Economics

The Daily Chase: Canada's economy eked out 0.3% growth in April

Shipping containers are shown at the Port of Montreal, Sunday, April 25, 2021. THE CANADIAN PRESS/Graham Hughes

Here are five things you need to know this morning:

April GDP shows slight growth: New GDP data released from Statistics Canada this morning shows Canada’s economy expanded by 0.3 per cent in April. The figure was in line with expectations and an increase from the flat showing in March. Both goods producing industries and the service sector expanded by the same 0.3 per cent figure. Wholesale trade led the way, while construction was a drag to the downside. Early data for May suggests the growth continued into that month, but slowed to 0.1 per cent.

WestJet strike seemingly averted: The federal government has stepped in to seemingly avert a strike at WestJet that would have severely disrupted travel plans during the Canada Day long weekend. Labour Minister Seamus O’Regan directed the Industrial Relations Board to impose binding arbitration in the dispute between the airline and its maintenance engineers union, the Aircraft Mechanics Fraternal Association. Members of the latter had overwhelmingly rejected a previous agreement and were pushing for more talks ahead of today’s strike deadline. The airline, meanwhile, has been seeking arbitration to end the dispute. The union said in a statement it will comply with the order and “directs its members to refrain from any unlawful job action.”

Reaction to Biden-Trump debate: The first debate of the 2024 U.S. presidential election took place last night and it’s safe to say the reaction has not been the one that Democrats were hoping for. There was a general perception that the incumbent didn’t do much to improve his chances of being re-elected, and the market is adjusting its expectations accordingly. A Trump win would have seismic consequences for countless U.S. economic policies, from trade to taxation, Bloomberg reports. Markets were already anticipating some momentum behind Trump prior to the debate and that picked up in the aftermath. The U.S. dollar pushed higher against a basket of global currencies, with the Japanese yen and Mexican peso faring especially poorly against the greenback. The loonie, meanwhile, is trading at just under 73 cents U.S. this morning, the level it has hovered above and below since about April.

Canadian oil stopping over in California before Asian voyage: An interesting trend has emerged in the weeks since the opening of the TMX Pipeline Expansion, in that oil from the pipeline long pitched as a way for Canada to better access eager markets in Asia has instead been headed to the West Coast of the U.S. While some refineries there are the end consumer, Bloomberg reports on a surge in tankers stopping in Los Angeles to have their cargo transferred to larger vessels prior to heading West. The reason for the layover is simple: B.C.’s cost can only accommodate smaller Aframax sized oil tankers, and it’s more efficient to ship crude across the Pacific Ocean on larger VLCCs.

Lundin considers sale of zinc mines in Europe: In corporate news, TSX-listed miner Lundin Mining Corp. is reportedly considering divesting two European zinc mines so it can turn its focus to copper. Bloomberg reports that Lundin is gauging interest in its Zinkgruvan mine in Sweden and Neves-Corvo mine in Portugal. The two assets are the company’s oldest and produce about 19 per cent of their revenue, but the company’s focus is increasingly moving toward copper, especially new projects in South America.