Canadian banks announced they were raising their prime lending rates after the Bank of Canada surprised markets by hiking it benchmark interest rate on June 7.
Business
Northern Pulp to proceed with environmental process – TheChronicleHerald.ca
Northern Pulp has informed the provincial government that it will continue with the environmental process for a proposed effluent treatment plant.
“Since the company has chosen to carry on with the environmental assessment process, we are legally required to continue,” provincial Environment Minister Gordon Wilson said in a news release.
“I want to assure Nova Scotians that, as Premier McNeil has confirmed, the Boat Harbour Act will be enforced as of Jan. 31.”
Brian Baarda, chief executive of Paper Excellence Canada, Northern Pulp’s parent company, made it clear at a Dec. 20 news conference in downtown Halifax that the company was closing the Abercrombie Point mill in Pictou County.
Baarda made the statement a short time after Premier Stephen McNeil had announced that there would be no extension to the Boat Harbour Act, legislating the closure of the mill’s long-used effluent treatment plant by Jan. 31.
“This decision ensures the closure of Northern Pulp, the devastation of Nova Scotia’s forest industry, the loss of 2,700 rural jobs and a significant impact to another 8,300 forestry jobs across Nova Scotia,” Baarda said of the premier’s decision.
It is not immediately clear what the company’s decision to continue with the assessment process means for any potential long-term viability of the mill.
Three days before McNeil’s announcement, Wilson had withheld approval of Northern Pulp’s focus report in support of a proposed effluent treatment facility that would discharge treated effluent into the Northumberland Strait.
As regulator of the project, Wilson said he concluded that more science-based evidence is needed to properly assess the potential risk to air, water, fish and human health.
At that time, Wilson gave the company the opportunity to file an environmental assessment report, a report that could take up to two years to complete.
What the province expects
Draft terms of reference for that environmental assessment report were released Wednesday by the Environment Department.
“Northern Pulp is expected to prepare an environmental assessment report that addresses the deficiencies in the information provided to date through the environmental assessment process and which fulfills the intent of the terms of reference,” the draft term document states. “The environmental assessment report must consider all the effects that are likely to arise from the project, including any not explicitly identified in the terms of reference. The EA report will be used to meet the requirements of a provincial Class I undertaking.”
The environmental assessment report from the company must include, among other requirements, a description of and reason for the project, alternative methods of carrying out the waste water disposal and a description of the environmental risks, including any effects on species or habitats at risk, along with measures that can be taken to prevent or mitigate those risks.
The report also must identify a program to monitor environmental effects produced by the project during its construction, operation and abandonment phases and a program of public information to explain the project.
The information in the report is to be prepared taking into consideration comments from the public, the provincial Environment Department, the federal government and its agencies, municipalities in the vicinity of the project, any affected aboriginal people or cultural community and neighbouring jurisdictions to Nova Scotia in the vicinity of the project. Public and government reviewers have 30 days, until Feb. 7, to comment on the draft terms of reference. Once that happens, the company will have a chance to comment on the draft.
A final terms of reference will be provided to the company by early April.
Once the terms of reference are final, the company will have up to two years to complete the environmental assessment report.
Northern Pulp initially registered its effluent treatment plant project for assessment in February but previous environment minister Margaret Miller asked for a company focus report on March 29 to provide additional information.
That focus report was submitted on Oct. 2 and Wilson on Dec. 17 called for more project information in the form of an environmental assessment report.
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Business
Rob Carrick: What the Bank of Canada rate hike means for investors and savers who want to park money safely – The Globe and Mail
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The benefit of parking cash in a high-interest savings account ETF was demonstrated this week after the latest increase in the Bank of Canada’s overnight rate.
The central bank raised its trendsetting rate by a quarter of a percentage point Wednesday. Almost immediately, the yield on HISA exchange-traded funds increased by a similar amount. For example, the gross yield on the Horizons High Interest Savings ETF CASH-T was 5.18 per cent late this week, up from 4.93 per cent late last month. CASH has a management expense ratio of 0.11 per cent, so its net yield is now 5.07 per cent.
Changes in the overnight rate do not directly influence returns from guaranteed investment certificates, but there’s an indirect effect that right now is working in favour of GIC investors. The Bank of Canada is worried about inflation – that’s why it increased the overnight rate. Inflation fears are also weighing on the bond market, where rates have been moving higher as well lately. Yields on Government of Canada bonds influence rates on GICs, which have been creeping higher lately for terms of one and two years.
As of late this week, the number of alternative banks, trust companies and credit unions offering 5 per cent for one year had grown to seven, and the number offering 5 per cent for two years was four. The best three-year rate was 4.95 per cent. GIC issuers have been reluctant to raise rates on longer terms, but this could change if bond yields keep rising.
HISA ETFs accounted for two of the top 10 sellers last month in ETF land, even though they are under review by the federal Office of the Superintendent of Financial Institutions. These funds hold their assets in accounts at big banks that pay rates of return that are superior to what’s offered to retail depositors. Regulators at OSFI are looking into what would happen to banks if investors were to pull all their money from HISA ETFs at once. OSFI may order changes that will lower returns on HISA ETFs.
As a hedge against this outcome, some ETF providers recently introduced funds holding government treasury bills. T-bill yields have been rising lately as a result of the same inflation concerns that drove the Bank of Canada rate increase this week. T-bill ETF yields would benefit if this continues.
HISAs for investors are also available in a mutual fund format. Rates on these products have been stuck in the 4.05 to 4.35 per cent range in recent months.
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The company says director Chika Stacy Oriuwa indicated she resigned “because of her loss of confidence in board leadership and because of mistreatment.”
In addition to Oriuwa, Indigo says Frank Clegg, Howard Grosfield and Anne Marie O’Donovan have also stepped down as directors. No explanation for their departures was given.
6:05
Indigo CEO Heather Reisman talks about creating a happier planet in her new book ‘Imagine It!’
Indigo wished the departing directors well and thanked them for their contributions.
The retailer says Reisman will retire as executive chair and from the board effective Aug. 22.
Reisman stepped down as chief executive of Indigo last year as part a transition that saw Peter Ruis, who had been the retailer’s president, promoted to chief executive.
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Big banks follow suit after surprise quarter-point hike
Royal Bank of Canada, TD Canada Trust, Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal, National Bank of Canada and Bank of Nova Scotia all said they were increasing the prime rate by 25 basis points to 6.95 per cent from 6.70 per cent, effective June 8, 2023.
Desjardins Group and Equitable Bank also announced it would raise its Canadian prime rate by the same amount.
The Bank of Canada surprised markets and observers when it raised its benchmark policy rate by a quarter percentage point to 4.75 per cent earlier in the day.
The central bank has raised its rate nine times, and 4.5 percentage points, since March 2022, and the commercial banks’ prime rate has moved in lockstep from 2.7 per cent to 6.95 per cent.
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