Events Affecting Canada’s Economy in August

Economy Events

Sept 11, 2020

This article 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 British Columbia announced on August 4 that it had formally extended the provincial state of emergency until August 18. On August 18, the Government further extended the state of emergency until September 1.

• The Government of the Northwest Territories announced on August 5 that it had extended the territory-wide Public Health Emergency until August 18. On August 18, the Government further extended the Public Health Emergency until September 1.

• The Government of Nunavut announced on August 6 that it had extended the territory’s public health emergency until August 20. On August 21, the Government announced it had extended the public health emergency until September 3.

• The Government of Nova Scotia announced on August 8 that it was renewing the state of emergency until August 23. On August 21, the Government announced it was renewing the state of emergency until September 6.

• The Government of Manitoba announced on August 12 that it would extend the provincewide state of emergency for a period of 30 days.

• The Government of Ontario announced on August 20 that it was extending orders currently in force under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 to September 22, 2020.

• The Government of New Brunswick announced on August 21 that the state of emergency mandatory order was renewed.

Selected COVID-19 responses

• The Government of Canada announced on August 20 that it will (i) be transitioning from the Canada Emergency Response Benefit (CERB) to an Employment Insurance (EI) program, effective September 27, 2020, to provide income support to those who remain unable to work and are eligible, and (ii) introducing a new suite of temporary and taxable recovery benefits to further support workers. The Government said that while it prepares for this transition, the CERB will be extended by an additional four weeks, providing a new maximum of up to 28 weeks of benefits.

• The Government of Canada announced on August 14 that it was extending reciprocal restrictions at the Canada-U.S. border until September 21, 2020.

• The Government of Canada announced on August 26 up to $2 billion in support for provinces and territories through the Safe Return to Class Fund. The Government said the fund is in addition to the more than $19 billion previously announced for the Safe Restart Agreement to help provinces and territories safely restart their economies.

Resources

• Calgary-based Suncor Energy Inc. announced that both upgraders at Base Plant remain online at minimum rates following a fire that occurred in the secondary extraction area on August 14. Suncor said it expects mined bitumen production to return to operation by early September.

• On August 24, the Government of Canada announced that it welcomes the World Trade Organization (WTO) panel ruling that U.S. countervailing duties against Canadian softwood lumber are inconsistent with the WTO obligations of the United States.

Manufacturing

• Mississauga-based Maple Leaf Foods Inc. announced on August 18 that it had temporarily suspended pork exports to China on a voluntary basis due to recent protocols adopted by the Chinese government for Canadian processors that require any plant reporting a COVID-19 positive case to suspend exports to China temporarily.

Transportation

• Toronto-based Porter Airlines announced it was updating its return-to-service date to October 7, from the previously announced target of August 31. Porter said it temporarily suspended operations as of March 21, due to COVID-19.

Other news

• The President of the United States announced the U.S. would re-impose the 10% ad valorem tariff on imports of non-alloyed unwrought aluminum articles from Canada. The President said the tariffs would take effect on August 16, 2020. The Government of Canada subsequently announced it intends to impose surtaxes against imports of aluminum and aluminum-containing products from the U.S., representing a proportionate amount of Canadian aluminum products affected by the U.S. tariffs. The Government of Canada said these countermeasures will take effect by September 16, 2020 and will remain in place until the U.S. eliminates its tariffs against Canada.

• On August 12, the Government of Ontario released its 2020-21 First Quarter Finances, which included additional investments in support of health care and jobs. The Government forecasts a $38.5 billion deficit in 2020-2021 and a contraction in real GDP of 6.6% in 2020.

• On August 27, the Government of Alberta released its 2020-21 First Quarter Fiscal Update and Economic Statement. The Government forecasts a $24.2 billion deficit in 2020-2021 and a contraction in real GDP of 8.8%.

• On August 27, the Government of Saskatchewan released its 2020-21 First Quarter Budget Update and Medium-Term Outlook. The Government forecasts a $2.1 billion deficit in 2020-2021 and a contraction in real GDP of 5.5%.

• Toronto-based Cineplex Inc. announced that all 164 Cineplex theatres and 1,687 screens across Canada would be open as of August 21.

• The Maritime Employers Association (MMA) announce that it and the Port of Montreal Longshoreman’s Union had reached an agreement in principle on a seven-month truce ending the strike that began on August 10, 2020. The MMA said the port would be operational again from August 22.

• Unifor announced on August 22 that Unifor Local 597 members at Dominion grocery stores across Newfoundland began strike action.

• Smith Falls, Ontario-based Canopy Growth Corporation announced on August 28 that it would be opening 10 brick-and-mortar retail cannabis locations across Alberta over the next week.

United States and other international news

• U.S. President Donald J. Trump declared that a major disaster exists in the State of California and ordered Federal aid to supplement State, tribal, and local recovery efforts in the areas affected by wildfires beginning on August 14, 2020, and continuing.

• U.S. President Donald J. Trump declared that an emergency exists in the States of Louisiana, Mississippi, and Texas and ordered Federal assistance to supplement State, tribal, and local response efforts due to the emergency conditions resulting from Tropical Storms Marco and Laura beginning on August 22, 2020, and continuing.

• The Bank of England’s Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 0.1%. The MPC also voted to continue with the existing programmes of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, maintaining the target for the total stock of these purchases at £745 billion.

• The Reserve Bank of Australia (RBA) maintained the target for the cash rate and the yield on 3-year Australian Government bonds at 0.25%. The last change in the target for the cash rate was a 50 basis points reduction in March 2020.

• The Reserve Bank of New Zealand left the Official Cash Rate (OCR), its main policy rate, unchanged at 0.25% and expanded the Large Scale Asset Purchase (LSAP) programme up to NZD $100 billion. The last change in the OCR was a 75 basis points reduction in March 2020.

• 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.

• Atlanta, Georgia-based The Coca-Cola Company announced structural changes that will result in the reallocation of some people and resources, which will include voluntary and involuntary reductions in employees. The company said the voluntary separation program will be first offered to approximately 4,000 employees in the United States, Canada and Puerto Rico.

• New Jersey-based Bed Bath & Beyond Inc. announced a workforce reduction of approximately 2,800 roles from across its corporate headquarters and retail banner stores, effective immediately.

Financial market news

• West Texas Intermediate crude oil closed at USD $42.61 per barrel on August 31, up from a closing value of USD $40.27 at the end of July. Western Canadian Select crude oil traded in the USD $29 to $34 per barrel range throughout August. The Canadian dollar closed at 76.68 cents U.S. on August 31, up from 74.60 cents U.S. at the end of July. The S&P/TSX composite index closed at 16,514.44 on August 31, up from 16,169.20 at the end of July.

Source: Statistics Canada, www.statcan.gc.ca/eng/dai/btd/cen/aug2020

Photo: Pixabay

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