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Coronavirus: G7 finance ministers 'ready to tackle economic hit' – BBC News

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Finance ministers from the G7 group of nations have said they will use “all appropriate policy tools” to tackle the economic impact of coronavirus.

The group of major economies said in a joint statement they were monitoring the outbreak and ready to deploy “fiscal measures”.

It follows warnings the economic impact could tip countries into recession.

On Tuesday, Bank of England boss Mark Carney said the virus could produce a “large” but temporary hit to UK growth.

Central bankers and finance ministers from Canada, France, Germany, Italy, Japan, the UK and the US held a conference call on Tuesday, led by US Treasury Secretary Steve Mnuchin and US Federal Reserve boss Jerome Powell.

“Given the potential impacts of Covid-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks,” they said.

“Alongside strengthening efforts to expand health services, G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase.

“G7 central banks will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system.”

On Monday, the Organisation for Economic Cooperation and Development (OECD) warned the global economy could grow at its slowest rate since 2009 this year because of the virus.

The influential think tank forecast growth of just 2.4% in 2020, down from 2.9% in November, but it said a longer “more intensive” outbreak could tip many countries into recession.

There were also sharp falls on global stock markets last week as factory activity in China contracted.

Earlier on Tuesday, Mr Carney told MPs that the virus was “beyond the containment phase”, before adding the economic effects in the UK could last up to six months.

But he said he expected to see “disruption not destruction” and added that the Bank was ready to help businesses and households adjust.

Mr Carney hands over his role to Andrew Bailey on 16 March, and said the two had been in constant contact in order to have a smooth transition.

Stock markets have rebounded this week amid signs that governments and major central banks will work together to tackle the economic hit of coronavirus.

The US Federal Reserve and the Bank of Japan have said they are ready to help stabilise markets, after the recent volatility.

And both Australia and Malaysia cut interest rates on Tuesday as a result of the outbreak.

The Reserve Bank of Australia cut rates to a record low of 0.5% because of the “significant effect” of the outbreak on the country’s economy.

Malaysia’s central bank – Bank Negara Malaysia – cut its rates to 2.5%, saying: “The ongoing Covid-19 outbreak has disrupted production and travel activity, especially within the region.”


Mark Carney’s comments that the economic shock of coronavirus will be “temporary” in the UK, suggests the Bank of England is willing to act decisively to create a financial “bridge”.

Mark Carney also said the fact that in the near term this was likely to be more of a demand issue than a supply issue is a “consideration for the stance of monetary policy” – a hint that the Bank of England is considering rate cuts to boost confidence.

The BBC understands a statement from G7 finance ministers acknowledging the economic impact of coronavirus, and the willingness to work together, is likely to be released after their conference call.

President Trump has renewed his social media pressure on the US Federal Reserve to cut interest rates because of the outbreak.


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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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