The Bank of Canada says the domestic economy will grow at a slightly slower pace this year than it previously thought and sees the risks from COVID-19 waning, but not enough to change its trendsetting policy rate.
The central bank said it expects the economy to grow 6.0 per cent in 2021, down from its previous forecast of 6.5 per cent. However, the bank now expects growth of 4.6 per cent in 2022, up from its earlier forecast of 3.7 per cent.
The reason for the shift is a weaker first half of the year than the bank expected as the economy was hampered by lockdowns and restrictions.
With public health restrictions partially or entirely lifted across the country, the central bank now expects consumers to start spending more, including from some of the estimated $200 billion in savings Canadians accumulated during the pandemic that officials previously hadn’t worked into their forecasts.
The bank’s updated economic outlook also said spending shouldn’t be affected by a decline in federal aid as it expects more people to get back to work, meaning they earn more and offset declines in government assistance.
“The reopening of the economy and the strong progress on vaccinations have given us reason to be more optimistic about the direction of the economy,” governor Tiff Macklem said in his opening statement at a late-morning press conference. “But we are not there yet, and we are mindful that the process is likely to be bumpy, and some scars will remain.”
As a result, the bank kept its key policy rate on hold at 0.25 per cent on Wednesday, where it has been since the onset of the pandemic. The bank said it will keep the rate at near-zero until the economy is ready to handle an increase in rates, which it doesn’t expect to happen until the second half of 2022.
The central bank also said that economic conditions have improved enough to allow it to reduce its weekly purchases of federal bonds to $2 billion from $3 billion. The purchases are a stimulus measure, known as quantitative easing, designed to help drive down rates charged on mortgages and business loans.
“With the economic recovery strengthening on the back of easing public health restrictions, it was a prudent move by the Bank to remove some policy support,” said TD senior economist Sri Thanabalasingam.
Macklem said the pace of purchases should slow over time if the economy recovers broadly in line with the bank’s outlook, but future changes will be gradual and deliberate.
BMO chief economist Douglas Porter said he expected the bank to wind down the quantitative easing program by early next year, which would set the stage for rate hikes likely within the ensuing 12 months.
In the scenario the bank laid out Wednesday, inflation runs above three per cent for the rest of the year because of higher gasoline prices and service businesses raising prices as demand returns. Inflation also stays above the Bank of Canada’s two-per-cent target next year and in 2023 because of excess demand before coming back to target in 2024.
Macklem said the factors pushing up inflation are likely to be short-lived, but that the bank will watch them closely in case they become persistent or grow.
“What we’re seeing are some sharp movements in prices, but that doesn’t look like inflation – it’s unlikely to cause ongoing price increases,” he said.
“Sure, there is some uncertainty about this. We will be watching these effects, we will be watching the evolution of inflation very carefully.”
One reason the bank plans to let inflation run hot is because the country’s labour market needs to hire roughly 550,000 people just to reach pre-pandemic employment levels. Macklem said the pace at which those jobs are recovered will vary by industry, and it could take some businesses, such as restaurants, a bit more time to fill positions.
“One of the things we are learning more about is it’s a lot easier to close an economy than it is to reopen one, and particularly in some sectors demand can rebound faster than supply can keep up,” he said.
This report by The Canadian Press was first published July 14, 2021.
Voluntary recall issued for Frank’s RedHot Buffalo Ranch Seasoning – Global News
A voluntary recall has been issued for Frank’s RedHot Buffalo Ranch Seasoning over a possible Salmonella contamination.
McCormick & Company, Inc. says the recall covers 153g bottles with a best before date of September 6, 2022.
The bottles were shipped to British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec.
No illnesses have been reported, and McCormick says the potential risk was brought to their attention by the FDA during routine testing.
Salmonella poisoning can result in a wide range of symptoms, from short-term fever, headache and nausea to more serious issues including severe arthritis and, in rare cases, even death.
© 2021 The Canadian Press
Pfizer sells $7.8 billion in Covid shots in the second quarter, raises 2021 guidance on vaccine sales – CNBC
Pfizer said Wednesday it sold $7.8 billion in Covid-19 shots in the second quarter and raised its 2021 sales forecast for the vaccine to $33.5 billion from $26 billion, as the delta variant spreads and scientists debate whether people will need booster shots.
The company’s second-quarter financial results also beat Wall Street expectations on earnings and revenue. Here’s how Pfizer did compared with what Wall Street expected, according to average estimates compiled by Refinitiv:
- Adjusted earnings per share: $1.07 per share vs. 97 cents per share expected
- Revenue: $18.98 billion vs. $18.74 billion forecast
Pfizer expects an adjusted pretax profit in the high 20% range of revenue for the vaccine.
The company now expects full-year earnings in the range of $3.95 to $4.05 per share. That’s up from its prior range of $3.55 to $3.65 per share. It expects revenue in the range of $78 billion to $80 billion, up from its previous estimate of $70.5 billion to $72.5 billion.
Shares of Pfizer dipped 0.4% in premarket trading.
“The second quarter was remarkable in a number of ways,” Pfizer CEO Albert Bourla said in a statement. “Most visibly, the speed and efficiency of our efforts with BioNTech to help vaccinate the world against COVID-19 have been unprecedented, with now more than a billion doses of BNT162b2 having been delivered globally.”
Pfizer’s other business units also saw strong sales growth. Revenue from its oncology unit rose by 19% year over year to $3.1 billion. The company’s hospital unit generated $2.2 billion in revenue, up 21% from the prior year. Its internal medicine unit grew by 5% from a year ago to $2.4 billion.
Pfizer said earlier this month it was seeing signs of waning immunity induced by its Covid vaccine with German drugmaker BioNTech, and planned to ask the Food and Drug Administration to authorize a booster dose. It also said it is developing a booster shot to target the delta variant.
In slides posted Wednesday alongside its earnings report, Pfizer said it could potentially file for an emergency use authorization for a booster dose with the FDA as early as August. It expects to begin clinical studies testing its delta variant vaccine in the same month.
It expects full approval for its two-dose vaccine by January 2022.
Pearson airport won’t sort arriving passengers based on COVID-19 vaccination status – CityNews Toronto
Canada’s largest airport is no longer splitting arriving international passengers into different customs lines based on their vaccination status.
Toronto’s Pearson International Airport announced last week it may be sorting travellers arriving from the U.S. or other international locations into vaccinated and partially or non-vaccinated queues.
But a spokesperson for the Greater Toronto Airports Authority says the practice has been discontinued as of Monday.
Beverly MacDonald says in a statement that the airport has determined separating vaccinated and partially or non-vaccinated travellers into different customs lines “results in minimal operational efficiencies.”
She says entry requirements related to vaccination status will now be enforced once a passenger reaches a customs officer.
Fully vaccinated Canadian citizens and permanent residents are now able to forgo a 14-day quarantine when arriving in Canada from abroad.
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