Economy

Canadian economy posted steepest decline on record as coronavirus struck: StatCan – CTV News

Published

4 years ago

August 28, 2020

OTTAWA —
Statistics Canada says the economy posted its steepest decline on record in the second quarter as the COVID-19 pandemic forced the closure of non-essential businesses and slowed the economy to a crawl.

The agency says real gross domestic product contracted at an annualized rate of 38.7 per cent for the three-month period, the worst showing since the start of 2009 at the height of the global financial crisis.

Economists had expected a contraction in the quarter at an annualized rate of 39.6 per cent, according to financial markets data firm Refinitiv.

Almost every single component of the economy used to calculate GDP was at its lowest point over April, May and June — driven largely by widespread lockdowns in April.

Economic output rebounded in May by 4.8 per cent, and the agency says June posted an increase of 6.5 per cent.

The agency’s preliminary estimate for July indicates a three-per-cent increase in real GDP.

The second quarter of 2020 was largely expected to be the worst three-month stretch for the economy this year before the country begins what is expected to be a long, bumpy road to a recovery.

Even with the gains in June, economic output is about nine per cent below pre-pandemic levels, Statistics Canada says.

On Thursday, Bank of Canada governor Tiff Macklem told an international gathering of central bankers that not all small and medium-sized businesses are going to be able to reopen even as restrictions to contain COVID-19 are rolled back.

That will be especially the case in sectors such as restaurants and hospitality, where people are in close proximity.

“We are seeing now some very impressive rebound numbers as the economy reopens,” Macklem said on a virtual panel hosted by the Federal Reserve Bank of Kansas City.

“That’s a really good thing, but not all parts of the economy are going to be able to reopen for some time, and so we expect that after this first phase, it’s going to be a pretty long, bumpy phase.”

The record decline in output over the last quarter, which was the worst posting for the economy over six decades of comparable data, was fuelled by record drops in spending as businesses stayed closed, Canadians ordered to stay home and millions out of work.

Household spending on goods was down by 8.4 per cent, and down 16.7 per cent for services.

Business investment fell 16.2 per cent, which Statistics Canada says is a result of plant closures, low oil prices and heightened economic uncertainty.

Employee compensation fell by 8.9 per cent, the steepest drop ever recorded, as workers were laid off, furloughed, or had their hours slashed.

Federal emergency aid, particularly through the Canada Emergency Response Benefit, more than offset that drop, the agency says, noting a 10.8 per cent increase in household disposable income.

The Liberals are now proposing a $37 billion income-support package of benefits and changes to employment insurance when the CERB winds down starting next month, which will add to the $343 billion record deficit.

On Thursday, credit rating agency Fitch Ratings said the pandemic has taken “a permanent toll” on economic growth potential in Canada, and dropped growth expectations to around one per cent.

The agency said government spending will remain high while economic activity takes years to recover, and warned it may have to further downgrade the country’s credit rating if deficits and debts weren’t brought under control.

This report by The Canadian Press was first published Aug. 28, 2020

Let’s block ads! (Why?)

Source link

Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

1 day ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

Source link

Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

Source link

Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

6 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

Source link