Category: Uncategorized

Prime Minister Mark Carney is back in Ottawa and apparently ready to resume his government’s Parliamentary responsibilities and get on with the business of looking after some of Canada’s internal political and economic issues. The short list includes growing deficits and debt, health-care bottlenecks, rising consumer costs, taxation, climate commitments, trade war impacts, Indigenous relations, pipelines to the coasts, and major mining projects.

Canadians can only hope that attempts to deal with these issues are a little more obviously effective than the long trail of uncertainty the prime minister has left behind following his numerous excursions abroad. The larger uncertainties include the Canada-U.S. trade relationship, the new plan to become an associate member of the EU, and the foreign investment booster summit that has yet to produce results.

Beyond those big national economic questions are many uncertainties, confusions and contradictions surrounding such topics as Arctic defence, China, electric vehicles, artificial intelligence, Belarus and Mexico.

Article content

On Sunday, Carney met Norwegian Prime Minister Jonas Gahr Støre in Ottawa to promote greater economic ties and announce plans to deepen collaboration in the Arctic and across defence, critical minerals, energy, science and emerging technologies. The joint Canada/Norway Arctic defence strategy, an objective proposed in previous years, was given new publicity just after U.S. President Donald Trump announced last Friday that the U.S. had reached an Arctic defence agreement with Denmark and its subsidiary territory, Greenland.

Greenland, of course, had been declared a takeover target by Trump, just as he has verbally threatened to annex Canada. Now that he has succeeded in acquiring rights for military operations in Greenland, does this change the outlook for Canada’s role in the Arctic?

Canada has a new Arctic deal with Norway, and the U.S. has a deal with Denmark/Greenland. At the same time, European Commission President Ursula von der Leyen has said that Arctic defence would be a “flagship joint project” if Canada were to become an associate member of the EU.

Article content

But will Canada become an associate EU member?

Article content

Denmark has said that under the United States-Greenland deal, Arctic security would fall under NATO oversight, where Denmark is also believed to be among European nations that lack enthusiasm for making Canada an “associate member” of the EU. Others, including Germany, do not support the associate member label.

Article content

Germany is also taking a stand against Chinese EVs and hybrid models. The EU already imposes 10 per cent tariffs on Chinese EVs and wants China to now restrict exports of hybrids prior to new trade deal negotiations. An EU official told the Financial Times “if they will not limit their exports to our market, then we will.” Ottawa, meanwhile, is prepared to allow 49,000 Chinese-made EVs into Canada on a quota system at a most-favoured nation tariff rate of 6.1 per cent. The government says the objective is to “catalyze considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing jobs for Canadian workers, and ensure a robust build-out of Canada’s EV supply chain.”

Auto sales in September in Canada were up from a year ago, marking the fourth consecutive month of gains, according to DesRosiers Automotive Consultants Inc.

The firm estimates 168,000 vehicles were sold in the month, up 3.4 per cent from September 2025.

Andrew King, managing partner at DesRosiers, says the market has shown stability in recent months despite conflict in the Middle East and a tariff dispute with the United States.

But DesRosiers says sales could be weaker in the fourth quarter, compared with stronger sales seen in 2025.

On a year-to-date basis, auto sales are still 0.7 per cent lower than 2025 levels.

Despite the winning streak, auto sales have slowed this year as gas prices remain elevated and Canadian households pull back on spending amid geopolitical uncertainties.

The Group of Seven nations agreed Friday to release 100 million barrels of reserves to address surging diesel fuel prices, after the Trump administration pushed Europe to deploy their stocks.

The G7 leaders said the deployment will begin immediately and continue over four months with “a frontloaded substantial diesel release within the first 20 days” coordinated through the International Energy Agency.

“We will convene in the context of the IEA in the coming days to discuss the possibility of additional diesel releases as necessary,” the G7 leaders said in a joint statement. U.S. diesel prices hit record highs in September and remain elevated Friday at $6.37 per gallon on average.

The G7 members are France, Canada, Germany, Italy, Japan, the United Kingdom and the United States. France currently holds the group’s presidency. The European Union also participates in its meetings.

President Donald Trump said moments before the G7 announcement that Europe had “agreed to release a massive amount of their heavily stocked Diesel Oil.” The world is facing a fuel supply crisis due to Ukraine’s attacks on Russian refineries and disruptions in the Middle East from the Iran war.

The Trump administration has been pressuring Europe to release diesel stocks as an alternative to the U.S. imposing an export ban. Treasury Secretary Scott Bessent said Thursday that U.S. partners in Europe “should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions.”

“America is doing its part. We look to our allies to match their commitments with action,” Bessent said.

Trump is facing mounting political pressure from Republican lawmakers to tackle soaring fuel prices ahead of the midterm elections in November.

Trump said last week that he was considering an export ban, a move the oil industry and broader business community in the U.S. staunchly opposes. The president subsequently seemed to lean against an export ban due to its potential impact on gasoline prices.

EU exposure

The prospect of the world’s largest diesel exporter implementing an outright ban raised alarm across the Atlantic. The U.S. supplied around half of the EU’s diesel imports in August, according to the International Energy Agency, underscoring the 27-nation bloc’s exposure to a potential U.S. export ban.

EU trade chief Maros Sefcovic said he had discussed diesel supplies and soaring prices with his counterpart U.S. Trade Representative Jamieson Greer.

“We have every interest in ⁠working together on lowering the prices, be it on diesel or also other products from oil and gas supplies,” Sefcovic told reporters in Milwaukee at the G20 trade ministers meeting, according to Reuters.

He added that any move from the U.S. to restrict diesel exports would be unexpected and have a negative impact on Europe’s economic outlook.

‘A global energy problem’

Energy strategists at Macquarie Group said Thursday it is understandable that the U.S. position on the global diesel crisis has taken on an apparent global dimension.

“The core issue the US faces is not a diesel problem. Nor is it a refined product problem. It may not even be a petroleum problem. It is a global energy problem,” Macquarie Group’s Walt Chancellor said in a research note.

“So what is the solution then? In short, more oil through the Strait of Hormuz and out of the Middle East. Anything short of that is really just shuffling deck chairs,” he added.

The Strait of Hormuz is a major throughway for the global oil trade that saw ship traffic stifled after the U.S. and Israel attacked Iran in late February. But this week it saw daily exports return to prewar levels.

• Nonfarm payrolls rose by just 29,000 in September, well below the 84,000 forecast. The unemployment rate increased to 4.2%, though largely due to an influx of members in the labor force.
• Markets rose off the report, as traders priced in a high probability that the Fed will stay put on interest rates when it meets later in October.
• Wage growth slipped to its lowest annual level since May 2021.
• Job gains were concentrated in health care, construction and manufacturing.

The U.S. economy created far fewer jobs than expected in September, pointing to a surprising soft spot in the labor market and broader economy.

Nonfarm payrolls rose a seasonally adjusted 29,000 for the month while the unemployment rate increased to 4.2%, the Bureau of Labor Statistics reported Friday. Economists surveyed by Dow Jones had been looking for job growth of 84,000 and an unemployment rate of 4.1%.

In addition to the weakness in September, the August jobs count was revised lower to reflect a gain of 133,000 while July switched from a gain to a loss as payrolls fell by 10,000. The revisions in total showed 60,000 fewer jobs than previously reported.

Market reaction was swift to the report, with traders interpreting the soft jobs numbers as good news as they likely further cemented the Federal Reserve staying put at its October meeting.

Stock futures rose sharply after the release while Treasury yields slumped after recently rising to levels not seen since the early part of the century. Market-implied odds that the Fed will hold rates steady at its Oct. 27-28 meeting jumped to 82.8%, according to the CME Group’s FedWatch tool.

“For the Fed, this number should be the nail in the coffin for an October hike,” Thomas Simons, chief U.S. economist at Jefferies, said in a note.

“The payroll data surged in August, and we had expected the momentum to continue this month, given the historically low prints on jobless claims in recent weeks,” he added. “However, it now appears that the August number was nothing more than a rebound from very weak hiring in June and July.”

Fed officials more closely watch the unemployment rate than the headline payrolls numbers.

The household survey, which is used to calculate the jobless level, was considerably better than the establishment survey, which is used to derive the payrolls count.

Household employment rose by 406,000 for the month, while the labor force swelled by 485,000 and the participation rate, which counts those working or actively searching for a job as a share of the total labor force, increased 0.2 percentage point to 61.8%, its highest since May.

An alternative measure of unemployment, which includes discouraged workers and those holding part-time jobs for economic reasons, edged down to 7.6%, its lowest since January 2025.

The report comes with Federal Reserve officials weighing the state of the economy and how it should affect their next interest rate move.

Following statements in recent days from central bank policymakers, markets have recalibrated expectations and now expect the rate-setting Federal Open Market Committee to hold off until December for its next hike. The FOMC raised benchmark rates a quarter percentage point in September.

Policymakers largely see inflation as a larger threat to the economy than the labor market, which had shown resilience in recent months. The data has painted a picture of a low-hire, low-fire economy, with weekly jobless claims low and one indicator showing layoffs at their lowest rate in four years.

Inflation, though, has held well above the Fed’s 2% target. The most recent indicator of the central bank’s preferred gauge showed core inflation at a 3% annual rate.

Wages, though, continued to show signs of disinflation.

Average hourly earnings increased just 0.1% in September, putting the 12-month gain at 3%, the lowest since May 2021. Wall Street had been looking for readings of 0.3% and 3.1%, respectively. The average work week was unchanged at 34.6 hours.

Canada’s manufacturing sector expanded at the slowest pace in six months in September as trade frictions and elevated energy prices weighed on activity, while confidence in the outlook dropped to the lowest level in nine months.

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to 51.5 last month from 53.0 in August, marking the lowest level since March. A reading above 50 indicates expansion in the sector.

“Canada’s manufacturing economy showed a degree of resilience in the face of several headwinds during September,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “However, tariffs and elevated global energy prices due to the war in Iran continued to have a damaging impact on the sector.”

A U.S. import ban on many Canadian alcoholic beverages, motorcycles and dairy products took effect on Tuesday after talks involving President Donald Trump and Prime Minister Mark Carney broke down in August.

The output index dipped to 50.8 from 52.8 in August, while the new orders measure slipped below the 50 threshold for the first time since March.

“These issues didn’t just cause present difficulties, such as around stock and production management, but also added to a pervading uncertainty amongst clients and manufacturers alike especially given the seemingly intractable nature of trade tensions with the US and the ongoing conflict in the Middle East,” Smith said.

The future output index fell to its lowest level since December 2025 at 54.6, down from 58.7 in August, while delivery delays grew the most widespread since August 2022 and inflation pressures intensified.

The measure of input costs rose to 71.1 from 66.4 in August, notching its highest level since July 2022.

A proposed pipeline from Alberta to the West Coast has been designated a project of national interest, Prime Minister Mark Carney said Thursday, citing the conduit’s economic benefits and how it can boost Canada’s share of global energy markets.

This is the first time that the government has made an official designation of a project of national interest under the Building Canada Act. The legislation is a marquee part of Mr. Carney’s economic agenda and while the government has begun the process of listing other projects in the national interest, none of the others have yet passed the final hurdle.

Mr. Carney made the announcement on a frosty morning in Fort McMurray in northern Alberta – the heart of the oil sands – alongside Premier Danielle Smith and Indigenous leaders from various communities in the region, including Treaty 8 Grand Chief Trevor Mercredi.

With global oil demand at around 100 million barrels a day and supply becoming more volatile in the face of conflicts in the Middle East and Ukraine, Mr. Carney said: “The question is, who will emerge as the world’s trusted suppliers? It should be us. It must be Canada.”

U.S. threatens France and Germany to release diesel stocks or face export ban, Reuters sources say

The next step for the pipeline – now called Pacific Link – is a federal review process, including consultations with stakeholders about the project’s ownership, as well as Indigenous rights and environmental protections.

Ottawa’s Major Projects Office will lead that process with support from the Canada Energy Regulator, federal officials said Thursday.The MPO aims to finalize conditions of the project by Sept. 1, 2027, so the pipeline can be under construction by 2032. Its expected price tag is between $35.2-billion and $43.7-billion.

As the arrangement stands, Canada and Alberta would share equal ownership of Pacific Link. Indigenous communities would be offered a minimum of 10-per-cent ownership interest through federal and provincial Indigenous loan-guarantee programs, officials said.

The pipeline is a key part of Mr. Carney’s suite of policy changes that aim to reset federal relations with Alberta and diversify Canadian exports away from the United States. It would carry one million barrels of oil a day to the coast, largely following the route of the Trans Mountain system, allowing Alberta oil to access more international markets and garner higher prices.

Economics of West Coast pipeline in focus ahead of Ottawa major project decision

Faster project approvals for major projects has been a major focus for the federal government under Mr. Carney. Last month, for example, it tabled Bill C-39, the Building Canada Strong Act. The legislation aims to introduce a system where major projects such as pipelines get just one review and receive a decision within one year.

Major infrastructure builds in Canada have been “weighed down by well-intentioned but arduous and often duplicative regulatory processes” in recent years, Mr. Carney said Thursday.

“Investors should know that when Canadians want something built, Canada will get it built. In a more volatile, dangerous and divided world, speed, certainty and predictability are competitive advantages,” he said.

“Canada will remain a country of high standards, but high standards do not require slow decisions.”

But the Coldwater Indian Band, in B.C, is opposing the speed at which Ottawa listed the new pipeline as a project of national interest.

The group says the federal government has yet to follow through on previous obligations to the community and did not allow for enough time during wildfire season to have meaningful consultations on the new pipeline.

“There is anger in our community today, as we hear that Canada has given the green light to a third Trans Mountain pipeline through the Coldwater Valley. The Crown’s duty to consult and accommodate Coldwater remains unfilled and Canada and Trans Mountain are not legally or respectfully operating in our reserve,” Vice-Chief Michael Smithers said in a press release.

Environmental groups also slammed the designation.

The world doesn’t want or need another pipeline, and Pacific Link will put billions of taxpayers dollars at risk, said Emilia Belliveau, the energy transition program manager at Environmental Defence.

“There is no excuse for this reckless project that will deepen the climate crisis, put endangered Southern Resident Orca Whales at risk of extinction, and benefit very rich oil companies at the expense of everyday Canadians,” Ms. Belliveau said in a statement.

Keith Stewart, a senior energy specialist at Greenpeace Canada said Ottawa should be focusing on renewable energy, not fossil fuels.

“The only thing moving faster than the Prime Minister’s bulldozing of environmental laws and Indigenous rights is the unprecedented speed with which our would-be future customers in Europe and Asia are building solar power and wind farms to protect themselves against increasingly unreliable and conflict-ridden oil and gas imports,” Mr. Stewart said in a statement.

The business community, however, largely viewed the designation as a positive move that would boost growth in Canada’s energy sector.

“This designation demonstrates that the federal government recognizes what this project will mean for Canada’s economic prosperity and sovereignty,” the Business Council of Alberta said in a statement.

Bryan Detchou, the senior director of natural resources, environment and sustainability for the Canadian Chamber of Commerce, said the Pacific Link is a “prime example” of a major project in the national interest.

“Getting our resources to Asia-Pacific markets is a path to more production, prosperity and a brighter future for workers, their families and communities,” he said in a statement.

“This path will strengthen Canada’s role on the world stage, connecting our resources with new customers while helping support the stability and resilience of global supply chains, and reinforcing our reputation as a trusted partner to our allies.”

Brent benchmark oil ⁠prices rose by US$3 ​on Thursday after China suspended oil products exports, potentially tightening fuel markets already coping with supply shortages globally, while investors continued to assess diplomatic efforts to end the US-Israeli war on Iran.

The new front-month December Brent crude futures contract traded at US$101.06 per barrel at 10:52 a.m. ET or 1452 GMT, up 3 per cent, or US$3.02, from Wednesday’s close. The November contract ​expired on Wednesday, settling at US$103.50 per barrel, marking a monthly gain of around ‌14 per cent in September for the front-month contract.

US West Texas Intermediate crude futures were up US$1.67, or 1.9 per cent, at US$92.09 a barrel, having traded close to US$93 earlier in the session.

Prices were volatile on Thursday, having slipped more than 1 per cent in early trading before rebounding.

Chinese refiners have suspended exports of oil products to regions beyond Hong Kong and Macau until further notice, four people briefed on the matter said on ‌Thursday, a move ​that will further crimp war-constrained fuel markets. ‌A global diesel shortage fueled by the wars in Iran and Ukraine is unlikely to ease before next year, according ​to storage market indicators and industry participants.

“The Chinese export ban suggests concerns ⁠about domestic product availability,” UBS analyst Giovanni Staunovo said, adding that it remains to be seen whether the ⁠measures will support higher crude imports after recent drawdowns in Chinese crude and fuel stocks.

Global diesel supplies have tightened as a result of falling refining ​capacity due to attacks linked to the Middle East and Ukraine wars, raising pressure on governments to intervene to shield consumers.

“China’s pause removes a source of flexible supply at a particularly difficult moment. Middle Eastern disruptions have already reduced the availability of refined products, so importers have fewer alternatives,” said Nitesh Shah, commodity strategist at WisdomTree.

The Trump administration has told Germany and France to draw down emergency diesel inventories to help ⁠ease global fuel prices or face a potential US diesel export ban, three people close to the discussions said.

European diesel refinery profit margins were trading at around US$78.22 per barrel at 1145 GMT, down about 6 per cent from the previous session. The margin hit an all-time high of US$95 per barrel on September 23.

Asia’s gasoline margin <GL92-SIN-CRK> rose to a record high of US$50.53 per barrel over Brent crude on Thursday after various outages at regional refineries and China’s fuel exports ban, traders said.

Investors continued ⁠to watch diplomacy efforts and oil exports in the Middle East.

Iran is preparing ​a broader and more forceful response if the US resumes large-scale military attacks, sources said, while continuing a diplomatic push that ⁠Iranian officials privately see as unlikely to succeed.

Offering some relief to markets was news that Saudi Arabia resumed oil tanker loadings from Yanbu, after earlier restarting operations on ‌its East-West Pipeline.

Meanwhile, Goldman Sachs estimated Gulf oil exports, including “dark exports” involving ships operating with their location transponders turned off, have recovered ​to 23.3 million barrels per day over the last week, in line with their 2025 average, as exports doubled in September, it said in a note on Tuesday.

And OPEC+ oil-producing countries are likely to keep their oil production targets steady for November when they meet on Sunday, two sources with knowledge of the matter told ​Reuters.

Down ~240 points (~0.7%) to ~34,996 at midday, extending a three-day slide. Yesterday it closed at 35,236, down 224 points (-0.63%), its third straight losing day and lowest close since late July.

Reasons:

• Global bond rout. The US 10-year is near 5.3% and the 30-year at ~5.64%, the highest since 2002; Canadian yields are near multi-year highs. Financials (the index’s biggest weight) fell 1.7% on credit-quality and loan-growth concerns.
• Oil-driven inflation fears. Oil rose 2%+ after China suspended refined-fuel exports; Brent sits near $103 with US-Iran tensions unresolved (Trump denied reports he’d ease sanctions). Higher oil = “rates higher for longer” worries.
• Weak domestic data. Canada’s September manufacturing PMI dropped to 51.5 from 53, a six-month low; recent GDP data was subdued.
• Trade war escalation. A new US ban on multiple Canadian imports took effect, following Canada’s retaliatory tariffs earlier in September; the loonie is around 70.2 US cents.

Partial offsets: energy +0.7% on higher crude, tech +2.9% (Micron’s blockbuster earnings lifted the group), and First Quantum +3.1% after Panama recommended talks to reopen the Cobre Panama mine. Softer-than-expected US PCE inflation (3.4% vs 3.7% expected) cooled bets on another Fed hike, which helped gold and miners early, though materials still faded 1.2% by midday.

Note: session is still open, so these are intraday figures, not the final close.

TC Energy TRP-T -0.18%decrease said on Tuesday its Coastal GasLink Phase 2 project will proceed after LNG Canada and its joint venture partners made a positive final investment decision on the LNG Canada expansion project.

The company said Coastal GasLink Phase 2 will nearly double the pipeline’s capacity through the addition of new compressor stations and upgrades along its existing 670-km route linking Dawson Creek and the LNG Canada export facility in Kitimat, British Columbia.

Tight global markets, outages among major producers and strong long-term demand growth from countries seeking to replace coal with cleaner-burning natural gas are driving interest in new LNG projects and more diversified sources of supply.

Earlier on Tuesday, LNG Canada partners led by Shell approved a multi-billion-dollar Phase 2 expansion of the Kitimat facility that will double its production capacity to 28 million metric tonnes a year from 14 million metric tonnes per annum (mtpa), strengthening Canada’s position in the global LNG export market.

LNG Canada, Canada’s first large-scale LNG export terminal, is a joint venture between Shell, Petronas, PetroChina, Mitsubishi Corp and Korea Gas Corp , and ranks among the country’s largest private-sector investments.

TC Energy operates a 58,100-mile network of pipelines, supplying more than 30 per cent of the clean-burning natural gas consumed daily across North America.