated. The Port said this could result in processing delays and a backlog of containers waiting to be handled. On October 27th, the Port of Montreal announced a 24-hour strike will take place at the Port of Montreal on Sunday, October 27, in accordance with the notice filed by the Longshoremen's Union CUPE, Local 375 and that this would affect all Port of Montreal container and dry bulk terminals. On October 31st, the Port of Montreal announced that a new strike had been filed by the longshore workers' union providing for an unlimited strike affecting two container terminals and that these two terminals would be closed until further notice.

United States and other international news

• On October 2nd, United States President Joseph R. Biden, Jr. declared that major disasters exist in the State of Georgia and the Commonwealth of Virginia and ordered Federal aid to supplement Commonwealth and local recovery efforts in the areas affected by Hurricane Helene beginning on September 24, 2024, and continuing.
• On October 7th, U.S. President Joseph R. Biden, Jr. declared that an emergency exists in the State of Florida and ordered Federal assistance to supplement State, tribal, and local response efforts due to the emergency conditions resulting from Hurricane Milton beginning on October 5, 2024, and continuing.
• The Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR), its main policy rate, by 50 basis points to 4.75%. The last change in the OCR was a 25 basis points cut in August 2024.
• The European Central Bank (ECB) lowered its three key interest rates by 25 basis points to 3.25% (deposit facility), 3.40% (main refinancing operations), and 3.65% (marginal lending facility). The last change in the deposit facility was a 25 basis points reduction in September 2024. The ECB said it intends to discontinue reinvestments under the pandemic emergency purchase programme (PEPP) at the end of 2024.
• The Bank of Japan announced it will encourage the uncollateralized overnight call rate to remain at around 0.25%.
• The European Commission announced it had completed its anti-subsidy investigation by imposing definitive countervailing duties on imports of battery electric vehicles (BEVs) from China for a period of five years. The Commission said that sampled Chinese exporting producers will be subject to the following countervailing duties: BYD: 17.0%, Geely: 18.8%, and SAIC: 35.3%. The Commission also said that other cooperating companies would be subject to a duty of 20.7% while all other non-cooperating companies would have a duty of 35.3%.
• On October 1st, the International Longshoremen's Association (ILA) announced that members had launched a strike at all major United States ports on the Atlantic and Gulf Coasts. On October 3rd, the ILA and the United States Maritime Alliance, Ltd. announced they had reached a tentative agreement on wages and had agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues. The ILA said that effective immediately, all current job actions would cease, and all work covered by the Master Contract would resume.
• Virginia-based Boeing Company announced plans to reduce the size of its total workforce by roughly 10% over the coming months. Boeing said the reductions would include executives, managers and employees.
• Kansas-based Spirit AeroSystems announced employee furloughs in response to the ongoing strike by Boeing employees that began on September 13th. The company said that effective October 28th, it will implement a 21-day furlough for approximately 700 employees working on the 767 and 777 programs and that if the strike continues beyond November, financial pressures may require it to implement additional cost savings measures including layoffs and additional furloughs.
• United Kingdom-based Rio Tinto and Arcadium Lithium plc of Ireland, a lithium chemicals producer, announced a definitive agreement under which Rio Tinto will acquire Arcadium in an all-cash transaction that values Arcadium's diluted share capital at approximately USD $6.7 billion. The companies said the transaction is expected to close in mid-2025, subject to receipt of shareholder and customary regulatory approvals and other closing conditions.
• France-based Airbus SE announced it plans to adapt its Airbus Defence and Space Division's organization and workforce at that this is expected to result in a reduction of up to 2,500 positions within Airbus Defence and Space until mid 2026.
• Germany-based Siemens AG announced an agreement to acquire Altair Engineering Inc. of Michigan, a provider of software in the industrial simulation and analysis market, for an enterprise value of USD $10 billion. Siemens said the transaction is expected to close within the second half of 2025, subject to customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $69.26 per barrel on October 31st, up from a closing value of USD $68.17 at the end of September. Western Canadian Select crude oil traded in the USD $55 to $66 per barrel range throughout October. The Canadian dollar closed at 71.86 cents U.S. on October 31st, down from 74.08 cents U.S. at the end of September. The S&P/TSX composite index closed at 24,156.87 on October 31st, up from 24,000.37 at the end of September.