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. This special edition focuses on news related to the COVID-19 pandemic.
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.
- On March 11th, the World Health Organization announced that COVID-19 can be characterized as a pandemic.
- On March 14th, the Government of Quebec declared a state of health emergency.
- On March 16th, the Government of Canada announced it was barring foreign nationals from all countries except the United States from entering Canada and that it was redirecting international passenger flight arrivals to four airports: Toronto Pearson International, Vancouver International, Montréal-Trudeau International, and Calgary International.
- On March 16th, the Government of Prince Edward Island declared a public health emergency.
- On March 17th the Governments of British Columbia and Alberta declared public health emergencies. The Government of Ontario declared a state of emergency.
- On March 18th the Governments of Newfoundland and Labrador, Yukon, and Nunavut declared public health emergencies. The Government of Saskatchewan declared a state of emergency.
- On March 19th, the Government of New Brunswick declared a state of emergency.
- On March 22nd, the Government of Nova Scotia declared a provincial state of emergency.
- On March 27th, the Government of the Northwest Territories declared a territory-wide state of emergency, effective March 24, 2020. The Government of Manitoba also declared a state of emergency.
Selected COVID-19 responses
- The Government of Canada announced on March 13th a coordinated package of measures being taken by financial sector partners to support the functioning of markets and continued access to financing for Canadian businesses. These included:
- establishing a Business Credit Availability Program (BCAP) to further support financing in the private sector through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC);
- lowering the Domestic Stability Buffer requirement for domestic systemically important banks by 1.25% of risk weighted assets, effective immediately;
- a new Bankers' Acceptance Purchase Facility to support a key funding market for small- and medium-size businesses.
- The Government of Canada announced on March 25th that the COVID-19 Emergency Response Act had received Royal Assent. The Act provides direct support to Canadian workers and businesses, including:
- additional assistance to families with children and to individuals and families with low and modest incomes;
- assistance to workers who lose their income as a result of the COVID-19 pandemic;
- a pause on the repayments of Canada Student Loans;
- support for provinces and territories with a COVID-19 Response Fund;
- support for Canadian business through the Business Development Bank of Canada (BDC) and through Export Development Canada (EDC);
- On March 27th, the Government of Canada announced additional support for small businesses, including a 75% wage subsidy for qualifying businesses, for up to 3 months, retroactive to March 15, 2020; allowing businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June; as well as a new Small and Medium-sized Enterprise Loan Guarantee program that will enable up to $40 billion in lending.
- On March 4th, the Bank of Canada lowered its target for the overnight rate by 50 basis points to 1.25%. On March 13th, the Bank lowered its target for the overnight rate by 50 basis points to 0.75%. On March 27th, the Bank lowered its target for the overnight rate by an additional 50 basis points to 0.25%. The Bank also announced on March 27th that it had launched the Commercial Paper Purchase Program, designed to alleviate strains in short-term funding markets. In addition, the Bank said it will begin acquiring Government of Canada securities in the secondary market, and that purchases will begin with a minimum of $5 billion per week, across the yield curve.
- On March 23rd, the Government of British Columbia announced its COVID-19 Action Plan, which included $5 billion in income supports, tax relief and direct funding for people, businesses and services.
- On March 25th, the Government of Ontario released Ontario's Action Plan: Responding to COVID-19 (March 2020 Economic and Fiscal Update), which included $7 billion in additional resources for the health care system and direct support for people and jobs. The Government said it will also make available $10 billion in support for people and businesses through tax and other deferrals to improve their cash flow, protecting jobs and household budgets.
- Calgary-based Suncor Energy Inc. announced on March 23rd that its revised capital program is expected to be between $3.9 billion and $4.5 billion, a $1.5 billion or 26% decrease compared to the original 2020 capital guidance midpoint. Suncor said the updated capital spend is concentrated on sustaining capital and continuing with a limited number of low capital intensity, value creating projects.
- Calgary-based Husky Energy Inc. announced on March 12th that it had revised its 2020 capital guidance to $2.3 billion - $2.5 billion from a previous estimate of $3.2 billion - $3.4 billion. The company said that investment in resource plays and conventional heavy oil projects in Western Canada has been halted, drilling of sustaining pads at all thermal operations has been suspended, and Lloydminster thermal projects scheduled to be delivered beyond 2020 have been deferred and will be reconsidered as market conditions improve. Husky later announced on March 22nd that it will begin a systematic and orderly suspension of major construction activities related to the West White Rose Project.
- Calgary-based Cenovus Energy Inc. announced on March 9th that it was reducing its 2020 capital spending by approximately 32%, to $0.9 billion-$1.0 billion from $1.3 billion-$1.5 billion, temporarily suspending its crude-by-rail program and deferring final investment decisions on major growth projects. The company said capital originally budgeted to progress potential phase H expansions at both Christina Lake and Foster Creek to sanction-ready status this year has been put on hold, and the majority of the remaining planned capital spend at the company's Deep Basin and Marten Hills operations has been suspended.
- Calgary-based Pembina Pipeline Corporation announced on March 18th a $900 million to $1.1 billion overall reduction to the Company's 2020 capital spending plans in response to the COVID-19 pandemic and the recent significant decline in global energy prices. Pembina said it had decided to defer some of its previously announced expansion projects to reflect the current market reality, including the Peace Pipeline Phase VII, VIII and IX expansions, the Empress Co-generation Facility, and the Prince Rupert Terminal Expansion.
- Montreal-based Bombardier Inc. announced on March 24th that in support of the recent mandates from the Governments of Quebec and Ontario to help slow the spread of the COVID-19 pandemic, it will suspend all non-essential work at most of its Canadian based operations until April 26, 2020, inclusively. The company said the suspension includes Bombardier's aircraft and rail production activities in the provinces of Quebec and Ontario and that employees impacted by these temporary shutdowns will be placed on furlough.
- Montreal-based Air Canada announced on March 18th that it will gradually suspend the majority of its international and U.S. transborder flights by March 31, 2020 in response to decisions by national governments, including Canada and the United States, to close borders and restrict commercial aviation as a result of the COVID-19 crisis. The company said that subject to further government restrictions, the airline intends to continue to serve a small number of international and U.S. trans-border destinations from select Canadian cities after April 1, 2020.
- Calgary-based WestJet announced that effective March 22, 2020, it was suspending scheduled commercial operations for all international and transborder flights for a 30 day period.
Finance and insurance
- On March 27th, the Toronto Dominion Bank, RBC Royal Bank, Scotiabank, BMO Bank of Montreal, and CIBC announced they had decreased their Canadian prime lending rate by 50 basis points to 2.45% from 2.95%, effective March 30, 2020.
United States and other international news
- On March 13th, U.S. President Donald Trump announced that the COVID-19 outbreak in the United States constitutes a national emergency, beginning March 1, 2020.
- On March 27th, U.S. President Donald Trump signed the USD $2.2 trillion CARES Act, which includes making available direct cash payments to every American citizen earning less than USD $99,000 per year; job retention loans for small businesses; expanded unemployment benefits; support for hard-hit industries; a Disaster Relief Fund; support for doctors, nurses, and hospitals; and support for the development of vaccines, therapies, and other public health response efforts.
- The U.S. Federal Open Market Committee (FOMC) on March 3rd lowered the target range for the federal funds interest rate by 50 basis points to 1.00% to 1.25%. The FOMC then lowered the target range for the federal funds rate to 0.00% to 0.25% on March 15th. On March 23rd, the FOMC announced it will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and the effective transmission of monetary policy. The FOMC had previously announced it would purchase at least USD $500 billion of Treasury Securities and at least USD $200 billion of mortgage-backed securities.
- The Reserve Bank of Australia lowered the cash rate by 25 basis points to 0.50% on March 3rd. Subsequently on March 19th, the Reserve Bank Board agreed to a package to support the Australian economy, including (i) a reduction in the cash rate target to 0.25%; (ii) a target for the yield on 3-year Australian Government bonds of around 0.25%, achieved through purchases of Government bonds in the secondary market; (iii) a term funding facility for the banking system, with support for credit to small and medium-sized businesses; and (iv) exchange settlement balances at the Reserve Bank will be remunerated at 10 basis points, rather than zero.
- The Bank of England's Monetary Policy Committee (MPC) voted on March 10th to lower the Bank Rate by 50 basis points to 0.25% and to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion. Subsequently on March 19th, the MPC voted to increase the Bank's holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion and to reduce the Bank Rate by 15 basis points to 0.1%.
- The European Central Bank (ECB) on March 12th decided on a package of monetary policy measures, including (i) additional temporary longer-term refinancing operations (LTROs) to provide immediate liquidity support to the euro area financial system; (ii) more favourable terms to be applied during the period from June 2020 to June 2021 to all TLTRO III operations outstanding; (iii) temporary additional net asset purchases of €120 billion until the end of the year; (iv) 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; and (v) reinvestments of the principal payments from maturing securities purchased under the APP. On March 18th, the ECB announced a new temporary asset purchase programme, the €750 billion Pandemic Emergency Purchase Programme (PEPP), with purchases conducted until the end of 2020.
- The Executive Board of Norway's Norges Bank on March 12thdecided to reduce the policy rate by 50 basis points to 1.00%. Subsequently on March 19th, the Executive Board decided to reduce the policy rate by 75 basis points to 0.25%.
- The Bank of Japan (BoJ) announced on March 16th that it will continue to apply a -0.1% interest rate to the Policy-Rate Balance 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 and added that it judged appropriate to enhance monetary easing through (i) the further ample supply of funds by conducting various operations including purchases of JGBs and the U.S. dollar funds-supplying operations, (ii) measures to facilitate corporate financing including the introduction of a new operation, and (iii) active purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs).
- The Reserve Bank of New Zealand on March 16th lowered the Official Cash Rate, its main policy rate, by 75 basis points to 0.25% and said that the rate will remain at this level for at least the next 12 months. The Bank later announced on March 23rd that it had decided to implement a Large Scale Asset Purchase programme (LSAP) of up to NZD $30 billion of New Zealand government bonds to provide further support to the economy.
Financial Market News
- West Texas Intermediate crude oil closed at USD $20.48 per barrel on March 31st, down from a closing value of USD $44.76 at the end of February. Western Canadian Select crude oil traded lower in March, declining below USD $10 per barrel during the second half of the month. The Canadian dollar closed at 70.49 cents U.S. on March 31st, down from 74.47 cents U.S. at the end of February. The S&P/TSX composite index closed at 13,378.75 on March 31st, down from a closing value of 16,263.05 at the end of February.