Canada

Canadian Overseas Petroleum Ltd. has filed bankruptcy in its home country and the U.S. and said that it intends to restructure, Bloomberg News reported. The Calgary-based oil and gas production company said its existing lenders have offered to provide as much as US$11 million in financing to fund its proposed restructuring. COPL said it has requested the immediate suspension on trading of its shares on both the London Stock Exchange and the Canadian Securities Exchange. COPL has sought a form of chapter 11 protection in Canada and filed for bankruptcy in Delaware to protect its U.S.

Canadian business insolvencies will likely remain elevated throughout 2024, experts said, as the economy plays catch-up after historically low levels during the pandemic, the Canadian Press reported. “We did have ... so many years of artificially low filings. We've got a fair bit of catch-up to do,” said Natasha MacParland, a partner at Davies Ward Phillips & Vineberg LLP. The pandemic saw a historically low level of insolvency filings — which include bankruptcy and restructuring procedures — as government supports kicked in but in 2023 things started to normalize, said MacParland.

Canada’s labor market continues to run slightly hotter than expected, with another solid month of hiring buoyed by rapid population growth and signs still-high wage growth has begun to cool, the Wall Street Journal reported. Employers added 40,700 jobs last month, though that wasn’t enough to prevent the unemployment rate from ticking up 0.1 percentage point to 5.8%, Statistics Canada reported Friday. The pace of hiring was the strongest in five months and beat market expectations for the addition of a modest 20,000 jobs.

Canada’s labor market surged past expectations with the biggest job gains since September, but a rising unemployment rate and slowing wage growth still point to easing inflation pressures ahead, Bloomberg News reported. The country added 41,000 jobs in February, while the unemployment rate rose to 5.8%, Statistics Canada reported Friday in Ottawa. The employment figure more than doubled expectations and the jobless rate matched the median estimate in a Bloomberg survey of economists.

The Bank of Canada held its policy rate steady for a fifth consecutive meeting, acknowledging progress on inflation while reiterating that it’s still “too early” to consider rate cuts, Bloomberg News reported. Policymakers led by Governor Tiff Macklem left the benchmark overnight rate unchanged at 5% on Wednesday. The pause was expected by markets and by economists in a Bloomberg survey.

The mid-January deadline for businesses to qualify for partial forgiveness of pandemic loans likely played a major role in driving up business insolvencies that month, said the Canadian Federation of Independent Business, the Canadian Press reported. As businesses continue to face inflation, labour shortages, higher interest rates and weakened consumer spending, for many the deadline was “the straw that broke the camel’s back,” said Simon Gaudreault, the CFIB’s chief economist and vice-president of research. “The math just doesn’t add up anymore,” he said.

Chinese investment can’t be the solution for cash-strapped Canadian miners seeking financial backing, according to Canada’s natural resources minister, Bloomberg News reported. “We need to be working to solve access to capital issues, but the answer cannot be investment from Chinese state-owned industries,” Natural Resources Minister Jonathan Wilkinson said Tuesday in an interview.

Canada's government said on Thursday it would invest up to C$10.5 billion ($7.74 billion) savings it has gleaned from departmental expenditures into healthcare and housing over the next three years, Reuters reported. The move is a first phase in repurposing some government spending that was announced in the 2023-24 budget. Prime Minister Justin Trudeau's Liberal government is facing calls from the opposition to cut the budget deficit, and the central bank has also warned that any new spending could delay interest rate cuts.

Some energy companies are still failing to pay millions of dollars in taxes, says a survey released this week by the Rural Municipalities of Alberta, CBC.com reported. Oil and gas producers missed $43 million in payments last year, the group says. "Year after year, the problem drags on due to a lack of industry regulation and accountability," said president Paul McLauchlin in a news release. The association found oil and gas companies owe the communities in which they operate nearly $252 million in all. That's down slightly from last year's total of $268 million.

Bank of Nova Scotia missed analysts’ estimates for loan-loss provisions amid growing stress in consumer lending as the Canadian economy weakens as well as higher delinquencies among retail borrowers in its Latin American businesses, Bloomberg News reported. Provisions for credit losses rose to C$962 million ($713 million) in the fiscal first quarter, the Toronto-based bank said in a statement Tuesday. That was more than the C$922 million average estimate of analysts in a Bloomberg survey.