Canadian Economic News, June 2025 Edition

Wildfires

• On May 31st, Calgary-based MEG Energy Corp. announced it had evacuated all non-essential personnel from its Christina Lake Regional Project production facilities in Alberta in response to regional wildfires. MEG also said a power outage was delaying startup of the company's Phase 2B operations, which represents approximately 70,000 barrels per day of production. On June 11th, MEG said it had safely returned all personnel to site and restored its connection to Alberta's electric grid. MEG said that, in addition, it had commenced restarting Phase 2B operations after successful completion of the turnaround.
• On May 31st, Calgary-based Canadian Natural Resources Limited announced it had safely evacuated workers from its Jackfish 1 thermal in situ operations in Alberta and completed a temporary shut-in of approximately 36,500 barrels per day of bitumen production. Canadian Natural said that on June 2nd operational staff had commenced start-up activities at Jackfish 1, targeting full bitumen production by June 6th.
• On June 1st, Calgary-based Cenovus Energy Inc. announced that only essential personnel were at the Christina Lake oil sands asset in Alberta, where the company began safely shutting in production on May 29th. Cenovus said approximately 238,000 barrels per day of production had been impacted. On June 12th, Cenovus said that production operations restarted on June 3rd and production was ramped up over the course of the week.
• Toronto-based Hudbay Minerals Inc. announced on June 16th it had resumed operations in Snow Lake Manitoba following the lifting of evacuation orders in the Snow Lake region on June 14th. Hudbay said milling activities at the New Britannia gold mill were expected to ramp up to full production that week, while milling activities at the Stall base metal concentrator were expected to ramp up to full production the following week as the workforce continued to be impacted by the Flin Flon regional evacuations.
• On June 23rd, the Government of Manitoba announced it had rescinded the provincewide state of emergency under the Emergency Measures Act. The Government said the state of emergency was first declared on May 28th.

Tariffs

• The White House announced that President Donald J. Trump had signed a Proclamation to increase the tariff on steel and aluminum imports from 25% to 50%, with the higher tariff set to go into effect on June 4, 2025.
• On June 19th, the Government of Canada announced a series of measures to protect Canadian steel and aluminum producers and workers, including (i) adjusting its existing counter-tariffs on steel and aluminium products to levels consistent with progress that had been made in the broader trading arrangement with the United States; (ii) implementing reciprocal procurement policies to limit access to federal procurements to suppliers from Canada and from reliable trading partners; (iii) establishing new tariff rate quotas on imports of steel products from non-free trade agreement partners to stabilize the domestic market and prevent harmful trade diversion; (iv) adopting additional tariff measures to address risks associated with persistent global overcapacity and unfair trade in the steel and aluminum sectors; and (v) creating two government-stakeholder task forces, one for steel and one for aluminum, to closely monitor trade and market trends to support government decision making.
• On June 27th, the Government of Canada announced the implementation of new tariff rate quotas (TRQs) for steel mill products imported into Canada from non-free trade agreement (FTA) partners. The Government said the TRQs, set at 2.6 million tonnes, would result in a 50% surtax being applied on steel imports above 2024 levels from non-FTA partners.
• On June 29th, the Government of Canada announced it would rescind the Digital Services Tax in anticipation of a mutually beneficial comprehensive trade arrangement with the United States. The Government said that consistent with this action, Prime Minister Carney and President Trump had agreed that parties would resume negotiations with a view towards agreeing on a deal by July 21, 2025.

Canada's internal trade

• On June 6th, the Government of Canada announced it had introduced the One Canadian Economy: An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act, that would remove federal barriers to internal trade and labour mobility, and advance nation-building projects to drive Canadian productivity growth, energy security, and economic competitiveness. On June 26th, the Government announced that Bill C-5, the One Canadian Economy Act, received Royal Assent.
• On June 30th, the Government announced it would be removing all remaining federal exceptions from the Canadian Free Trade Agreement. The Government said that most of the exceptions removed focus on procurement, which will provide Canadian businesses with more opportunities to be competitive across the country.
• The Government of Nova Scotia announced that it, along with Alberta, British Columbia, Manitoba, Ontario, and Prince Edward Island, had taken action to remove barriers and red tape that would open up new trade and investment opportunities. The Government said the barriers being removed by Nova Scotia focussed on three key areas: (i) ending Canadian Free Trade Agreement exemptions that limit interprovincial trade with Nova Scotia; (ii) allowing goods or services that are legally sold, used or provided in another province to automatically be able to be sold/used/provided in Nova Scotia without having to meet Nova Scotia's specific labelling, packaging, certification or inspection requirements; and (iii) removing labour mobility barriers. The Government also said that removal of trade barriers with Alberta and P.E.I. came into effect immediately, while barriers with the other provinces and federal government would be removed upon proclamation of their equivalent legislation.
• The Government of Manitoba announced on June 2nd it had passed Bill 47, the Fair Trade in Canada (Internal Trade Mutual Recognition) Act, and amendments to the Commemoration of Days, Weeks and Months Act (Buy Manitoba, Buy Canadian Day). The Government said Bill 47 removes trade barriers for goods and services between Manitoba and other jurisdictions in Canada. Later, the Government of Manitoba announced it would sign a new memorandum of understanding with British Columbia to advance free trade between the two provinces and that cabinet would pass regulations by July 1st to ensure mutual recognition of other provinces.
• The Government of Ontario announced it had signed Memorandums of Understanding (MOUs) with Alberta and Prince Edward Island to advance efforts to knock down barriers to trade across Canada.
• The Government of Saskatchewan announced it had signed a Memorandum of Understanding (MOU) with Ontario to collaborate on the removal of trade barriers across the two jurisdictions.
• The Government of Yukon announced it was removing five Party-Specific Exceptions under the Canadian Free Trade Agreement, including limitations on procurement, real estate licensing, forestry, fisheries, and agricultural land use. The Government said that removing these trade barriers will help strengthen the territory's position as a domestic trade partner within Canada.

Resources

• Calgary-based Keyera Corp. announced it had entered into a definitive agreement to acquire substantially all of Texas-based Plains All American Pipeline's Canadian natural gas liquids business, plus select U.S. assets, for total cash consideration of $5.15 billion. Keyera said the assets include fractionation capacity of approximately 193,000 barrels per day, storage capacity of approximately 23 million barrels, and over 1,500 miles of pipeline infrastructure. The company said the transaction is expected to close in the first quarter of 2026, subject to the satisfaction or waiver of customary closing conditions, including clearance under the Competition Act (Canada) and other applicable regulatory reviews.
• Toronto-based Dundee Precious Metals Inc. (DPM) announced it had agreed with Adriatic Metals plc of the United Kingdom to the terms of an acquisition of the entire issued, and to be issued, ordinary share capital of Adriatic for an implied equity value of approximately USD $1.3 billion. Dundee said the transaction would be subject to certain closing conditions, including court and shareholder approval, receipt of the approval for listing of such DPM common shares by the Toronto Stock Exchange, unconditional approval by the Bosnian Competition Council in accordance with the Bosnian Competition Act, and the transaction becoming effective no later than December 31, 2025.
• The Government of Canada announced management plans for Northern cod and Capelin for the 2025-26 seasons, saying the responsible total allowable catch for cod increases from 18,000 tonnes to 38,000 tonnes while the total allowable catch for Capelin remains at 14,533 tonnes.

Other news

• The Bank of Canada held its target for the overnight rate at 2.75%. The last change in the target for the overnight rate was a 25 basis points cut in March 2025.
• British Columbia's general minimum wage increased from $17.40 to $17.85 per hour on June 1st.
• Contrecoeur, Quebec-based ArcelorMittal Long Products Canada announced that its wire drawing activities, which were operated from sites in Hamilton and Montreal, would now be entirely concentrated at the Montreal site. The company said the decision leads to the permanent shutdown of production at the Hamilton wire drawing mill in the coming weeks and would affect 153 employees.
• Unifor announced that its members at Brampton-based DHL Express Canada were locked out by their employer after midnight on June 8th. DHL Express later announced that its shipping operations in Canada would be suspended effective June 20th as a result of ongoing labour disruptions. On June 28th, Unifor announced that its members had ratified a new four-year agreement, officially ending the lockout and strike.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 4.25% to 4.50%. The last change in the target range was a 25 basis points cut in December 2024. The Committee also said that it would continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.
• The European Central Bank (ECB) lowered its three key interest rates by 25 basis points to 2.00% (deposit facility), 2.15% (main refinancing operations), and 2.40% (marginal lending facility). The last change in these rates was a 25 basis points reduction in April 2025.
• The Bank of Japan (BoJ) announced it will encourage the uncollateralized overnight call rate to remain at around 0.50%. The last change in the uncollateralized overnight call rate was a 25 basis points increase in January 2025. The BoJ also said that the amount of outright purchases of Japanese Government Bonds will be cut down, in principle, by about ¥400 billion each calendar quarter until January-March 2026, and by about ¥200 billion each calendar quarter from April-June 2026.
• The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 4.25%. The last change in the Bank Rate was a 25 basis points cut in May 2025.
• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank reduced the policy rate by 25 basis points to 4.25%. The last change in the policy rate was a 25 basis points increase in December 2023.
• The eight OPEC+ countries - Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman - which previously announced additional voluntary adjustments in April and November 2023, announced they would implement a production adjustment of 411 thousand barrels per day, equivalent to three monthly increments, in July 2025 from June 2025.
• Pennsylvania-based United States Steel Corporation and Nippon Steel Corporation of Japan announced that U.S. President Donald Trump had approved the companies' partnership. The companies said they had also entered into a National Security Agreement and that with these approvals, all necessary regulatory approvals for the partnership had been received, and the partnership was expected to be finalized promptly.
• Japan-based Marelli Holdings Co. Ltd., a multinational automotive parts manufacturer, announced it had commenced voluntary chapter 11 cases in the United States Bankruptcy Court in order to comprehensively restructure its long-term debt obligations. Marelli said it had received USD $1.1 billion in debtor-in-possession financing from its lenders and that it did not expect any operational impact from the chapter 11 process.

Financial market news

• West Texas Intermediate crude oil closed at USD $65.11 per barrel on June 30th, up from a closing value of USD $60.79 at the end of May. Western Canadian Select crude oil traded in the USD $50 to $62 per barrel range throughout June. The Canadian dollar closed at 73.30 cents U.S. on June 30th, up from 72.68 cents U.S. at the end of May. The S&P/TSX composite index closed at 26,857.11 on June 30th, up from 26,175.05 at the end of May.