Finance Minister Chrystia Freeland says federal aid programs won’t last forever, making the comments on the same day the Bank of Canada targeted 2022 for an economic recovery from COVID-19.
The road to recovery is dependent on the path of the pandemic, and the central bank warned the road will be bumpy over the next two years.
Some businesses may never reopen, while some unemployed workers won’t find a new job, leaving some parts of the economy and workforce behind as conditions, hopefully, improve.
In a speech Wednesday afternoon, Freeland defended the depth of that spending, which will send the deficit to a historic level.
But she said she isn’t among those who believe “that deficits don’t matter for a government.”
“Whether on Bay Street or Main Street, there are no blank cheques, and there are no free lunches,” she says in the text of her speech.
“Our fiscally expansive approach to fighting the coronavirus cannot and will not be infinite. It is limited and temporary.”
She said the federal government will impose spending limits upon itself, rather than waiting for “more brutal external restraints” from international market forces.
Freeland didn’t say what those spending guardrails will be, only that she’ll have more to say on it soon.
The central bank’s updated economic outlook released earlier Wednesday said government aid has played a key role in providing a financial lifeline to individuals and businesses.
Changes to employment insurance and new benefit programs will increase households’ disposable income, officials write, adding that the bank expects government aid to provide important support to the economy throughout the recovery.
The country has reversed about two-thirds of the economic decline seen in the first half of the year, the Bank of Canada said Wednesday, exceeding expectations.
Officials estimate the economy will still shrink by 5.7 per cent this year, but grow by 4.2 per cent next year, and 3.7 per cent in 2022, meaning gross domestic product won’t rebound to pre-pandemic levels for another two years.
The road to recovery will be uneven across sectors and choppy over time, governor Tiff Macklem said, and likely to cause long-lasting damage to some people’s job prospects.
“The effects of this have been very uneven. I think that underlines the importance of the income-support programs that the government has provided to protect the most vulnerable, and that has underpinned this recovery,” Macklem said.
As for how long the aid should last, Macklem said it was up to the government.
The bank held its overnight rate target at 0.25 per cent on Wednesday, which is where it will stay until the economy has recovered and inflation is back on target. The bank forecasts that annual inflation at 0.6 per cent this year, 1.0 per cent next year, and 1.7 per cent in 2022.
The bank also announced Wednesday that it intended to buy more longer-term bonds because those have a “more direct influence on the borrowing rates that are most important for households and businesses,” hoping to prod consumption.
James Laird, co-founder of Ratehub.ca, said the outlook suggests low interest rates until at least 2023, which is the earliest the bank anticipates the economy would be able to handle higher rates.
The projections for growth and inflation mark a return to the bank’s usual practice of giving a longer view for the economy in its quarterly monetary policy report.
The report said the six months of experience with containment measures and support programs, as well as more information on medical developments like vaccines, has given the bank a better foundation to make a base-case forecast.
Underpinning the bank’s outlook are two major assumptions: that widespread lockdowns won’t be utilized again and that a vaccine or effective treatment will be widely available by mid-2022.
The country has recouped about three-quarters of the three million jobs lost in March and April. Emergency federal aid has replaced lost wages for millions of workers, and provided loans and wage subsidies to struggling businesses.
The hardest-hit sectors, such as restaurants, travel and accommodations, continue to lag as the economy recuperates.
Workers in those sectors, as well and youth and low-wage workers, continue to face high levels of unemployment, the report says.
All may be hit hard again by any new rounds of restrictions, the report notes. Some areas of the country have already imposed such public health restrictions in the face of rising COVID-19 case counts.
“The breadth and intensity of reimposed containment measures, including impacts on schools and the availability of child care, could lead to setbacks,” the report says.
“Long breaks in employment have the potential for longer-term impacts on the income prospects of vulnerable groups.”
This report by The Canadian Press was first published Oct. 28, 2020
Ontario to release updated COVID-19 projections after locking down Toronto, Peel – CP24 Toronto's Breaking News
The Canadian Press
Published Thursday, November 26, 2020 6:03AM EST
Last Updated Thursday, November 26, 2020 7:05AM EST
TORONTO – Ontario health officials are expected to release new COVID-19 projections today.
It will be the first time they have released such data since sending the province’s two biggest virus hot spots — Toronto and Peel Region — into lockdown earlier this week.
Two weeks ago, the province unveiled modelling that showed Ontario could see as many as 6,500 new daily cases of COVID-19 by mid-December unless steps are taken to limit the spread of the virus.
It said the province would reach 2,500 new daily cases by that time if the growth rate was at three per cent, or 6,500 if the growth rate was at five per cent.
At the time, Dr. Adalsteinn Brown, one of the experts behind the projections, said a five per cent growth rate was “slightly optimistic.”
Premier Doug Ford announced he would lower thresholds for imposing stricter COVID-19 measures under the province’s colour-coded restrictions system the following day.
This report by The Canadian Press was first published Nov. 26, 2020.
Oil extends gains on surprise U.S. inventory draw amid vaccine rally – CNBC
U.S. oil rose for a fifth day on Thursday as a surprise drop in crude inventories extended a rally driven by hopes that vaccines would end the coronavirus pandemic and revive fuel demand.
Brent was up by 20 cents, or 0.4%, at $48.81 a barrel, after rising around 1.6% in the previous session. West Texas Intermediate crude was up by 14 cents, or 0.3%, at $45.85, having gained 1.8% on Wednesday.
Both benchmarks have risen about 9% this week, getting a boost after AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective, adding to the potential armory to end the worst pandemic in a century.
U.S. oil stockpiles fell 754,000 barrels last week, data showed, while analysts in a Reuters poll had predicted a 127,000-barrel rise. Stockpiles at the Cushing, Oklahoma delivery point for WTI, fell 1.7 million barrels.
But gasoline demand for the week fell by 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June.
“With new U.S. virus cases still at very high levels, we think that it probably won’t be until next year – once vaccines can have a material impact – that demand recovers to more normal levels,” Capital Economics said in a note.
U.S. President-elect Joe Biden has urged people to forgo big family gatherings, wear protective masks and maintain social distancing for the Thanksgiving holiday in the face of the surging coronavirus pandemic. But Americans are defying pleas from officials to stay home.
The United States has recorded 2.3 million new infections in the past two weeks.
Sask. suspends team sports, activities along with other tweaks to existing COVID-19 restrictions – CTV News
The Government of Saskatchewan has tweaked some of its COVID-19 restrictions for the province, including changes for sports, restaurants, places of worship and performance and gaming venues.
All team and group sports, activities, games, competitions, recitals and practices have been suspended, including hockey, curling, racquet sports, cheerleading, dance practices in group setting, etc.
The province is also discouraging gatherings of any size, outside of your immediate household.
These restrictions come into effect on Friday, Nov. 27.
SPORTS, FITNESS, DANCE
Team and group sport and fitness activities are suspended including activities, games, competitions, recitals and practices.
Persons under 18 may continue to train only in groups of fewer than eight. There must be at least three metres of distance between participants. Coaches and trainers are not counted so long as they are wearing masks.
Group fitness for all ages can continue in groups of eight or fewer, masks must be worn and physical distance of three metres must also be maintained.
INDOOR PUBLIC GATHERINGS
Indoor public banquets, conferences, wedding and funeral receptions in public venues are reduced to 30 people maximum. This restriction also applies to places of worship. The limit on private gatherings stays at five. Food and beverage cannot be present of served.
If your immediate household has five people or more, additional guests should not come over.
“Individuals, recurring caregivers, support personnel (i.e. therapists, nursing staff) and tradespersons (i.e. housekeeper, plumber) are permitted, though they should maintain two metre distancing and be masked during service provision,” the province said in a news release.
RESTAURANTS, BARS, ENTERTAINMENT
Restaurants and licensed establishments are now limited to four people per table. Capacity is also being reduced down to 30 at all casinos, bingo halls, arenas, live theatres, movie theatres, performing arts venues and any other facilities that are currently supporting a capacity of 150 people.
Establishments must keep guest information on all patrons.
The curfew on liquor sale remains.
Masks are now required in all indoor fitness activities with an exception for aquatic acitivites.
All persons in schools and daycares are now required to wear masks at all time, expect for during meals.
All employees and visitors at all businesses and workplaces are required to wear masks in all common areas. All residents employees and visitors of correctional facilities must wear a mask in all common areas.
Large retail spaces must reduce customer access to 50 per cent or four square metres of space per person.
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