Prime Minister Justin Trudeau is stepping in to aid a long-delayed, over-budget hydroelectric project in the province of Newfoundland and Labrador, Bloomberg News reported. The Canadian government will buy an equity stake in the Muskrat Falls project and provide debt guarantees as part of a “multi-billion dollar” financial restructuring agreement with the Atlantic province, the Canadian Broadcasting Corp. reported Tuesday evening, without providing specific amounts. Muskrat Falls’ estimated cost has soared to more than C$13 billion ($10.3 billion), nearly double the early projections.
Read more
Bridging Finance Inc., the private lender that was seized by Canadian regulators amid an investigation of its top executives, has drawn interest from a “broad range” of potential bidders, according to the firm managing its affairs during the probe, Bloomberg News reported. PricewaterhouseCoopers said Friday it will soon seek court approval for a sales and investor solicitation process to market some or all of Bridging’s assets, and that it has already received indications of interest from multiple parties. Bloomberg News reported on Thursday that funds managed by BlackRock Inc.
Read more
Within the U.S., cannabis is now legal in 16 states including Washington, D.C., with legalization taking effect in two more states, Virginia and New Mexico, later this year, Mondaq reported. This state-level trend toward legalization in the U.S. continues even though cannabis remains illegal at the federal level. However, in Canada, cannabis has been legal at both the federal and provincial levels since 2018. The opening of these markets has generated significant investment on both sides of the U.S./Canadian border.
Canada on Monday said it will begin to ease pandemic restrictions at the U.S./Canada border next month, allowing U.S. citizens and permanent residents living in the U.S. who are fully vaccinated with Canadian-authorized vaccines to enter for nonessential travel without quarantining, The Washington Post. The decision, which takes effect Aug. 9, follows months of criticism from U.S.
Canadian companies are on track to sell a record volume of bonds in their own currency this year, taking advantage of low rates to refinance and fund post-pandemic investments, Bloomberg News reported. Almost C$78 billion ($52.5 billion) has been issued already this year, more than 70% of the record C$111 billion sold in all of 2020, according to data compiled by Bloomberg. Bankers expect a new high, despite a slower pace through year-end as borrowers shift from stockpiling liquidity to rightsizing balance sheets and protecting ratings.
The Bank of Canada on Wednesday held interest rates steady and reduced its bond-buying program, saying the economy needed less help as it recovers from the COVID-19 pandemic, but warned that inflation would be higher than previously forecast in the near-term, Reuters reported. The central bank said economic growth should pick up in the third quarter of 2021 after being weaker than expected in the first half of the year.
Read more
Canadian municipalities reeling from a pandemic-driven hit to revenues are facing an added blow from surging liability insurance costs, forcing them to raise property taxes or even cut services for residents, Reuters reported. The increase in premiums, about 20% to 30% in many cases, has been driven by a shrinking pool of insurers, more claims in an increasingly litigious climate and uncertainty around payout amounts.
Read more
There were fewer corporate restructurings and bankruptcies among small and medium businesses in Canada last year compared to 2019. This was directly related to government initiatives that supported financially vulnerable businesses, delaying bankruptcy for many, according to a Toronto Star commentary. However, when the stimulus and government support come to an end, those businesses that were already vulnerable will find that repaying both pre-coronavirus and post-coronavirus debt may not be possible, and that the possibility of bankruptcy looms large.
Read more
Canadian aerospace firms are struggling to hire back workers to meet resurgent travel demand in the latest evidence of a post-pandemic labor crunch, industry executives said, Reuters reported. The squeeze has emerged as a warning signal for aviation's recovery internationally and accelerates a shift in the workforce toward fast-growth sectors like electric vehicles, they said.
Read more
Canadian lawmakers on Wednesday passed Prime Minister Justin Trudeau's budget bill, approving billions in funding to extend COVID-19 supports on the last day of voting before the summer break and a likely election in the fall, Reuters reported. Bill C-30 passed 211 to 121, as the opposition New Democrats and Bloc Quebecois supported the measure. Trudeau's ruling Liberals have a minority in the House of Commons and must rely other parties to pass legislation. The bill will only become law once the Senate, or upper chamber, adopts it and it receives royal assent.
Read more