Good evening, let’s start with today’s top stories:
RBC acquiring HSBC’s Canadian unit for $13.5-billion
Royal Bank of Canada is buying HSBC Bank Canada for $13.5-billion in cash in the largest deal ever reached between two domestic banks in the country.
The transaction, which is subject to regulatory and government approvals, would see RBC consolidate its position as Canada’s largest bank. HSBC Canada is the country’s seventh-largest bank by assets with $134-billion as of Sept. 30 It has about 130 branches and 4,200 full-time staff.
HSBC is consistently profitable and the last Canadian-based bank with enough scale to meaningfully shift market share in deposits and loans, outside the Big Six banks that dominate the industry. Given HSBC’s unique position in Canada’s banking market, the deal raises competition and concentration questions.
Also today, Canadian banks’ earning season kicked off, with Bank of Nova Scotia reporting lower profit in the fourth quarter as expenses and loan-loss provisions grew. It kept its dividend unchanged. RBC releases its results tomorrow.
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Beijing warns against ‘excessive and arbitrary’ enforcement of COVID-19 measures after protests
Beijing has acknowledged the public anger surrounding its tough COVID-19 policies, just days after anti-lockdown protests in cities across the country.
But at a news conference today, top health officials did not chart a course out of the government’s zero-COVID strategy, instead laying the blame on overzealous local authorities who applied measures “excessively and arbitrarily.”
Meanwhile, in his first public comments on China since Canada released its new Indo-Pacific policy, Prime Minister Justin Trudeau showed support of the rare and widespread demonstrations, saying the Chinese “should be allowed to express themselves” and protest.
Opinion: The Tiananmen Square protests were built on hope. China’s current protests are built on anger - Margaret McCuaig-Johnston, advisory board member of China Risks Institute
Bank of Canada reports first loss
The Bank of Canada has reported a $522-million third-quarter loss, the first time the central bank has lost money in its 87-year history.
The bank has been caught in an unprofitable bind in recent months, as its dash to increase interest rates to fight inflation has created a mismatch between assets and liabilities on its enlarged balance sheet.
It is now paying out a higher interest rate on roughly $200-billion worth of commercial bank deposits at the central bank than it is earning in interest on bonds that it owns.
Alberta Premier to introduce controversial sovereignty act
Developing story: Alberta Premier Danielle Smith is set to introduce her sovereignty act today when the legislature reconvenes, after months of debate about the proposal’s constitutionality, including among members of her own cabinet.
The Premier claims the bill would give the province the authority to disregard federal laws that threaten its jurisdiction. It was the centrepiece of her successful campaign to lead the United Conservative Party, but it was condemned by her leadership rivals, constitutional experts and Indigenous groups.
Opinion: Danielle Smith’s walk has not matched her talk as Alberta’s premier - Jen Gerson
ALSO ON OUR RADAR
Court strikes down Bill 124: An Ontario court has struck down a bill that limited annual wage increases for provincial public-sector workers at 1 per cent
GDP up 2.9%: The Canadian economy grew more than expected in the third quarter, although weakening housing investment and consumer spending suggests that higher interest rates are beginning to take their toll.
Suncor keeping Petro-Canada: Suncor Energy plans to hold on to its Petro-Canada division and expand the gas stations’ offerings, defying an activist investor’s push to sell the chain.
RIP Clarence Gilyard Jr.: The popular supporting actor, whose credits include the blockbuster films Die Hard and Top Gun and the hit TV series Matlock and Walker, Texas Ranger, has died at age 66.
MARKET WATCH
Wall Street stocks ended mixed today ahead of a speech by U.S. Federal Reserve Chair Jerome Powell that could provide hints about the magnitude of future interest rate hikes. Canada’s main stock index closed modestly higher on strength in the materials and energy sectors.
Dow Jones Industrial Average rose 3.07 points or 0.01 per cent to 33,852.53 points, the S&P 500 declined 6.321 points or 0.16 per cent to 3,957.63 and the Nasdaq Composite Index slid 65.72 points or 0.59 per cent to 10,983.78.
The S&P/TSX Composite Index rose 56.92 points or 0.28 per cent to 20,277.41. The loonie traded at 73.64 U.S. cents
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TALKING POINTS
In 1970, a Trudeau government went too far. In 2022, so did another Trudeau government
“It was up to multiple police forces, several provinces and ultimately the federal government to restore law and order. But the extraordinary legal tool chosen by Ottawa does not appear to have been proportionate to the nature, scope or timing of the threat.” - Globe editorial
People with irremediable mental illness should not be denied access to assisted death
“Is cancer more grievous and irremediable than chronic pain or depression? Is ending one’s suffering from a physical illness nobler than doing so for a mental illness?” - André Picard
Alphonso Davies is the hub of the Canadian men’s soccer team: Everything revolves around him
No country can expect one person to carry an entire sports program, but that’s what Davies is being asked to do. - Cathal Kelly
LIVING BETTER
You may want to stock up on woolies and keep a shovel handy: The Weather Network is forecasting a colder than normal start to winter across most of Canada. The network’s winter outlook says a La Nina pattern is returning for a rare third winter, likely meaning colder and snowier weather through December.
TODAY’S LONG READ
Top federal government official casts doubt on Ontario’s Ring of Fire mining development
The remote Ring of Fire region, located 550 kilometres north of Thunder Bay, has been touted by the Ontario government as a key part of its plan to produce battery metals domestically.
A top Canadian federal government official has raised doubts about whether Ontario’s Ring of Fire region will ever be developed, pouring cold water on a critical minerals project that the provincial government has championed and the United States administration has expressed interest in funding.
Jeff Labonté, assistant deputy minister for lands and minerals at Natural Resources Canada, told senior leadership at the Neskantaga First Nation in a meeting on Nov. 17 that it’s possible no mines will be built in the region, and that there is no guarantee Ottawa will ever come forward with the roughly $1-billion in funding needed for development to proceed. He is the government’s foremost expert on critical minerals.
His skepticism comes as a key environmental study in the Ring of Fire faces a multiyear delay, and during a standoff between Ottawa and the Ontario government over funding. Read Niall McGee’s full story.
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