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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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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.






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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.

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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.






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

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

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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

The Canadian Press. All rights reserved.

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

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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.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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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.

The Canadian Press. All rights reserved.

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