Canada

A replacement lender for U.S. Steel Canada that will in effect double the cost of keeping two Canadian steel plants afloat was approved by a Toronto court Friday, CBC.ca reported. The application from USSC to replace its parent company, U.S. Steel (USS) with the new lenders, Brookfield Capital Partners, could cost the company $9.25 million, plus administration costs.

Canada's central bank cut its key interest rate Wednesday as it slashed its economic outlook and predicted a pullback in the second quarter due to the impact of lower oil prices and weaker demand for exports, the International New York Times reported. The Bank of Canada cut its target for the overnight rate by a quarter of a percentage point to 0.5 percent. In response, the Canadian dollar plunged to a post-recession low of 77.29 U.S. cents Wednesday afternoon, down 1.2 cents from the previous close.

Insolvent Laricina Energy Ltd. plans to close its Saleski pilot oilsands project by fall to save money, according to a report filed online by its court-appointed monitor, PricewaterhouseCoopers, The Calgary Herald reported. The report says Laricina has successfully shut down its 100-per-cent-owned Germain commercial demonstration project — as it announced it would in February — and is negotiating with 40 per cent partner Osum Oil Sands Corp. to close Saleski after the gathering of production data is complete in August or, at the latest, in September.

A judge has approved the distribution of funds in Mobilicity’s restructuring proceedings after the small wireless carrier struck a $465-million deal to sell itself to Rogers Communications Inc., The Globe and Mail reported. The court’s order Monday was necessary for the companies to proceed on closing the deal, which they announced last week and which already has approval from the federal government and faces no opposition from the Competition Bureau.

Alberta's online university is facing a financial crisis, but the president is reassuring students that the institution will not be closing down, CBC News reported. According to an internal report, Athabasca University (AU) will be insolvent in two years. The report was prepared by a task force struck by Peter MacKinnon, the interim president of the university. Enrolment demographics are behind the university's troubles, MacKinnon said. Provincial funding has dropped from covering 80 per cent of operating expenses at Athabasca to closer to 30 per cent. The rest comes from student tuition.

The number of Canadians who can’t pay their debts and are being forced into insolvency is on the rise for the first time since the recession, according to a report by CIBC, The Canadian Press reported. The bank says the cumulative number of insolvencies rose by 1.2 per cent in the six-month period ended in February. The overall increase came as personal bankruptcies fell by 4.7 per cent. However the number of proposals, where consumers negotiate to repay only a portion of their debt, rose by no less than nine per cent.

Two weeks after announcing it will shut down its money-losing oilsands project, insolvent Southern Pacific Resource Corp. said its first-lien creditors have filed to throw it into receivership, The Calgary Herald reported. “The effect of a receivership will make any recovery for unsecured creditors or shareholders very unlikely,” the Calgary-based junior producer warned in a brief news release issued Thursday afternoon.

The deal between the Canadian government and U.S. Steel that allowed the steelmaker to renege on its obligation to make steel in Canada — at plants in Hamilton and Nanticoke in Ontario — will remain a secret, CBC.ca reported. An Ontario Superior Court judge ruled that while it is reasonable that the deal be open, for fairness in the bankruptcy protection process, he dismissed an unsealing motion, saying he didn't have the authority to make that happen.

Cliffs Natural Resources Inc said on Wednesday it was seeking court protection from creditors of its Wabush iron ore mine and related assets in Eastern Canada, four months after it sought similar protection for its other Canadian iron ore assets. The U.S.-based iron ore and coal miner said it had concluded that a "more comprehensive restructuring and sale process" would result if it was able to include the Wabush group under the same creditor protection it obtained in January for its larger Bloom Lake iron ore assets in Quebec Superior Court.

The number of Canadians who can’t pay their debts and are being forced into insolvency is on the rise for the first time since the recession, according to a report by CIBC. The bank says the cumulative number of insolvencies rose by 1.2 per cent in the six-month period ended in February. The overall increase came as personal bankruptcies fell by 4.7 per cent. However the number of proposals, where consumers negotiate to repay only a portion of their debt, rose by no less than nine per cent. CIBC economist Benjamin Tal noted the affect of lower oil prices is starting to show.