Canadian Economic News, May 2025 Edition

Wildfires

• On May 13th, the Government of Manitoba announced that, with wildfire conditions continuing to escalate, it had declared a state of local emergency for Nopiming, Wallace Lake, South Atikaki and Manigotagan River provincial parks and issued an evacuation order for Nopiming Provincial Park. The Government said these parks would remain closed to the public until conditions improve. On May 14th, the Government announced it was closing Whiteshell Provincial Park until conditions improve. On May 28th, the Government of Manitoba declared a provincewide state of emergency, effective for 30 days. The Government also said that in addition, the city of Flin Flon and the First Nations of Pimicikimak and Mathias Colomb had issued mandatory evacuation orders.
• On May 29th, the Government of Saskatchewan declared a provincial State of Emergency due to the wildfires affecting communities across Saskatchewan. The Government said the state of emergency would be in effect for 30 days.

Resources

• Texas-based Sunoco LP and Parkland Corporation of Calgary announced they had entered into a definitive agreement whereby Sunoco will acquire all outstanding shares of Parkland in a cash and equity transaction valued at approximately USD $9.1 billion, including assumed debt. The companies said the transaction is expected to close in the second half of 2025, subject to the satisfaction of closing conditions, including approval by Parkland's shareholders and customary regulatory and stock exchange listing approvals.
• France-based TotalEnergies SE announced it had signed a Sales and Purchase Agreement with Ksi Lisims LNG for the purchase of 2 Mtpa (million tonnes per annum) of LNG for 20 years from the future liquefaction plant located on the northwest coast British Columbia. The company said that, in parallel, it acquired a 5% stake in Texas-based Western LNG LLC, the developer, shareholder, and future operator of the Ksi Lisims LNG project.
• Calgary-based Strathcona Resources Ltd. announced it had entered into definitive agreements to sell substantially all of its Montney assets for approximately $2.84 billion to ARC Resources Ltd. and Tourmaline Oil Corp.
• Calgary-based Vermilion Energy Inc. announced it had entered into a definitive agreement for the sale of its Saskatchewan and Manitoba assets for cash proceeds of $415 million. Vermillion said the transaction is anticipated to close in the third quarter of 2025, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.
• Vancouver-based Pan American Silver Corp. and MAG Silver Corp. announced they had entered into a definitive agreement whereby Pan American will acquire all of the issued and outstanding common shares of MAG for total consideration of approximately USD $2.1 billion. The companies said the transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including shareholder approval, clearance under Mexican anti-trust laws, and approval of the listing of the Pan American common shares to be issued under the transaction on both the Toronto Stock Exchange and the New York Stock Exchange.
• The Government of Ontario announced it had approved Ontario Power Generation's (OPG) plan to begin construction on the first of four small modular reactors (SMRs) at the Darlington nuclear site. The Government said the SMR will produce enough electricity to power the equivalent of 300,000 homes.

Canada's internal trade

• The Government of Manitoba announced it had signed an agreement with the Ontario government to boost the flow of goods, services, investment and workers in both provinces. The Government said the premiers signed a memorandum of understanding to signal the provinces' intention to work together to knock down interprovincial trade barriers including direct-to-consumer alcohol sales and improved labour mobility between Manitoba and Ontario.
• The Government of Nova Scotia announced it was removing more interprovincial trade barriers by introducing legislative changes to enhance the new Traffic Safety Act in the fall that would allow more types of commercial trucks and other passenger vehicles to enter and operate in the province, supporting the movement of goods and services across the country. The Government also said it plans to amend the Nova Scotia Building Code Regulations to allow factory-built (modular) buildings that meet the National Building Code to be installed in the province without having to meet additional Nova Scotia-specific standards.
• The Government of Quebec announced it had tabled a Bill to promote trade in products and the mobility of labour from other provinces and territories of Canada, in order to stimulate interprovincial trade by improving the free movement of goods and skilled workers.

Other news

• The Government of Canada announced that it was moving forward with the proposal to deliver tax relief for Canadians by reducing the lowest marginal personal income tax rate from 15% to 14%, effective July 1, 2025.
• The Government of Alberta announced it was freezing the industrial carbon price at the current rate of $95 per tonne of emissions to keep industry competitive and defend jobs in response to the uncertainty caused by United States' tariffs.
• On May 15th, the Government of Ontario released its 2025 Budget, which included support for workers and businesses, the creation of a new Critical Minerals Processing Fund, and investments in infrastructure, skills training, housing, health, and education. The Government forecasts a $14.6 billion deficit in 2025-26 and real GDP growth of 0.8% in 2025 and 1.0% in 2026.
• The Government of Ontario announced its plan to permanently cut the gasoline and fuel tax rates, keeping the provincial rates of tax at nine cents per litre, which the Government said would save households, on average, about $115 per year going forward. The Government also said it was proposing to remove tolls from the provincially owned Highway 407 East, which the Government said is expected to save daily commuters an estimated $7,200 annually.
• Quebec's minimum wage increased from $15.75 to $16.10 per hour on May 1st.
• The Government of the Yukon announced that the 2025 rent index would be set at 2.0%.
• Toronto-based Canadian Tire Corporation announced it had entered into a definitive agreement to become the home of Canadian brands and other intellectual property of the Hudson's Bay Company (HBC), including the HBC Stripes and various company names, logos, designs, coat of arms and brand trademarks, for $30 million. Canadian Tire said the transaction is expected to close later this summer, subject to court approval and other customary terms and conditions.
• In a court filing with the Superior Court of Ontario, the Hudson's Bay Company (HBC) said that by June 1, 2025, it will have terminated approximately 8,347 or approximately 89% of its employees. HBC said the remaining 1,017 include Distribution Centre employees, and that the Distribution Centres are expected to close June 15, 2025.
• Toronto-based TD Bank Group announced it had initiated a new restructuring program in the second quarter of 2025 to reduce its cost base, including savings from an approximate 2% workforce reduction.
• Vancouver-based Telus Corporation announced it was investing more than $70 billion over the next five years to expand and enhance its network infrastructure and operations, including bringing TELUS PureFibre connectivity to homes and businesses across British Columbia, Alberta, Quebec, and Ontario; deploying enhancements to its 5G and LTE services; and launching two Sovereign AI Factories in Kamloops and Rimouski.
• Montreal-based BCE Inc. announced Bell AI Fabric, an investment that will create a national network starting with a data centre supercluster in British Columbia that will aim to provide upwards of 500 MW of hydro-electric powered AI compute capacity across six facilities. Bell said the first facility would come online in June 2025, in Kamloops BC with a second facility opening in Merritt, BC, by the end of 2025.
• Waterloo Ontario-based Definity Financial Corporation announced today that it had entered into a definitive agreement with the Travelers Companies, Inc. of New York to acquire Canadian operations of Travelers for cash consideration of approximately $3.3 billion. Definity said the transaction is expected to close in the first quarter of 2026, subject to customary regulatory approvals.

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 Bank of Japan 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 Bank of England's Monetary Policy Committee (MPC) voted to reduce the Bank Rate by 25 basis points to 4.25%. The last change in the Bank Rate was a 25 basis points cut in February 2025.
• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank left the policy rate unchanged at 4.5%. The last change in the policy rate was a 25 basis points increase in December 2023.
• The Executive Board of Sweden's Riksbank left the repo rate unchanged at 2.25%. The last change in the repo rate was a 25 basis points reduction in January 2025.
• The Reserve Bank of Australia (RBA) lowered the cash rate target by 25 basis points to 3.85%. The last change in the cash rate target was a 25 basis points cut in February 2025.
• The Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR), its main policy rate, by 25 basis points to 3.25%. The last change in the OCR was a 25 basis points cut in April 2025.
• U.S. President Donald J. Trump and United Kingdom Prime Minister Sir Keir Starmer announced on May 8th a trade deal – the U.S.-UK Economic Prosperity Deal (EPD) – to remove barriers to make it easier for American and British businesses to operate, invest and trade in both countries.
• The White House announced on May 12th that U.S. President Donald J. Trump had reached an agreement with China whereby the United States would remove the additional tariffs it imposed on China on April 8 and April 9, 2025, but would retain all duties imposed on China prior to April 2, 2025. The White House said China would remove the retaliatory tariffs it announced since April 4, 2025, and would also suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025. President Trump said the suspension of tariffs would be for a period of 90 days.
• Moody's Ratings announced it had downgraded the Government of United States of America's long-term issuer and senior unsecured ratings to Aa1 from Aaa and changed the outlook from stable to negative. Moody's said the downgrade reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.
• Virginia-based Boeing and Qatar Airways announced the carrier would purchase up to 210 widebody jets, including 130 787 Dreamliners, 30 777-9s, and options for an additional 50 787 and 777X airplanes. Boeing said the order would support nearly 400,000 jobs in the U.S.
• 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 June 2025.
• Japan-based Nissan Motor Co., Ltd announced a recovery plan with a cost reduction target of ¥250 billion. Nissan said it will consolidate its vehicle production plants from 17 to 10 by fiscal year 2027 and reduce its workforce by a total of 20,000 employees between fiscal years 2024 and 2027, which includes a previously announced reduction of 9,000.

Financial market news

• West Texas Intermediate crude oil closed at USD $60.79 per barrel on May 30th, up from a closing value of USD $58.21 at the end of April. Western Canadian Select crude oil traded in the USD $44 to $52 per barrel range throughout May. The Canadian dollar closed at 72.68 cents U.S. on May 30th, up from 72.40 cents U.S. at the end of April. The S&P/TSX composite index closed at 26,175.05 on May 30th, up from 24,841.68 at the end of April.