July 2017 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.

British Columbia wildfires

  • The Government of British Columbia announced a provincial state of emergency on July 7th to ensure a co-ordinated response to the wildfire situation. On July 9th, the Government of Canada accepted a request for federal assistance and, on July 14th, announced the creation of a new ad hoc Cabinet committee to coordinate federal efforts to communities affected by the wildfires. In a July 31st update, the Government of British Columbia reported that there were 149 wildfires burning in the province and approximately 5,946 residents under evacuation due to wildfires.
  • Vancouver-based West Fraser Timber Co. Ltd. announced on July 10th that it was temporarily suspending its operations at 100 Mile House, Williams Lake and Chasm in response to the wildfire situation. The company said in a July 30th update that the Chasm mill was under evacuation order. West Fraser also said that all of its other affected mills were operational.
  • Toronto-based Norbord Inc. announced on July 10th that its oriented strand board (OSB) mill in 100 Mile House had temporarily suspended production due to wildfires burning nearby in the region and in order to comply with evacuation orders in the 100 Mile House and surrounding areas. On July 24th, the company announced that production at the mill had resumed.
  • Vancouver-based EnGold Mines Ltd. announced on July 10th that it had shut down all exploration activity on its Lac La Hache Property due to forest fires in the Cariboo region.
  • Vancouver-based Imperial Metals Corporation announced on July 10th that mining operations had been significantly reduced at its Mount Polley mine site, located northeast of Williams Lake, as a result of forest fires in south central British Columbia. The company later announced that Mount Polley mine operations were suspended on July 15th. On July 27th, the company announced that Mount Polley mine operations were planned to resume, with crews recalled to work effective July 31st with the intention of having the mine fully operational by August 2nd.
  • Vernon B.C.-based Tolko Industries Ltd. announced on July 11th that its Lakeview and Soda Creek mills would not be operating until further notice as a result of the wildfire situation. On July 27th, Tolko announced that it was preparing for the return of its employees to the Lakeview and Soda Creek mills. The company said that maintenance work would commence on July 28th and that other hourly employees would be starting as early as July 31st.
  • Vancouver-based Taseko Mines Limited announced on July 12th that mining and milling operations at its Gibraltar Mine had been scaled back due to reduced workforce availability. On July 17th, the company said the Gibraltar Mine had been temporarily idled. Taseko announced on July 19th that mining and milling operations at Gibraltar had been restarted.

Resources

  • Malaysia-based Petroliam Nasional Berhad (PETRONAS) announced that it and its partners have decided not to proceed with the Pacific NorthWest LNG project at Port Edward, British Columbia.
  • Toronto-based Canada Pension Plan Investment Board (CPPIB) and Vermilion Energy Inc. of Calgary announced a strategic partnership in the Corrib Natural Gas Field in Ireland whereby CPPIB will acquire Shell Exploration Company B.V.'s 45% interest in Corrib, for total cash consideration of €830 million. The CPPIB and Vermilion said the acquisition is anticipated to close in the first half of 2018, subject to customary conditions and receipt of all necessary government consents.
  • Texas-based Apache Corporation announced it had agreed to sell its Apache Canada Ltd. subsidiary to Paramount Resources Ltd. of Calgary. In separate transactions in June, Apache agreed to sell its Provost assets in Alberta to an undisclosed privately owned company and sold its assets in Midale and House Mountain, located in Saskatchewan and Alberta, to Calgary-based Cardinal Energy Ltd. Apache said the aggregate proceeds from the three transactions are approximately $927 million with the  Cardinal transaction closing in late June and the remaining two transactions expected to close by the end of August 2017.
  • Toronto-based Dominion Diamond Corporation and Montana-based The Washington Companies announced they had entered into an arrangement agreement under which an entity affiliated with Washington will acquire all of Dominion's outstanding common shares for a total equity value of approximately USD $1.2 billion. Dominion said the transaction is expected to close in the fourth quarter of 2017, subject to the approval of at least two-thirds of Dominion shareholders and certain other customary closing conditions.
  • Calgary-based Husky Energy Inc. announced that a three-week turnaround is planned at the SeaRose FPSO in the third quarter of 2017. The company also announced that a three-week turnaround at the partner-operated Terra Nova FPSO is scheduled in the third quarter.

Manufacturing

  • Toronto-based Cott Corporation announced it had entered into a definitive agreement to sell its traditional beverage manufacturing business to Refresco Group N.V. of the Netherlands for USD $1.25 billion. The company said the acquisition is expected to close in the second half of 2017, subject to Refresco shareholder and regulatory approval.

Finance and insurance

  • RBC Royal Bank, TD Canada Trust, CIBC, Scotiabank, and BMO Bank of Montreal increased their prime lending rates by 25 basis points from 2.70% to 2.95%, effective July 13th, 2017.
  • Toronto-based OMERS Private Equity Inc. announced it has agreed to sell UK-based Civica, a provider of business software and technology-based services, to funds managed and/or advised by Partners Group AG of Switzerland for a total consideration of £1,055 million.

Other news

  • The Bank of Canada announced that it was raising the target for the overnight rate by 25 basis points to 0.75%, the first increase in the target for the overnight rate since September 2010.The last change in the target for the overnight rate was a 25 basis-point reduction announced in July 2015.
  • On July 4th, the Government of Canada announced $2.1 billion for the Trade and Transportation Corridors Initiative (TTCI), the core element of which is the merit-based National Trade Corridors Fund (NTCF), which will provide $2 billion over 11 years to strengthen Canada's trade infrastructure, including ports, waterways, airports, roads, bridges, border crossings, rail networks and the interconnectivity between them.
  • Effective July 1, 2017, Saskatchewan Personal Income Tax rates were lowered by half a percentage point, and the Saskatchewan general Corporation Income Tax (CIT) rate was lowered by half a percentage point. Both reductions were previously announced by the Government of Saskatchewan in the 2017-18 Budget.
  • Toronto-based Hydro One Limited and Avista Corporation of Washington, an energy company with a service territory that includes eastern Washington, northern Idaho and parts of southern and eastern Oregon, announced a definitive merger agreement under which Hydro One will acquire Vista for $6.7 billion. Hydro One said the transaction is expected to close in the second half of 2018, subject to Avista common shareholder approval and certain regulatory and government approvals and clearances.
  • Laval-based Alimentation Couche-Tard Inc. announced that it had signed an agreement with Holiday Companies Inc. of Minnesota to acquire all of the issued and outstanding shares of Holiday Stationstores, Inc. and certain affiliated companies. The company said the transaction is anticipated to close in the fourth quarter of Couche-Tard's fiscal year 2018 and is subject to customary regulatory approvals and closing conditions.
  • Texas-based FedEx Office announced it will discontinue operations in Canada and that centre closures will begin in August 2017. FedEx Office has 24 stores in Canada, located in Ontario, Nova Scotia, and British Columbia.

United States and other international news

  • On July 17, the United States Trade Representative Robert Lighthizer released a summary of the negotiating objectives for the renegotiation of the North American Free Trade Agreement (NAFTA), which included: reducing the U.S. trade deficit by improving market access in Canada and Mexico for U.S. manufacturing, agriculture, and services; adding a digital economy chapter and incorporating and strengthening labor and environment obligations. Ambassador Lighthizer subsequently announced that the first round of negotiations between the United States, Canada and Mexico will take place in Washington, D.C. from August 16-20, 2017.
  • The U.S. Federal Open Market Committee (FOMC) maintained the target range for the federal funds interest rate at 1.00% to 1.25%. The last change in the target range was a 25 basis point increase announced in June 2017. The FOMC said it expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated.
  • The European Central Bank (ECB) left the interest rate on the main refinancing operations of the Eurosystem unchanged at 0.00%, and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.25% and -0.40%, respectively. The ECB also confirmed that net asset purchases will continue at a monthly pace of €60 billion until the end of December 2017.
  • The Bank of Japan (BoJ) announced it will continue to apply a -0.1% interest rate to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ. The BoJ also said it would continue to purchase Japanese government bonds (JGB) so that 10-year JGB yields will remain at around zero percent.
  • The Reserve Bank of Australia maintained the cash rate at 1.50%. The last change in the cash rate was a 25 basis point reduction in August 2016.
  • Sweden's Riksbank left its main interest rate, the repo rate, unchanged at -0.5%. The last change in the repo rate was a 15 basis point cut in February 2016. The Riksbank also said the purchases of government bonds will continue in the second half of 2017, as decided in April, to a total of SEK 290 billion by the end of 2017.
  • The European Commission announced that the European Union and Japan had reached an agreement in principle on the main elements of an Economic Partnership Agreement. The European Commission said the two negotiating teams will work towards a rapid finalization of the agreement, and should aim to complete this process by mid-2018 with entry into force of the agreement in early 2019.
  • Maryland-based McCormick & Company Inc. announced it had signed a definitive agreement to acquire Reckitt Benckiser's Food Division, makers of Frank's RedHot and French's, from UK-based Reckitt Benckiser Group plc for USD $4.2 billion. The company said the transaction is expected to close in the third or fourth quarter of McCormick's fiscal 2017, subject to customary closing conditions.
  • New York-based Michael Kors Holdings Limited announced it had reached an agreement to acquire Jimmy Choo PLC of the UK for an enterprise value of approximately USD $1.35 billion. Michael Kors said the transaction is expected to close in the fourth quarter of calendar 2017, subject to Jimmy Choo shareholder and regulatory approval.
  • New York-based WebMD Health Corp. and Internet Brands of California, a KKR & Co. L.P. portfolio company, announced that Internet Brands had entered into a definitive agreement to acquire WebMD in a transaction valued at approximately USD $2.8 billion. KKR said the transaction is expected to close in the fourth quarter of 2017, subject to the satisfaction of customary closing conditions.
  • Washington-based Starbucks Corporation announced entry into a definitive agreement to acquire the remaining 50% share of its East China business from long-term joint venture partners, Uni-President Enterprises Corporation and President Chain Store Corporation, for approximately USD $1.3 billion. The company said the transaction is expected to close by early calendar year 2018, subject to customary closing conditions.
  • Maryland-based Discovery Communications, Inc. and Scripps Networks Interactive, Inc. of Tennessee announced they had signed a definitive agreement for Discovery to acquire Scripps in a cash-and-stock transaction valued at USD $14.6 billion. The companies said the transaction is expected to close by early 2018, subject to approval by Discovery and Scripps' shareholders, regulatory approvals, and other customary closing conditions.

Financial market news

  • Crude oil (West Texas Intermediate) closed at USD $50.17 on July 31st, up from USD $46.04 at the end of June. The Canadian dollar closed at 80.10 cents U.S. at the end of July, up from 77.06 cents U.S. on June 30th. The S&P/TSX closed at 15,143.87 on July 31st, down from a closing value of 15,182.19 at the end of June.
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