Housing was the national obsession in 2016. Record home sales and double-digit price gains in the country’s hottest markets spurred government intervention that will have profound ramifications on Canada’s economy for years to come. Those are among the reasons BNN selected housing as the top story of the year. But there were a myriad of other market moving events and political surprises that made 2016 a very memorable year for investors. Here are the other top stories that captivated us over the last 12 months.
President Donald Trump
Populist political discontent pushed Britain to vote to leave the European Union and helped Donald Trump win the race for the White House. The real estate tycoon and reality TV star’s message of getting tough with trading partners and “draining the swamp” in Washington resonated with U.S. voters. Canada will be watching the president-elect’s twitter feed to see if he makes good on his threat to rip-up the North American Free Trade deal or his promise to approve the controversial Keystone XL pipeline.
Fort McMurray was already suffering from the crash in crude oil prices when the town deep in the heart of the Alberta oil sands was ravaged by wildfires that destroyed much of the once-mighty oil boomtown. It was the costliest natural disaster in Canadian history with an estimated $3.77 billion in insurance claims filed so far, according to the Insurance Bureau of Canada. The cost of the fires hurt Canada’s economy and added to Alberta’s budget deficit -- but rebuilding the city may give some much-needed stimulus to the provincial economy in 2017.
TSX global outperformance
After being hit hard by the collapse in global oil prices, many Canadian energy companies rallied when oil prices stabilized. And other commodity companies did even better. Teck Resources (TECKb.TO), for instance, has surged more than 400 per cent this year. “While everyone was looking left (to the U.S.) as the best place to put your money in 2016, it was the Canadian market that reigned supreme,” said Amber Kanwar, host of BNN’s Business Day AM.
Pipelines and politics
Pipelines were a political hot potato in Canada this year. National Energy Board hearings into potential pipeline projects had to be suspended after aggressive protestors created a security risk. Later, NEB panelists reviewing TransCanada’s (TRP.TO) Energy East pipeline stepped down amid allegations of bias. But by the end of the year, Prime Minister Justin Trudeau signed off on Kinder Morgan’s Trans Mountain expansion and Enbridge’s Line 3, two major pipeline projects that will help ship nearly a million more barrels of oil a day from Alberta's oil sands. The pipelines are not a done deal as environmental groups and local politicians vow to continue their opposition.
A federal task force laid out a blueprint for legalizing marijuana in December. The Liberals say they will move to make good on their campaign promise to legalize recreational cannabis in the coming months. Share of many publicly-traded licensed Canadian marijuana producers soared on the news. A legal market for recreational marijuana could give Canada’s economy a boost of up to $22.6 billion annually, according to a study from Deloitte. The new industry has a bit of a wild-west feel to it and with so many unanswered questions, many Canadian money managers say the stocks are still too risky for them to recommend to their clients.
Bombardier back from the brink
At the beginning of the year Bombardier Inc. (BBDb.TO) appeared to be flirting with bankruptcy protection. The company was struggling with a cash crunch, high costs and a long dry spell without firm orders for its CSeries jet. But the company appears to be back from the brink. The iconic airplane and train manufacturer slashed jobs, streamlined operations and booked big jet orders with Air Canada (AC.TO) and Delta (DAL.N). The company is still facing challenges. Toronto Mayor John Tory has accused Bombardier of “complete failure” on its billion-dollar streetcar order for the city. Bombardier has promised to make it right in the coming year.
Resilient Canadian banks
Despite the concern over Canada’s hot housing markets and the slowdown in Canada’s energy sector, the Big Five banks continue to hover near all-time highs. All the banks say they have contained any potential oil-related losses and are keeping a close eye on the mortgage market. But with Canadian consumers carrying record-high debt the banks could be put to the test again in 2017.
Short sellers cash in
Valeant Pharmaceuticals (VRX.TO) once had the largest market capitalization of any Canadian company. But shares of the company have plunged as short-sellers raised questions about the company’s accounting and business practices. Similar questions about another Canadian pharma stock – Concordia International (CXR-TO) – sent its stock into a tailspin.
Rogers CEO ousted
Rogers Communications (RCIb.TO) made headlines back in late 2013 when it appointed Guy Laurence, a brash British telecom executive, to head up the family-run company. It made headlines again when it fired him earlier this year and replaced him with Joe Natale, the long-time telco executive who was dropped as CEO of Telus in 2015. Natale is still subject of a non-compete agreement with his old company and will not assume his new role until July.