Canadian Economic News, May 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.

Selected COVID-19 responses

  • The Government of Quebec on May 13th announced that as of May 14th wearing a mask will no longer be mandatory, except in transport and healthcare settings.
  • The Government of Canada announced on May 31st that it was extending current border measures for travellers entering Canada until at least June 30th.

Selected responses to Russia's attack on Ukraine

  • On May 8th, G7 Leaders announced they would:
    • Commit to phase out their dependency on Russian energy, including by phasing out or banning the import of Russian oil;
    • Take measures to prohibit or otherwise prevent the provision of key services on which Russia depends; and
    • Take action against Russian banks connected to the global economy and systemically critical to the Russian financial system.
  • On May 31st, the Government of Canada announced it was imposing new sanctions under the Special Economic Measures (Russia) Regulations that impose restrictions on 22 individuals and 4 entities, including senior officials of Russian financial institutions and their family members, as well as key financial institutions and banks.

Resources

  • The Government of Canada announced that the Trans Mountain Corporation had secured up to $10 billion in third-party financing, which will be used to fund the Trans Mountain Expansion Project's construction costs, and that the federal government was providing a loan guarantee on behalf of the corporation.
  • The Government of British Columbia announced it is introducing a new oil and gas royalty system that eliminates fossil-fuel subsidies, including the Deep Well Royalty Program and other programs such as the Marginal Well, Ultramarginal Well, Low Productivity Well Rate Reduction and the Clean Growth Infrastructure Royalty programs. The Government said the new system will apply to all new wells and will be phased in over two years starting on September 1, 2022.
  • Calgary-based Cenovus Energy Inc. announced that it and its partners had agreed to restart the West White Rose Project offshore of Newfoundland and Labrador. Cenovus said first oil from the platform is anticipated in the first half of 2026 and that the remaining capital required to achieve first oil is expected to be approximately $2.0 billion to $2.3 billion net to Cenovus.
  • Calgary-based Parkland Corporation announced plans to increase renewable fuel production at its Burnaby Refinery in British Columbia, including expanding existing co-processing volumes to approximately 5,500 barrels per day and building a stand-alone renewable diesel complex, within the Burnaby Complex, capable of producing approximately 6,500 barrels per day of renewable diesel. Parkland said the projects will require an investment of approximately $600 million, with production expected to commence in 2026.
  • Calgary-based AltaGas Ltd. announced an agreement to sell its Alaskan Utilities to TriSummit Utilities Inc., also of Calgary, for approximately $1.025 billion. AltaGas said the transaction is anticipated to close no later than the first quarter of 2023, subject to customary closing conditions, including State regulatory approvals.
  • Vancouver-based Sandstorm Gold Ltd. and Nomad Royalty Company Ltd. of Montreal announced they had entered into a definitive agreement whereby Sandstorm will acquire all of the issued and outstanding common shares of Nomad for approximately USD $590 million. The companies said the acquisition is expected to close in the second half of 2022, subject to receipt of all applicable court, regulatory and securityholder approvals, and satisfaction of other conditions precedent customary for transactions of this nature. Sandstrom also announced it had agreed to acquire nine royalties and one stream from BaseCore Metals LP of Toronto for total consideration of USD $525 million. The companies said the transaction is expected to close in 4 to 6 weeks, subject to regulatory approvals and other customary conditions for a transaction of this nature.
  • On May 18th, the Government of Canada announced it had been advised that China had reinstated access to its market for two Canadian companies that China Customs had suspended from exporting canola seed to China since March 2019.

Manufacturing

  • Netherlands-based Stellantis NV announced plans to invest $3.6 billion in its Windsor and Brampton, Ontario Assembly Plants. Stellantis said the Windsor Assembly Plant will be transformed to support production of a new multi-energy vehicle architecture that will provide battery-electric capability for multiple models, with retooling expected to begin in 2023, while the Brampton Assembly Plant will be retooled and fully modernized, beginning in 2024. Stellantis also said that both assembly plants are expected to return to three shift operations. 
  • Winnipeg-based NFI Group Inc. announced the closure of the Motor Coach Industries coach manufacturing facility in Pembina, North Dakota, anticipated to occur in the fourth quarter of 2022.

Other news

  • On May 19th, the Government of Canada announced it intends to prohibit the inclusion of China-based Huawei and ZTE products and services in Canada's telecommunications systems. The Government said that as a result, telecommunications companies that operate in Canada would no longer be permitted to make use of designated equipment or services provided by Huawei and ZTE and that companies that already use this equipment installed in their networks would be required to cease its use and remove it.
  • On May 10th, the Government of Alberta announced that the Alberta Court of Appeal had ruled the federal Impact Assessment Act as unconstitutional, and that the federal government does not have constitutional authority to control provinces and territories and the development of their natural resources.
  • Quebec's minimum wage increased from $13.50 to $14.25 per hour on May 1st.
  • On May 1st, the International Union of Operating Engineers, Local 793 announced that effective May 2nd, members working in Ontario under the Provincial Collective Agreement were on strike and that work falling under the Provincial Collective Agreement includes crane and equipment rental; steel erection and mechanical installations; foundation, piling, and caisson boring; excavation and earth moving; general contractor construction; and surveying (in connection with the previous types of work). On May 20th, the International Union of Operating Engineers announced that its members had ratified a new three-year Provincial Collective Agreement with contractors.
  • On May 12th, the Carpenters' District Council of Ontario, United Brotherhood of Carpenters and Joiners of America announced that the Ontario-wide strike of carpenters in the industrial, commercial, and institutional sector in the construction industry was continuing. On May 27th, the Carpenters' District Council of Ontario, United Brotherhood of Carpenters and Joiners of America announced that the province-wide strike was over.
  • Vancouver-based Telus Corporation announced investments of $34.5 billion in network infrastructure, operations, and spectrum across Alberta and British Columbia over the next four years. Telus said the investments would generate 8,500 jobs in Alberta and 5,500 jobs in British Columbia, with a focus on construction, engineering, emerging technologies, and other supporting industries. Telus also said it has committed to investing $70 billion overall across Canada by 2026.

United States and other international news

  • The U.S. Federal Open Market Committee (FOMC) raised the target range for the federal funds rate by 50 bps to 0.75% to 1.00% and said it anticipates that ongoing increases in the target range will be appropriate. The last change in the target range was a 25 basis points increase in March 2022. The Committee also said that it had decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1st.
  • The Bank of England's Monetary Policy Committee (MPC) voted to increase the Bank Rate by 25 basis points to 1.00%. The last change in the Bank Rate was a 25 basis points increase in March 2022.
  • The Reserve Bank of Australia (RBA) increased the target for the cash rate by 25 basis points to 0.35%. The last change in the target for the cash rate was a 15 basis points reduction in November 2020.
  • The Reserve Bank of New Zealand (RBNZ) increased the Official Cash Rate (OCR), its main policy rate, by 50 basis points to 2.0%. The last change in the OCR was a 50 basis points increase in April 2022.
  • The Monetary Policy and Financial Stability Committee of Norway's Norges Bank decided to keep the policy rate unchanged at 0.75%. The last change in the policy rate was a 25 basis points increase in March 2022.
  • OPEC and non-OPEC members announced they had decided to adjust upward monthly overall production by 0.432 mb/d for the month of June 2022.
  • Broadcom Inc. and VMware, Inc., both of California, announced an agreement under which Broadcom will acquire all of the outstanding shares of VMware in a cash-and-stock transaction that values VMware at approximately USD $61 billion. The companies said the transaction is expected to be completed in Broadcom's fiscal year 2023, subject to receipt of regulatory approvals and other customary closing conditions, including approval by VMware shareholders.
  • New York-based Pfizer, Inc. and Biohaven Pharmaceutical Holding Company Ltd. of Connecticut announced they had entered into a definitive agreement under which Pfizer will acquire Biohaven for approximately USD $11.6 billion. The companies said they expect the transaction to close by early 2023, subject to the completion of the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven's shareholders.
  • Calgary-based Enbridge Inc. announced the advancement of its Venice Extension Project and Gator Express Meter Project to deliver 1.5 billion cubic feet per day of natural gas to Venture Global's Plaquemines LNG facility located in Plaquemines Parish, Louisiana. Enbridge said the Gator Express Meter Project is expected to be in service in 2023 and the Venice Extension Project is expected to be in service in 2024, with an estimated cost for both projects of USD $400 million.

Financial market news

  • West Texas Intermediate crude oil closed at USD $114.67 per barrel on May 31st, up from a closing value of USD $104.69 at the end of April. Western Canadian Select crude oil traded in the USD $85 to $102 per barrel range throughout May. The Canadian dollar closed at 79.06 cents U.S. on May 31st, up from 78.17 cents U.S. at the end of April. The S&P/TSX composite index closed at 20,729.34 on May 31st, down from 20,762.00 at the end of April.
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