Premier Jason Kenney, seen here on Feb. 24, 2020, will play host Monday to a conference call with a new economic advisory council, chaired by Calgary economist Jack Mintz.
CODIE MCLACHLAN/The Globe and Mail
Alberta is set to release an economic stimulus package this week as the province has been hit hard from the COVID-19 pandemic and plunging oil prices.
Premier Jason Kenney will play host Monday to a conference call with a new economic advisory council, chaired by Calgary economist Jack Mintz, as the province hashes out the best way to give its teetering economy a fiscal shot in the arm.
At a news conference on Friday, Mr. Kenney said the goal was to announce an initial package of assistance by the end of this week.
With fiscal year-end approaching, along with spring breakup for oil drilling rigs and the start of construction season, Mr. Kenney said his government is moving as quickly as possible on an economic rescue package.
“I expect a lot of very important economic decisions to be made for the Alberta economy by business leaders over the course of the next two and half weeks. We want them to know the government of Alberta will be there as much as we reasonably can,” he said.
The Premier and Energy Minister Sonya Savage have met with the energy sector and will continue talks with other sectors in the coming days to nail down the government’s next moves.
Alberta leans heavily on non-renewable resources, which are forecast to comprise around 13 per cent of provincial revenue in the 2019-20 fiscal year.
But mid-sized energy producers are facing a liquidity crisis as lenders tighten their purse strings and the per-barrel price of oil withers. Western Canadian Select crude has hovered just above $30 over the past few months, but plunged below $20 last week in the face of decreased demand because of the new coronavirus spread and an escalating Saudi-Russia oil price war.
On Friday, the federal government announced that the two Crown corporations that lend to Canadian businesses – Export Development Canada (EDC) and Business Development Bank of Canada (BDC) – will boost their loans by $10-billion, as part of a strategy to inject additional liquidity into the economy.
While details on that plan are yet to be released, federal Finance Minister Bill Morneau said small and medium businesses would receive most of the funds. Smaller companies are facing the prospect of severe hits to cash flow as social distancing hurts the retail and hospitality sectors, in particular. Loans from EDC and BDC could provide a financial bridge during the fight against the virus.
Mr. Kenney said he was encouraged by the move, but that his government is doing the calculations to figure out if it is adequate support for the already-struggling energy sector. If not, his government will pursue additional credit tools.
His United Conservative government is considering an instrument similar to the Troubled Asset Relief Program (TARP) rolled out in the United States during the global financial crisis. Under TARP, the U.S. Congress authorized US$700-billion to bail out financial companies and automakers.
Alberta Finance Minister Travis Toews said Friday he has raised energy-industry concerns with Mr. Morneau, and is working with Alberta’s financial institutions to ensure that the province is prepared to meet credit and liquidity challenges.
Mr. Kenney stressed that all areas of Alberta’s economy – including tourism, hospitality and travel – will be hit by the pandemic, and said his government is “looking at a whole suite of measures” to help those industries.
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(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
©2024 Bloomberg L.P.
The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
Author of the article:
Published Apr 18, 2024 • 2 minute read
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
Article content
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
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Article content
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
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Article content
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
Article content
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