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Coronavirus: COVID-19 and the Canadian economy, one year later – Global News

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The true financial impact of COVID-19 will take years, if not decades, to ascertain.  But now, a year after the pandemic forced all Canadians inside their homes for the first time, we know not every Canadian was dealt the same hand.

“I think one thing: regardless of how you fared during COVID, it threw a stick of dynamite on everyone’s finances,” says financial expert Kelly Keehn.

Keehn says Canadians can be divided into two groups.  The first are those that used government programs like the Canadian Emergency Response Benefit (CERB) to pay their bills and continue to struggle making ends meet in a tough economy.  The second are full-time workers with benefits who put off spending money on vacations and are now sitting on extra cash.

“That camp over there that has some extra money, they’re actually reaching out to me saying they’re kind of embarrassed to even talk about it because they know so many people are suffering and the people that are suffering are still dealing with that conversation of, you know, tax time’s coming up. They may owe money,” Keehn says.

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Read more:
Canadian economy posts worst showing on record in 2020

According to Statistics Canada data released in the fall, Canadians are sitting on over $170 billion in household and business excess cash.  CIBC economist Benjamin Tal says that number today is well over $180 billion, or more than four times larger than the banks see accumulated in normal times.

Much of that can be attributed to the areas of the economy that continue to suffer like travel.  With fewer people spending money on trips, domestic flights are down 35 per cent and international flights 77 per cent in year-over-year numbers as of December.

Tourist destinations within Canada have suffered because of the near-disappearance of U.S. travellers to Canada (a decrease of 95 per cent) as well as international travellers, (a decrease of 94 per cent) the Statistics Canada data also showed.


Click to play video 'Coronavirus: Travel agents join growing calls for greater financial support amid new restrictions'



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Coronavirus: Travel agents join growing calls for greater financial support amid new restrictions


Coronavirus: Travel agents join growing calls for greater financial support amid new restrictions – Jan 30, 2021

And Canadians are spending far less on food, the data showed, as sales in restaurants unable to fill their dining rooms are down 52 per cent from the same time last year.

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There is some reason for optimism, as retail numbers have rebounded after months of big losses to pre-COVID-19 levels. The housing market had a tough second quarter in 2020 but has put up record numbers in the two quarter since. And it remains hot despite only 1.9 months worth of inventory, according to the Canadian Real Estate Association (CREA) — the lowest reading on record.

Read more:
Canada’s small businesses now have $135B in debt due to COVID-19, CFIB estimates

One person who won’t be buying a house anytime soon is 2020 University of Toronto graduate Patty Facy, who has been frustrated by a system she says has overlooked her and her classmates.

“And if you are somebody that just was unlucky enough to graduate right now, you’ve kind of slipped through the cracks when it comes to government relief,” she says.

That’s true, in that recent graduates didn’t qualify for CERB unless they had worked the previous year. The Canada Emergency Student Benefit (CESB) paid far less and for only 16 weeks.  And while current students received a tax credit, graduates have asked repeatedly to no avail for a freeze on repaying their student loans.

Facy has been working part-time for far less than she should get with a Masters of Information degree.

“There aren’t as many jobs out there, and new grads are competing with people that have been laid off from the workforce that have been in the workforce for years already,” she says.

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“So you’re competing with people who have years of experience.


Click to play video 'Freeland says consultations launched to help rebuild Canada’s economy post-COVID-19'



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Freeland says consultations launched to help rebuild Canada’s economy post-COVID-19


Freeland says consultations launched to help rebuild Canada’s economy post-COVID-19 – Jan 25, 2021

© 2021 Global News, a division of Corus Entertainment Inc.

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Economy

CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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Canadian dollar rebounds from one-week low ahead of jobs data

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) -The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from a one-week low the day before, as the level of oil prices bolstered the medium-term outlook for the currency and ahead of domestic jobs data on Friday.

The Canadian dollar was trading 0.4% higher at 1.2560 to the greenback, or 79.62 U.S. cents. On Wednesday, it touched its weakest intraday level since March 31 at 1.2634.

“We have seen partial retracement from the decline over the last couple of days,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets.

“With oil prices where they are – let’s call WCS still at roughly $49 a barrel – I still think CAD has room to strengthen over the medium term and even over a one-week horizon.”

Western Canadian Select (WCS), the heavy blend of oil that Canada produces, trades at a discount to the U.S. benchmark. U.S. crude futures settled 0.3% lower at $59.60 a barrel, but were up nearly 80% since last November.

The S&P 500 closed at a record high as Treasury yields fell following softer-than-anticipated labor market data, while the U.S. dollar fell to a two-week low against a basket of major currencies.

Canada‘s employment report for March, due on Friday, could offer clues on the Bank of Canada‘s policy outlook. The central bank has become more upbeat about prospects for economic growth, while some strategists expect it to cut bond purchases at its next interest rate announcement on April 21.

On a more cautious note for the economy, Ontario, Canada‘s most populous province, initiated a four-week stay-at-home order as it battles a third wave of the COVID-19 pandemic.

Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year fell 3.3 basis points to 1.469%.

(Reporting by Fergal Smith;Editing by Alison Williams and Jonathan Oatis)

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