Today’s top headlines
Enbridge to sell Alliance, Aux Sable stakes to Pembina for $3.1 billion
Enbridge Inc. says it has agreed to sell its stakes in the Alliance pipeline and Aux Sable gas processing facility to Pembina Pipeline Corp. for $3.1 billion.
The Alliance pipeline is a 3,848-kilometre pipeline stretching southeast from B.C. that brings gas into Chicago’s Aux Sable, one of the largest natural gas liquids processing facilities in North America.
Enbridge currently owns 50 per cent of Alliance and 42.7 per cent of Aux Sable, while Pembina Pipeline owns the remaining 50 per cent of Alliance and 42.7 per cent of Aux Sable.
As part of the transaction, Pembina, which is the current operator of Aux Sable, will become the sole operator of Alliance.
The $3.1 billion purchase price includes non-recourse debt of approximately $0.3 billion.
Enbridge says the proceeds from the sale will fund a portion of its previously announced US$14-billion acquisition of three U.S.-based gas utilities, and will also be used to pay down debt.
The deal is expected to close in the first half of 2024.
The Canadian Press
Market close: Energy stocks help TSX gain 2% as U.S. stock markets also rise
Strength in energy, utilities and base metals helped lead Canada’s main stock index up almost two per cent, while U.S. markets also jumped after the United States Federal Reserve announced it is keeping its overnight rate unchanged.
The S&P/TSX composite index gained 395.61 points at 20,629.45.
In New York, the Dow Jones industrial average was up 512.30 points at 37,090.24. The S&P 500 index was up 63.39 points at 4,707.09, while the Nasdaq composite was up 200.57 points at 14,733.96.
The Canadian dollar traded for 73.74 cents U.S. compared with 73.53 cents U.S. on Tuesday.
The January crude contract was up 86 cents at US$69.47 per barrel and the January natural gas contract was up two cents at US$2.34 per mmBTU.
The February gold contract was up US$4.10 at US$1,997.30 an ounce and the March copper contract was unchanged at US$3.79 a pound.
The Canadian Press
Read more: Dow hits record high, Treasury yields drop after Powell signals rate cuts
Tesla recall to affect roughly 193,000 cars in Canada
Tesla Inc.’s recall over its autopilot function will affect about 193,000 vehicles in Canada.
Transport Canada says Tesla will provide an over-the-air software update to fix the advanced driver assistance features.
Transport Canada says the recall will be added to its database of vehicles with safety recalls.
Tesla has recalled more than two million cars across its model lineup, which were produced between Oct. 5, 2012 and Dec. 7 of this year, after a lengthy investigation by the U.S. National Highway Safety Administration.
U.S. safety regulators had investigated a series of crashes involving Tesla’s autopilot feature, some of which were fatal.
Tesla did not responded to a request for comment.
The Canadian Press
Alberta researchers call for public inquiry into program to ensure oilsands cleanup
Alberta university researchers are calling for an open public inquiry into a provincial program designed to ensure oilsands producers can pay to clean up after themselves.
They say the agreement at an international climate meeting to transition away from fossil fuels makes it all the more imperative that there’s enough money left to clean up tailings ponds and other impacts when the mines complete their useful life.
Co-author Martin Olszynski at the University of Calgary says the government’s current plan allows companies to delay paying for remediation until production starts to decline — meaning there will be less money for cleanup just as it starts to be needed.
He says the current tailings pond plans are scientifically unproven and won’t return the land to something that can be used for other purposes.
He and his colleagues are calling for an inquiry similar to the one being held into renewable energy in Alberta, especially after delegates at the COP28 meeting in Dubai agreed the world needs to move from the use of oil, gas and coal.
Neither industry representatives nor government spokespeople were immediately available for comment.
The Canadian Press
Fed holds interest rate steady
The United States Federal Reserve held the target range of the federal funds rate steady at 5.25 to 5.5 per cent.
The Fed’s policymakers also signalled that they expect to make three quarter-point cuts to their benchmark interest rate next year, fewer than the five envisioned by financial markets and some economists.
The relatively few number of rate cuts forecast for 2024 — which may not begin until the second half of the year — suggest that the officials think high borrowing rates will still be needed for most of next year to further slow spending and inflation.
PwC pays $1.45 million in fines, costs to CPA Ontario for breaching code of conduct
CPA Ontario says accounting firm PwC has paid $1.45 million in fines and costs after 445 staff shared answers during mandatory internal training assessments between 2016 and 2020.
CPA Ontario says PwC self-reported the breach of the regulatory organization’s code of professional conduct.
The training was on accounting and auditing standards, audit strategy, planning, procedures and documentation, professional integrity and independence matters, and other issues related to audits.
CPA Ontario says the firm admitted to breaching its code of conduct.
The firm has paid a fine of $1 million and a further $455,000 in costs to CPA Ontario.
The regulatory organization says it has taken into account the remedial actions by PwC, which include ongoing periodic monitoring and internal discipline.
The Canadian Press
Midday markets: TSX rises, Wall Street braces for Fed interest rate outlook
Strength in energy stocks helped Canada’s main index move higher in early-afternoon trading, while U.S. stock markets also gained ground.
The S&P/TSX composite index was up 0.27 per cent at 20,287.83 as the price of oil rose on reports of a strong drawdown in U.S. stockpiles that helped thaw a market frozen by concerns about excess supplies.
West Texas Intermediate climbed as much as 1.6 per cent to approach US$70 a barrel, rebounding from earlier declines as steep as 1.3 per cent.
On Wall Street, the S&P 500 was up 0.10 per cent at 4,648.32. The Dow Jones Industrial Average was up 0.04 per cent at 36,591.38 while the Nasdaq composite was up 0.06 per cent at 14,542.92.
U.S. markets are gearing up for what’s expected to be the most-important Federal Reserve decision of the year, with traders awaiting any signals on whether the market’s aggressive dovish bid is now overdone.
The Canadian Press, Bloomberg
Markets open: Countdown to the Fed rate decision
Wall Street is gearing up for what’s expected to be the most-important United States Federal Reserve meeting of the year, with traders awaiting any indications on whether the market’s aggressive dovish bid is now overdone.
Stocks, bonds and the U.S. dollar saw mild moves amid bets the Fed will hold rates Wednesday and try to put a lid on expectations for rate cuts of over 100 basis points in the next 12 months. How the Fed frames its outlook for policy ending next year and 2025 via its “dot plot” could inject some uncertainty into the market that has run well ahead of the central bank’s forecasts.
The Federal Open Market Committee is poised to keep rates in a range of 5.25 per cent to 5.5 per cent — a 22-year high first reached in July. The decision and a statement will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later. Economists surveyed by Bloomberg expect the median Fed projection will show two rate cuts next year and five more in 2025.
On Wall Street, the S&P 500 was up 0.15 per cent at 4,650.81. The Dow Jones Industrial Average was down 0.03 per cent at 36,565.76 while the Nasdaq composite was up 0.31 per cent at 14,577.89.
In Toronto, the S&P/TSX composite index was down 0.05 per cent at 20,222.80.
Canadians spend record amount to pay down debt
Canadians are spending more of their disposable income to pay down debt than ever recorded, as mortgage interest payments have nearly doubled since the Bank of Canada began hiking interest rates in early 2022.
The household debt service ratio, which tracks the total payments — principal and interest — that Canadians are required to make as a proportion of their disposable income, reached 15.22 per cent in the third quarter, the highest since data started being collected in 1990.
Statistics Canada released the figure in national balance sheet data on Wednesday. The report provides insight into the financial health of Canadians, who are the most indebted in the Group of Seven due to the high cost of housing.
Household wealth also slumped in the third quarter, as those higher debt costs were accompanied by weaker financial and housing markets. Household net worth — the value of all assets minus all liabilities — shrank 1.8 per cent to $16.2 trillion, the statistics agency said.
Still, the agency said the quarterly increase in household debt marked the slowest year-over-year expansion since 1990, suggesting that Canadians are putting the brakes on mortgage borrowing in the face of high interest rates.
Credit market debt as a proportion of disposable income also fell slightly to 181.6 per cent in the third quarter from 181.9 per cent in the second quarter. In other words, there was $1.82 in credit market debt for every dollar of household disposable income in the third quarter.
Since the Bank of Canada started raising interest rates in the first quarter of 2022, the amount of total mortgage interest payments has increased 89.6 per cent, the statistics agency said, leading to a 16.8 per cent drop in principal paid. The central bank held its benchmark rate at five per cent earlier this month.
Porter Airlines signs new partnership deal with Alaska Airlines
Porter Airlines has signed a new partnership deal with Alaska Airlines.
The companies say the interline agreement means that travellers can now buy combined Porter-Alaska itineraries directly from the Porter website or via third-party agencies.
Porter flights from Toronto to California are expected to start in January.
The new routes will allow passengers to fly directly into major Alaska Airlines hubs in Los Angeles and San Francisco.
Connections via shared Canadian airports are expected in early 2024.
Under the partnership, Alaska’s Mileage Plan members will also start earning points on Porter flights booked via Alaska Airlines from January and later in 2024.
Both VIPorter and Mileage Plan members will earn miles in their respective loyalty programs no matter where they book their flights.
Read the full story here.
The Canadian Press
Dollarama profit and sales rise
Dollarama Inc. reported its third-quarter profit as sales rose compared with a year ago, raising its guidance for comparable-store sales.
The retailer says it earned $261.1 million or 92 cents per diluted share for the 13-week period ended Oct. 29, up from a profit of $201.6 million or 70 cents per diluted share a year earlier.
Sales totalled $1.48 billion, up from $1.29 billion in the same quarter last year.
Dollarama says the increase in sales was driven by growth in its total number of stores and increased comparable-store sales.
Comparable-store sales grew 11.1 per cent as the number of transactions rose 10.4 per cent and the average transaction size gained 0.6 per cent.
In its outlook, the company says it now expects comparable-store sales for its full year to grow 11 to 12 per cent, up from earlier expectations for growth of 10 and 11 per cent.
— The Canadian Press
Natural gas to play role in shift away from fossil fuels under COP28 deal
COP28 climate talks in Dubai ended with a nod that lower-carbon fuels like natural gas will play a role in the shift to cleaner energy sources.
The summit’s final text recognized that such fuels “can play a role in facilitating the energy transition while ensuring energy security.” Producers have long argued that gas should complement the roll-out of intermittent renewables, replacing dirtier fossil fuels like coal and oil.
The proposal adds to an intense debate about the role of gas in the shift to clean energy. Major suppliers including Shell PLC and Woodside Energy Group Ltd. insist the fuel has a secure long-term role, and are pushing for more investments in new projects, while the International Energy Agency forecasts demand will peak this decade. Environmentalists argue that expanding gas production threatens 2050 net zero targets.
Gas has been heralded by the industry as the cleanest fossil fuel since it releases less carbon dioxide than coal when combusted. However, it’s responsible for rampant methane emissions, a byproduct of production that’s 80 times more dangerous than CO2. The COP28 text included a pledge to reduce methane pollution to near zero by the end of decade, and has been widely endorsed by the fossil fuel industry.
Stock markets before the opening bell
Stocks are treading water this morning as investors await the Federal Reserve’s interest rate decision later this afternoon.
Contracts for the S&P 500 and the Nasdaq 100 pointed to modest gains.
The central bank is widely expected to hold, but the latest U.S. inflation data raised doubts about the likelihood of an aggressive pivot toward policy easing. Investors are bracing for any warnings from Fed chair Jerome Powell that market expectations of policy easing are overdone.
The S&P 500 closed at the highest since January 2022 on Tuesday, while Treasury yields have tumbled on speculation the Fed will cut its benchmark rate by more than a full percentage point next year.
The TSX moved lower Tuesday, weighed down by losses in energy, utilities and battery metals.
— Bloomberg, The Canadian Press
What to watch today
- All eyes will be on the United States Federal Reserve today with the Federal Open Market Committee expected to hold the benchmark interest steady for the third meeting in a row. Markets will be looking for clues on the Fed’s next move when chair Jerome Powell speaks at a news conference after the 2 p.m. ET rate announcement.
- In Canada, Bank of Nova Scotia will release its new strategic plan at its investor day and discount retailer Dollarama Inc will release its earnings for the third quarter.
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg