OTTAWA — A major global credit rating agency is issuing a new warning about federal debt that it says may become more difficult to tackle once the pandemic passes.
Fitch Ratings downgraded Canada’s triple-A credit rating in June, dropping the country to an “AA+” rating over what it called “the deterioration of Canada’s public finances” due to COVID-19.
The decision came out before the Liberals released an updated outlook in early July for federal spending, which projected a deficit of $343.2 billion and a debt of over $1.2 trillion.
Those figures were before the Liberals promised last week to spend $37 billion to revamp income support programs for hard-hit workers.
Fitch says in a note that gross government debt will be 120 per cent of economic output, which is “significantly higher” than the median for a double-A rating.
The ratings agency says it expects government spending to drop sharply starting in 2021, but the current growing deficit will make reining in spending and the debt more challenging over the medium-term.
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But it is also sending a signal about the political dynamics on Parliament Hill, with a looming speech from the throne that will outline a recovery plan that will require the Liberals to gain support from enough opposition MPs to win a confidence vote, or plunge the party into a federal campaign.
Fitch says it’s uncertain whether the Liberals and Prime Minister Justin Trudeau could capture a majority in a federal election. Newly elected Conservative Leader Erin O’Toole “presents a new dynamic,” the agency wrote, noting his leadership platform included a pledge to balance the budget.
“Regardless of which party is in power after 2020, the government faces deep fiscal and economic policy challenges and risks,” the Fitch note says.
The government has had to sharply ramp up spending since March when the pandemic swept into Canada, forcing the closure of businesses and workers ordered to stay home to slow the spread of COVID-19.
Those restrictions have since been rolled back, and economic output grew in May as a result.
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On Friday, Statistics Canada will release gross domestic product readings for June and the second quarter of 2020. The average economist estimate is for a drop of nearly 40 per cent in GDP for the second quarter compared to the same three-month stretch in 2019, according to financial data firm Refinitiv.
Fitch expects the economy to remain subdued and unemployment to remain high for the rest of the year, just as the federal government projected in its July economic snapshot.
Since then, some of the key political players have changed. Bill Morneau resigned as finance minister and was replaced by Chrystia Freeland, “who quickly announced the new spending measures,” Fitch wrote.
The Liberals are proposing three new benefits for workers costing $22 billion, to help those who don’t qualify for employment insurance, and easing access to EI at a cost of $7 billion.
The Canada Emergency Response Benefit, previously budgeted at around $80 billion, will be extended by four weeks at a cost of $8 billion. The latest federal figures show spending on the CERB surpassed $70 billion by the middle of this month.
New spending measures are expected this fall when the government updates spending plans. The Liberals have yet to introduce a budget for the fiscal year.
“We expect spending pressures to remain pronounced while unemployment remains high and economic activity subdued, and Canada’s decentralized fiscal framework, especially its large intergovernmental transfers, will increase the complexity of any fiscal adjustment,” the ratings agency wrote.
“Failure to place consolidated gross general government debt/GDP on a downward path over the medium-term could lead to negative rating action.”
© 2020 The Canadian Press
Snowbirds debate winter plans as temperatures drop and COVID-19 cases rise – CTV News
As temperatures begin to cool down in Canada, some snowbirds are considering toughing out the winter months north of the border, while others hope border restrictions ease so they can make the trip south.
Jack Deneboom is among the estimated 350,000 Canadians who spend between three and six months in Florida. He and his wife are still unsure if they will try to head to their winter home in Naples, Fla. this winter.
“Too many people are not taking it seriously and down there we see a very politicized situation,” he told CTV News.
On Monday, the state of Florida reported 1,701 new cases of COVID-19 on Monday, bringing their overall total to 685,439 cases since the pandemic began. Canada reported 1,308 new cases of COVID-19 on Monday, hitting a total of 145,418 confirmed cases of the virus.
While the Canada-U.S. border is closed to non-essential travel until Oct. 21 and may be extended, the U.S. Customs and Border Protection says Canadian air passengers can still enter the country, provided they haven’t visited Brazil, China, Iran, Ireland, the U.K. or countries in the Schengen Area in the 14 days prior.
Depending on the state, Canadians entering the U.S. may have to self-isolate upon arrival.
Joanne Atherton faces a similar decision. She spends hers summers at a gated RV resort in Peterborough County, Ont. but drives down to Northport, Fla. every winter.
Atherton said she isn’t comfortable taking a flight, meaning she may have to stay with family members this year if the border isn’t opened sometime soon.
“I don’t think I’m COVID crazy,” she said. “I’m cautious.”
COMPANIES NOW PROVIDE COVID-19 INSURANCE
Due to the growing demand for international travel, several insurance companies have begun offering COVID-19 medical coverage as part of their travel insurance.
Medipac, a service with ties to the Canadian Snowbirds Association, offers four months of coverage for less than $900, provided the customer is below the age of 70 and in good health.
“There was a large outcry from Canadian snowbirds at the beginning of this travel season, asking if there was going to be coverage for COVID-19 related illness,” said Christopher Davidge, Medipac vice president of sales and marketing.
Manulife announced a similar service last week, designed to provide medical coverage for COVID-19 infections and some coverage in the event a trip is cancelled or interrupted.
While the Canadian government continues to advise against all non-essential travel, there are several destinations Canadians can fly to with few, if any, restrictions, including Cuba, Mexico, the Dominican Republic and much of Europe.
Experts do point out, however, that many of the attractions may be limited or closed down as countries experience a second wave of cases.
Upon return from any international travel, Canadians must still self isolate for 14 days.
Survey finds working Canadians are better off financially, more stressed about money – CTV News
A new survey has found that Canadians who’ve been able to continue working through the pandemic are in a better spot financially than they were a year ago, but are more stressed about money.
The survey from the Canadian Payroll Association shows 62 per cent of working Canadians were able to save more than five per cent of their paycheque so far in 2020, compared to 59 per cent last year
Additionally, 37 per cent of Canadians reported living paycheque-to-paycheque, a decline of six percentage points from 2019 and the lowest in the 12-year history of the survey.
The researchers hypothesize that less commuting, not having to pay for child care and saving on lunches contributed to the improved financial well-being of working Canadians through the pandemic.
However, the survey also found 43 per cent of Canadians are financially stressed, and just 22 per cent consider themselves “comfortable.” The results had previously remained steady at about 33 per cent in each category since 2009.
The Canadian Payroll Association believes this jump is above the historical trends, meaning there is an outside factor impacting this stress, namely the COVID-19 pandemic.
“While it’s not a surprise that more Canadian workers are financially stressed, the variance between this year’s results and what was expected based on the historical trends, caught us off guard,” Dr. Adam Metzler, associate professor at Wilfrid Laurier University and one of the survey leads, said in a news release.
“The algorithm recognized that, despite remaining on payroll and being in a measurably better financial position right now, financial stress this year was impacted by a complex combination of new factors — including those that are more psychological than financial in nature.”
The survey also found the majority of Canadians are concerned about inflation, their ability to retire, their job security and a possible recession.
Additionally, 69 per cent of Canadians said they spent time at work thinking about their personal finances, which the association estimates represents $20.3 billion in lost productivity.
“That estimate is a conservative one,” said Peter Tzanetakis, president of the Canadian Payroll Association. “The costs of increased absenteeism, decreased motivation, strained relationships with colleagues, and turnover that many respondents cite as consequences of financial stress, also need to be taken into account.”
As a means of lowering financial stress levels in the workplace, the association suggests employers can work with employees to establish long-term saving habits, engage with employees during a crisis and to establish a payroll continuity plan.
According to the August Labour Force Survey from Statistics Canada, the national unemployment rate is at 10.2 per cent. That’s an improvement of 1.4 per cent from July, but still a ways away from the 4.5 per cent unemployment rate in February, before the pandemic.
Spouse witnessed N.S. gunman torching their cottage, court documents say – CBC.ca
The man responsible for April’s mass shootings in Nova Scotia took a leisurely drive around a community close to his rural cottage, stopped to chat with a fellow denturist and oversaw work being done on his property in the hours before the massacre began.
The details of a seemingly mundane day leading up to the shootings are contained in sections of court records that a provincial court judge ordered released Monday following a court hearing.
The documents also say that on the evening of April 18, the gunman’s spouse was present inside as he doused the floor of the cottage they shared with gasoline — before grabbing guns and igniting the log building he’d prized. The woman, whose name is redacted from the records, later told police he said, “I’m done, I’m done. It’s too late [redacted], I’m done.”
On April 18 and 19, Gabriel Wortman killed 22 neighbours, acquaintances and strangers in several communities in rural Nova Scotia. He torched his own cottage and garage, and three other homes over a 13-hour period before being shot dead by police at a gas station in Enfield, N.S. after a lengthy search.
A judge on Monday approved the release of six more of the approximately 23 judicial authorizations RCMP have obtained since the massacre — to search gunman’s properties in Portapique and Dartmouth, and for his financial records. Redacted copies of seven were previously released.
Though the new documents are heavily redacted, each is about 90 pages long and includes information about how the gunman procured decommissioned RCMP cruisers and police equipment and about his financial transactions months prior to the attacks. All information related to the type of firearms used remains blacked out.
Expected to head to Dartmouth
It’s unclear why the gunman “snapped,” as his spouse described it to police. The documents also offer little information about why Wortman targeted his victims, some of whom he knew. His partner told police she did not know their neighbours well.
She also told police that, that night, she believed he was going to take her to Dartmouth, where they had another home and a clinic, to kill people or burn buildings, according to the documents. The specifics are blacked out. The woman has never spoken publicly about what she saw on April 18. Her lawyer has declined requests for comment from CBC News.
At some point after Wortman loaded guns and ammunition into his mock cruiser, the woman escaped. She told investigators she initially hid in a truck before spending hours in a wooded area in Portapique. Though she heard someone announcing they were police on a loudspeaker, she said she feared it was her partner. Around dawn she went to the home of a neighbour who called 911.
Large cash withdrawal
RCMP have previously said Wortman liquidated his assets and stockpiled gas and food due to COVID-19 fears. A warrant that the court released in May revealed people told the investigators the gunman was paranoid and had a history of abuse.
According to the new documents, his spouse also told police in the weeks prior to the attacks he was “consumed” by the pandemic, talking about it constantly and saying he “knew he was going to die.”
She also said he feared that Prime Minister Justin Trudeau would find a way to control money and that prompted him to withdraw nearly half a million dollars from his own accounts. The RCMP interviewed officials from CIBC and Brinks about a March 30 withdrawal in Dartmouth.
Officials from the bank told police that Wortman asked to liquidate investments and then transferred the money to his business accounts. On March 25 at a branch in Dartmouth, he asked the bank’s director that his $475,000 be paid out in $100 bills, according to the court documents.
The records state the bank worked with Brinks to set up a pick-up on March 30.
RCMP have not said how much cash police have recovered. The search warrant documents show that on April 22, investigators found cash folded in tinfoil packets inside an ammunition box discovered at the Portapique property.
Suspicious transactions flagged
Canada’s money-laundering watchdog, the Financial Transactions and Reports Analysis Centre (Fintrac), reported on Wortman’s personal and professional financial activities after the massacre, according to the newly released documents.
The records say Wortman’s PayPal account was used to buy vehicle accessories labelled as being for police use on eBay. The court documents describe the purchases as “for items utilized in the facilitation of domestic terrorist activities.”
According to the court documents, the Fintrac review found that PayPal flagged suspicious transactions between March 22 and Dec. 5, 2019 — though it’s not clear from the records if that’s when they were reported as suspicious or if that’s when they occurred.
Those purchases included accessories for police vehicles such as:
- A centre console for a 2013 Ford Taurus.
- A ram for the front bumper of a Taurus sedan.
- Siren lights.
- A dashcam.
- Thin blue line vinyl decal.
- A gun rack.
Other transactions listed as suspicious include $15,045 worth of items — including decommissioned cars — purchased with credit cards from GCSurplus in Ottawa. The site is run by Public Services and Procurement Canada.
There’s also reference to cash deposits payable to Wortman from Northumberland Investments, one of his companies. The Fintrac review found three questionable transactions: two cash deposits in 2010 totalling $200,000 and another for $246,000. The transactions happened in Fredericton and Dartmouth, but the documents don’t elaborate on the circumstances.
What is clear is that over the years, people around the gunman knew he had a penchant for acquiring car parts and collecting motorcycles. Some also knew he had guns and one car that he’d outfitted to resemble an actual cruiser.
The documents reference interviews with two people who responded to a Kijiji ad about an off-road vehicle in the weeks prior to April’s attacks. In both cases, Wortman showed off his replica cruiser inside the large garage he had in Portapique.
Using one of his companies, he purchased the 2017 Ford Taurus used in the attacks on July 3, 2019, from the RCMP, according to the search warrant records.
A friend of Aaron Tuck, who was one of Wortman’s victims, told police that in August 2019, Tuck told him that Wortman’s mock cruiser was indistinguishable from an actual police vehicle and that he kept a holster for a gun in the back of it. Tuck was killed alongside his wife, Jolene Oliver, and his daughter, Emily, at their home in Portapique.
Peter Griffon, a neighbour who was on parole and who printed the decals for the cruiser, initially lied to police about his involvement but later showed investigators images of the vehicle he kept on his phone. He did odd jobs for Wortman and on April 18 had been splitting wood for him. He last saw him around noon that day, before Wortman headed out for a drive.
Wortman also stopped and talked with a fellow denturist, who is not identified, about work and COVID-19.
The gunman’s spouse said Wortman was constantly scouring sites for police gear which he bought in both Canada and the U.S.
Records the RCMP obtained from Canada Border Services Agency showed that Wortman crossed the U.S.-Canada border in Woodstock, N.B., 15 times over a two-year period, with his last return to Canada on March 6. He did not have permits to import supplies for his denturist business, but the CBSA said he was personally importing car parts.
Wortman appears to have had a long history of threats and violence. A former neighbour has spoken out about being harassed by Wortman after reporting to RCMP that Wortman abused his spouse. The spouse and another relative relayed to police an account of Wortman’s vicious attack on his father during a trip to the Caribbean. In 2011, someone reported to Truro police that the denturist threatened to “kill a cop.”
The documents released Monday are the second batch of search warrant documents the court has agreed to release. CBC applied in April for access to the records and seven other media outlets joined the application.
David Coles, the lawyer representing the media organizations, has filed a request for a judicial review of decisions Judge Laurel Halfpenny MacQuarrie had made in the case. Halfpenny MacQuarrie will consider that request Oct. 2 in Halifax provincial court.
If you are seeking mental health support during this time, here are resources available to Nova Scotians.
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