Canadian Economic News, November 2020 edition

COVID-19 timeline

• The Government of Nova Scotia announced on October 30th that it was renewing the state of emergency, effective November 1st to November 15th. On November 13th, the Government extended the state of emergency until November 29th. On November 27th, the Government extended the state of emergency until December 13th.
• The Government of Manitoba announced on November 6th that it would extend the province-wide state of emergency for a period of 30 days.
• The Government of New Brunswick announced on November 6th that the state of emergency mandatory order was revised under the authority of the Emergency Measures Act. On November 13th, the Government announced the state of emergency mandatory order had been renewed. On November 26th, the state of emergency was further renewed.
• The Government of British Columbia announced on November 10th that it had formally extended the provincial state of emergency until November 24th. The Government announced on November 24th that it was extending the provincial state of emergency until December 8th.
• The Government of the Northwest Territories announced on November 10th that it had extended the territory-wide Public Health Emergency through November 24th. On November 19th, the Government extended the State of Emergency in the City of Yellowknife through December 4th.
• The Government of Nunavut announced on November 12th that it had extended the territory's public health emergency until November 26th. On November 26th, the Government of Nunavut extended the territory's public health emergency until December 10th.
• The Government of Canada announced on November 19th that it was extending non-essential travel restrictions with the United States until December 21, 2020. On November 29th, the Government of Canada announced it would extend the Mandatory Isolation Order and temporary travel restrictions for all travelers seeking entry into Canada from a country other than the United States, until January 21, 2021.
• The Government of Alberta on November 24th declared a state of public health emergency.

Selected COVID-19 responses

• The Government of Manitoba announced that, effective November 2nd, the Winnipeg Metro Region would move to the critical level (red) on the province's pandemic response system. This included the following changes:
  • Bars and restaurants will be closed except for take-out and delivery;
  • Most retail will be reduced to 25% capacity;
  • Sports and recreation programming will be suspended;
  • Gyms and fitness centres will have reduced capacity to 25%;
  • Movie theatres and concert halls will close;
  • Faith-based gatherings are reduced to 15% or 100 people, whichever is lower.
  
  On November 10th, the Government announced that the province of Manitoba would move to the critical level (red) to halt COVID-19 transmission. On November 19th, the Government announced updated health orders, including further restrictions on gatherings at private residences, prohibitions from assembling in a gathering of more than five people at any indoor or outdoor public place, and restrictions on retail businesses to sell only essential items in person and ensure compliance with capacity limits of 25%.
• The Government of Alberta on November 12th announced new targeted measures to help protect the health system and limit the spread of COVID-19. The new public health measures included:
  • All restaurants, bars, lounges and pubs in regions under enhanced status must cease liquor sales by 10 p.m. and close by 11 p.m. for a two-week period from November 13th to 27th;
  • A two-week ban on group fitness classes, team sport activities and group performance activities in Edmonton and surrounding areas, Calgary and surrounding areas, Grande Prairie, Lethbridge, Fort McMurray and Red Deer;
  • Additional public health measures including maximum attendance of 50 at wedding or funeral services, recommendations against social gatherings in private homes, and recommendations that employers in office settings reduce the number of employees in the workplace at one time.
• The Government of Canada announced on November 13th that it will invest an additional $1.5 billion in the Workforce Development Agreements to ensure quick access to training to help support workers in sectors hardest hit by COVID-19.
• The Government of Saskatchewan announced new public health measures effective November 16th, including mandatory masking in indoor public places in all communities with populations of 5,000 people or greater, and the requirement that all restaurants and licensed establishments stop serving alcohol by 10 p.m. and that consumption end by 11 p.m. The Government later announced new measures effective November 19th, including the requirement to wear a non-medical mask in all indoor public spaces in the province, along with a decrease in indoor private gathering sizes from ten to five, including in the home.
• The Government of Nunavut on November 16th announced that beginning November 18th, Nunavut would enter a mandatory, territory-wide restriction period for two weeks in an effort to limit the spread of COVID-19. The Government said that:
  • All non-essential services, businesses and organizations will be required to close and wherever possible, switch to work from home;
  • Masks are strongly recommended in public spaces, and when physical distancing cannot be maintained.
  
  The Government also said it would re-evaluate the effectiveness of these measures on December 2nd.
• The Government of Ontario on November 20th announced it had extended all orders currently in force under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 (ROA) until December 21, 2020. The Government also said that the province was moving certain public health unit regions to new levels in the COVID-19 Response Framework: Keeping Ontario Safe and Open, which included moving Toronto and Peel into Lockdown effective November 23rd. The Government said that measures under Lockdown include:
  • No indoor organized public events or social gatherings except with members of the same household;
  • Outdoor organized public events or social gatherings limited to a maximum of 10 people;
  • Retail permitted to be open for curbside pick-up or delivery only, with certain exceptions such as for supermarkets, grocery stores, pharmacies, hardware stores, discount and big box retailers selling groceries, beer, wine and liquor stores, safety supply stores, and convenience stores, which will be allowed to operate at 50% capacity;
  • Restaurants, bars, and food and drink establishments will only be able to provide takeout, drive-through and delivery;
  • Personal care services closed;
  • Casinos, bingo halls and other gaming establishments closed;
  • Indoor sports and recreational facilities, including pools, closed with limited exceptions.
• The Government of Nova Scotia on November 20th announced new restrictions on gathering limits and social circles in urban and many suburban areas of Halifax Regional Municipality (HRM) and Hants County, including:
  • Five people can gather in a close social group without physical distancing, down from 10;
  • Onsite gatherings at long-term care facilities can have a maximum of five people (including residents and staff), down from 10;
  • 25 people, down from 50, can gather with physical distancing for informal indoor and outdoor social events;
  • Indoor events run by a recognized business or organization can have 50% of the venue's capacity to a maximum of 100 people with physical distancing, down from 200;
  • Outdoor events run by a recognized business or organization can have 150 people with physical distancing, down from 250.
  
  On November 24th, the Government of Nova Scotia announced new restrictions across the province, effective November 26th until December 9th, including avoiding non-essential travel in and out of western and central HRM and to other provinces. The Government also added new restrictions in western and central HRM, including:
  • Restaurants and licensed establishments are closed for in-person dining but may provide take-out or delivery;
  • Retail stores must restrict shoppers and staff to 25% or less of allowable capacity;
  • Profit and non-profit fitness and recreational facilities are closed;
  • Libraries and museums are closed;
  • The casino and First Nations gaming establishments are closed.
• The Government of Newfoundland and Labrador on November 23rd announced that effective November 25th, people arriving in Newfoundland and Labrador from within the Atlantic Bubble would be required to self-isolate for 14 days. The Government also said that non-essential travel outside of Newfoundland and Labrador is not recommended at this time.
• On November 23rd, the Government of Prince Edward Island said that it had decided to suspend non-essential travel within the Atlantic Bubble for the next two weeks to curb the spread of the pandemic. The Government said that anyone who needs to travel to Prince Edward Island, including residents of Atlantic Canada, will have to apply for pre-travel approval in advance.
• On November 24th, the Government of Alberta announced that new mandatory restrictions came into effect and will be in place for at least three weeks. The new restrictions include:
  • No indoor social gatherings in any setting, outdoor gatherings with a maximum of 10 people;
  • Wedding and funeral services for a maximum of 10 people and no receptions permitted;
  • No festivals or events;
  • Grades 7 to 12 at-home learning between November 30th and January 11th, grades K to 6 at-home learning between December 18th and January 11th;
  • Working from home should be considered;
  • Banquet halls, conference centres, trade shows, auditoria and concert venues, children's play places, and all levels of sport closed for in-person services;
  • Restaurants, bars, pubs, and lounges will be open with restrictions;
  • Most retail businesses may remain open with capacity limited to 25%.

Resources

• Calgary-based Enbridge Inc. announced that the Minnesota Pollution Control Agency had announced approvals for Enbridge's Line 3 project, including the 401 Water Quality Certification, and that the Minnesota Department of Natural Resources had released the final eight permits for the project. Enbridge later announced that the U.S. Army Corps of Engineers announced approvals of federal permits for the project and that Enbridge had now received all federal permits required for replacing Line 3. Enbridge said final state permits and authorizations are still needed before work can begin.
• Texas-based Exxon Mobil Corporation announced that, as part of an ongoing global review to identify cost efficiencies, it anticipated that up to 300 positions will be impacted by the end of 2021 across the company's affiliates in Canada, including Imperial Oil Limited, ExxonMobil Canada Ltd. and ExxonMobil Business Centre Canada ULC.
• Calgary-based TransAlta Corporation announced it will discontinue all mining operations at the Highvale Mine by December 31, 2021, and that, effective January 1, 2022, the company will discontinue firing with coal in Canada.
• UK-based Endeavour Mining Corporation and Teranga Gold Corporation of Toronto announced they had entered into a definitive agreement whereby Endeavour will acquire all of the issued and outstanding securities of Teranga by way of a Plan of Arrangement under the Canada Business Corporations Act. The companies said the closing of the combination is anticipated to take place in the first quarter of 2021, subject to shareholder and court approval as well as applicable regulatory approvals and other closing conditions.
• Toronto-based IAMGOLD Corporation announced it was temporarily reducing the underground workforce at its Westwood mine in Canada, affecting approximately 437 workers or approximately 70% of the underground workforce. The company said that Westwood underground remains suspended following a seismic event reported earlier this month.
• Toronto-based Norbord Inc. announced it had decided to permanently close the 100 Mile House OSB mill. Norbord said the mill had been indefinitely curtailed since August 2019 in response to a wood supply shortage and rising fibre costs.
• Vancouver-based West Fraser Timber Co. Ltd. and Norbord Inc. of Toronto announced they had entered into a strategic business combination pursuant to which West Fraser will acquire all of the outstanding common shares of Norbord in an all-stock transaction valued at approximately $4.0 billion. The companies said the transaction is expected to close in the first quarter of 2021, subject to shareholder approvals and approval by the Ontario Superior Court of Justice, as well as regulatory approvals and closing conditions customary in transactions of this nature.
• On November 24th, the Government of British Columbia announced that the U.S. Department of Commerce released its final determination for the First Administrative Review (AR1) in antidumping duty (AD) and countervailing duty (CVD) investigations of imports of certain softwood lumber products from Canada. The Government of Canada said the new duty rate that will apply to exports from most companies subject to the first administrative review is 8.99%, compared to the current rate of 20.23%.

Manufacturing

• Oshawa-based General Motors of Canada Company announced that, subject to ratification of the 2020 agreement with Unifor, it plans to bring pickup production back to the Oshawa Assembly Plant while making additional investments at the St. Catharines Propulsion Plant and the Woodstock Parts Distribution Centre. GM said planned investment will include $1 billion to $1.3 billion at Oshawa Assembly with the expected hiring of 1,400 to 1,700 workers.

Transportation

• Toronto-based Porter Airlines Inc. announced it was updating its planned restart date for flights to February 11, 2021, due to increasing COVID-19 cases and ongoing travel restrictions affecting customer demand.

Finance and insurance

• Toronto-based Intact Financial Corporation announced that, together with Tryg A/S of Denmark, it had reached an agreement with RSA Insurance Group plc of the United Kingdom on the terms of a recommended all-cash acquisition for the entire issued and to be issued share capital of RSA for a total consideration of approximately $12.3 billion. The companies said the transaction is expected to be completed during the second quarter of 2021, subject to customary regulatory and shareholder approvals.
• New York-based Nasdaq, Inc. and Verafin Inc. of St. John's, Newfoundland and Labrador, a platform provider to help detect, investigate, and report money laundering and financial fraud, announced they had entered into a definitive agreement for Nasdaq to acquire Verafin for USD $2.75 billion. The companies said the transaction is expected to close in the first quarter of 2021, subject to regulatory approvals and other customary closing conditions.

Other news

• The Government of Canada announced the successful conclusion of talks for the Canada-United Kingdom Trade Continuity Agreement—an interim deal that will be in place as Canada and the United Kingdom work towards negotiating a comprehensive free trade agreement. The Government said that as the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) will no longer apply to the United Kingdom beginning January 1, 2021, this new agreement will provide continued access to the benefits of CETA on a bilateral basis.
• The Government of Canada on November 30th released its Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020, which included investments in health care and infrastructure, support for businesses and workers, including lockdown support and support for those in highly affected sectors, as well a plan to invest up to $100 billion over the next three fiscal years. The Government forecasts a $381.6 billion deficit in 2020-2021 and a contraction in real GDP of 5.8% in 2020.
• The Government of Ontario on November 5th released Budget 2020, Ontario's Action Plan: Protect, Support, Recover, which included increased spending on health care; support for seniors and businesses; and investments to support jobs, including reducing electricity prices, lowering business property taxes, and providing workers with skills training. The Government forecasts a $38.5 billion deficit for 2020-2021 and a contraction in real GDP of 6.5% in 2020.
• The Government of Quebec on November 12th presented its Update on Quebec's Economic and Financial Situation, which included additional measures totaling $1.8 billion over three years to continue to support Quebecers and revive the economy. The Government forecasts a $15 billion deficit in 2020-2021 and a contraction in real GDP of 6.0% in 2020.
• The Government of Alberta on November 24th presented its fiscal update. The Government forecasts a $21.3 billion deficit for 2020-2021 and a contraction in real GDP of 8.1% in 2020.
• The Government of Saskatchewan on November 27th released its 2020-2021 Mid-year report. The Government forecasts a $2.0 billion deficit for 2020-2021 and a contraction in real GDP of 5.0%.
• Vancouver-based TELUS Corporation announced that TELUS International had entered into an agreement to acquire Lionbridge AI, a provider of crowd-based training data and annotation platform solutions used in the development of AI algorithms to power machine learning, for approximately $1.2 billion. The company said closing is expected to occur on December 31, 2020, subject to customary closing adjustments.
• Missouri-based Caleres, Inc. announced it had commenced a strategic realignment of the Naturalizer retail locations in the United States and Canada, including plans to close approximately 133 Naturalizer stores by the end of fiscal year 2020.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 0.00% to 0.25%. The last change in the target range was a 100 basis points decrease announced in March 2020. The FOMC also said that to support the flow of credit to households and businesses, the Federal Reserve over the coming months will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning.
• The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 0.1%. The MPC also voted to maintain the stock of sterling non-financial investment-grade corporate bond purchases at £20 billion, to continue with the existing programme of £100 billion of UK government bond purchases, and to increase the target stock of purchased UK government bonds by an additional £150 billion to take the total stock of government bond purchases to £875 billion.
• The Reserve Bank of Australia (RBA) decided on a package of further measures to support job creation and the recovery, including (i) a reduction in the cash rate target to 0.1%; (ii) a reduction in the target for the yield on the 3-year Australian Government bond to around 0.1%; (iii) a reduction in the interest rate on new drawings under the Term Funding Facility to 0.1%; (iv) a reduction in the interest rate on Exchange Settlement balances to zero; and (v) the purchase of $100 billion of government bonds of maturities of around 5 to 10 years over the next six months.
• The Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR), its main policy rate, unchanged at 0.25% and agreed to continue with the Large Scale Asset Purchase (LSAP) Programme up to NZD $100 billion. The last change in the OCR was a 75 basis points reduction in March 2020. The RBNZ also agreed to provide additional monetary stimulus to the economy through a Funding for Lending Programme (FLP) that will reduce banks' funding costs and lower interest rates, commencing in December.
• The Executive Board of Norway's Norges Bank decided to keep the policy rate unchanged at 0.0%. The last change in the policy rate was a 25 basis points reduction in May 2020.
• The Executive Board of Sweden's Riksbank left the repo rate unchanged at 0.00% and said the rate is expected to remain at this level in the coming years. The Board also decided to expand the envelope for the asset purchases by SEK 200 billion, to a nominal amount of up to SEK 700 billion, and to extend the asset purchase programme to December 13, 2021.
• Atlanta, Georgia-based The Home Depot announced it had entered into a definitive agreement to acquire HD Supply Holdings, Inc., also of Atlanta, for a total enterprise value of approximately USD $8 billion. Home Depot said the transaction is expected to be completed by January 31, 2021, subject to shareholder and regulatory approvals.
• Pennsylvania-based Pennsylvania Real Estate Investment Trust (PREIT) announced it had taken the next step to execute its prepackaged financial restructuring plan and filed a voluntary Chapter 11 petition in the United States Bankruptcy Court. PREIT said the filing will ensure it can continue all business operations without interruption.
• Tennessee-based CBL Properties announced that CBL & Associates Properties, Inc., CBL & Associates Limited, and certain other related entities had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in order to implement a plan to recapitalize the company, including restructuring portions of its debt. CBL Properties said all day-to-day operations and business of the Company's wholly owned, joint venture and third-party managed shopping centers will continue as normal.
• Pennsylvania-based PNC Financial Services Group, Inc. and Banco Bilbao Vizcaya Argentaria, S.A. of Spain announced they had signed a definitive agreement for PNC to acquire BBVA USA Bancshares, Inc. of Texas, including its U.S. banking subsidiary, BBVA USA, for a purchase price of USD $11.6 billion. The companies said the transaction is expected to close in mid-2021, subject to customary closing conditions, including regulatory approvals.
• New York-based S&P Global Inc. and IHS Markit Ltd of the United Kingdom announced they had entered into a definitive merger agreement to combine in an all-stock transaction which values IHS Markit at an enterprise value of USD $44 billion. The companies said the transaction is expected to close in the second half of 2021, subject to shareholder, regulatory, and antitrust approvals, and other customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $45.34 per barrel on November 30th, up from a closing value of USD $35.79 at the end of October. Western Canadian Select crude oil traded in the USD $27 to $35 per barrel range throughout November. The Canadian dollar closed at 77.13 cents U.S. on November 30th, up from 75.09 cents U.S. at the end of October. The S&P/TSX composite index closed at 17,190.25 on November 30th, up from 15,580.64 at the end of October.