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5:45 pm.

Regulator provides reasons for Trans Mountain route change ruling

The Canada Energy Regulator has released its reasons behind its decision last month to allow Trans Mountain Corp. to go ahead with a pipeline route deviation against the wishes of a B.C. First Nation.

In its written reasons released Friday, the regulator said it agreed with Trans Mountain’s position that being forced to stick to a previously agreed upon route and construction method despite the difficulties encountered tunneling through rock in that area would result in unacceptable delays and cost increases.

Following an oral hearing in September, the regulator ruled in favour of Trans Mountain’s request to slightly alter the route for a 1.3-kilometre stretch of pipeline to be constructed in the Jacko Lake area near Kamloops, B.C.

Trans Mountain’s application was opposed by the Stk’emlupsemc te Secwepemc Nation, whose traditional territory the pipeline crosses and who had only agreed to the originally proposed route and construction method.

The First Nation had said the area has “profound spiritual and cultural significance” to their people, and that they only consented to the pipeline’s construction with the understanding that it would minimize surface disturbances by implementing specific trenchless construction methods.

But the regulator said it accepted Trans Mountain’s argument that being forced to continue to attempt tunneling in the originally proposed area could delay the pipeline’s completion by up to 10 months, at a cost of approximately $2 billion in lost operating revenue.

The Canadian Press

4:36 p.m.

Market close: TSX down more than 200 points, U.S. stock markets also lower

Canada’s main stock index was down more than one per cent today with broad-based losses led by financial, telecom and base metal stocks, while U.S. markets also fell to close the week.

The S&P/TSX composite index closed down 233.17 points at 19,115.64.

In New York, the Dow Jones industrial average was down 286.89 points at 33,127.28.The S&P 500 index was down 53.84 points at 4,224.16, while the Nasdaq composite was down 202.37 points at 12,983.81.

The Canadian dollar traded for 73.02 cents U.S. compared with 72.91 cents U.S. on Thursday.

The December crude contract was down 29 cents at US$88.08 per barrel and the November natural gas contract was down six cents at US$2.90 per mmBTU.

The December gold contract was up US$13.90 at US$1,994.40 an ounce and the December copper contract was down four cents at US$3.56 a pound.

The Canadian Press

1:32 p.m.

Indigenous ownership of Trans Mountain pipeline must be ‘material,’ prospective bidder says

The director of one of the groups seeking to buy a stake in the Trans Mountain pipeline says nothing less than “material” ownership by Indigenous people is acceptable if Ottawa is serious about reconciliation.

The federal government recently launched talks with more than 120 western Canadian Indigenous communities whose lands are located along the pipeline route, to find out if any of them are interested in acquiring a minority stake.

It’s the first part of what will be a two-phase divestment process by the federal government, which bought Trans Mountain in 2019 but has always stated it does not intend to be the long-term owner.

The second phase of the divestment process will involve the consideration of commercial offers for the remaining stake in the pipeline.

Project Reconciliation is an initiative that has lined up its own financing for a Trans Mountain bid in an effort to secure Indigenous economic participation in the pipeline. It intends to participate in the second phase of the divestment process.

The Canadian Press

1:20 p.m.

Premiers ask Ottawa to extend CEBA repayment period

Canada’s premiers have sent a letter to Prime Minister Justin Trudeau asking the federal government to extend the repayment period for a year for interest-free loans to small businesses and non-profits given during the pandemic.

The federal government’s Canada Emergency Business Account offered interest-free loans of up to $60,000 to small businesses during the COVID-19 pandemic.

B.C. Premier David Eby says in a letter to the prime minister that small businesses, like most other Canadians, are feeling squeezed by the rising cost of housing, groceries and other daily essentials, and just when they are starting to recover after the pandemic they are facing rising inflation and interest rates.

The Canadian Press

12:36 p.m.

Midday markets: TSX down more than 150 points, U.S. stock markets also lower

Canada’s main stock index was down more than 150 points in late-morning trading as losses in the base metal, financial and telecommunications sectors helped lead the way lower, while U.S. stock markets also fell.

The S&P/TSX composite index was down 159.54 points at 19,189.27.

In New York, the Dow Jones industrial average was down 185.75 points at 33,228.42. The S&P 500 index was down 42.69 points at 4,235.31, while the Nasdaq composite was down 190.17 points at 12,996.01.

The Canadian dollar traded for 73.02 cents U.S. compared with 72.91 cents U.S. on Thursday.

The December crude contract was up 83 cents at US$89.20 per barrel and the November natural gas contract was down five cents at US$2.91 per mmBTU.

The December gold contract was up US$23.70 at US$2,004.20 an ounce and the December copper contract was down two cents at US$3.58 a pound.

The Canadian Press

12:27 p.m.

CRTC might ease Corus’ Canadian content spending requirements after profit plunge

Canada’s telecommunications regulator says it’s looking to ease some Canadian content spending requirements for Corus Entertainment Inc. after the company said in a filing its financial situation is increasingly dire.

Corus vice-president and associate general counsel Matt Thompson wrote to the Canadian Radio-television and Telecommunications Commission last week, asking the regulator to “urgently” change some conditions for its English-language television stations and discretionary services.

That includes lowering its obligation to spend 8.5 per cent of revenues on programs of national interest for its English-language stations to five per cent, as Corus cites a 22 per cent drop in third-quarter profits this year compared with the same period in 2022.

The company says it’s facing multiple challenges, including recent strikes by the Writer’s Guild of America and the Screen Actors Guild in the United States that have affected its TV lineup, along with ongoing high inflation that has raised programming costs while reducing advertising demand.

CRTC secretary general Marc Morin responded to the application on Oct. 19, saying the regulator is in favour of granting the company’s request but will first hold a consultation on the proposals.

In June, Bell Canada also submitted two applications to the CRTC, which have yet to be ruled upon, asking the regulator to waive local news and Canadian programming requirements for its television stations amid financial strain.

The Canadian Press

12:12 p.m.

Trans Mountain pipeline faces new construction issue months before start

Canada’s government-owned $31-billion oil pipeline to the Pacific Coast is facing a new construction challenge just a few months before its scheduled opening.

Trans Mountain pipeline is facing a “very challenging” task of drilling through hard rock in the Fraser Valley in British Columbia as it builds a pipeline to almost triple oil shipments from Alberta. The company has proposed a contingency plan to use a 30-inch pipeline instead of the planned 48-inch conduit should the difficulties persist into next month, according to a letter filed with the Canada Energy Regulator.

The project that has faced years of delays and a quadrupling of costs is scheduled to start operation by the end of the first quarter. In September, the company won regulatory approval to alter a section of the route because of similar drilling challenges, averting a potential nine-month delay.

Trans Mountain didn’t immediately respond to an email seeking comment. Prime Minister Justin Trudeau’s government bought the project from Kinder Morgan Inc. in 2018 after the company threatened to pull the plug on it amid fierce opposition in British Columbia.

Bloomberg

11 a.m.

Pierre Poilievre calls on Ottawa to block RBC, HSBC merger

Conservative Leader Pierre Poilievre has called for Prime Minister Justin Trudeau’s government to block the merger of Royal Bank of Canada and HSBC Holdings PLC’s Canadian business.

“We have an overly concentrated government-protected banking sector that gives too much power to too few players already,” Poilievre said in a statement. “But if the biggest banks in Canada simply buy up growing players, there’s no hope for there ever being more competition in Canadian banking.”

Last month the Competition Bureau gave RBC’s acquisition of HSBC the green light, saying it was unlikely to result in much less competition. Its report was meant to inform federal Finance Minister Chrystia Freeland’s ongoing review of the proposed $13.5-billion transaction that was announced in November 2022.

Poilievre said HSBC offers lower mortgage rates than RBC and these deals may be lost if the sale goes through, forcing Canadians to pay more.

“Trudeau’s Finance Minister, Chrystia Freeland, has the power to stop this merger,” he said. “The Competition Bureau found that HSBC’s mortgage business was a rate disrupter in the Canadian market. If you have a smaller competitor pulling down rates, then we should want them to remain in place.”

Financial Post

10 a.m.

Opening bell: Stocks drop, bonds rise on fears over Middle East conflict

The S&P 500 dropped for a fourth straight session. The gauge approached its 200-day moving average, a threshold seen by some chartists as a harbinger of more losses, if crossed. Wall Street’s “fear gauge” — the VIX — hovered near its highest since March. Treasury 10-year yields pushed away from the 5 per cent mark. Gold rose. Bitcoin briefly topped US$30,000.

“The ongoing situation in the Middle East has triggered a surge of volatility in the oil and stock markets, compelling investors to re-evaluate their strategies and shift their focus from riskier assets to ‘safer’ investments,” Fawad Razaqzada, market analyst at City Index and Forex.com, told Bloomberg.

The S&P 500 was down 18 points, the Dow 129 points, the Nasdaq 50 points and the TSX was off 140 points.

Bloomberg

9:16 a.m.

Transat CFO moving to Dollarama

The chief financial officer of Transat AT Inc. is leaving the company to become chief financial officer at Dollarama Inc.

Transat says Patrick Bui will step down from his position at the travel company on Dec. 15.

He is expected to remain in his role through the announcement of Transat’s results for its financial year ending Oct. 31 to help ensure a smooth transition.

He is set to join Dollarama on Dec. 18.

He fills a job left vacant by the departure of J.P. Towner who moved from the discount retailer to become chief financial officer at Rona Inc.

Transat, which operates as an airline under the Air Transat banner, says it has started a formal search for a new chief financial officer.

The Canadian Press

8:37 a.m.

Retail sales fall in August

Retail sales fell 0.1 per cent in August, with volume of sales down 0.7 per cent, Statistics Canada said today.

Sales were down in six of the nine sectors with motor vehicles and parts leading declines.

September sales were flat according to the agency’s early estimate.

“This suggests that consumer spending is getting weaker for the second quarter in a row, with domestic demand under pressure from higher interest rates, and indicating that the Bank of Canada likely won’t need to take interest rates any higher from here,” said CBIC economist Katherine Judge in a note after the data.

Financial Post

7:30 a.m.

Luxury Toronto skyscraper with $1.7 billion in debt put into receivership

A landmark condominium project in one of Toronto’s ritziest neighbourhoods has been put into receivership after construction delays and cost overruns.

Construction of the 85-story tower will be taken over by a court-appointed receiver after its owners, developer Sam Mizrahi and investor Jenny Coco, defaulted on part of the project’s nearly $1.7 billion in debt, according to an Oct. 18 order from the Ontario Superior Court of Justice.

Two funds run by South Korea-based IGIS Asset Management Co. applied for the receivership. Another IGIS fund will extend at least another $315 million to continue work on the project, court documents said.

The super-tall tower sits at the corner of Yonge and Bloor Streets, near a stretch of upscale shops known locally as “The Mink Mile.” The building, called The One by its developers, has been one of the most high-profile projects in the lengthy condominium boom that has reshaped Toronto’s skyline.

Financing woes, delays and soaring costs plagued the project since construction began in 2017. The $1.4-billion cost projected in 2019 had climbed to $2 billion earlier this year, the court documents show.

Though it was supposed to be finished last year, concrete columns and walls have only been poured up to the 40th floor as of early October. The project’s retail space lost its anchor tenant with a replacement yet to be found, and its projected completion has been pushed back to March 2025, the court documents say.

Now, the project faces a softer Canadian real estate market as interest rates at their highest point in more than 20 years dampen demand.

And the partners aren’t getting along. “Over the past several years, Coco’s and Mizrahi’s relationship has become increasingly acrimonious and dysfunctional,” the lenders alleged in the court filings. “Their disagreements have impeded the ability of the borrower to complete the project and impaired the relationship with the senior secured lenders.”

Ari Altstedter, Bloomberg

Before the opening bell: Stocks retreat, oil and gold climb

Oil and gold prices climbed while stocks retreated as investors responded to the threat of a weekend escalation that could spread the conflict between Israel and Hamas to the wider Middle East region. Treasuries rose as yields at multi-year highs drew buyers.

United States equity futures posted modest declines, while Europe’s Stoxx 600 Index dropped 0.9 per cent. Treasuries gained, led by 10-year debt, where yields have soared by 30 basis points this week to near five per cent. United States Federal Reserve chairman Powell suggested the U.S. central bank is inclined to hold interest rates steady again at its next meeting, while it watches key growth data. The dollar trimmed its advance.

Oil traded above US$90 a barrel and gold approached US$2,000 an ounce after the Pentagon said it’s seeing an increase in drone attacks in Iraq and Syria, while an American destroyer intercepted cruise missiles fired toward Israel by Houthi rebels in Yemen. Israel’s military said it struck Hamas targets in Gaza overnight and hit Hezbollah assets in response to fire from Lebanon, where the Iran-backed group is based.

“The risk premium in crude has shot up again,” said Vandana Hari, founder of consultancy Vanda Insights. “As long as the Israel-Hamas tensions run high, crude will remain susceptible to further spikes on signs of an escalation.”

In Canada, the S&P/TSX composite index closed down 101.89 points at 19,348.81 on Thursday.

Bloomberg

What to watch today

Statistics Canada will release retail sales numbers for August this morning, along with construction investment.

American Express Co. will report earnings today.

Need a refresher on yesterday’s top headlines? Get caught up here.

Additional reporting by The Canadian Press, Associated Press and Bloomberg