Canadian Economic News, December 2020 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.

COVID-19 timeline

  • The Government of the Northwest Territories announced on December 3rd it had extended the State of Emergency in the City of Yellowknife until December 18th. On December 8th, the Government extended the territory-wide Public Health Emergency until December 22nd. On December 22nd, the territory-wide Public Health Emergency was extended until January 5, 2021, and on December 31st, the State of Emergency in the City of Yellowknife was extended until January 14, 2021.
  • The Government of Manitoba announced on December 4th that it would extend the provincial state of emergency for a period of 30 days. On December 8th, the Government announced it had extended public health orders until January 8, 2021. The Government also said the existing Critical (red) level restrictions had been extended.
  • The Government of Yukon announced on December 8th it was extending the state of emergency for 90 days.
  • The Government of British Columbia announced on December 8th that it had formally extended the provincial state of emergency until December 22nd. On December 22nd, the state of emergency was extended to January 5, 2021.
  • The Government of Nunavut announced on December 10th it had extended the territory's public health emergency until December 24th. On December 24th, the Government extended the public health emergency until January 7, 2021.
  • The Government of Canada announced on December 11th that the current restrictions on all non-essential travel between Canada and the United States will remain in effect until January 21, 2021.
  • The Government of Nova Scotia announced on December 11th that it was renewing the state of emergency until December 27th. On December 23rd, the Government announced it was renewing the state of emergency until January 10, 2021.

Selected COVID-19 responses

  • The Government of Quebec announced on December 2nd that in anticipation of the holiday shopping season, a tightening of measures will come into effect and that operators of commercial establishments will be required to reduce the number of customers that may be permitted in their establishments. The Government also announced that measures limiting gatherings will continue to apply for the New Year period.
  • The Government of Canada announced on December 4th the expansion of the Canadian Emergency Business Account (CEBA) whereby eligible businesses facing financial hardship as a result of the COVID-19 pandemic are able to access a second CEBA loan of up to $20,000—on top of the initial $40,000 that was available to small businesses. The Government also confirmed that the deadline for CEBA had been extended to March 31, 2021.
  • The Government of Nova Scotia announced on December 4th that the current restrictions in areas of Halifax Regional Municipality (HRM) and Hants County were extended until at least December 16th. On December 16th, the Government announced that these restrictions were extended until December 20th and that the closure of restaurants and licensed establishments for dine-in service was extended to January 10, 2021. The Government also said that, as of December 21st, the following restrictions are in place provincewide:
    • Gatherings in the home can have 10 people total;
    • People can have a close social group of 10 without physical distancing;
    • Social events, festivals, special events, arts/cultural events, and sports events are not permitted;
    • Restaurants and licensed establishments outside of HRM and Hants County must stop service by 10:00 p.m. and close by 11:00 p.m.;
    • Fitness facilities like gyms and yoga studios can operate at 50% capacity;
    • Retail and shopping mall rules currently in place for areas of HRM and Hants County will extend to the entire province, including operating at 25% capacity.
  • The Government of Prince Edward Island announced on December 7th that it was transitioning to a COVID-19 circuit breaker phase for two weeks. The Government said restrictions include:
    • No personal gatherings;
    • Each household can associate with two other consistent individuals;
    • Organized gatherings of no more than 10 people indoors and outdoors;
    • Recreational facilities, including gyms, fitness facilities, bingo halls, casinos, museums, and libraries are closed;
    • Retail stores and markets must reduce the number of people to approximately 50% of the standard operating capacity;
    • No in-room dining—take-out and delivery only; and
    • Full-time classroom learning for K to grade 12 with public health measures in place and a contingency plan for remote learning.
  • The Government of Alberta announced on December 8th that expanded health measures would be in effect provincewide for a minimum of four weeks. Measures that took immediate effect included:
    • All indoor and outdoor social gatherings prohibited;
    • Festivals, parades, events, concerts, exhibitions, competitions, sport and performance remained prohibited.

    Measures that commenced December 13th included:

    • Retail services must reduce customer capacity to 15% of fire code occupancy;
    • Restaurants, pubs, bars, lounges and cafes will be closed to in-person service;
    • Casinos, bingo halls, gaming entertainment centres, racing entertainment centres, horse tracks, raceways, bowling alleys, pool halls, legions, and private clubs are closed;
    • Recreational facilities, including fitness centres, recreation centres, pools, spas, gyms, studios, day and overnight camps, indoor rinks and arenas are closed;
    • Libraries, science centres, museums, galleries are closed;
    • Community halls and centres, indoor children's play centres and indoor playgrounds, theatres, auditoriums, concert halls, and community theatres, nightclubs, banquet halls and conference centres, and tradeshows are closed.
  • The Government of Canada announced on December 9th that it had determined that the Pfizer-BioNTech COVID-19 vaccine meets Health Canada's safety, efficacy and quality requirements for use in Canada.
  • The Government of Ontario announced on December 10th that it was extending all orders currently in force under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 until January 20, 2021. On December 11th, the Government announced it was moving Windsor-Essex County Health Unit and York Region Public Health into Lockdown. On December 18th, the Government announced it was moving the City of Hamilton Public Health Services to Lockdown.
  • The Government of Quebec announced on December 15th that, effective December 17th to January 11, 2021, all heath regions in Quebec would move to the maximum alert level (red), with the exception of Abitibi-Témiscamingue, Northern Quebec, North Coast, Grosse-Île and Îles-de-la-Madeleine, Nunavik, and Terres-Cries-de-la Baie James.
  • The Government of Prince Edward Island announced on December 17th new, eased restrictions for the province, including:
    • Personal gatherings (indoor and outdoor) are permitted with up to 10 additional people;
    • Organized gatherings, such as concerts, worship services and movie theatres, can operate with a total of 50 people;
    • Gyms/fitness facilities, museums, and libraries may operate at 50% capacity;
    • Retail stores, markets and craft fairs may operate at 50% capacity;
    • Restaurants and licensed premises may re-open in-room dining with a closing time of 11:00 p.m. and a maximum table size of ten people.
  • The Government of Canada announced on December 20th that it had suspended all commercial and private passenger flights from the United Kingdom for 72 hours in response to the new variant of COVID-19 identified in the U.K. The Government on December 23rd extended the temporary suspension until January 6th.
  • On December 21st, the Government of Ontario announced it was imposing a Provincewide Shutdown effective December 26th. Measures include:
    • Restricting indoor organized public events and social gatherings;
    • Prohibiting in-person shopping in most retail settings;
    • Restricting indoor access to shopping malls;
    • Prohibiting indoor and outdoor dining;

    The Government said the impacts of these measures would be evaluated throughout the 14 days in Northern Ontario and 28 days in Southern Ontario to determine if it is safe to lift any restrictions.

  • The Government of Canada announced on December 23rd that it had authorized the second COVID-19 vaccine in Canada, manufactured by Moderna.
  • The Government of Canada announced on December 31st that, effective January 7, 2021, all air passengers five years of age or older will be required to test negative for COVID-19 before travelling from another country to Canada. The Government also said that anyone who receives a negative test result and is authorized to enter Canada must still complete the full, mandatory 14-day quarantine period under the Quarantine Act.

Resources

  • Calgary-based Suncor Energy Inc. announced that its 2021 capital program is expected to be between $3.8 billion and $4.5 billion. The company said the capital program is largely focused on sustaining capital ($2.9 billion to $3.4 billion) given the major planned maintenance programs in Oil Sands upgrading operations, Syncrude and Downstream refineries.
  • Calgary-based Imperial Oil Limited announced it no longer plans to develop a significant portion of its unconventional portfolio in Alberta, resulting in an after-tax charge of approximately $0.9 billion to $1.2 billion in the company's fourth quarter 2020 results.
  • Calgary-based Crescent Point Energy Corporation announced a 2021 capital expenditures budget of $475 million to $525 million, a reduction in comparison to 2020. The company said its capital expenditures budget is allocated to its key focus areas in Viewfield, Shaunavon, and Flat Lake.
  • Calgary-based Baytex Energy Corp. announced a 2021 capital budget of $225 million to $275 million, with approximately 85% of the capital program directed to high netback light oil assets in the Viking and Eagle Ford, and 10% directed to heavy oil assets at Peace River and Lloydminster.
  • Calgary-based Canadian Natural Resources Limited announced a 2021 capital budget of approximately $3.205 billion, of which $1.345 billion is allocated to conventional and unconventional assets and $1.860 billion is allocated to long life low decline assets.
  • Calgary-based InterPipeline Ltd. announced a $1 billion capital expenditure program for 2021. The company said approximately $930 million of total capital expenditures will be for organic growth initiatives, including approximately $800 million for the final stages of the Heartland Petrochemical Complex, with the remainder invested in sustaining capital projects.
  • Calgary-based Enbridge Inc. announced that the Line 3 Replacement Project can now start construction in Minnesota after receiving all necessary permits and approvals.
  • Calgary-based TC Energy Corporation announced it had entered into a definitive agreement and plan of merger to acquire all the outstanding common units of TC PipeLines, LP of Texas for approximately USD $1.68 billion. The company said the transaction is expected to close late in the first quarter or early in the second quarter of 2021, subject to shareholder and customary regulatory approvals.
  • Calgary-based Pembina Pipeline Corporation announced that it and its partner, Petrochemical Industries Company K.S.C. of Kuwait, through their joint venture Canada Kuwait Petrochemical Limited Partnership, were suspending execution of the integrated propane dehydration plant and polypropylene upgrading facility indefinitely due to significant risks arising from the ongoing COVID-19 pandemic.
  • Saskatoon-based Cameco Corp. announced on December 14th it would be temporarily suspending production at its Cigar Lake uranium mine in northern Saskatchewan over the coming weeks due to the increasing risks posed by the COVID-19 pandemic. The company said that as a result of this decision, it would be placing the mine in a state of care and maintenance and that there would be a significant reduction in personnel.

Transportation

  • The Atlantic Canada Airports Association announced that it had been advised by Air Canada that effective January 11, 2021, the company will be suspending all flights until further notice in Sydney and Saint John and suspending four routes until further notice in Deer Lake, Charlottetown, Fredericton, and Halifax.
  • The Government of Canada announced that aviation safety experts had completed their review of the design changes to the Boeing 737 MAX aircraft recently certified by the United States Federal Aviation Administration (FAA), and have now validated these changes. The Government said this validation is an important first step in the eventual return to service of this aircraft in Canadian airspace.

Other news

  • The Bank of Canada announced it was maintaining its target for the overnight rate at the effective lower bound of 0.25%. The target for the overnight rate was reduced by 150 basis points in March 2020. The Bank also said it was maintaining its forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.
  • The Government of Canada announced on December 11th its plan titled A Healthy Environment and a Healthy Economy, which builds on the Pan-Canadian Framework on Clean Growth and Climate Change. The Government said the plan includes 64 new measures and $15 billion in investments, in addition to the Canada Infrastructure Bank's $6 billion for clean infrastructure announced this fall.
  • Leamington, Ontario-based Aphria Inc. and Tilray, Inc. of Nanaimo, British Columbia, announced they had entered into a definitive agreement to combine their businesses. The companies said the implied pro forma equity value of the Combined Company is approximately $5.0 billion and that the transaction is expected to close in the second quarter of 2021, subject to shareholder, regulatory, and court approvals, and other customary closing conditions.
  • Mississauga-based Walmart Canada announced that all active store, distribution centre and fleet associates in Canada would receive a new appreciation bonus, with full-time associates receiving $250 and part-time associates $150. Walmart said more than 85,000 associates were included.
  • The Government of Nova Scotia announced on December 11th that the Eden Valley Poultry Inc. processing plant in Berwick would be closed for at least two weeks due to an outbreak of COVID-19.

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 the Federal Reserve would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals.
  • The European Central Bank (ECB) announced that in view of the economic fallout from the resurgence of the pandemic, the Governing Council recalibrated its monetary policy instruments as follows:
    • The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively;
    • Increase the envelope of the pandemic emergency purchase programme (PEPP) by €500 billion to a total of €1,850 billion and extend the horizon for net purchases under the PEPP to at least the end of March 2022;
    • Further recalibrate the conditions of the third series of targeted longer-term refinancing operations by extending the period over which considerably more favourable terms will apply by twelve months, to June 2022;
    • Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion.
  • 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 commence the previously announced programme of £150 billion of UK government bond purchases, maintaining the target for the stock of these government bond purchases at £875 billion.
  • The Reserve Bank of Australia (RBA) maintained the targets for the cash rate and the yield on 3-year Australian Government bonds at 0.10%. The last change in the target for the cash rate was a 15 basis points reduction in November 2020. The RBA also maintained the parameters of the Term Funding Facility and the government bond purchase program.
  • The Bank of Japan (BoJ) announced it will apply a negative interest rate of -0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ and that it will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent. The BoJ also said it would extend the duration of additional purchases of CP and corporate bonds and of the Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus by 6 months until the end of September 2021.
  • 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.
  • On December 3rd, OPEC and non-OPEC members announced that Declaration of Cooperation (DOC) participating countries decided to voluntary adjust production by 0.5 mb/d (from 7.7 mb/d to 7.2 mb/d) and to hold monthly OPEC and non-OPEC ministerial meetings to assess market conditions and decide on further production adjustments.
  • The Government of the United Kingdom announced on December 24th that it had completed a comprehensive Canada style free trade deal with the European Union (EU) that will allow UK goods and components to be sold without tariffs and without quotas in the EU market.
  • California-based Chevron Corporation announced a 2021 organic capital and exploratory spending program of USD $14 billion and lowered its longer-term guidance to USD $14 billion to USD $16 billion annually through 2025, from a previous guidance of USD $19 billion to USD $22 billion.
  • Texas-based Exxon Mobil Corporation announced capital and exploration investments of USD $16 billion to USD $19 billion in 2021 and USD $20 billion to USD $25 billion annually to 2025. The company also announced ongoing business line reorganizations that include a global workforce reduction of 15% by year-end 2021 and removal of less strategic assets from its development plan, including certain dry gas resources in Western Canada.

Financial market news

  • West Texas Intermediate crude oil closed at USD $48.52 per barrel on December 31st, up from a closing value of USD $45.34 at the end of November. Western Canadian Select crude oil traded in the USD $32 to $35.50 per barrel range throughout December. The Canadian dollar closed at 78.54 cents U.S. on December 31st, up from 77.13 cents U.S. at the end of November. The S&P/TSX composite index closed at 17,433.36 on December 31st, up from 17,190.25 at the end of November.
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