Story of the year: Canada's energy crisis
2018 was a historic year for the Canadian economy in many respects. The country reached a new trade deal with the U.S. and Mexico, and it became the first G7 nation to legalize recreational cannabis. However, Canadians are heading into 2019 facing high debt levels and a battered energy sector – all while interest rates are expected to rise. Significant business stories emerged from these themes and resonated with BNNBloomberg.ca readers over the past 12 months.
Here’s a breakdown of some of the most-read articles on BNNBloomberg.ca over the past year.
Following the G7 summit in Charlevoix, Que., when U.S. President Donald Trump took aim at Prime Minister Justin Trudeau, tensions between the two countries were heightened. Bruce Heyman, former U.S. ambassador to Canada, joined BNN Bloomberg to weigh in on the situation and said he believes Trump’s advisors dislike Canada because its values are too closely-aligned with those of the Obama administration.
In the thick of NAFTA renegotiations, Trump threatened to create a new trade agreement with Mexico and leave Canada out of the equation. He also took to Twitter to publicly say that it “wasn’t politically necessary” to have Canada in the deal. Concern within the business community festered when both countries missed a set deadline to sign a new deal. This situation was at the core of U.S.-Canada relations in 2018, and - while a trade deal between the three countries was ultimately reached - this hurdle threatened an economic partnership between two nations that had been closely tied for decades.
BNN Bloomberg was first to report that Coca-Cola Co. was in “serious talks” with Aurora Cannabis Inc. to develop cannabidiol (CBD)-infused beverages in September, sending shares of both companies higher that day. The report, which came to light before the Oct. 17 marijuana legalization date, would signal a potential significant foray into the marijuana sector by one of the world’s most iconic beverage companies.
When former U.S. Attorney General Jeff Sessions - known for his hard stance against legalizing recreational cannabis - announced his resignation in November, marijuana stocks surged. While some states have already legalized the recreational use of the substance, many were left wondering if Sessions’ exit meant cannabis legalization at the federal level could soon be on the horizon.
The fear of an interest rate increase loomed over 28 per cent of Canadians who had already felt the impact of a series of hikes over the past year, according to a July MNP survey. A large portion of Canadians worried that another hike would push them into bankruptcy. While the bank did raise rates at its July meeting, and then again in October, it decided to stand pat in December as it scaled back some of its optimism about the country’s economic outlook.
In early 2018, Loblaw Companies Ltd. began issuing gift cards to customers in an attempt to regain their trust after the grocer admitted to a bread price-fixing scheme over a 14-year span that ended in 2015. Canadians made the most of situation by signing up for the gift cards or donating them to those in need. This analysis looked at what the company was hoping to get in exchange for its gift cards – and how the plan could backfire.
The November announcement that Encana Corp. was acquiring U.S. energy company Newfield Exploration Co. meant that one of Canada’s largest energy producers would now see the core of its asset base located in the U.S. Former Encana CEO Gwyn Morgan placed the blame almost entirely on Trudeau for his government’s policies, which he believes have made Canada increasingly irrelevant in the global energy market.
The proposed Eagle Spirit pipeline project was seen by some as a viable alternative to Trans Mountain – except for the mayor of a local Alaskan border town standing in its way. In an interview with BNN Bloomberg, Mayor Wes Loe of the remote Alaskan border village Hyder called the idea “ridiculous,” contributing to the Canadian debate over where pipelines should be built… if at all.
Two Canadian cities – Toronto and Vancouver – were included among the world’s top 10 liveable regions, according to the Economist Intelligence Unit. Factors such as stability, healthcare, and the environment were among the factors that determined the rankings.
One of Canada’s most prominent economists warned that high Canadian debt levels will make it more difficult for the country to deal with the risk of a recession in 2019. In a December interview, Gluskin Sheff + Associates Chief Economist David Rosenberg said the risk of the economy shrinking in the coming year is “higher than a lot of people think.” He added that Canadians currently owe about $2.2 trillion in total debt, up by nearly a trillion dollars in just the last decade.