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Bank of Canada keeps key interest rate on hold – CTV News

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OTTAWA —
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

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Dow hits 30000 on Biden transition, stimulus odds – BNN

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U.S. stocks rallied toward records, oil surged past US$45 and the dollar fell as the formal start of President-elect Joe Biden’s transition spurred investors into risk assets.

The Dow Jones Industrial Average climbed to 30,000 for the first time, led by a 5 per cent rally in Boeing Co. The S&P 500 jumped more than 1 per cent. Back-to-normal stocks led the gains. Carnival Corp. surged 9 per cent, MGM Resorts International added 7 per cent and Planet Fitness Inc. jumped 8 per cent. The Russell 2000 rose almost 2 per cent and is on track for its best month ever.

Energy companies in the S&P 500 surged 4 per cent after oil topped US$45 a barrel in New York for the first time since March 6. Bitcoin rallied past US$19,000. The dollar weakened versus major peers and Treasuries slipped. Gold fell toward US$1,800 an ounce.

“The market has room to run but on the premise that investors are trying to rotate into these undervalued areas of the market and more into the value play rather than the technology,” Shawn Snyder, head of investment strategy at Citi Personal Wealth Management, said by phone.

Stock markets globally trended higher after the General Services Administration acknowledged Biden as the apparent winner of the presidential election. The move reduces political uncertainty in the U.S., giving Biden and his team access to current agency officials, briefing books, some US$6 million in funding and other resources. Markets also cheered his plan to nominate former Federal Reserve Chair Janet Yellen to lead the Treasury Department.

“Markets love certainty and the move by Trump overnight partially removes ambiguity over the presidential succession,” Jeffrey Halley, a senior market analyst with Oanda Asia Pacific Pte, wrote in a note. “A Biden administration is expected to be much less isolationist, with hopes that the U.S. will reengage on global trade and improve relations with China.”

Wall Street is also viewing a possible Yellen appointment as reason to count on more economic stimulus. She recently said the recovery will be uneven and lackluster if Congress doesn’t spend more to fight unemployment and keep small businesses afloat. That’s fueling the rotation out of defensive technology stocks and into assets that have been hardest hit by the pandemic, such as airlines and energy producers.

In other markets, gold dropped to a four-month low and the dollar weakened against its major peers.

In New Zealand, the government proposed adding home prices to the central bank’s remit to rein in an overheating property market. The move has prompted investors to reduce bets on lower interest rates, pushing the kiwi to the highest level since June 2018.

In Germany, the operator of the DAX index announced the biggest overhaul since the index’s inception in 1988. The number of members will increase to 40 from 30 and new quality criteria will be imposed on both existing and prospective members.

These are the main moves in markets:

Stocks

The S&P 500 Index rose 1.4 per cent as of 11:39 a.m. New York time.
The Stoxx Europe 600 Index rose 0.6 per cent.
The MSCI Asia Pacific Index rose 0.9 per cent.
The MSCI Emerging Market Index was little changed.

Currencies

The Bloomberg Dollar Spot Index fell 0.3 per cent.
The euro climbed 0.2 per cent to US$1.187.
The British pound gained 0.1 per cent to US$1.3333.
The onshore yuan was little changed at 6.586 per dollar.
The Japanese yen was little changed at 104.54 per dollar.

Bonds

The yield on 10-year Treasuries jumped two basis points to 0.87 per cent.
The yield on two-year Treasuries increased less than one basis point to 0.16 per cent.
Germany’s 10-year yield gained three basis points to -0.56 per cent.
Japan’s 10-year yield climbed one basis point to 0.025 per cent.

Commodities

West Texas Intermediate crude surged 4.7 per cent to US$45.07 a barrel.
Brent crude climbed 1.6 per cent to US$47.845 a barrel.
Gold futures weakened 1.9 per cent to US$1,809.30 an ounce.

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Ontario reports dip in new COVID-19 case numbers due to technical issue – CTV Toronto

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TORONTO —
Ontario is reporting a dip in the number of new COVID-19 cases on Tuesday, but government officials say that a technical error resulted in an underestimated count today and an overestimated count yesterday.

The province issued a statement outlining the error, explaining that the record-breaking 1,589 new cases reported on Monday was overestimated and the 1,009 new cases reported today are underestimated.

Due to the technical issue, Monday’s report included cases registered up until 8 p.m. on Nov. 22 instead of up until 12 p.m. as usual, which led to the two-day error, the province said.

Health officials have not confirmed how many cases should not have been included in Monday’s total and added to today’s total instead. When averaging out new infections reported on both days, Ontario saw 1,299 cases.

The province also reported on Tuesday that 14 more people have died due to COVID-19. The day before, the province reported 19 more deaths.

Seniors continue to be the age group hardest hit by the pandemic. According to the province’s epidemiology report, 10 of the 14 deaths recorded on Tuesday were people living in long-term care homes.

Since the pandemic started in January, of the 3,519 people who have died in Ontario due to the disease and 2,441 were over the age of 80.

Provincial health officials deemed 1,082 more cases to be resolved as of Tuesday, bringing the total number of recovered patients in Ontario to 90,074.

The total number of lab-confirmed cases of COVID-19 in Ontario now stands at 106,510, including deaths and recoveries.

There are at least 534 people currently in Ontario hospitals due to COVID-19 and 159 of those patients are in an intensive care unit. Ninety-one of them are breathing with the assistance of a ventilator.

The province previously stated that once the number of COVID-19 patients in the ICU reaches 150, it becomes harder to support medical needs not related to the disease in hospitals. Furthermore, once 350 COVID-19 patients are in the ICU, it becomes “impossible” to handle other medical needs, the province said.

Where are the COVID-19 cases in Ontario?

Of the 1,009 cases reported on Tuesday, health officials say that 497 were in Toronto, 175 were in Peel Region and 118 were in York Region. Officials say these numbers may be underestimated due to the technical error.

Toronto and Peel Region entered the province’s lockdown phase on Monday, which is the final category in the province’s COVID-19 tiered framework that guides restrictions.

Most non-essential businesses, including gyms, malls and personal care services, will have to shutter in the two COVID-19 hot spots for at least 28 days.

Several other regions in Ontario reported COVID-19 cases numbers in the double digits.

Waterloo reported 40 new cases, Windsor-Essex reported 31 new cases, Simcoe-Muskoka reported 25 new cases, Ottawa and Niagara Region reported 19 new cases, Durham Region reported 16 new cases and Hamilton reported 10 new cases.

Most of the new cases of COVID-19 reported on Tuesday involve people under the age of 80.

There were 354 infections in people between the ages of 20 and 39, at least 307 in people between the ages of 40 and 59 and 130 in people between the ages of 60 and 79. There were 163 cases in people under the age of 19.

COVID-19 testing in Ontario

Officials processed 27,053 COVID-19 tests in the last 24 hours. The ministry of health said the province’s positivity rate now stands at about 5.8 per cent when including duplicate tests and errors.

There are 29,316 COVID-19 tests still under investigation.

In total, Ontario has processed more than 5.9 million tests since the pandemic began in January 

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Ford, minister of long-term care to make announcement in Toronto – CP24 Toronto's Breaking News

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Premier Doug Ford and his minister of long-term care are set to make an announcement in Toronto this afternoon.

On Monday, the premier, who provides daily updates on Ontario’s response to the pandemic, released some details of the province’s new COVID-19 vaccine task force, which will be led by retired Gen. Rick Hillier, the former head of the Canadian military.

Ford called distribution of the vaccine a “massive logistical challenge” that could turn into a “logistical nightmare” without the right planning.

“We need military precision. We need the discipline that only a general can bring to this task,” Ford said of Hillier, who served as Chief of the Defence Staff of the Canadian Forces between 2005 and 2008.

Ontario Health Minister Christine Elliott has previously indicated that she expects the province to receive a combined 2.4 million doses of the Pfizer and Moderna COVID-19 vaccines during the first three months of 2021.

Vaccine recipients will require two doses 21 days apart, meaning that the initial shipments will likely only be enough to protect about 1.2 million Ontarians.

Health Canada still needs to approve both vaccines but Elliott said planning for the early rollout of the province’s COVID-19 vaccine program is “well underway.”

“This task force will be made up of representatives from across our government and will include experts in operations and logistics, federal/ provincial relations, health care, public health and immunizations, ethics, information technology and data,” she said.

“They will be advising on the delivery, storage, and distribution of the vaccine, (and) support for health care system partners to deliver a phased vaccination program that will initially prioritize vulnerable populations followed by mass immunization.”

Today’s news conference is scheduled to begin at 1 p.m. and will be streamed live on CP24.com.

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