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Bank of Canada's inflation mandate renewed: Economists react – BNN



Prime Minister Justin Trudeau’s government announced on Monday that it will renew the Bank of Canada’s 2 per cent inflation target, while adding language that will give the central bank more flexibility to overshoot the target in order to achieve employment objectives. 

Here are some reactions from economists and analysts:

  • Doug Porter, chief economist at the Bank of Montreal, by email: “The very heavy emphasis on employment was notable, as was the sense that low-for-long will sometimes be needed to meet goals. Overall, it struck us as a tad more dovish than generally expected.”
  • Jimmy Jean, chief economist at Desjardins Securities Inc., by email: “It adds a bit of a concreteness to the idea of leaning on favoring max employment, especially the option to adjust the 1-3 per cent range as warranted. But I’m expecting these adjustments to be fairly rare and perhaps more likely in a context where we’re recovering from a real recession.”
  • Jean-Francois Perrault, chief economist at Bank of Nova Scotia, by email: “I do think an explicit call out to maximum sustainable employment goes beyond the informal approach of the past in part because it will be very difficult to conclude that we are at that maximum level at any given point in time. It also risks making things awkward between the Bank of Canada and the government.”

What Bloomberg Economics Says…
“Over the short term, the renewal points to a patient approach to tightening, much like the framework change the Federal Reserve made in 2020. However, patience is not unlimited, and it would be a mistake to think recent inflation rates near 5 per cent represent what the BoC will tolerate in search of better job-market outcomes”
— Andrew Husby, economist

  • Sri Thanabalasingam, senior economist at Toronto-Dominion Bank, by email: “I thought it was mostly a continuation of the current framework from a Bank of Canada perspective. The consideration of labor market indicators and the use of the inflation target range are things the bank was already incorporating in its policy making. Today, we saw a confirmation of that in writing. That said, by explicitly having labor market considerations in the mandate, it may result in more accommodative monetary policy in the future.”
  • Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, by email: “It’s clear that the inflation target takes priority over other considerations, and that while the mandate has some flexibility, that is only within the constraints of keeping inflation expectations grounded at 2 per cent. The new language will not have any material impact on decisions in 2022, since the economy has actually made better progress on employment than it has on GDP, and has already had an extended ‘low for long’ period in monetary policy to ensure that it is truly lifting off before the first hikes come.”
  • Simon Deeley, director of Canada rates strategy at RBC Dominion Securities Inc., in a report to investors: “While we agree that the BoC has had — and used — the flexibility in its framework in the past, the changes are nevertheless important. The lower-for-longer component hints at average inflation targeting and the specific employment considerations in certain situations incorporates elements of a dual mandate. Indeed, the BoC notes in the full renewal piece that it is adding the positive elements of both policies, while avoiding the negative aspects by emphasizing the inflation target — and anchored inflation expectations — as the over-arching objective.”
  • Josh Nye, an economist at Royal Bank of Canada, by email: “It seems pretty much as expected an in line with your reporting from last week. The decision to maintain a 2 per cent midpoint inflation target within the 1-3 per cent control band is status quo, and the language around maximum sustainable employment (as what I would call a secondary objective) is largely as expected.”
  • Stephen Gordon, economics professor at Universite Laval, by Twitter: “Gotta admit I don’t like the fact that that we all think the BoC mandate is something that requires interpreting.”

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Canada’s First Quantum agrees to higher payments at Panama copper mine



The Panamanian unit of Canadian miner First Quantum Minerals has agreed with Panama’s government to increase royalty payments at its flagship copper mine, the company and the government said on Monday.

Minera Panama, which is majority owned by First Quantum Minerals, has agreed to pay $375 million a year to state coffers from the Cobre Panama mine, which it says is one of world’s largest copper producers.

“We accept the proposal of the national Government, while requesting that the necessary protections be provided in order to safeguard the continuity of the operation,” Minera Panama said in a statement.

The company did not immediately respond to a question about the size of the increase in royalty payments

Panama‘s government said President Laurentino Cortizo would give details of the agreement on Tuesday.

The company began negotiating a new contract with officials in September, after Cortizo promised to seek a fairer deal with better public benefits.

Toronto-based First Quantum began commercial operations at Cobre Panama, about 120 km (75 miles) west of Panama City, in 2019.

The mine contributes 3.5% of the country’s gross domestic product, according to government figures, and at full capacity can produce more than 300,000 tonnes of copper per year.


(Reporting by Elida Moreno, writing by Daina Beth Solomon, editing by Richard Pullin)

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U.N. chief urges business to help poor nations in ‘hour of need’



U.N. Secretary-General Antonio Guterres appealed to business leaders on Monday to support developing countries “in their hour of need” with access to COVID-19 vaccines, help to combat the climate crisis and reform of the global financial system.

Speaking virtually to the World Economic Forum, Guterres said: “Across all three of these areas, we need the support, the ideas, the financing and the voice of the global business community.”

He said there has been a “global inability to support developing countries in their hour of need” and warned that without immediate action inequalities and poverty would deepen, fueling more social unrest and more violence.

“We cannot afford this kind of instability,” said Guterres, who began a second five-year term as U.N. chief on Jan. 1.

He has long been pushing for more global action to address COVID-19 vaccine inequity and climate change and for reform of the global financial system.

“We need a global financial system that is fit-for-purpose. This means urgent debt restructuring and reforms of the long-term debt architecture,” Guterres said.

The World Health Organization last year set targets for 40% of people in all countries to be vaccinated against COVID-19 by the end of 2021 and 70 per cent by the middle of this year.

“We are nowhere near these targets. Vaccination rates in high-income countries are — shamefully — seven times higher than in African countries. We need vaccine equity, now,” Guterres said.

He also warned of a lopsided recovery from the pandemic with low-income countries at a huge disadvantage.

“They’re experiencing their slowest growth in a generation,” Guterres said. “The burdens of record inflation, shrinking fiscal space, high interest rates and soaring energy and food prices are hitting every corner of the world and blocking recovery — especially in low- and some middle-income countries.”


(Reporting by Michelle Nichols, Editing by Franklin Paul)

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'I'm out of gas:' Leadership burnout on the rise as pandemic takes mental health toll – CTV News



Workers turn to them for support, clients rely on them for answers, companies lean on them in times of crisis.

Yet as the pandemic stretches inexorably on, experts say the never-ending demands on business leaders are pushing some to the brink of burnout.

Stress, uncertainty and long hours are causing malaise among many managers. It’s a condition that — if left unchecked long enough — can manifest as exhaustion, disengagement, depression and burnout, they say.

“Leaders are under tremendous strain,” says Paula Allen, global leader and senior vice-president of research and total well-being at LifeWorks.

“When the pandemic first started, we saw the adrenalin kick in, decisions were made fast and work got done,” she says. “But it’s been relentless. Leaders are exhausted.”

It’s not just people in charge hitting a wall 22 months, five waves and multiple variants into the COVID-19 pandemic.

New research has found an extreme level of exhaustion among many Canadian workers from the bottom to the top. Many say they’re more stressed now than during initial lockdowns.

Essential front-line workers from nurses to grocery store clerks have faced innumerable risks of infection. Others face precarious employment without sick days or benefits. Some have lost their jobs altogether and struggle to pay rent and buy food.

In comparison to these hardships, some might be quick to dismiss the challenges of leaders.

Yet many have reported an increase in exhaustion and mental health concerns since the start of the pandemic.

Supervisors, low-level managers, small business owners and senior executives are grappling with increasing demands and surging work volumes.

Many are putting in extra hours to keep things running while also providing support and encouragement to workers.

“Business leaders are supposed to be cheerleaders,” says Mike Johnston, president and CEO of Halifax software company Redspace.

“But we’ve been trying to hustle and pivot and get through this for so long now. I’m out of gas.”

For some managers, the inability to offer more certainty and support to workers is what keeps them up at night.

“When you’re the leader of a group of people you want to have all the answers,” says Barry Taylor, director of operations for The Ballroom, a large entertainment venue in downtown Toronto.

“But you don’t and you just feel helpless and burnt out.”

Experts say late-stage pandemic fatigue is taking a toll on many managers, with some veering towards burnout.

The symptoms can include emotional exhaustion, detachment, loss of motivation and reduced efficiency — all of which can have a ripple effect throughout an entire workplace, they say.

“It’s exhausted leaders leading exhausted teams,” says Jennifer Moss, a Waterloo, Ont.-based workplace consultant and author of The Burnout Epidemic: The Rise of Chronic Stress and How We Can Fix It.

“Managers are trying to be stoic and demonstrate strength and certainty for their employees when many don’t feel that themselves.”

Pandemic burnout isn’t unique to leaders, but she says there are particular stressors facing those in charge.

“It can be more isolating at the top,” Moss says. “Senior leaders and managers can sometimes feel very alone.”

There’s also a perception that because people in management positions “earn the big bucks” they should be prepared to cope with the additional responsibility and stress, she says.

“We sometimes forget there’s a human behind that role and regardless of how much they’re being paid, how much they earn, it doesn’t fix the grief and the pain and the stress that they’re dealing with,” Moss says.

The perception that managers should demonstrate unwavering leadership and steadfast support of their workers can increase fears of seeking help, experts say.

“There’s a definite stigma,” says Chantal Hervieux, associate professor of strategy at Saint Mary’s University’s Sobey School of Business and director of the school’s MBA program and Centre for Leadership Excellence.

“There’s less acceptance for leaders to talk about mental health issues.”

Leaders are expected to be in control, have the answers and be supportive of their team members, she says.

Despite the near constant uncertainty and upheaval of the pandemic, those expectations have remained the same — or increased, Hervieux says.

“Canadian business leaders are working hard to keep things going but some are suffering,” she says. “They’re paying a mental health price and we need to talk about it.”

The challenge of trying to lead during the pandemic is backed up by research.

A survey by LifeWorks and Deloitte Canada released last summer found 82 per cent of senior leaders reported feeling exhausted.

The poll found the top two stressors were an increase in work volume compared to pre-pandemic levels, and the desire to provide adequate support for the well-being of staff.

More than half of those polled said they were considering leaving their roles.

“I’ve been chatting with other CEOs and there seems to be a shift,” Johnston with Redspace says. “There’s a number of founders looking to get out, to exit. The fun of the chase isn’t balanced against the stress of it.”

Still, despite some of the unique pressures facing leaders, burnout appears to be impacting all workers.

A new Bromwich+Smith poll conducted by Angus Reid found more than 70 per cent of people surveyed are worried about their physical and mental health, including sleep issues, fear of COVID-19 and burnout.

Another study by Canada Life found a high level of burnout among Canadian workers. The survey conducted by Mental Health Research Canada found more than a third of all working Canadians are feeling burned out.

This report by The Canadian Press was first published Jan. 17, 2022.

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