Author: Consultant

IF you have been wondering what meaning to attach to that irritating phrase the Carney Liberals use to describe themselves, “Canada’s New Government” – which was irritating enough when it was first employed, under Stephen Harper, when it was actually a new government – wonder no longer. As this Spring Economic Update makes abundantly clear, it means nothing whatever. Or next to nothing.

Well, I suppose it depends on whether you are looking at things in static or dynamic terms. So whereas the Trudeau government did all sorts of things that steadily made matters worse, fiscally and economically speaking, the all-new Carney government will do almost nothing to make them better.

Spring economic update: Ottawa announces $6-billion to boost skilled trades, smaller deficit projection of $66.9-billion

This is, remember, the Carney government’s second crack at it. The first, last fall’s budget, was extravagantly hyped beforehand, but delivered very little. Tuesday’s update, by contrast, came with next to no advance hype, and delivered very little. So the government is at least managing expectations better than it was. But in substance it amounts to more of the same.

The basic issues in front of the government are, not coincidentally, also unchanged. They are 1) the deteriorating state of the country’s finances, and 2) the snail-like pace of economic growth, a problem that has been growing steadily worse for decades.

On the deficit and debt situation, things are if anything worse than before. The Trudeau government ran through a series of fiscal “guardrails,” later changed to “anchors,” each one more forgiving than the last. Balanced budgets, of course, are but a fond memory. So is the “declining debt-to-GDP ratio” that replaced them. Ditto for “deficits smaller than one per cent of GDP.”

The Carney government set even less exacting targets for itself. Now it’s a steadily declining deficit-to-GDP ratio, plus that mumbo-jumbo about achieving “day-to-day operating balance” (a concept nowhere defined), eventually, while continuing to borrow for capital spending (also undefined), more or less indefinitely.

But the deficit for fiscal 2026, at 2.1 per cent of GDP, was higher, proportionately, than it was in fiscal 2025, and is projected to remain at similarly elevated levels this year and next. What’s the fastest-growing government program? Interest on the debt, projected to cost, four years out, more than $80-billion, or 13 cents of every tax dollar. Four years ago it was just 6 cents.

The new government, like the old, cannot even be bothered to present the current figures in a meaningful fashion. The federa

The provinces’ net debts, collectively, are north of 30 per cent. The combined federal-provincial debt, according to a recent report from the C.D. Howe Institute, is at about 75 per cent of GDP today, on its way to 82 per cent by fiscal 2029.

On what basis, then, does the government continue to insist that Canada’s all-government net debt-to-GDP ratio is at just (checks notes) 10.2 per cent? By subtracting the assets held by the Canada Pension Plan and Quebec Pension Plan, funds that appear on neither the federal nor the provincial governments’ balance sheets – and, more important, are not available to either to pay off their debts.

The picture is even bleaker on the growth side. Yes, things could be worse. The tariff shock is wearing off. Inflation is contained. Interest rates are falling. But the government’s own long-term projection is for growth averaging 1.7 per cent after inflation. That’s a third as fast as we grew in the 1950s and 60s. It’s half as fast as in the 1970s and 80s.

Highlights from the spring economic update, including CPP contribution cuts and new sports funding

That’s a major contributor to high deficits. But high deficits also hurt growth, crowding out productive private investment. So do high tax rates and unnecessary regulation – especially the kind that protects cozy industrial oligopolies from competition, such as those that now stifle the telecoms, financial services and airline industries.

What, then, does “Canada’s New Government” propose to do about these? Sweeping, pro-investment tax reforms? Radical steps to open protected sectors to competition? No and no. It’s more of the same incremental noodling and state-directed wheel-spinning that got us here. Complacency on taxes, “sector strategies” for every industry under the sun, etc. etc. etc.

A “whole of government competition plan” sounds promising, until you discover that it’s just more hedge-trimming: a watery promise to “limit to the extent possible the potential negative impacts on competition that can, often inadvertently, stem from government policies.” I say, how frightfully stimulating.

Oh, and there’s the Canada Strong Fund, advertised as “Canada’s first sovereign wealth fund,” about which more on another occasion.

There’s no use being disappointed. By this stage, we should all be managing our own expectations. Canada’s New Government is no more interested in arresting our economic decline than Canada’s Old Government.

• Oil prices rose on Wednesday amid fears about prolonged shipping disruption through the strategically vital Strait of Hormuz.
• Brent oil is within reach of $120 per barrel again.

Oil prices jumped more than 6% Wednesday, after President Donald Trump said he will maintain the U.S. naval blockade against Iran until they agreed to a nuclear deal.

International benchmark Brent crude futures rose more than 6% to $118.33 per barrel by 12:10 p.m. ET, U.S. West Texas Intermediate futures also advanced more than 6% to $106.37 per barrel.

“The blockade is somewhat more effective than the bombing,” Trump told Axios on Wednesday. “They are choking like a stuffed pig, and it is going to be worse for them. They can’t have a nuclear weapon.”

Attempts to continue negotiations to end the war have stalled in recent days. Iran has refused to reopen the Strait of Hormuz until the U.S. lifts its blockade. Tehran’s control of the strait has choked off oil exports from the Middle East.

Energy market participants were also digesting the ramifications of the UAE’s abrupt decision to quit OPEC, although analysts said the move was likely to have a limited market impact given the ongoing Middle East crisis.

Strategists at Dutch bank ING said in a research note published Wednesday that the UAE’s exit from the oil producer group represents “a big blow” to OPEC and would certainly be welcomed by Trump “as it erodes OPEC’s influence in the oil market, while it should also be beneficial for importers and consumers.”

“However, in the near term, the biggest driver for oil prices remains developments in the Persian Gulf and the timing of a resumption in oil flows through the Strait of Hormuz,” they added.

The Bank of Canada held its benchmark interest rate steady on Wednesday, but warned that interest rates may need to change depending on the duration of the oil price shock and the outcome of trade talks with the United States and Mexico.

As widely expected, the bank’s governing council kept its policy rate at 2.25 per cent for the fourth consecutive time, even as the conflict in the Middle East has pushed energy prices sharply higher and squeezed Canadian consumers at the gas pump.

Governor Tiff Macklem said his team decided to “look through” the energy price shock in the near term. But he said the trajectory of monetary policy will depend to a significant degree on how long oil prices remain elevated – something that’s contingent on the outcome of peace talks between the United States and Iran.

“Our baseline forecast assumes oil prices will come down and U.S. tariffs will remain at current levels. If this holds true, a policy rate close to current settings looks appropriate,” Mr. Macklem said, according to the prepared remarks from his press conference opening statement.

Live updates on the Bank of Canada rate decision

In this situation, the bank may still need to adjust rates, but changes “can be expected to be small,” he said, in unusually candid remarks about the direction of monetary policy.

But the bank is also considering a scenario where oil prices remain elevated and start bleeding into other consumer prices, becoming generalized inflation.

“If this starts to happen, monetary policy will have more work to do – there may be a need for consecutive increases in the policy rate,” Mr. Macklem warned.

Global oil prices have gyrated wildly in recent weeks, reacting to each new headline from the U.S.-Iran peace talks. The price of a barrel of Brent crude hit US$117 on Wednesday morning, while West Texas Intermediate reached US$105. In January, the bank expected Brent would remain around US$60 over the next two years.

The energy price shock has pushed up gasoline prices in Canada and raised headline inflation in March to 2.4 per cent from 1.8 per cent the previous month. The bank expects headline inflation to increase to about 3 per cent in April.

“So far, there is little evidence that higher oil prices have fed through to other goods and services prices more broadly. But it is early days and we will be watching this closely,” Mr. Macklem said.

Oil prices aren’t the only source of uncertainty for the Canadian economy and for monetary policy. Mr. Macklem also highlighted the six-year review of the United States-Mexico-Canada trade agreement, which is scheduled to happen on July 1.

Officials from all three countries have said they expect negotiations to continue past the summer deadline, and the future of the trilateral agreement remains uncertain.

“If the United States imposes significant new trade restrictions on Canada, we may need to cut the policy rate further to support economic growth,” Mr. Macklem said.

The two-sided uncertainty is unfolding against the backdrop of a sluggish Canadian economy that’s been battered by U.S. tariffs but supported by resilient consumers and increased government spending at both the provincial and federal level.

The bank’s baseline forecast, published in its quarterly Monetary Policy Report (MPR) on Wednesday, sees Canadian gross domestic product growing 1.2 per cent in 2026 and 1.6 per cent in 2027 – slightly higher than the January forecast.

GDP is expected to grow by 1.5 per cent in the first quarter at an annualized pace – slower than the 1.8 per cent expected in January.

Meanwhile, the bank upgraded its forecast for consumer price index inflation due to the energy price shock. The bank expects headline inflation to average 2.3 per cent in 2026, up from the previous forecast of 2 per cent. It expects inflation to peak at around 3 per cent in April, before declining to 2.5 per cent in June and 2 per cent by early 2027.

Both the GDP and inflation forecasts are heavily contingent on fragile assumptions about oil prices and tariffs.

The baseline forecast – based on oil futures markets – assumes that Brent crude prices will gradually decline from US$90 a barrel in the second quarter to US$75 by mid-2027. The average tariff rate on Canadian goods shipped to the United States is assumed to remain at 5.1 per cent.

“If the United States imposes new trade restrictions on Canada, GDP growth would be weaker and inflationary pressures lower,” the bank said in the MPR. “But if the war in the Middle East continues and global energy prices rise further and stay high for longer, price pressures could broaden and become more persistent.”

The energy price shock is expected to have a mixed impact on the Canadian economy. Higher oil prices boost exports and generate profits for energy companies and tax revenues for Ottawa and the provincial governments. At the same time, consumers are squeezed at the gas pump, leaving them with less discretionary income to spend.

“Higher global oil prices are expected to have little impact on overall growth but will affect its composition,” the MPR said.

Alongside its main forecast, the bank outlined an “illustrative” scenario where oil prices remain at US$100 for the next few years. In this situation, GDP growth is similar to the baseline scenario, but interest rates are higher as the bank is forced to react to inflationary pressures.

“There are many possible outcomes. Monetary policy may need to be nimble,” Mr. Macklem said.

TORONTO – Celestica Inc. boosted its financial guidance for its full year as it reported its first-quarter profit and revenue rose compared with a year ago.

The technology company, which keeps its books in U.S. dollars, says it earned US$212.3 million or US$1.83 per diluted share in the quarter ended March 31, up from US$86.2 million or 74 cents US per diluted share a year earlier.

On an adjusted basis, Celestica says it earned US$2.16 per diluted share in its latest quarter, up from an adjusted profit of US$1.20 per diluted share in the same quarter last year.

Revenue totalled US$4.05 billion, up from US$2.65 billion.

In its outlook, the company says it now expects its 2026 revenue to total US$19.0 billion, up from earlier expectations for US$17.0 billion.

Celestica says its adjusted earnings per share for the year are now expected to total US$10.15, up from its earlier forecast for US$8.75.

This report by The Canadian Press was first published April 28, 2026.

Companies in this story: (TSX:CLS)

• Spotify’s soft guidance overshadowed a first-quarter earnings beat and the stock plummeted.
• The company expects to add 17 million net users to reach 778 million MAUs this quarter and to grow its premium subscribers by 6 million to 299 million. 
• But net premium subscribers had been expected to grow to just over 300.4 million.

Shares of Swedish audio-streamer Spotify fell over 13% after the market opened Tuesday, as soft guidance overshadowed an earnings beat.

The company said first-quarter revenue rose 8% from last year to 4.5 billion euros ($5.3 billion), while monthly active users (MAUs) rose 12% year-on-year to 761 million, both slightly above FactSet estimates.

Premium subscribers grew 9% to 293 million, reflecting 3 million quarterly net adds, Spotify said. 

For the current quarter, Spotify expects to add 17 million net users to reach 778 million MAUs. It expects to grow its premium subscribers by 6 million to 299 million.

While second-quarter MAU guidance was slightly above Wall Street’s expectations, net premium subscribers had been expected to grow to just over 300.4 million, according to analysts polled by FactSet.

The guidance is “subject to substantial uncertainty,” Spotify said in an earnings presentation. 

Operating income was guided to 630 million euros, while the Street was expecting closer to 680 million euros, per FactSet estimates.

Spotify has repeatedly hiked prices for its premium subscription in an attempt to improve profitability.

In February, the company increased the subscription price from $11.99 to $12.99 a month in the U.S. 

At Monday’s close, the stock was down 14% year-to-date.

Published Mon, Apr 27 20269:05 PM EDTUpdated 2 Hours

• President Donald Trump is dissatisfied with Iran’s proposal to open the Strait of Hormuz, according to The New York Times.
• The strait remains effectively closed to tanker traffic, cutting of Gulf oil exports to the world.

https://www.cnbc.com/2026/04/28/oil-prices-us-iran-hormuz-negotiations-wti-brent-crude.html

Shell PLC SHEL-N +1.38%increase is acquiring ARC Resources Ltd. ARX-T +1.47%increase in a US$16.4-billion deal, boosting its holdings in a basin that supplies gas to LNG Canada as the British company mulls an expansion of a liquefied natural gas export terminal it partially owns in Kitimat, B.C.

The deal, announced Monday, will increase Shell’s production by roughly 370,000 barrels a day. ARC is the largest pure-play producer in the Montney basin, which straddles Alberta and northeast British Columbia. Its portfolio includes natural gas, condensate, natural gas liquids and crude oil. Those operations are in the same regionas Shell’s existing Groundbirch asset in B.C.–which supplies gas to the LNG Canada liquefaction plant – and its Gold Creek project in Alberta.

Analysts said the deal underscores the attractiveness of Canadian assets – particularly those in the liquefied natural gas sector. Demand for the fuel is surging, in part owing to the push for natural-gas-fired electricity to power data centres that run artificial-intelligence models.

Wael Sawan, Shell’s chief executive, said in a statement that the acquisition would establish Canada as “a heartland” for the company and complement its existing footprint in the country.

LNG Canada gas flaring far exceeding permitted volumes, documents show

But it also marks something of a turnaround for Shell on the fossil fuels front. Last year, the company exited the Alberta oil sands, swapping its remaining 10-per-cent interest in the Albian mine in the province’s north for a greater stake in an upgrader and carbon-capture project outside Edmonton. Shell attributed that decision to its strategy of moving toward assets with lower greenhouse gas emissions.

Monday’s announcement comes as a Shell-led consortium contemplates the expansion of LNG Canada. Shell holds a 40-per-cent share in the asset, whose liquefied natural gas can reach Asian buyers faster than most other North American suppliers.

While there has been no final investment decision made on the second phase of the terminal, it is on the list of five projects that Prime Minister Mark Carney has said will be reviewed for fast-track approval under Ottawa’s Building Canada Act.

Expanding Canada’s oil and gas exports has come into sharp focus recently, as the conflict in Iran shakes up the structure of energy markets and countries that face a severe supply crunch look for stable supplies.

Between the world’s hunger for gas to displace coal – particularly in Asia – and Shell customers seeking diversified energy supplies, Canada is in a strong position to take advantage of the global LNG market, Mr. Sawan told The Globe and Mail in September.

The deal announced Monday combines Calgary-based ARC’s more than 1.5 million net acres with the British company’s 440,000 acres in the Montney formation and adds roughly two billion barrels of proved and probable oil reserves to its books. ARC’s proven and probable gas reserves can also “support Shell’s growth in LNG Canada,” Shell said.

ARC CEO Terry Anderson said in a statement he’s pleased that the company’s “assets and world class people will play an important role in helping Shell to further strengthen Canada’s resource landscape whilst also providing the secure energy that the world needs.”

National Bank of Canada had already flagged ARC as a takeover candidate, analyst Travis Wood said in a Monday research note. The company is a strong operator with a vast undeveloped inventory, he added, which will likely be accelerated given Shell’s access to global markets.

“This deal clearly signals a compounding benefit to the Canadian gas market with global integrated names showing an appetite for Canadian resources, which we haven’t seen in a while,” Mr. Wood said.

More consolidation in the region is likely for three reasons, he wrote: Chatter around increasing Canadian energy exports into a world hyperfocused on energy security and supply; a wave of LNG projects coming online on B.C.’s West Coast in the coming years; and the continuing thesis of product scarcity in the region.

Scotiabank analysts said in a research note that the deal could increase investor interest in other large Montney producers such as Tourmaline Oil Corp., Whitecap Resources Inc., which are both based in Calgary, and Denver-based Ovintiv Inc.

Related: Ovintiv, formerly Encana, to sell Anadarko assets for $3-billion

The acquisition boosts Shell from the seventh-largest producer in the Montney to second place, trailing only Ovintiv, said Andrew Dittmar, principal analyst at Enverus Intelligence Research.

Between the high-quality gas in the Montney and crude in the oil sands, Canada represents one of the world’s “most attractive opportunities,” Mr. Dittmar wrote in an a note Monday.

Under the terms of the agreement, ARC’s shareholders will receive $8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share. Shell will also take on roughly US$2.8-billion of ARC’s net debt and leases.

TD Cowen equity research analyst Aaron Bilkoski wrote Monday in a note that the likelihood of a competing offer for ARC is relatively low, adding that the assets could become more valuable should LNG Canada Phase 2 move forward.

Shell will hold an investor call about the deal on Tuesday morning.

The United Arab Emirates said on Tuesday it was quitting oil-producers’ group OPEC, as an unprecedented energy crisis triggered by the Iran war exposes discord among Gulf nations.

The loss of the UAE, a long-standing OPEC member, could create disarray and weaken the group, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.

UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters the decision was taken after a careful look at the regional power’s energy strategies.

Asked whether the UAE consulted with OPEC’s de facto leader, Saudi Arabia, he said the UAE did not raise the issue with any other country.

“This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” said the energy minister.

OPEC Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a choke point between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels.

Iran-U.S. peace talks stall as both sides seem determined to enforce their blockades

Mazrouei said the move, in which the UAE will also leave the OPEC+ grouping, would not have a huge impact on the market because of the situation in the strait.

Move is a win for Trump

The UAE’s exit from OPEC represents a win for U.S. President Donald Trump, who in a 2018 address to the U.N. General Assembly accused the organization of “ripping off the rest of the world” by inflating oil prices.

Trump has also linked U.S. military support for the Gulf with oil prices, saying that while the U.S. defends OPEC members they “exploit this by imposing high oil prices.”

The move came after the UAE, a regional business and financial hub and one of Washington’s most important allies, criticized fellow Arab states for not doing enough to protect it from numerous Iranian attacks during the war.

Anwar Gargash, the diplomatic adviser for the UAE president, criticized the Arab and Gulf response to the Iranian attacks in a session at the Gulf Influencers Forum on Monday.

“The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically,” Gargash said.

“I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the (Gulf) Cooperation Council and I am surprised by it,” he said.

Mazrouei noted the UAE has been a member of OPEC and OPEC+ for a long time, but he said the world would demand more energy, suggesting his country’s move will help meet those needs.

The UAE’s exit comes as global spare capacity hovers at historically low levels, leaving the oil market increasingly tight.

Operating outside the producer group allows the UAE to fully leverage its position as a supplier of some of the world’s lowest-cost and lowest-carbon barrels.

Ultimately, the UAE views its exit from the bloc as a net positive for consumers and the broader global economy, ensuring a more responsive and reliable energy supply.

Prime Minister Mark Carney says Canada will launch its first ever national sovereign wealth fund, an investment account that he says will ensure all Canadians reap the rewards of government support for major new projects.

The Canada Strong Fund will begin with an initial endowment of $25-billion.

The Prime Minister made the announcement Monday, one day before his government releases a spring economic update.

A sovereign wealth fund is a state-owned investment account that is typically independently managed.

“This will be a Government of Canada fund, but more importantly, it will be a people’s fund. It will be your fund,” Mr. Carney said at a news conference in Ottawa at the Canada Science and Technology Museum, according to his prepared remarks.

Mr. Carney described the fund as a national savings and investment account that is designed to grow wealth for future generations.

“Many countries that are blessed with natural resources, like Norway, have them. Canada has not. Until now. The new Canada Strong Fund will give all Canadians a direct stake in building Canada strong,” he said.

Canada to host September summit in Toronto to help draw billions in foreign investment, Carney says

The fund is linked to planned federal support for what the government describes as nation-building projects, including ports and natural resources projects.

“Over time, the fund will grow through asset recycling and reinvestment, creating even greater opportunities for future generations,” he said, adding that Canadians will be able to invest directly in the fund if they wish.

The Prime Minister said the fund will be professionally managed and will operate at arm’s length from the government as an independent Crown corporation. The government will hold consultations over the coming months on the details of the fund.

“This is about ensuring that you – and your children, and your children’s children – benefit from the prosperity we create today,” he said.

It was not immediately clear from Mr. Carney’s comments how the new fund would interact with other federal entities with similar responsibilities, including the Canada Infrastructure Bank and the Canada Growth Fund.

Finance Minister François-Philippe Champagne will have a separate and related event in Montreal.

Mr. Champagne’s office invited leaders of the country’s largest banks, pension plans and construction companies to the minister’s event, which was described to them as a pre-release of his spring economic statement, focused on infrastructure investment.

By late Sunday, the minister’s team and staff at the Prime Minister’s Office had yet to supply them with any details on the Finance Minister’s announcement.

Opinion: Mark Carney, the banker for all seasons

The Globe is not identifying the business leaders who relayed details of the event, because they were not authorized to comment on the matter.

Mr. Carney has travelled abroad extensively to attract more foreign capital to Canada, including from sovereign wealth funds in regions such as the Middle East.

He’s also inviting more than 100 of the world’s largest investors to a summit in Toronto in September.