Canadian Economic News, December 2025 Edition

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• Calgary-based Suncor Energy announced total capital expenditures are expected to be between $5.6 billion and $5.8 billion in 2026. Suncor said major economic investments planned or continuing in 2026 include in situ well pads, Mildred Lake East, West White Rose, Fort Hills North Pit development and the ongoing execution of the Petro-Canada retail network optimization plan.
• Calgary-based Cenovus Energy Inc. announced it expects capital investment to be between $5.0 billion and $5.3 billion in 2026. Cenovus said that included in the capital investment budget is sustaining capital of $3.5 billion to $3.6 billion, while an additional $1.2 billion to $1.4 billion of investment will be directed towards growth projects, including an expansion project at Christina Lake North.
• Calgary-based Imperial Oil Limited announced its capital and exploration expenditures are forecasted to be between $2.0 to $2.2 billion and would be focused on projects to strengthen long-term profitability, including progress on secondary bitumen recovery projects at Kearl, drilling at Cold Lake, and mine progression at both Kearl and Syncrude, as well as investments in digital infrastructure.
• Calgary-based Baytex Energy Corp. announced 2026 exploration and development expenditures of $550 million to $625 million. Baytex said maintenance capital would be $435 million and growth capital would be $50 million to $75 million.
• Calgary-based Enbridge Inc. announced it expects to deploy approximately $10 billion of growth capital in 2026, exclusive of maintenance capital.
• Toronto-based Vale Base Metals announced it had signed an agreement with Glencore Canada to jointly evaluate a potential brownfield copper development project at their adjacent properties in the Sudbury Basin. Vale said the project is estimated to produce 880 kt of copper over 21 years, with a capital cost of about USD $1.6 billion to USD $2.0 billion, and that a final investment decision is expected in the first half of 2027.
• Montreal-based Domtar Corporation announced it would permanently close operations at its Crofton, British Columbia, facility. Domtar said the decision will affect approximately 350 employees and will reduce Domtar's annual pulp production by approximately 380,000 air-dried metric tons of pulp.

Economic and fiscal updates

• The Government of Manitoba released its Fiscal and Economic Update on December 15th. The Government forecasts a $1.66 billion deficit in 2025-26 and real GDP growth of 1.1% in 2025 and 1.4% in 2026.
• The Government of Newfoundland and Labrador released its fall Fiscal and Economic Update on December 16th. The Government forecasts a $948 million deficit in 2025-26 and real GDP growth of 5.3% in 2025.
• The Government of Nova Scotia released its Forecast Update on December 18th. The Government forecasts a $1.29 billion deficit before contingency for 2025-26 and real GDP growth of 1.5% in 2025 and 1.3% in 2026.

Other news

• The Government of Canada announced on December 12th the implementation of new measures announced by the Prime Minister on November 26th, designed to provide relief and clarity for Canadian manufacturers, including the temporary extension of the horizontal remission of Canadian tariffs on imports from the United States, and the reduction of tariff rate quota levels for imported steel products effective December 26, 2025.
• The Bank of Canada left its target for the overnight rate unchanged at 2.25%. The last change in the target for the overnight rate was a 25 basis points cut in October 2025.
• The Government of Quebec announced it had received notices from 39 unions affiliated with the Fédération du préhospitalier du Québec (FPHQ) that ambulance workers had announced their intention to go on an indefinite strike starting December 24th. The Government said there are sufficient services to ensure the health and safety of the population is not endangered.
• Montreal-based Transcontinental Inc. announced it had entered into a stock purchase agreement with ProAmpac Holdings Inc. of Ohio pursuant to which ProAmpac agreed to purchase all of the issued and outstanding shares of capital stock of entities which carry on Transcontinental's Packaging Sector for an enterprise value of approximately $2.22 billion. Transcontinental said the transaction is subject to shareholder and regulatory approvals and other customary conditions.
• Montreal-based Laurentian Bank of Canada announced that (i) National Bank of Canada had entered into a definitive agreement to acquire Laurentian Bank's retail and Small and Medium Enterprise (SME) banking portfolios; and that (ii) Fairstone Bank of Canada had entered into a definitive agreement to acquire all issued and outstanding common shares of Laurentian Bank for total cash consideration of approximately $1.9 billion, subject to customary closing conditions, including receipt of key regulatory approvals. Laurentian Bank said the transactions are expected to close by late 2026.
• Montreal-based WSP Global Inc. announced it had entered into an agreement to acquire TRC Companies, a U.S. Power & Energy brand from Connecticut, for a total cash purchase price of approximately $4.5 billion. WSP said the acquisition is expected to be completed in the first quarter of 2026, subject to the satisfaction of certain customary closing conditions, including applicable regulatory approvals.
• Washington State-based Microsoft announced it was investing more than $7.5 billion in Canada in the next two years, including building new digital and AI infrastructure with new capacity beginning to come online in the second half of 2026. Microsoft said its investments in Canada will total $19 billion between 2023 and 2027.
• Toronto-based EQB Inc. and Loblaw Companies Limited of Brampton announced they had entered into a definitive agreement pursuant to which EQB will acquire President's Choice Bank (PC Bank), PC® Financial Insurance Agency Inc., PC® Financial Insurance Brokers Inc., and certain other affiliated entities of PC Bank for an estimated total value of $1.3 billion. The companies said closing is expected to occur in 2026, subject to customary closing conditions and regulatory approvals.
• The United Steelworkers union (USW) announced more than 1,000 layoffs at Algoma Steel in Sault Ste. Marie, Ontario. The union said the job losses were expected due to a transition to electric arc furnace steel production as well as the United States imposition of 50% tariffs on Canadian steel exports.

United States and other international news

• The U.S. Federal Open Market Committee (FOMC) lowered the target range for the federal funds rate by 25 basis points to 3.50% to 3.75%. The last change in the target range was a 25 basis points cut in October 2025.
• The Reserve Bank of Australia (RBA) left the cash rate target unchanged at 3.60%. The last change in the cash rate target was a 25 basis points cut in August 2025.
• The Bank of England's Monetary Policy Committee (MPC) voted to reduce the Bank Rate by 25 basis points to 3.75%. The last change in the Bank Rate was a 25 basis points cut in August 2025.
• The European Central Bank (ECB) left its three key interest rates unchanged at 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 June 2025.
• The Executive Board of Sweden's Riksbank left the repo rate unchanged at 1.75%. The last change in the repo rate was a 25 basis points reduction in September 2025.
• The Monetary Policy and Financial Stability Committee of Norway's Norges Bank left the policy rate unchanged at 4.00%. The last change in the policy rate was a 25 basis points decrease in September 2025.
• The Bank of Japan (BoJ) announced it will encourage the uncollateralized overnight call rate to remain at around 0.75%. The last change in the uncollateralized overnight call rate was a 25 basis points increase to 0.50% in January 2025.
• The eight participating OPEC+ countries - Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman - reaffirmed their November 2, 2025 decision to pause production increments in January, February, and March 2026.
• New York State-based IBM and Confluent, Inc., a cloud-native streaming platform from California, announced they had entered into a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Confluent for an enterprise value of USD $11 billion. The companies said the transaction is expected to close by the middle of 2026, subject to approval by Confluent shareholders, regulatory approvals, and other customary closing conditions.
• New York-based Brookfield Asset Management and Qai, Qatar's AI company and a subsidiary of Qatar Investment Authority (QIA), announced a strategic partnership to establish a USD $20 billion joint venture focused on artificial intelligence (AI) infrastructure in Qatar and select international markets.
• California-based Netflix, Inc. and Warner Bros. Discovery, Inc. announced they had entered into a definitive agreement under which Netflix will acquire Warner Bros. in a cash and stock transaction for a total equity value of USD $72.0 billion. The companies said the transaction is expected to close in 12-18 months, subject to required regulatory approvals, approval of Warner Bros. shareholders, and other customary closing conditions.

Financial market news

• West Texas Intermediate crude oil closed at USD $57.95 per barrel on December 31st, down from a closing value of USD $58.55 at the end of November. Western Canadian Select crude oil traded in the USD $42.00 to $48.00 per barrel range throughout December. The Canadian dollar closed at 72.96 cents U.S. on December 31st, up from 71.54 cents U.S. at the end of November. The S&P/TSX composite index closed at 31,712.76 on December 31st, up from 31,382.78 at the end of November.