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
The latest news on COVID-19 developments in Canada for Monday, Jan. 25, 2021 – News 1130
The latest news on COVID-19 developments in Canada (all times eastern):
There are 1,958 new cases of COVID-19 reported in Ontario today and 43 more deaths attributed to the novel coronavirus.
Health Minister Christine Elliott says 727 of the new cases are in Toronto, 365 in Peel Region, and 157 in York Region.
She says nearly 36,000 tests were completed since Sunday’s report.
Ontario also reports that 2,448 more cases of COVID-19 are considered resolved.
This report by The Canadian Press was first published Jan. 25, 2021.
The Canadian Press
Commons returns with opposition leaders slamming COVID-19 vaccine program – CBC.ca
Canada’s opposition leaders attacked the federal Liberal government’s COVID-19 vaccination program today in their first encounter in the House of Commons following the winter break.
Vaccine deliveries will grind to a halt this week as a shutdown at Pfizer’s plant in Belgium disrupts shipments from that company.
Conservative Leader Erin O’Toole said that while the prime minister promised a steady supply of the Pfizer-BioNTech shots in the first three months of 2021, the country’s inoculation efforts are now “in jeopardy” and provinces are scrambling to meet vaccination targets.
The delivery delay is already prompting some provinces — notably Alberta and Ontario — to warn that they will have to curtail vaccination appointments in the weeks ahead as they direct the existing supplies of the two-dose Pfizer vaccine to patients who need their second shots.
“We want to see our government succeed but this prime minister has abandoned us. The Liberal plan for vaccines must be reviewed by all of Parliament. We must work together to improve the Liberal vaccine plan and get Canadians back to work,” O’Toole said.
“We wish we could trust the prime minister but this situation demands Parliament’s urgent attention.”
Canada will receive no doses of the Pfizer product this week, and a dramatically reduced shipment next week, as the company retools its plant to pump out many more shots this year than planned.
O’Toole said the Liberal government should have prepared for delivery disruptions like this one with a contingency plan to prevent the provinces from running dry.
Maj.-Gen. Dany Fortin, the military commander leading vaccine logistics at the Public Health Agency of Canada, has said Pfizer deliveries will be reduced by roughly 50 per cent over a four-week period — and Canada doesn’t know for certain how many doses will arrive over that time period.
The Health Canada website that tracks vaccines has been scrubbed of all Pfizer delivery forecasts, citing “changes to manufacturing timelines.”
“Unknown means there is no real plan,” O’Toole said. “Canadians are worried. We’re in the second wave of the pandemic, there’s U.K. strains and this week we’re receiving zero Pfizer vaccines.”
Moderna, which delivers shots to Canada every three weeks, is expected to deliver roughly 230,000 doses over the first week of February.
Later in question period, Prime Minister Justin Trudeau acknowledged the “ongoing challenges” with the global supply vaccine chain but said Canada is expecting “hundreds of thousands” of Pfizer doses, some in February. He said Canada expects to have enough doses on hand this year to vaccinate every Canadian who wants a shot by the end of September.
Michelle Rempel Garner, the Conservative health critic, questioned that promise, saying that Canada needs to start getting through tens of thousands of vaccinations each day to reach that target.
With only 100,000 people fully vaccinated so far, Canada would have to administer well over 200,000 shots a day for the next 248 days to fully vaccinate Canadians with the two-dose Pfizer and Moderna products.
O’Toole said the Liberal government never should have partnered with the Chinese firm CanSino Biologics to develop a vaccine — a collaboration that was derailed last summer when China refused to ship vaccine samples to Canada for clinical trial testing.
After that partnership was shelved, O’Toole said, Canada then turned to procuring promising vaccine candidates from U.S. firms like Pfizer and Moderna.
Public Services and Procurement Minister Anita Anand has disputed this version of events. Speaking to reporters in December, Anand said the CanSino deal fell within former industry minister Navdeep Bains’ portfolio, not her own, and nothing about the project prevented her from negotiating with other companies.
Anand has said she started talks with the companies behind promising vaccine candidates in July — companies that were recommended by the COVID-19 Vaccine Task Force — before Canada walked away from the ill-fated CanSino partnership in late August. Canada was among the first countries in the world to sign deals with Pfizer and Moderna.
“Engagement and negotiations with COVID-19 vaccine suppliers began in early July 2020, following the receipt of recommendations from the vaccine task force in June,” a spokesperson for the minister told CBC News.
O’Toole said Canada should have sought domestic manufacturing of vaccine candidates to avoid having to depend on other countries for supply. The government did not pursue domestic manufacturing rights for the AstraZeneca product.
Asked what he’d do to jump-start the stalled vaccination campaign, O’Toole said he would encourage Trudeau to obtain doses from the Pfizer manufacturing plant in Kalamazoo, Mich., which is not experiencing the same disruptions as the Belgian facility and is only 220 kilometres away from the Detroit-Windsor border crossing.
“There are vaccines being made not far from us, in Kalamazoo. Did the prime minister ask for the ability to have that plant used, not just rely on the retooled plant in Belgium?” O’Toole said. “There are a lot of options here, but there’s never any leadership from Mr. Trudeau.”
Anand has said the Michigan facility’s product is earmarked for the American market in the first quarter of this year.
While there will be significant delivery disruptions over the next month, Anand has said that Canada still expects to receive 4 million doses of the Pfizer product and 2 million Moderna shots in the first three months of this year. That would be enough to vaccinate 3 million people by the end of March.
NDP Leader Jagmeet Singh pointed out that the prime minister and his office are mired in a scandal of their own making over the abrupt resignation of former governor general Julie Payette amid reports of workplace harassment.
“The focus should be on the pandemic and the struggles that we’re going through. This has become a distraction,” Singh said of the Payette affair. “The focus … should be entirely on making sure people are vaccinated.”
Canada’s Telus International aims for nearly $7 billion valuation in IPO
(Reuters) – Telus International (Cda) Inc, a subsidiary of wireless carrier Telus Corp., aims to raise as much as $833 million in its initial public offering (IPO), which would give the Vancouver-based company a valuation of nearly $7 billion.
The flotation would be one of the largest in recent years for a Canadian company. Last year, Canadian waste management firm GFL Environmental Inc raised about $1.4 billion in its IPO, making it one of the largest ever stock market listings in Canada.
Telus International said it planned to list its shares on the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol “TIXT”.
The company plans to offer 33.33 million shares in its IPO and has set a price range of between $23 and $25 per share.
Telus International said its revenue for the full year ended Dec. 31 was estimated to be between $1.57 billion and $1.58 billion, compared with $1.02 billion a year earlier, according to regulatory filings from the company. [https://bit.ly/3sXwZYi]
Started in 2005, Telus International provides IT services to global brands and counts Cisco Systems Inc, Salesforce.com Inc and Google Cloud among its customers.
J.P. Morgan and Morgan Stanley are the lead underwriters of the offering.
(Reporting by Sohini Podder in Bengaluru; Editing by Anil D’Silva)
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