February 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.

Resources

  • Vancouver-based Teck Resources Limited announced on February 23rd that it is withdrawing the Frontier Project from the regulatory review process. The company said that, as a result of this decision, it would write down the $1.13 billion carrying value of the Frontier Project. The Government of Canada later announced that, as a result of Teck's decision, Cabinet will no longer be making a decision on the Frontier oil sands project.
  • The Canadian Federal Court of Appeal announced on February 4th that it had dismissed four challenges to the Federal Cabinet's approval of the Trans Mountain Pipeline Expansion Project. The Court said that parties can apply to the Supreme Court for permission to appeal the decision and have sixty days to do so. Calgary-based Trans Mountain Corporation announced on February 7th that it had recently approved a Project cost estimate of $12.6 billion to bring it into service by the end of 2022.
  • On February 24th, the Court of Appeal of Alberta concluded that Parts 1 and 2 of the Greenhouse Gas Pollution Pricing Act are unconstitutional in their entirety and that the regulation of GHG emissions or any variation on this theme does not qualify for inclusion as a federal head of power under the national concern doctrine. The Government of Canada later said that it looks forward to the Supreme Court of Canada's deliberations and is confident that the price on pollution is within federal jurisdiction.
  • The Government of Alberta announced it is divesting the crude-by-rail program to the private sector for a total cost of $1.3 billion. The Government said that divesting the program will add 120,000 barrels per day of takeaway capacity.
  • The Minnesota Public Utilities Commission announced on February 3rd that it had approved the revised final environmental impact statement (FEIS) and reissued the certificate of need and route permit for Calgary-based Enbridge's Line 3 Replacement project.

Transportation

  • On February 13th, Montreal-based CN Rail announced it had been forced to initiate a disciplined and orderly shutdown of its operations in Eastern Canada, including stopping and securing all trans-continental trains across its Canadian network. CN also said that intercity VIA Rail service would be discontinued across CN's Canadian network.
  • On February 14th, Montreal-based VIA Rail announced that following an advisory from the infrastructure owner, VIA Rail had to cancel all of its services on the network with the exception of Sudbury-White River (CP Rail) and Churchill-The Pas (Hudson Bay Railway) until further notice. VIA announced on February 19th that it was proceeding with temporary work suspensions and that close to 1,000 VIA Rail employees will receive a notice regarding this matter. The company announced on February 20th that full service had resumed on some routes, including those in Southwestern Ontario. VIA said on February 24th that its Quebec-Montreal-Ottawa route was in full-service and that its Montreal-Halifax route would resume service on February 28th.

Manufacturing

  • Montreal-based Bombardier Inc. announced on February 12th that it, Airbus SE of the Netherlands, and the Government of Quebec had agreed upon a new ownership structure for the A220 programme, whereby Bombardier transferred its remaining shares in Airbus Canada Limited Partnership to Airbus and the Government of Quebec. Bombardier said that with this transaction, it will receive a consideration of USD $591 million from Airbus, net of adjustments, and that the transaction is effective immediately.
  • Bombardier Inc. announced on February 17th that it had signed a Memorandum of Understanding with Alstom SA of France and the Caisse de dépôt et placement du Québec for the sale of its Transportation business to Alstom at an enterprise value of USD $8.2 billion. Alstom said the closing is expected in the first half of 2021, subject to clearance from regulatory and anti-trust authorities.
  • Unifor announced on February 27th that the decision by Fiat Chrysler Automobiles (FCA) to eliminate the third shift at the Windsor Assembly Plant as of June 29, 2020, will eliminate approximately 1,500 direct jobs.
  • Montreal-based Saputo Inc. announced it will close its facilities in Trenton, Ontario, and Saint John, New Brunswick, and that the closures are scheduled in September 2020 and January 2021, respectively. The company said that approximately 280 employees will be impacted.

Retail

  • Texas-based Pier 1 Imports, Inc. announced it and its subsidiaries had commenced voluntary Chapter 11 proceedings and that it intends to use this process to complete the previously announced closure of up to 450 store locations, which includes closure of all its stores in Canada. The company said it had received a commitment of approximately USD $256 million in debtor-in-possession financing and that it expects to operate its business in the normal course during this process.

Other news

  • The Government of Canada announced on February 9th that it was working with its partners and international organizations to control the spread of the novel coronavirus. The Government said it had deployed approximately 16 tonnes of personal protective equipment to China since February 4th.
  • The Government of Canada announced that a new Benchmark Rate for insured mortgages will replace the Bank of Canada 5-Year Benchmark Posted Rate in determining the minimum qualifying rate (stress test). The Government said the new Benchmark Rate will come into force on April 6, 2020.
  • The Government of British Columbia tabled Budget 2020 on February 18th, which included a new tax bracket for the top 1% of income earners in the province, new investments in health, education, and child care, and support for the forestry sector. The Government forecasts a $227 million surplus in 2020-21 and real GDP growth of 2.0% in 2020.
  • The Government of Nunavut tabled Budget 2020-21 on February 19th, which included additional funding for medical travel as well as investments to support homeless and family violence shelters, and funding to enhance the Financial Assistance for Nunavut Students program. The Government forecasts an operational deficit of $30 million in 2020-21 and real GDP growth of 12.9% in 2020.
  • The Government of Nova Scotia tabled Budget 2020-21 on February 25th, which included increased investments in affordable housing, health care, and education, as well as reductions in the corporate tax rate and in small business taxes. The Government forecasts a $55 million budget surplus in 2020-21 and real GDP growth of 0.4% in 2020.
  • The Government of the Northwest Territories tabled Budget 2020-21 on February 25th,  which included investments in education, health, the environment, and infrastructure. The Government forecasts an operating surplus of $203 million in 2020-21 and real GDP growth of 3.8% in 2020.
  • The Government of Alberta tabled Budget 2020 on February 27th, which included reductions in the corporate tax rate to 9% on January 1, 2021 and then to 8% on January 1, 2022. The Budget also included investments in health care, education and other infrastructure, as well as reductions in public sector employment. The Government forecasts a $6.8 billion deficit in 2020-2021 and real GDP growth of 2.5% in 2020.
  • The Government of Alberta announced on February 25th that it had introduced Bill 1, the Critical Infrastructure Defence Act, that would designate infrastructure such as railways, highways and pipelines as critical and create offences for trespassing, interfering with operations and construction, and causing damage. The Government said the legal definition of this infrastructure will cover both publicly owned and privately owned infrastructure, such as pipelines and related infrastructure, oil and gas production and refinery sites, highways, railways, utilities (electric, gas and water), telecommunication lines, towers and equipment, and mines.
  • Calgary-based Northview Apartment Real Estate Investment Trust announced it had entered into an arrangement agreement pursuant to which affiliates of Starlight Group Property Holdings Inc. and KingSett Capital Inc., both of Toronto, will acquire Northview, and the holders of Northview's outstanding trust units, in a cash transaction valued at $4.8 billion including net debt. Northview said the transaction is expected to close by the third quarter of 2020, subject to shareholder, court, and regulatory approvals and other customary closing conditions.
  • California-based Google announced it was building new offices in Waterloo, Toronto and Montreal and that by 2022 these offices will accommodate up to 5,000 employees.
  • Brampton, Ontario-based Loblaw Companies Limited announced the future closure of two distribution centres in Laval and Ottawa. The company said that over the next two years the distribution centres will be transferring their volumes to Cornwall.  
  • Toronto-based The Supreme Cannabis Company, Inc. announced the implementation of a new operating structure, including the reduction in total number of positions of approximately 15%. The company also said it exited its U.K. and European investment platform to focus on domestic operations.
  • Montreal-based Air Canada announced on January 29th that following the Government of Canada's Advisory to avoid all non-essential travel to mainland China, the company  was temporarily suspending all direct flights to Beijing and Shanghai effective January 30, 2020 until February 29, 2020.

United States and other international news

  • The Reserve Bank of Australia maintained the cash rate at 0.75%. The last change in the cash rate was a 25 basis point reduction in October 2019.
  • Sweden's Riksbank left its main interest rate, the repo rate, unchanged at 0.00%. The last change in the repo rate was a 25 basis point increase in December 2019.
  • The Reserve Bank of New Zealand left the Official Cash Rate, its main policy rate, unchanged at 1.0%. The last change in the Official Cash Rate was a 50 basis point reduction in August 2019.
  • The World Health Organization (WHO) announced on February 28th that it had increased its assessment of the risk of spread and the risk of impact of COVID-19 to very high at a global level.
  • New York-based Morgan Stanley announced it had entered into a definitive agreement with E-Trade Financial Corporation under which Morgan Stanley will acquire E-Trade in an all stock transaction valued at USD $13 billion. Morgan Stanley said the transaction is expected to close in the fourth quarter of 2020, subject to customary closing conditions, including regulatory approvals and approval by E-Trade shareholders.
  • California-based Macy's Inc. announced an updated strategy and three-year plan designed to stabilize profitability, including the closure of approximately 125 of its least productive stores over the next three years, which includes approximately 30 stores already in the process of closure. Macy's said its streamlining will result in a net reduction in its corporate and support function headcount of 9%, or approximately 2,000 positions.

Financial market news

  • West Texas Intermediate crude oil closed at USD $44.76 per barrel on February 28th, down from a closing value of USD $51.56 at the end of January. Western Canadian Select crude oil traded lower in late February, declining to around USD $30 per barrel at the end of the month. The Canadian dollar closed at 74.47 cents U.S. on February 28th, down from 75.57 cents U.S. at the end of January. The S&P/TSX composite index closed at 16,263.05 on February 28th, down from a closing value of 17,318.49 at the end of January.
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