Oil sands workers will be declared essential in Alberta as the province prepares a list of who will keep working should it need to ratchet up its response to the COVID-19 pandemic.
Ontario and Quebec shuttered all non-essential businesses Monday in a bid to slow the spread of the novel coronavirus. Essential workplaces in those provinces include supermarkets, gas stations, pharmacies, takeout and delivery restaurants, hotels, and hardware, liquor, beer and cannabis stores.
An Alberta government source, not authorized to speak publicly on the matter, said their province will soon take similar action. The source said the list is currently being developed by a cross-ministry team with officials from health, labour, energy and municipal affairs under the guidance of the Provincial Operations Centre.
Alberta Energy Minister Sonya Savage told The Globe and Mail in an e-mail the oil sands are strategically important to Alberta and Canada, and more information on their continued operation would be released in the coming days.
She said the health and safety of the thousands of workers from across Canada who live in fly-in, fly-out oil sands camps in northern Alberta, typically for several weeks at a stretch, will be a focus for the government.
Workers live communally in the camps, sharing bedrooms, washrooms, and elbow space in lunchrooms – conditions that make them ripe for a COVID-19 outbreak, experts say. But symptoms of the virus may be mild in the sector’s mainly young and physically healthy work force.
The risk is that they may then have contact with other people who are more vulnerable, such as seniors or people with underlying conditions.
Last week, a worker at Borealis Lodge, about 22 kilometres north of Fort McMurray, was taken to hospital with symptoms consistent with COVID-19. Civeo Corp., a U.S. company that operates that camp and others in the oil sands, told The Globe and Mail Tuesday the worker’s test came back negative.
Ms. Savage said camp operators are currently working with Alberta Health Services to ensure appropriate operating standards, including changes to food service operations and transportation methods, and ensuring proper social distancing protocols.
In the case of Civeo, the company said that means packaged food and reduced canteen hours, screening new arrivals for symptoms, controlled access to common areas, and banning anyone who has travelled internationally from accessing a facility for 14 days after their return.
Oil sands producers continue to operate despite oil prices battered by reduced demand because of the contagion, and a global oil-price war being waged by Saudi Arabia and Russia.
Those market conditions have led North American oil companies to slash more than US$20 billion from their capital budgets in efforts to protect their bottom lines.
The latest massive dial-down came from Suncor Energy Inc., which on Monday night announced it would trim spending by $1.5 billion this year. It also revised its crude production forecast down by 7 per cent.
A multibillion-dollar government aid package for Canada’s energy industry, expected to come from Ottawa, could be at least week away. Alberta Premier Jason Kenney has said he would like to see federal cash for a program to help clean up abandoned and inactive oil and gas wells, which would create jobs and shrink company liabilities.
As the sector faces its ongoing financial woes, Alberta’s Associate Minister of Natural Gas, Dale Nally, saw his folio expanded Tuesday to include electricity.
The government said in a statement the effective operation of Alberta’s natural gas and electricity systems is critical to the province’s health response to the COVID-19 pandemic, and to support much-needed economic activity.
Mr. Kenney said the change would allow Ms. Savage to focus on the “unprecedented challenges” faced by Alberta’s largest industry.
Interest rates will stay low as Canada faces 'long climb out' of COVID-19 hole, central bank says – CBC.ca
Canada’s central bank opted to keep its benchmark interest rate right where it was on Wednesday, at 0.25 per cent.
It’s the first rate decision under the stewardship of Tiff Macklem, who took over as governor of the Bank of Canada last month after Stephen Poloz’s seven-year term as governor ended.
The final months of Poloz’s tenure featured a sudden and dramatic series of rate cuts as central banks around the world moved in unison to slash lending rates to near zero to encourage borrowing and investment to stimulate the economy walloped by the COVID-19 pandemic.
The bank’s rate decision suggests there are no short term plans to deviate from that strategy any time soon.
“It’s going to be a long climb out,” Macklem said at a press conference following the announcement on Wednesday. “We are being unusually clear that interest rates are going to be unusually low for a long time.”
Move was expected
The decision was in line with expectations of economists who monitor the central bank polled by Bloomberg. The bank’s next decision is scheduled for Sept. 9 and no change is expected at that meeting either.
In addition to the interest rate decision, the bank also released its quarterly Monetary Policy Report, which outlines the bank’s outlook for the economy.
The bank calculates that lockdowns and other physical distancing efforts across Canada in the April-to-June period shaved off about 15 per cent of Canada’s GDP.
That makes for the worst quarter for Canada’s economy since the Great Depression, but it’s actually better than the worst-case scenario the bank was tracking when the pandemic began.
“There are early signs that the reopening of businesses and pent-up demand are leading to an initial bounce-back in employment and output,” the bank said.
Economy won’t get back to normal until 2022
For 2020 as a whole, the central bank is now expecting Canada’s economy to shrink by 7.8 per cent but then rebound by 5.1 per cent in 2021 and 3.7 per cent in 2022.
While that’s better than it could have been, it does mean the central bank doesn’t think the economy will get anywhere close to back to normal for another two years.
And that outlook hinges on one rather uncertain development: It assumes Canada’s economy will be spared a second wave of COVID-19.
“We have assumed there is no widespread second wave and hence there’s no widespread second lockdown,” Macklem said. “But we do anticipate there will be localized flare ups and localized restrictions.”
Sherry Cooper, chief economist of Dominion Lending Centres, says that view may prove to be overly optimistic.
“The last few weeks have shown that numbers can bounce back even faster than the numbers went down and a second wave is a very real possibility in the fall,” Cooper said.
In addition to signaling it has no plans to change rates any time soon, the bank also said it plans to continue its bond buying programs, to support credit markets.
Economist Brian DePratto of TD Bank said there were “no surprises” in the bank’s decision.
“With uncertainty still extremely elevated, the Bank of Canada is not taking any chances, maintaining stimulus, and reminding us again that they can and will do more to support the economy if needed.”
Google Said It Would Invest $10 Billion In India. Nearly Half Of It Is Going To The Country's Richest Man. – BuzzFeed News
On Monday, Google announced that it will invest $10 billion in India over the next few years. Two days later, the company revealed a key detail: Nearly half of the money will go to a top telecom operator owned by Asia’s richest man.
The internet giant will invest $4.5 billion into Jio Platforms as part of a plan to “increase access for the hundreds of millions in India who don’t own a smartphone,” Google CEO Sundar Pichai tweeted Wednesday. Mukesh Ambani, Jio’s owner, has a net worth of more than $70 billion.
Google first unveiled the $10 billion Digitization Fund for India on Monday at an online event featuring key Google executives, including Pichai, and members of the Indian government. The company said the money would go toward providing Indians with inexpensive internet access, digitizing the country’s small and medium businesses, and using artificial intelligence in areas like healthcare, agriculture, and education.
Over the last few years, India has become a key market for large American tech companies as they seek growth beyond the United States and Europe. More than 500 million Indians — just under half the country’s population — are now online, and nearly all of them use inexpensive smartphones that run Google’s Android operating system.
Most of that growth has been fueled by Jio. Ambani, an industrialist, founded Jio and pumped it with $35 billion to blanket the country with a high-speed 4G network, which brought the price of data down to pennies. The move launched a telecom pricing war in India and made Jio the country’s largest telecom carrier with nearly 370 million subscribers — more than the entire population of the United States. Jio plans to grow by rolling out internet-powered services such as e-commerce, streaming TV, music services, online gaming, and videoconferencing apps.
As part of the Jio investment, Google and Jio will also work together to create an affordable, entry-level Android smartphone for more than 500 million Indians who still don’t have access to the internet, both companies said.
Over the last three months, investors from around the world have poured in $20 billion into Jio Platforms. In April, Facebook announced that it would buy nearly 10% of the company for $5.7 billion. Facebook’s investment was followed by American private equity firms General Atlantic, Vista Equity Partners, and Silver Lake Partners, as well as chip giants Intel and Qualcomm.
Bank of Canada will maintain current level of policy rate until inflation objective is achieved, continues program of quantitative easing – Bank of Canada
Available as: PDF
The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent. The Bank Rate is correspondingly ½ percent and the deposit rate is ¼ percent. The Bank is also continuing its quantitative easing (QE) program, with large-scale asset purchases of at least $5 billion per week of Government of Canada bonds. The Bank’s short-term liquidity programs announced since March to improve market functioning are having their intended effect and, with reduced market strains, their use has declined. The provincial and corporate bond purchase programs will continue as announced. The Bank stands ready to adjust its programs if market conditions warrant.
While economies are re-opening, the global and Canadian outlook is extremely uncertain, given the unpredictability of the course of the COVID-19 pandemic. Reflecting this, the Bank’s July Monetary Policy Report (MPR) presents a central scenario for global and Canadian growth rather than the usual economic projections. The central scenario is based on assumptions outlined in the MPR, including that there is no widespread second wave of the virus.
After a sharp drop in the first half of 2020, global economic activity is picking up. This return to growth reflects the relaxation of necessary containment measures put in place to slow the spread of the coronavirus, combined with extraordinary fiscal and monetary policy support. As a result, financial conditions have improved. The prices of most commodities, including oil, have risen from very low levels. In the central scenario, the global economy overall shrinks by about 5 percent in 2020 and then grows by around 5 percent on average in 2021 and 2022. The timing and pace of the recovery varies among regions and could be hampered by a resurgence of infections and the limited capacity of some countries to contain the virus or support their economies.
The Canadian economy is starting to recover as it re-opens from the shutdowns needed to limit the virus spread. With economic activity in the second quarter estimated to have been 15 percent below its level at the end of 2019, this is the deepest decline in economic activity since the Great Depression, but considerably less severe than the worst scenarios presented in the April MPR. Decisive and necessary fiscal and monetary policy actions have supported incomes and kept credit flowing, cushioning the fall and laying the foundation for recovery. Since early June, the government has announced additional support programs, and extended others.
There are early signs that the reopening of businesses and pent-up demand are leading to an initial bounce-back in employment and output. In the central scenario, roughly 40 percent of the collapse in the first half of the year is made up in the third quarter. Subsequently, the Bank expects the economy’s recuperation to slow as the pandemic continues to affect confidence and consumer behaviour and as the economy works through structural challenges. As a result, in the central scenario, real GDP declines by 7.8 percent in 2020 and resumes with growth of 5.1 percent in 2021 and 3.7 percent in 2022. The Bank expects economic slack to persist as the recovery in demand lags that of supply, creating significant disinflationary pressures.
CPI inflation is close to zero, pulled down by sharp declines in components such as gasoline and travel services. The Bank’s core measures of inflation have drifted down, although by much less than the CPI, and are now between 1.4 and 1.9 percent. Inflation is expected to remain weak before gradually strengthening toward 2 percent as the drag from low gas prices and other temporary effects dissipates and demand recovers, reducing economic slack.
As the economy moves from reopening to recuperation, it will continue to require extraordinary monetary policy support. The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In addition, to reinforce this commitment and keep interest rates low across the yield curve, the Bank is continuing its large-scale asset purchase program at a pace of at least $5 billion per week of Government of Canada bonds. This QE program is making borrowing more affordable for households and businesses and will continue until the recovery is well underway. To support the recovery and achieve the inflation objective, the Bank is prepared to provide further monetary stimulus as needed.
The next scheduled date for announcing the overnight rate target is September 9, 2020. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on October 28, 2020.
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