Toronto and Vancouver housing markets threaten Canada’s rapid economic growth, OECD says

The Organization for Economic Co-operation and Development says Canada’s economy is growing so fast the country might soon hit full employment, but it remains worried about “overheating” housing markets in Vancouver and Toronto.

Canada’s gross domestic product will grow by 2.8 per cent during 2017, double last year’s pace, the Paris-based think-tank projects, fuelled by gains in household wealth, a pick-up in oil and gas industry investment, low interest rates and government spending.

“The federal government’s mildly expansionary fiscal stance will hasten the economy’s return to full employment,” the organization said in a report released Wednesday. “The labour market is strengthening. The unemployment rate is down about half a percentage point from a year earlier, and more people are coming into the labour force.”

Statistics Canada will release its jobs report for May on Friday. The unemployment figure for April was 6.6 per cent, and economists expect little change.

But the OECD is concerned about the housing markets in Toronto and Vancouver. The OECD thinks Canada’s economy is expanding fast enough for the Bank of Canada to push interest rates higher toward the end of this year, and is hoping higher interest rates could help cool the housing markets in those cities.

Provincial governments in Ontario and B.C. have introduced transfer taxes that aim to ease the Toronto and Vancouver residential real estate markets, but the OECD said the impact from those taxes will likely be short-lived.

The OECD is also concerned that a broad expansion of rent controls in Ontario may discourage the construction of new rental buildings. This may actually harm the people Ontario’s new rules are supposed to help, the OECD said. “Low rental supply would hamper labour mobility — particularly for the poor and the young.”

But rate hikes and transfer taxes won’t fully address the risks the Canadian economy faces from a “disorderly” housing price correction, the OECD said.

The Canadian government last year introduced some rules that are designed to keep riskier borrowers out of the housing market. The OECD said Canada needs to bring even more of this type of “macro-prudential” regulation. For example, it said Canada could use different debt-to-income constraints in regions that have high home prices.

“Higher interest rates will take some of the wind out of booming housing markets and rapidly rising house prices,” the OECD said. “Nevertheless, macro-prudential measures, which were strengthened during 2016, should be tightened further to address economic and financial risks related to the housing market.”

The OECD’s outlook for Canada is quite bullish. The OECD’s forecast tops the Bank of Canada’s estimate for Canadian growth this year of 2.6 per cent. The OECD also puts the Canadian economy well out in front of the U.S., which the think-tank expects will grow 2.1 per cent this year.

Canada’s economy is getting a push from what the OECD described as the federal government’s “mildly expansionary” deficit spending. Federal government spending accounted for 1.9 per cent of Canada’s 2016 GDP, up from 0.8 per cent the year before.

But the OECD is also expecting the private sector to drive growth. Business investment dropped sharply after the downturn in the oil and gas sector, but the OECD now sees signs of a “modest” pick-up in investment, particularly if oil remains above US$50 a barrel.

Indeed, although the OECD expects Canada’s economy to grow at a slower rate of 2.3 per cent in 2018, it’s looking for boosts in business investment and exports to keep the country’s economy expanding at a rate ahead of inflation.

And Canada needs that business investment and export growth. Canada’s recent economic gains have been due to private consumption, housing investments and government spending. The OECD said those increases aren’t sustainable because they haven’t been matched against gains in income or output.

The OECD said Canada faces several potential downside risks, chief among them the possibility of a “disorderly” decline in the Toronto and Vancouver housing markets.

“Such a correction would reduce residential investment, household wealth and consumption. A sufficiently large shock could even threaten financial stability,” it said.

The OECD also cautioned that Canadian export growth could be hit by protectionist measures, such as recently imposed U.S. tariffs on Canadian softwood lumber.

Financial Post

Pot producer MedReleaf in for worst Canadian IPO debut in two decades

Markham-based pot producer MedReleaf Corp. fell 22 per cent in its trading debut, the largest decline for a sizable Canadian initial public offering in 16 years, amid growing concern that marijuana stocks are overvalued.

Shares in the company — trading under the ticker “LEAF” — closed at $7.40 on the Toronto Stock Exchange on Wednesday, giving it a valuation of $669 million. The drop is the biggest for a sizable Canadian IPO since Intier Automotive Inc. fell 34 per cent in 2001.

MedReleaf’s chief executive officer Neil Closner declined to comment on the share price, but said being listed on the TSX will contribute to efforts to grow the business. “We’re very optimistic about the growth opportunities ahead,” he said.

Read more:

Canadian marijuana legalization reports send pot stocks higher

Canadian cannabis companies face dearth of female directors

MedReleaf priced its shares at $9.50 apiece last week, raising $100.7 million in the largest initial public offering for a pot producer in North America. It is now the second-largest publicly traded medical marijuana company in Canada, behind Canopy Growth Corp., which became the first pot producer to be added to the S&P/TSX Composite Index in March and has a market cap of $1.1 billion.

MedReleaf’s debut comes amid weakness in the market for pot stocks, after Health Canada said on May 26 that it will make several changes to its medical cannabis program that are expected to result in more licensed producers, increasing supply and competition.

Companies are announcing new marijuana expansions on a daily basis and investors are becoming “jaundiced” and are having trouble differentiating them, said Chris Damas, editor of the BCMI Report in Barrie.

Canopy has tumbled 22 per cent this year, while Leamington, Ont.-based Aphria Inc. has declined 3 per cent and Alberta-based Aurora Cannabis Inc. is down 7.4 per cent.

All marijuana companies rose during the market’s recent “pot mania,” regardless of their investment merit, and the industry is now seeing the opposite as strong businesses like MedReleaf, Cronos Group and Aphria fall in line with “inferior cannabis stocks,” PI Financial analyst Jason Zandberg said. Accumulating shares of market leaders as prices fall may prove to be a profitable trade, he said.

MedReleaf’s IPO was the second for a pot producer in Canada after CanniMed Therapeutics Inc. raised $69 million in December. Other publicly traded companies have listed mainly through reverse takeovers.

Flair Airlines purchase of NewLeaf could lead to cheaper flights, better service for Canadian travellers

Flair Airlines has bought deep discount flight seller NewLeaf Travel Company in a move one analyst says will lead to greater competition and lower airfares for Canadian travellers, at least initially.

“I think it’s a great move, particularly for the travelling public,” said Ken Beleshko, of Avacon Aviation and Aerospace consulting.

Kelowna, B.C.-based Flair said in a release Wednesday that it has bought NewLeaf Travel Company’s assets, including its “marketing, selling and distribution engine.” The purchase means Flair Air immediately moves from a charter company to a full-fledged, scheduled airline with its own reservation department, airport passenger services facilities, and full control over the operations side of the business.

Both Flair and NewLeaf have been linked since NewLeaf launched last summer, offering flights for as little as $59 one way between Canadian cities such as Abbotsford, Halifax, Edmonton, Hamilton and Winnipeg.

The company has completed more than 2,200 such flights and moved more than a quarter of a million passengers in the process.

Although it marketed itself as an airline, NewLeaf was just a ticket seller, while Flair Airlines owned the planes and operated the flights.

“Expansion is planned for new destinations beginning this year, plus the fall and winter domestic schedule will be released shortly,” Flair said in a release.

It also said the acquisition of NewLeaf establishes it “as Canada’s third national airline, providing service coast to coast.”

That may be overreaching a bit considering Flair has just five Boeing 737-400s, all with relatively limited range. 

NewLeaf Airline plane

NewLeaf sells tickets for flights between various Canadian cities at deeply discounted prices. (NewLeaf)

The company has also been at the centre of controversy recently as one of the operators involved in “The Mexican Game”

A CBC News investigation discovered Air Transat directed Flair — and Flair agreed — to mislead aviation authorities and passengers about unscheduled stops on flights from Mexico.  Flair was operating those flights on behalf of Air Transat, but its aircraft could not make it all the way back to Canada in some cases without stopping to refuel. 

Passengers on those flights also complained about Flair’s aircraft, saying the planes — which range in age from 24 to 27 years old — were dirty, had rickety seats, lacked modern amenities such as seat-back entertainment, and even the toilets malfunctioned.  

‘Third national airline or not, the mere presence of Flair Air as a full-fledged airline will mean more available flights and lower prices, according to Beleshko.

“If they’re going to make this a successful venture, they’re going to have to offer frequent service between major city pairings such as Vancouver-Toronto, Edmonton-Calgary, Montreal-Toronto and so forth to tap into that lucrative market.”

Beleshko also expects Flair to attempt to compete with both WestJet and Air Canada on regional short-haul service between cities like Winnipeg and Saskatoon.

That will prompt both WestJet and Air Canada to lower their prices and offer more flights and more amenities, he says.

“You can rest assured that the two major airline carriers, Air Canada and Westjet, are going to be very protective of their market share and they will go head to head with Flair or any other deep discount carrier that wants to enter the market.”

Canada’s aviation history is littered with airlines that either went out of business or failed to get off the ground. Flair’s owners actually tried this once before with Greyhound Air.

“And it was a short-lived proposition because they weren’t getting the ridership and it was a losing proposition financially.” said Beleshko, adding Flair/NewLeaf will face many of the same challenges.

“I would suggest that unless they [Flair] have very deep pockets and investors that are willing and have staying power. It’s going to be a tough haul.”

Canadian Grand Prix: McLaren express ‘serious concerns’ over ‘lost’ Honda


McLaren have “serious concerns” over whether they can win the world championship with engine partner Honda, says executive director Zak Brown.

The former world champions are facing their worst ever season after failing to register a single point so far in 2017 after a series of engine failures.

Brown said engine upgrades promised for Sunday’s Canadian Grand Prix were not ready and the team is “near our limit”.

“Honda’s working very hard but they seem a bit lost,” he told Reuters.

“We were eagerly awaiting this upgrade as were our drivers and it’s a big disappointment that it’s not coming.

“It’s not lack of effort, but they are struggling to get it to come together.”

  • What next for McLaren-Honda?
  • ‘Honda risking reputation’ – Alonso

Brown, who replaced Ron Dennis at the McLaren helm last year, added: “Our preference is to win the world championship with Honda.

“But at some point you need to make a decision as to whether that’s achievable. And we have serious concerns.

“Missing upgrades, and upgrades not delivering to the level we were told they were going to, you can only take that so long. And we’re near our limit.

“We’re not going to go into another year like this, in hope.

“There’s lots of things that go into the decision and we’re entering that window now of ‘which way do you go when you come to the fork in the road’.”

McLaren’s renewed partnership with Honda in 2015 was billed as a return to the glory days of their collaboration in the late 1980s and early 1990s, when Alain Prost and Ayrton Senna dominated.

  • McLaren explore Mercedes engine option
  • Canadian GP: Alonso returns… and seagulls

Yet McLaren remain without a race win since 2012 and their best finish this season was when Fernando Alonso, who started seventh on the grid, came 12th in last month’s Spanish Grand Prix.

In March it was revealed McLaren had made an exploratory approach to Mercedes about engine supply in the wake of problems with Honda.

And Brown again raised the prospect of McLaren paying for engines in future.

“Do I think you can win with a customer engine? I think you can,” he said.

How to follow the Canadian Grand Prix on BBC Sport

Canadian GP coverage details (all times BST)
Date Session Time Radio coverage Online text commentary
Thursday 8 June Preview 21:00-21:55 BBC Radio 5 live, online and podcast
Friday 9 June First practice 14:55-16:35 BBC Sport website From 14:30
Friday 9 June Second practice 18:55-20:35 BBC Sport website From 18:30
Saturday 10 June Third practice 14:55-16:05 BBC Sport website From 14:30
Saturday 10 June Qualifying 17:55-19:05 BBC Sport website From 17:00
Sunday 11 June Race 18:30-21:00 BBC Radio 5 live From 17:30
Monday 12 June Review 04:30-05:00 BBC Radio 5 live, online and podcast

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Oral fluid drug screening devices can be “successfully used in Canada,” Public Safety Canada reports

Results from the federal government’s oral fluid drug screening device pilot project suggest the devices can be “successfully used in Canada” to identify drivers who test positive for certain drugs in various conditions, Public Safety Canada (PSC) reported on Tuesday.

Police used the Securetec DrugRead (pictured above) and Alere DDS-2 for the tests. Credit:

While drivers can currently be tested for impairment by drug recognition experts and standard field sobriety testing, Public Safety Canada, in collaboration with the RCMP and the Canadian Council of Motor Transport Administrators, led the pilot project to test the use of oral fluid drug screening devices as an additional tool for detecting drug-impaired drivers.

A total of 53 police officers from seven jurisdictions across Canada – Vancouver, Toronto, Halifax, Gatineau, the Ontario Provincial Police and RCMP in Yellowknife and North Battleford, Sask. – collected over 1,140 samples between Dec. 18, 2016 and March 6, 2017, PSC reported in a statement.

Related: Motorists’ oral drug testing trial to ‘help establish possible future operating procedures:’ Public Safety Canada

Two oral fluid screening devices – the Securetec DrugRead and Alere DDS-2 – were selected for the pilot project. Oral fluid screening devices can detect the recent presence of several drugs, including THC from cannabis, cocaine, methamphetamines, opioids, benzodiazepines and amphetamines, PSC said in the statement.

“Feedback from officers involved in the pilot project was largely positive,” PSC noted. “Officers reported that the devices were easy to use at the roadside with some standard operating procedures. They also said they were able to successfully use them in various weather, temperature and lighting conditions. The officers also noted their comfort and confidence increased the longer they used the devices, and they were able to adapt and troubleshoot problems encountered at the roadside.”

The pilot project, announced on Dec. 14, 2016, is an example of a successful federal partnership with provinces, territories and police forces across Canada, PSC said. The Final Report on the Oral Fluid Drug Screening Device Pilot Project includes key recommendations, such as developing a list of standards for device functionality, as well as standard operating procedures at the roadside and development of core training for police forces, among others.

According to background information from PSC, approximately 15% of all volunteers who participated in the pilot project registered a positive drug reading. The report said that testing occurred under a variety of conditions, including “clear (913 tests, 80%), “snowy,” (139 tests, 12%) and “rainy,” (80 tests, 7%). Testing was also conducted at “all times of the day” (light conditions 4%, dark conditions 36%), with recorded temperatures ranging from -50°C to 26°C. Devices also “did not function as expected by the officer (e.g., device powers off during analysis)” in 13% of samples.

Information from Statistics Canada indicates that nearly 3,000 drug-impaired driving incidents were reported in 2015, representing 4% of all impaired driving incidents, double the proportion in 2009, when data on drug-impaired driving first became available.

Related: Opposition MPs concerned about lack of a ‘ready, usable, reliable roadside screening device’ for marijuana impairment

The federal government has also proposed Bill C-46, under which a law enforcement officer would be authorized, following a legal roadside stop, to demand that a driver provide an oral fluid sample if they reasonably suspect a driver has drugs in their body.

Ralph Goodale, Minister of Public Safety and Emergency Preparedness, said in the statement that “drug impaired driving is a serious problem and giving law enforcement more tools to detect and deter drug-impaired driving will better protect our communities. I am pleased the pilot project demonstrates this technology works in our unique Canadian environment.”

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Canada plans major defense spending boost over next decade

By David Ljunggren and Leah Schnurr

Canada on Wednesday unveiled plans for one of the biggest hikes in military spending in its recent history, acting less than two weeks after U.S. President Donald Trump demanded that NATO members ramp up defense expenditures.

Defence Minister Harjit Sajjan, unveiling a 20-year policy review that had been in the works for months, said the armed forces budget would jump by 73 percent to C$32.7 billion ($24.2 billion) in 2026/27 from C$18.9 billion in 2016/17, with the biggest increases coming in later years.

The Liberal government made the announcement a day after Foreign Minister Chrystia Freeland said Canada would have to play a larger global role as the administration of U.S. President Donald Trump retreated from multilateralism.

Sajjan told reporters the policy would result in “a Canada that is strong at home, secure in North America and engaged in the world.”

Canada and the United States are traditionally close allies but the relationship has become strained under Trump, who was elected on a promise to “put America first.”

David Perry, defense analyst at the Canadian Global Affairs Institute, said he was pleasantly surprised by the spending plans. The center-left Liberals have traditionally been skeptical about major military purchases.

“They’ve promised … to spend money on a lot of needed priorities, most of it on capital investments, which is where I think the real priorities were,” Perry said by phone.

Sajjan said the boost would take total defense expenditures to 1.4 percent of GDP by 2024/25 from 1.2 percent now. Other estimates put Canada’s spending at closer to 1.0 percent.

North Atlantic Treaty Organization members have committed to spend 2 percent of GDP on the military, a target few meet. Trump last month upset NATO leaders by insisting they commit more funds and also by not personally affirming the alliance’s mutual defense doctrine.

Asked whether he thought Trump would be satisfied, Sajjan said: “This defense policy is for Canada”.

NATO Secretary General Jens Stoltenberg said the announcement would “ensure Canada has the armed forces and the key capabilities that the Alliance needs”.

Ottawa will hold an open competition to buy 88 advanced fighters to replace its fleet of 77 CF-18 planes, more than the 65 new jets the previous Conservative government had planned.

The defense review said the jets would need to operate seamlessly with planes of Canada’s allies and estimated the cost at between C$15 billion to C$19 billion.

Ottawa said last year it wanted to buy 18 Boeing Corp Super Hornets as an interim measure but has since threatened to scrap the plan unless the U.S. firm drops an anti-dumping challenge against planemaker Bombardier Inc.

Potential winners include rival jet makers, such as Lockheed Martin Corp, Dassault Aviation SA, Airbus SE and Saab AB, analysts said.

Sajjan declined to comment when asked whether the spending would result in a larger budget deficit than the Liberals are already forecasting.

One major uncertainty is that the Liberals may not be in power in a decade’s time. They took office in 2015 and Canadian governments usually last between eight and 10 years.

Indeed, when in government, the Conservatives promised in 2008 to boost defense spending to C$30 billion by 2027/28 from C$18 billion in 2008/09. But by end of 2014/15, their last full year in power, the budget had only edged up to C$20.1 billion.

“It’s really really easy to backload promised spending, especially when you’re able to backload it into the 2020s,” said Kim Richard Nossal, a political studies professor at Queen’s University in Kingston who specializes in defense procurement.

The Liberal government also confirmed longstanding plans to buy 15 new ships and said the cost would rise to between C$56 billion and C$60 billion. Conservatives had put the cost at C$26.2 billion.

The Conservatives said they were skeptical the Liberals would be able to deliver on their promises.

“We learned that the majority of the funding announced today won’t be available until after the next election and the government won’t tell us where it is going to come from,” said party defense spokesman James Bezan.

(Reporting by David Ljunggren and Leah Schnurr; Editing by Denny Thomas and Tom Brown)

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and Canada to lead the Clean Energy Ministerial Energy Management Working Group

BEIJING, 7 June 2017 – The Government of Canada and the United Nations Industrial Development Organization (UNIDO) will lead the Energy Management Working Group (EMWG), which aims to accelerate the global adoption of energy management systems in the industrial and commercial buildings sectors.

This new leadership structure was announced today during the eighth meeting of the Clean Energy Ministerial (CEM), taking place in Beijing.

The EMWG is an initiative under the CEM, the International Partnership for Energy Efficiency Cooperation (IPEEC), and the G20 Energy Efficiency Action Plan. The participating governments are Australia, Canada, Chile, China (observer), Denmark (observer), the European Commission, Finland, Germany, India, Indonesia, Japan, Korea, Mexico, Saudi Arabia, South Africa, Sweden, United Arab Emirates, and the United States.

Together, Canada and UNIDO will provide strategic contributions and mobilize resources to maintain the EMWG as a key global forum for advancing energy management systems.

‘The EMWG has helped us to measure the benefits of the ISO 50001 certification in Canada, foster a qualified workforce and recognize leadership through the CEM Energy Management Leadership Award, presented in Canada for the first time this past year,’ said James Gordon Carr, Canada’s Minister of Natural Resources. ‘Canada is pleased to take on leadership of the Energy Management Working Group in collaboration and in cooperation with UNIDO.’

LI Yong, the Director General of UNIDO, added: ‘Energy management is a central part of UNIDO’s services and reinforces our mandate of inclusive and sustainable industrial development. We are proud to join the Government of Canada and all EMWG member countries on advancing ISO 50001 and energy management systems globally. We stand ready to provide our knowledge, expertise and technical resources in support of this cause. I am confident that through our programmes and expertise, we will help the EMWG increase its global outreach and achieve all of its objectives.’

For more information, please contact:

Rana Ghoneim

Industrial Development Officer

UNIDO Energy Department


Alexandre Deslongchamps

Press Secretary

Office of the Minister of Natural Resources


Media Relations

Natural Resources Canada



UNIDO – United Nations Industrial Development Organization published this content on 07 June 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 07 June 2017 16:00:26 UTC.

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Canada to Chair 2017 Commonwealth Finance Ministers Meeting

Canada’s Minister of Finance, Bill Morneau, will chair the 2017 Commonwealth Finance Ministers Meeting (CFMM) in Washington, D.C., this October. It will be Canada’s seventh time chairing the meeting since it first did so in 1966.

As the Commonwealth’s third largest economy and member of the G7 and G20, Canada is an influential leader in the global economy. The Government of Canada’s people-first approach to creating long-term growth has received international recognition and complements the theme of this year’s CFMM, which is Advancing Jobs and Resilience through Innovation. Canada’s people-first approach aims to ensure that Canadians have access to the tools, skills and training they need to obtain good, well-paying middle class jobs and success in the new, innovative economy of tomorrow.

‘I am honoured to have been asked by the Commonwealth to chair this important meeting and to lead by example with the Government of Canada’s approach to investing in people and growing the economy over the long term,’ said Minister Morneau. ‘Given this time of rapid global change, it is extremely important for all countries to work closely together to address the various challenges and seize the incredible opportunities. Above all, it is critical that the benefits of the growth we all create together are widely shared by all of our citizens.’

The CFMM will bring together 52 Commonwealth countries to discuss common economic challenges and opportunities.

‘This will be my second Finance Ministers Meeting as Secretary-General and I’m always struck by not only how diverse our Commonwealth family is, but by the potential that exists given the dynamic experience and skills that our countries bring to the table,’ said Patricia Scotland. ‘We represent a third of the world across six regions. We have small and vulnerable states, developed and developing states, and, of course, two, including Canada, which make up the Group of Seven richest nations in the world. When the Commonwealth comes together, it is incredible to witness what we can achieve in terms of collegiate dialogue and cooperation in creating greater prosperity for all of our citizens.’

The CFMM will take place just ahead of the Annual Meetings of the International Monetary Fund and World Bank Group, scheduled for October 13-15, 2017.

Note to Editors

More details on the precise date and location of the CFMM, as well as the specific topics for discussion, will follow.

Commonwealth Secretariat published this content on 07 June 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 07 June 2017 16:00:26 UTC.

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Canada to change sex assault consent laws

Parliament HillImage copyright
Getty Images

Canada has announced it is amending its sexual assault laws to clarify what consent means and better protect victims in court.

The proposed changes were announced on Tuesday by Justice Minister Jody Wilson-Raybould.

The law would clarify that someone cannot consent while unconscious, and expands “rape shield laws”.

Many of the proposed changes had already been introduced by the courts, but had yet to be written into law.

“I am hopeful that the proposed changes to the sexual assault provisions will go a long way towards ensuring that complainants are treated with the compassion, dignity and respect they deserve,” said Ms Wilson-Raybould in a statement.

The proposed laws were introduced as part of Bill C-51, which would also require the minister of justice to table a statement for each new government bill on how the bill would affect Canada’s Charter of Rights and Freedoms. The bill is expected to pass given the Liberals have a majority in Parliament.

In 1992, Canada introduced “rape shield laws” that ban a complainant’s sexual history or medical records from being used as evidence that she was likely to have consented to sex or that she was unreliable. The changes proposed on Tuesday would expand these laws to include sexual texts, emails, pictures and videos.

Similarly, in 2011 the Supreme Court of Canada ruled that someone cannot consent to sex while unconscious. But this provision had not been written into the Criminal Code, and advocates say more clarity is needed.

The law would also specify that a complainant has the right to an attorney when the courts are deciding whether a complainant’s sexual history is admissible or not.

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Kinder Morgan Canada Eyes Domestic Bond Sales for Trans Mountain

(Bloomberg) — Kinder Morgan Canada Ltd. may issue its first Canadian-dollar bonds next year to replace its existing funding for the Trans Mountain pipeline expansion.

The Calgary-based firm received a BBB investment-grade credit rating from S&P Global Ratings on June 2, a first step in a public debt sale. It will look to strategically replace its C$4 billion ($3 billion) construction credit facility after work begins in September, but likely not until at least 2018, David Michels, Kinder Morgan Inc.’s vice president of finance and investor relations, said by phone.

“It’ll be opportunistic, it’ll be how strong the market is, how much of a need do we have to do it, and that’ll be based on the amount that we’ve drawn under the construction facility,” Michels said.

Kinder Morgan Canada, which was spun out of Kinder Morgan Inc. in a recent C$1.75 billion initial public offering, has C$6.2 billion left to spend on its controversial C$7.4 billion project, which would triple the capacity in a pipeline running from near Edmonton, Alberta, to a terminal near the Vancouver port. It has secured C$5.5 billion in credit facilities to fund the project, all rated BBB by S&P, according to the ratings decision.

The federal government supports the project, but two political parties in British Columbia that oppose the pipeline have struck an alliance and are poised to oust the current provincial Liberal government, raising uncertainty around the future of the project. Kinder Morgan Canada shares are trading slightly below their IPO price.

“We’re confident that this will proceed and we’re confident it will proceed on budget and on time,” Michels said, noting that Prime Minister Justin Trudeau had reaffirmed the government’s support for the project after the New Democratic and Green parties aligned in B.C.

A Canadian-dollar bond sale would be the first for Kinder Morgan, according to data compiled by Bloomberg.

©2017 Bloomberg L.P.

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