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Bank of Canada holds rate steady, saying COVID-19 economic impact 'appears to have peaked' – CBC.ca

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The Bank of Canada held its benchmark interest rate steady at 0.25 per cent on Wednesday and said it thinks the economic impact of COVID-19 on the world’s economy “appears to have peaked.”

Canada’s central bank has dropped its rate dramatically since the pandemic began, cutting its rate from 1.75 per cent in late February to 0.25 per cent barely a month later.

The bank’s rate influences the rates that Canadian borrowers and savers get from their banks on things like mortgages and bank accounts. The central bank cut its rate in an attempt to encourage borrowing and investing to stimulate the economy, but those rate cuts weren’t the only thing it did to try to buttress the economy from the unprecedented hit of COVID-19.

The bank also started a number of bond and debt-buying programs in order to make sure there is enough cash in the system.

It announced on Wednesday it will tinker with two of them because things are starting to look up, but it is still buying up government bonds at a record-setting pace in order to make sure banks have enough cash on hand to lend to credit worthy borrowers.

“The Bank’s programs to improve market function are having their intended effect,” the bank said. “After significant strains in March, short-term funding conditions have improved. Therefore, the Bank is reducing the frequency of its term repo operations to once per week, and its program to purchase bankers’ acceptances to bi-weekly operations.”

Bond-buying

Bank of Montreal economist Benjamin Reitzes noted that “both of these operations have seen much less take-up (or none at all) of late.”

“The bank stands ready to adjust these programs if market conditions warrant,” the central bank said. “Meanwhile, its other programs to purchase federal, provincial, and corporate debt are continuing at their present frequency and scope.”

In barely two months, the feverish pace of bond buying to buttress the economy has ballooned the bank’s balance sheet by $125 billion, Toronto-Dominion Bank economist James Orlando calculated. 

Slowing the frequency of new purchases is likely to bring that number down a little, but stimulus measures will remain in place for a while yet, CIBC economist Royce Mendes says.

“The bank had accumulated a large swath of short-term securities on its balance sheet, but now that those programs can wind down, the composition of the bank’s balance sheet is likely to change.”

Worst case scenario avoided for now

The reason for the bank’s cautious optimism is the bank’s belief that Canada has avoided the worst-case economic scenario that it painted in April.

The central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019, less than the 15 to 30 per cent decline forecast in April. 

“Massive policy responses in advanced economies have helped to replace lost income and cushion the effect of economic shutdowns,” the bank said in explaining its rate decision. “Financial conditions have improved, and commodity prices have risen in recent weeks after falling sharply earlier this year.

The rate decision means that Canadians with variable rate mortgages shouldn’t expect any changes to their lending rate any time soon.

Mortgage rates

“The historically low mortgage rates currently in the market are here to stay until the economy approaches the level it was at before the pandemic started,” said James Laird, co-founder of Ratehub.ca and president of mortgage brokerage CanWise Financial.

“This means that anyone with a variable rate can expect prime to remain unchanged. Fixed rates will stay near historic lows.”

Wednesday’s decision is the last one under the leadership of Stephen Poloz. Tiff Macklem was named to replace him. Macklem “participated as an observer in governing council’s deliberations for this policy interest rate decision and endorses the rate decision and measures announced in this press release,” the bank said Tuesday.

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Australia plans a social media ban for children under 16

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MELBOURNE, Australia (AP) — The Australian government announced on Thursday what it described as world-leading legislation that would institute an age limit of 16 years for children to start using social media, and hold platforms responsible for ensuring compliance.

“Social media is doing harm to our kids and I’m calling time on it,” Prime Minister Anthony Albanese said.

The legislation will be introduced in Parliament during its final two weeks in session this year, which begin on Nov. 18. The age limit would take effect 12 months after the law is passed, Albanese told reporters.

The platforms including X, TikTok, Instagram and Facebook would need to use that year to work out how to exclude Australian children younger than 16.

“I’ve spoken to thousands of parents, grandparents, aunties and uncles. They, like me, are worried sick about the safety of our kids online,” Albanese said.

The proposal comes as governments around the world are wrestling with how to supervise young people’s use of technologies like smartphones and social media.

Social media platforms would be penalized for breaching the age limit, but under-age children and their parents would not.

“The onus will be on social media platforms to demonstrate they are taking reasonable steps to prevent access. The onus won’t be on parents or young people,” Albanese said.

Antigone Davis, head of safety at Meta, which owns Facebook and Instagram, said the company would respect any age limitations the government wants to introduce.

“However, what’s missing is a deeper discussion on how we implement protections, otherwise we risk making ourselves feel better, like we have taken action, but teens and parents will not find themselves in a better place,” Davis said in a statement.

She added that stronger tools in app stores and operating systems for parents to control what apps their children can use would be a “simple and effective solution.”

X did not immediately respond to a request for comment on Thursday. TikTok declined to comment.

The Digital Industry Group Inc., an advocate for the digital industry in Australia, described the age limit as a “20th Century response to 21st Century challenges.”

“Rather than blocking access through bans, we need to take a balanced approach to create age-appropriate spaces, build digital literacy and protect young people from online harm,” DIGI managing director Sunita Bose said in a statement.

More than 140 Australian and international academics with expertise in fields related to technology and child welfare signed an open letter to Albanese last month opposing a social media age limit as “too blunt an instrument to address risks effectively.”

Jackie Hallan, a director at the youth mental health service ReachOut, opposed the ban. She said 73% of young people across Australia accessing mental health support did so through social media.

“We’re uncomfortable with the ban. We think young people are likely to circumvent a ban and our concern is that it really drives the behavior underground and then if things go wrong, young people are less likely to get support from parents and carers because they’re worried about getting in trouble,” Hallan said.

Child psychologist Philip Tam said a minimum age of 12 or 13 would have been more enforceable.

“My real fear honestly is that the problem of social media will simply be driven underground,” Tam said.

Australian National University lawyer Associate Prof. Faith Gordon feared separating children from there platforms could create pressures within families.

Albanese said there would be exclusions and exemptions in circumstances such as a need to continue access to educational services.

But parental consent would not entitle a child under 16 to access social media.

Earlier this year, the government began a trial of age-restriciton technologies. Australia’s eSafety Commissioner, the online watchdog that will police compliance, will use the results of that trial to provide platforms with guidance on what reasonable steps they can take.

Communications Minister Michelle Rowland said the year-long lead-in would ensure the age limit could be implemented in a “very practical way.”

“There does need to be enhanced penalties to ensure compliance,” Rowland said.

“Every company that operates in Australia, whether domiciled here or otherwise, is expected and must comply with Australian law or face the consequences,” she added.

The main opposition party has given in-principle support for an age limit at 16.

Opposition lawmaker Paul Fletcher said the platforms already had the technology to enforce such an age ban.

“It’s not really a technical viability question, it’s a question of their readiness to do it and will they incur the cost to do it,” Fletcher told Australian Broadcasting Corp.

“The platforms say: ’It’s all too hard, we can’t do it, Australia will become a backwater, it won’t possibly work.’ But if you have well-drafted legislation and you stick to your guns, you can get the outcomes,” Fletcher added.

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A tiny grain of nuclear fuel is pulled from ruined Japanese nuclear plant, in a step toward cleanup

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TOKYO (AP) — A robot that has spent months inside the ruins of a nuclear reactor at the tsunami-hit Fukushima Daiichi plant delivered a tiny sample of melted nuclear fuel on Thursday, in what plant officials said was a step toward beginning the cleanup of hundreds of tons of melted fuel debris.

The sample, the size of a grain of rice, was placed into a secure container, marking the end of the mission, according to Tokyo Electric Power Company Holdings, which manages the plant. It is being transported to a glove box for size and weight measurements before being sent to outside laboratories for detailed analyses over the coming months.

Plant chief Akira Ono has said it will provide key data to plan a decommissioning strategy, develop necessary technology and robots and learn how the accident had developed.

The first sample alone is not enough and additional small-scale sampling missions will be necessary in order to obtain more data, TEPCO spokesperson Kenichi Takahara told reporters Thursday. “It may take time, but we will steadily tackle decommissioning,” Takahara said.

Despite multiple probes in the years since the 2011 disaster that wrecked the. plant and forced thousands of nearby residents to leave their homes, much about the site’s highly radioactive interior remains a mystery.

The sample, the first to be retrieved from inside a reactor, was significantly less radioactive than expected. Officials had been concerned that it might be too radioactive to be safely tested even with heavy protective gear, and set an upper limit for removal out of the reactor. The sample came in well under the limit.

That’s led some to question whether the robot extracted the nuclear fuel it was looking for from an area in which previous probes have detected much higher levels of radioactive contamination, but TEPCO officials insist they believe the sample is melted fuel.

The extendable robot, nicknamed Telesco, first began its mission August with a plan for a two-week round trip, after previous missions had been delayed since 2021. But progress was suspended twice due to mishaps — the first involving an assembly error that took nearly three weeks to fix, and the second a camera failure.

On Oct. 30, it clipped a sample weighting less than 3 grams (.01 ounces) from the surface of a mound of melted fuel debris sitting on the bottom of the primary containment vessel of the Unit 2 reactor, TEPCO said.

Three days later, the robot returned to an enclosed container, as workers in full hazmat gear slowly pulled it out.

On Thursday, the gravel, whose radioactivity earlier this week recorded far below the upper limit set for its environmental and health safety, was placed into a safe container for removal out of the compartment.

The sample return marks the first time the melted fuel is retrieved out of the containment vessel.

Fukushima Daiichi lost its key cooling systems during a 2011 earthquake and tsunami, causing meltdowns in its three reactors. An estimated 880 tons of fatally radioactive melted fuel remains in them.

The government and TEPCO have set a 30-to-40-year target to finish the cleanup by 2051, which experts say is overly optimistic and should be updated. Some say it would take for a century or longer.

Chief Cabinet Secretary Yoshimasa Hayashi said there have been some delays but “there will be no impact on the entire decommissioning process.”

No specific plans for the full removal of the fuel debris or its final disposal have been decided.

The Canadian Press. All rights reserved.

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Strong typhoon threatens northern Philippine region still recovering from back-to-back storms

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MANILA, Philippines (AP) — A strong typhoon was forecast to hit the northern Philippines on Thursday, prompting a new round of evacuations in a region still recovering from back-to-back storms a few weeks ago.

Typhoon Yinxing is the 13th to batter the disaster-prone Southeast Asian nation this season.

“I really pity our people but all of them are tough,” Gov. Marilou Cayco of the province of Batanes said by telephone. Her province was ravaged by recent destructive storms and is expected to be affected by Yinxing’s fierce wind and rain.

Tens of thousands of villagers were returning to emergency shelters and disaster-response teams were again put on alert in Cagayan and other northern provinces near the expected path of Yinxing. The typhoon was located about 175 kilometers (109 miles) east of Aparri town in Cagayan province on Thursday morning.

The slow-moving typhoon, locally named Marce, was packing sustained winds of up to 165 kilometers (102 miles) per hour and gusts of up to 205 kph (127 mph) and was forecast to hit or come very near to the coast of Cagayan and outlying islands later Thursday.

The coast guard, army, air force and police were put on alert. Inter-island ferries and cargo services and domestic flights were suspended in northern provinces.

Tropical Storm Trami and Typhoon Kong-rey hit the northern Philippines in recent weeks, leaving at least 151 people dead and affecting nearly 9 million others. More than 14 billion pesos ($241 million) worth of rice, corn and other crops and infrastructure were damaged.

The deaths and destruction from the storms prompted President Ferdinand Marcos Jr. to declare a day of national mourning on Monday when he visited the worst-hit province of Batangas, south of the capital, Manila. At least 61 people perished in the coastal province.

Trami dumped one to two months’ worth of rain in just 24 hours in some regions, including in Batangas.

“We want to avoid the loss of lives due to calamities,” Marcos said in Talisay town in Batangas, where he brought key Cabinet members to reassure storm victims of rapid government help. “Storms nowadays are more intense, extensive and powerful.”

In 2013, Typhoon Haiyan, one of the strongest recorded tropical cyclones, left more than 7,300 people dead or missing, flattened entire villages and caused ships to run aground and smash into houses in the central Philippines.

The Canadian Press. All rights reserved.

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