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At least 4M Canadians need to be vaccinated before reopening economy, RBC CEO says – Global News

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The leaders of Canada’s top banks believe an economic rebound is on the horizon, but say the short-term looks difficult and spending won’t truly pick up until the back half of 2021 or even 2022.

The chief executives of the country’s most prominent banks think Canada is benefiting from generous government relief packages that reduced delinquencies and insolvencies and the arrival of several promising COVID-19 vaccines.

However, they say the coming weeks don’t look pretty because growing numbers of Canadians are continuing to contract the virus.

“In the short-term things are going to be not as good as one might have hoped, but overall I think we are in a probably slow way of getting more positive as the year goes by,” TD chief executive Bharat Masrani said Monday.

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Masrani made his comments during a virtual appearance at Royal Bank of Canada’s Canadian Bank CEO conference, which saw the CEOs of all of the country’s top banks offer their economic predictions for the year.

They all agreed that Canada is in the midst of an economic rebound, but how fast that recovery takes hold will depend on the country’s ability to get the pandemic under control.

Vaccines will be key, they said.

“We believe roughly between four and 4.5 million high-risk Canadians will have to be vaccinated before we can really get back to reopening the economy and we can achieve that within 100 days, if we have the vaccines,” Royal Bank of Canada chief executive Dave McKay said.

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Canadians remain concerned about health of job market amid pandemic, Bank of Canada survey says

The number of doses of COVID-19 vaccines administered in Canada hit 319,938 on Monday. Efforts to get more shots in arms are ramping up as more supply arrives, but there are at least 38 million people living in the country.

Once people are vaccinated, McKay believes those who have been sitting on cash and not spending it because so many things are closed will race back to pastimes like travel and entertainment.

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But timing around when that will happen is still a big question.

Most businesses in provinces like Ontario remain closed and Quebec has gone as far as implementing a curfew to curtail cases. Some public health advocates and politicians are calling for similar measures to be implemented elsewhere.

Victor Dodig, Canadian Imperial Bank of Commerce’s chief executive, believes a rebound will be slow to materialize in the hospitality sector and others considered to be “discretionary.”

“We are looking into the following fiscal year before you are seeing any robustness there,” he said.

Masrani thinks some consumers will encounter credit trouble in the later half of 2021 or even into 2022, so he’s baking negativity into TD’s economic models.


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Experts say under new COVID-19 strategy, this could be the last lockdown


Experts say under new COVID-19 strategy, this could be the last lockdown

While Darryl White, Bank of Montreal’s chief executive, said he expects the next two to four months to be a “difficult” period, he has seen some positives.

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“We are just not seeing the impaired losses coming in at the rate people would have expected,” he said.

Rent relief, mortgage deferrals and wage subsidies have helped many Canadians manage the crisis and banks have built up large reserves to take care of bad loans that may transpire, he said.

For a rebound to really take shape, McKay believes government relief will have to continue and become focused on areas of the economy that are expected to take longer to recover like small businesses, hospitality businesses and transportation companies.

When a rebound comes, so will change at banks.


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Small businesses frustrated with extended COVID-19 regulations

Dodig has noticed people shift rapidly to online banking during the pandemic and even those who were using digital options before the virus began circulating are moving more of their transactions online.

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CIBC recently transformed 250 or one quarter of its banking centres into advice centres because digitization was accelerated by the health crisis, he said.

McKay said that many bank branches have been temporarily closed or operating with reduced hours throughout the pandemic.

RBC has closed some branches and McKay expects to pare back another three or four per cent over the coming year, he said.

That equates to between 30 and 50 branches, according to McKay.

He believes branch footprints can be reduced and the bank can get more flexibility by focusing on shorter leases, but how it should approach branches will depend on the recovery.

“Everything is positioned to watch how clients come back and how they use the branch,” he said.

“A lot of client activity still goes through our branches, but we will see what sticks with consumers and what changes through all of this.”

© 2021 The Canadian Press

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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