Finance Minister Bill Morneau is expected to provide an update on the state of the Canadian economy, and investors are watching whether there will be some relief for provinces.
Despite the thaw in U.S.-China trade standoff and more clarity on Brexit, the Canadian economy faces a number of headwinds including a sharp pullback in recent employment.
Some Western provinces are also clamoring for more support as they go through a tough period of slow economic growth.
“Oil-producing provinces, with the backing of all of Canada’s Premiers, are demanding a retroactive payment delivered through changes to a fiscal stabilization mechanism designed to deal with sudden economic shocks,” Young noted.
The federal government may be tempted to take a pragmatic approach and may choose to compensate affected regions with revenue windfalls that can be expected this year.
“This move would be temporary as crude prices are expected to recover and egress challenges abate, while it may also buy (some) good-will to advance an ambitious climate agenda down the road,” Young noted. “And more pragmatically, it allows the government to spend unexpected billions as it heads into the final quarter of the fiscal year.”
Young does not expect many new measures unveiled today, but adds that “there is still much debate (and horse-trading) ahead on other deliverables so we will have to wait for the government’s first budget, typically in March, for more details.”
BMO Capital Markets concurs, noting that unlike typical fall updates that are sometimes loaded with policy measures, “this one might just be an update of current budget projections, to establish the baseline before new announcements are rolled out in the 2020 budget early next year.”
Here’s what you need to know this morning:
- Morneau to provide update on federal books as provinces push for more help
- Alberta, Ottawa head to province’s Appeal Court over carbon tax dispute
- Cineplex to be bought by Britain’s Cineworld in $2.15 billion deal
- Former SNC-Lavalin executive found guilty of paying off foreign officials and pocketing millions
- Hudson’s Bay group said to consider shelving takeover offer
- These cannabis hopefuls bled money waiting for Ontario to change its tune on retail
- Stocks gain as investors welcome preliminary U.S.-China trade deal
- Equinox Gold to acquire Leagold for about $578 mln
- UK government to introduce Brexit bill on Dec. 20
- Mexico official complains about 3-way trade deal in tweetstorm
- Stephen Poloz’s parting gift to Canada: A shot of confidence to thrive in the new economy
- As Alberta energy companies struggle to pay their bills, farmers, ranchers and counties feel the pinch
- Alberta asks Ottawa to ‘expedite’ approval of Teck’s Frontier oilsands mega mine
- Nobody likes property taxes, but Toronto is doing the right thing with gradual hike
- Four reasons to be upbeat about markets you won’t find in the headlines
- Finance Minister Bill Morneau to hold a press conference to deliver the Economic and Fiscal Update in Ottawa
- Alberta government’s challenge of the constitutionality of federal carbon tax to be heard in Edmonton
- First Nations involved in the Federal Court of Appeal case on the Trans Mountain pipeline expansion hold a news conference in Vancouver
- Alton Gas is expected in court in Halifax for a hearing concerning an injunction against protesters
- Notable Earnings: Hexo Corp.
Farmers and ranchers own the surface rights to the land, while oil and gas companies own the mineral rights beneath the surface, writes Geoffrey Morgan, as part of a series on rural Alberta.
“Increasingly, landowners are angry about having to chase oil companies for payments and, sometimes being forced to wait years for the Surface Rights Board to settle the disputes. At the same time, Canadian agricultural exports have been shut out of critical markets such as China, further handicapping already cash-strapped farms and ranches,” Morgan notes.
With files from The Canadian Press, Thomson Reuters and Bloomberg