With growing economic uncertainty during the COVID-19 pandemic, the financial landscape is shifting every day.
Whether it’s dealing with sudden unemployment, ballooning debt, or expenses related to working from home, BNN Bloomberg wants to help Canadians navigate these uncharted waters.
That’s why we created Ask BNN Bloomberg, where you can have your personal finance questions answered by industry professionals.
Questions and answers have been edited for clarity. Last names will not be used.
Financial aid for Canadian contractors
Alex in Oshawa, Ont.:
My wife rents a commercial unit and is a sub-landlord to five hairstylists in her salon. These independent contractors pay a chair rental fee and are not on a payroll system. She pays rent to the landlord for the unit she leases it in her name.
My wife wants to know if she can apply for the rent relief program since she doesn’t think her landlord will participate in it and she wants to help her stylists out with rent.
Just trying to ease their pain. l keep hearing that we are all in this together. (May 12, 2020)
Mary Ng, minister of small business, export promotion and international trade:
Thank you, Alex. Like you said, we are all in this together – and we will continue working to support Canadians every step of the way through this crisis.
Although the tenant-landlord relationship is ultimately the responsibility of the provinces and territories, our government has stepped up to provide support through the tools that we have, the Canada Mortgage and Housing Corporation, so that small businesses can get the rent relief they need. We strongly urge all landlords to apply for the Canada Emergency Commercial Rent Assistance (CECRA) – it makes financial sense and will help all of us get through these tough times.
CECRA is just one of a wide range of other emergency supports we’ve bought in to help businesses and all Canadians. The Canada Emergency Response Benefit (CERB) could help your wife and her stylists if they’ve seen their income reduced, and the $40,000 interest-free loan CEBA (Canada Emergency Business Account) can help business owners like your wife keep up with non-deferrable expenses, like rent and utilities – which is available at your local bank or credit union. (June 30, 2020)
Choosing between CERB and CESB
Jenny from Montreal:
Hello BNN Bloomberg,
Thank you so much for taking the time to answer my questions concerning my personal financial situation.
I am a student who just graduated this winter semester. I was working part-time at school during the school year and with the pandemic, I stopped working there as the school was (and is still), closed.
I applied for CERB from mid-March till June, as I have earned more than $5,000 in 2019. On the side, I had a smaller part-time job that earns about $200 per month so I am also well-below the $1,000 maximum as income per month for CERB.
My question is, can I keep taking CERB instead of Canada Emergency Student Benefit (CESB)?
I have not returned to work at school but seeing that summer is here, I normally would have had to sign a new contract with the school for a part-time job as the winter semester is officially done.
Thank you so much for your clarification! (June 15, 2020)
Tim Cestnick, co-founder and CEO of Our Family Office Inc.:
Choosing between CERB and CESB
Tim Cestnick, co-founder and CEO of Our Family Office Inc., answers a viewer question on whether they can claim CERB even if their part-time job ended during the winter semester and it hasn’t been renewed.
There’s still a lot of confusion around the Canada Emergency Response Benefit and also the Canada Emergency Student Benefit and particularly which can you claim and when.
Now just to share with you one story; one student was working during the school year on a part-time basis, now that work was supposed to come to an end at the end of April but she was working part-time during school and had earned over $5,000 in the last year so she was fine that way. When her job came to an end because of COVID-19, she did qualify for the CERB and has been claiming that benefit. Her question was “What about the summer months?”
So in the summer months, she had no guaranteed work for the summer months, it’s not like there was a contract already in-place, she had a job for the summer, it was guaranteed and now she lost it because of COVID-19.
If that had been the case she would be able to continue claiming the CERB, but that wasn’t the case. Now she’s left looking for a job like many other students are this summer. If she has trouble finding that work for the summer, she could claim CESB.
Now it’s going to take a separate application, it’s not as generous as the CERB but it’s still not bad, it’s free money so don’t hesitate to apply for it. But keep in mind as well that the government will not let you claim both the CERB and CESB in respect to the same period of time so you can’t double dip.
But still if you do qualify make sure apply, because it is free money and it’s going to help you. (June 29, 2020)
Managing your portfolio amid ongoing waves of volatility
Roland from Toronto:
I’m finding it really difficult to sit and watch our (risk adverse) mutual funds fluctuate so greatly.
The advice we get from the bank from the on-set (early to mid-March) is that it will return to the original value and to be patient. Even when everyone was selling and things started to slide, we were told to hold on versus protecting our assets.
While we still haven’t recovered from initial losses from March, I wonder if it’s too late to protect what we already have in event there is another downturn this fall.
What types of guaranteed investments can we move our mutual fund money to until we get over this hurdle? (June 29, 2020)
Frank Settino, investment counsellor at Kerr Financial:
You are in good company because most investors find it difficult to deal with the volatility that comes with investing in equity markets. However, with the added volatility there is the prospect of generating rates of return that are well above guaranteed investments over the long-term. The long-term is measured in years and not months.
If you feel uncomfortable with the fact that the value of your investments has fallen below the original value, we suggest that you review your risk tolerance and time horizon. As a result, you may discover that based on your investor profile your current investments are not suitable for you.
If this is the case you may want a much smaller allocation to equities that typically exhibit greater volatility, and a larger allocation to bonds and guaranteed investment products that provide stable income and preserve capital. In reducing your exposure to investment risks tied to equities, you should also expect to generate lower returns over the long-term. (June 30, 2020)
To have your personal finance question answered an industry professional, send an email to askbnnbloomberg@bellmedia.ca.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
