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Homebuyers, take note: Canada’s mortgage stress test rate is changing in April

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OTTAWA —
The federal government is changing the stress test rate for insured mortgages starting April 6 that experts say should make it marginally easier for some buyers to purchase their first home, or owners refinancing their existing mortgages.

The new minimum qualifying rate will be the greater of the borrower’s contract rate or the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus two percentage points.

The stress test rate currently is the greater of the borrower’s contract rate or the Bank of Canada five-year benchmark posted mortgage rate, which is based on the posted rates at the six largest banks.

Finance Minister Bill Morneau unveiled the change by saying the stress test will rise and fall if there are changes in the median interest rates lenders are providing, while continuing to ensure people only take on mortgages they can afford.

“We think these are positive moves to ensure that the approach remains effective for Canadians and that it also deals with changing market conditions,” Morneau said Tuesday in announcing the change.

The federal government required the stress test apply to all insured mortgages in 2016.

Canadian household debt has been near record levels, fuelled in part by mortgages. The stress test is used to ensure that Canadians can afford their mortgage payments if interest rates rise in the future.

“Canadians who are getting insured and insurable mortgages can expect to qualify for a little bit more than what they can today,” James Laird, co-founder of Ratehub.ca, said in a statement.

The Bank of Canada five-year benchmark posted mortgage rate has typically been about two percentage points higher than the average five-year fixed contract rate for insured mortgages, the government said. The government said that rate has not been as responsive recently to changes in the average mortgage contract rates.

The test, then, didn’t adjust to recent drops in lending interest rates and became too tight, Sherry Cooper, chief economist of Dominion Lending Centres wrote in a note.

“With rates falling sharply in recent weeks, especially since the coronavirus scare, the gap between posted and contract mortgage rates has widened even more than what was already evident in the past two years,” she wrote.

The Bank of Canada five-year benchmark posted mortgage rate is currently 5.19 per cent, while the special offer rate advertised on the Royal Bank’s website for a five-year fixed-rate mortgage is 3.09 per cent and rates offered by smaller lenders are even lower.

The change should make qualification incrementally easier for some buyers, but still leaves too onerous a test for many given the economic realities of a low-rate environment, said Paul Taylor, president of Mortgage Professionals Canada.

“Having a stress-test at 200 basis points to prepare people for a potentially more expensive renewal just doesn’t seem practical,” Taylor said in an interview.

“If you really want to prepare people for a two-per-cent increase in interest rates, then a 75 basis point test today will do that.”

The Office of the Superintendent of Financial Institutions is also considering using the same new stress test rate for uninsured mortgages.

OSFI has been using a minimum qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada.

OSFI, which is consulting with stakeholders, has proposed that it will also adopt the new benchmark rate on April 6 to coincide with the changes for insured mortgages.

The lockstep move should avoid creating an imbalance in the marketplace, Taylor said.

This report by The Canadian Press was first published Feb. 18, 2020.

Source: – CTV News

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Pfizer will ship COVID-19 vaccine in fewer vials if Canada agrees to label change – CBC.ca

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Pfizer and BioNTech will cut back on how many vials of COVID-19 vaccine they send Canada this year if the federal health regulator agrees to change the vaccine label to say every vial contains six doses instead of five.

Medical professionals in the United States were first to discover in December that they could get six doses from each vial by using smaller syringes or special ones that trap less vaccine around the needle after an injection.

Initially heralded as a way to stretch the precious vaccine even further, the company stepped in to note its contracts are for doses, not vials: If a recipient can get six doses instead of five, then Pfizer and BioNTech can ship fewer vials and still fulfil their contractual obligation.

Pfizer pushed the U.S. and Europe to change the label information on the number doses per vial and both did in early January. On Friday, Pfizer asked Canada to follow suit, and Health Canada’s vaccine regulatory team is now considering the request.

“The final decision on the label update will reside with Health Canada,” said Pfizer Canada spokeswoman Christina Antoniou.

Special syringes needed

If Canada agrees to the change, Canada’s 40 million doses of Pfizer-BioNTech’s vaccine will be shipped in about 6.7 million vials. Antoniou said if Canada does not, then the existing deliveries will continue based on five doses per vial, for a total of eight million vials.

“We will supply to Canada in line with our supply agreement and the label valid in the country,” she said.

Health Canada told medical professionals they could use sixth doses if they can get them from single vials, but advised against taking partial doses from multiple vials to make one dose due to the risk of cross-contamination.

WATCH | Ottawa offers assurances about COVID-19 vaccine supply:

Prime Minister Justin Trudeau is trying to reassure Canadians about the COVID-19 vaccine supply after the European Union raised the possibility of imposing export controls on vaccines leaving the EU. Canada’s Pfizer-BioNTech shots are made in Belgium. 1:44

There has been some success at doing this. Saskatchewan reports receiving 22,425 doses of Pfizer’s and 10,300 doses of Moderna’s vaccine, for a total of 32,725. But it has injected 34,080 doses. The government attributed that to being able to get more doses out each vial than expected.

But European health officials have complained that a shortage of the special syringes needed is making it hard to get six doses out of each vial.

If Canada agrees to the change but can’t get the six doses out of every single vial, its goal to vaccinate 20 million people with Pfizer’s 40 million doses will be impossible to meet. 

Getting that extra dose requires the use of smaller syringes that allow less vaccine to go to waste with each injection. The best version is called a low-dead-volume syringe, which leaves less room for vaccine to get trapped in the needle and syringe after the plunger is pushed in all the way.

Those syringes are not as common as the three- and five-millilitre syringes mostly used in Canada’s vaccine campaign now, and the smaller ones have become the latest hot commodity of COVID-19.

Syringes on order

Public Services and Procurement Canada tendered contracts last year for 145 million syringes, 95 million of which are of the three- or five-millilitre variety.

There are 50 million one-millilitre syringes on order, including 37.5 million low-dead-volume versions.

The department wouldn’t say how many syringes of each type have arrived in Canada. A tender for one-millilitre syringes issued in October set a deadline for the first 15 million to be delivered at the end of this month and the rest by the end of March.

But whatever contract awarded has not been made public, including who the supplier is, how much it is worth, or when the supplies will be delivered.

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The latest news on COVID-19 developments in Canada for Wednesday, Jan. 27 – CityNews Toronto

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The latest news on COVID-19 developments in Canada (all times eastern):

10:45 a.m.

Ontario’s new daily case count of COVID-19 is the lowest it’s been in seven weeks.

The province is reporting 1,670 new cases of the virus today and 49 more deaths related to the disease.

Ontario’s daily case count hasn’t been this low since December 8.

Health Minister Christine Elliott says that 450 of those new cases are in Toronto, 342 are in Peel Region, and 171 are in York Region.

This report by The Canadian Press was first published Jan. 27, 2021.

The Canadian Press

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Canadian politicians struggle to come to grips with the global vaccine race – CBC.ca

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The global scramble to vaccinate the human race against COVID-19 is bigger than Canadian politics. But every Canadian politician no doubt understands the political and human importance of this country seeming to do well in this multinational competition. 

The result this week is anxiety and a rush to assign blame that has failed to produce easy answers to the central question of what, if anything, Canadian officials could be doing to procure more of what’s arguably the most precious commodity on Earth.

But this consternation among Canadian politicians might be obscuring a bigger question for the world: Is this really the best way to go about vaccinating 7.6 billion people against a common threat? 

The latest spasm of concern about Canada’s vaccine supply can be traced to a production facility in Puurs, Belgium, where Pfizer has been manufacturing one of the two approved vaccines for use in Canada. Pfizer has decided to retool that facility so that it can increase production. In the short-term, that means fewer doses will be available.

In response to Pfizer’s change of plans, Ontario Premier Doug Ford quickly declared that, if he were prime minister, he’d be on the phone to Pfizer’s top executive demanding the previously scheduled shipments. “I’d be up that guy’s ying-yang so far with a firecracker he wouldn’t know what hit him,” Ford said.

WATCH | Ontario premier says Trudeau’s ‘No. 1 job’ is to get vaccines:

Ontario Premier Doug Ford says Prime Minister Justin Trudeau needs to fight to get the Pfizer-BioNTech COVID-19 vaccine to Canada and he suggests the alternative to the Belgian plant may be Pfizer’s Michigan facility. 0:55

It stands to reason that if getting a plentiful supply of the Pfizer vaccine was as easy as getting up Pfizer CEO Albert Bourla’s ying-yang with a firecracker, nearly every leader on the planet would be doing so. But Ford got a chance to test his theory — a day later he spoke with the president of Pfizer Canada. If a firecracker was lit during that conversation, it has so far failed to change Pfizer’s plans.

In Ottawa, the consternation has been only slightly less colourful, culminating in an “emergency debate” in the House of Commons on Tuesday. 

The Conservatives argue that an ill-fated partnership between the National Research Council and China’s CanSino Biologics distracted Justin Trudeau’s government from pursuing better options — but Public Services Minister Anita Anand told the Canadian Press in December that Canada was the fourth country in the world to sign a contract with Pfizer and the first to sign with Moderna, the other major supplier of an approved vaccine. 

The New Democrats argue that the federal government should have negotiated for the right to domestically produce the currently approved vaccines — but that presumably depends in large part on the willingness of companies like Moderna and Pfizer to do so. 

A real effort to ensure Canada had domestic capacity to produce a pandemic vaccine likely would have had to have been implemented years ago.

Little control over vaccine supply

Eventually, Tuesday night’s debate landed on questions of transparency. The government says it has a plan for vaccinating Canadians, but the opposition says that plan isn’t detailed enough.

The opposition insists the government should release the details of the contracts it has signed with manufacturers, but the government says those contracts are necessarily confidential. There are suggestions that Europe’s supply of the Pfizer vaccine might be smaller than the interruption to Canada’s supply, but it’s not clear why that might be the case.

The Liberals surely understand the gravity of the vaccine race, but they have never shown much interest in explaining themselves in detail. They insist that their agreements with seven potential manufacturers have put Canada in a decent position and that their medium-term and long-term targets for vaccinating Canadians over the course of this year will not be affected by the current shortfall.

WATCH | EU threatens to slow vaccine exports, increasing concerns about vaccine nationalism:

The European Union is threatening to slow exports of the Pfizer vaccine after Astra-Zeneca announced a delay in production. With vaccines in short supply, global health leaders are growing increasingly concerned about the rise of vaccine nationalism. 2:00

But Pfizer’s decision to retool the plant in Puurs underlines how little control the Liberal government can claim to have over the situation and how little sympathy they’ll receive if things don’t work out the way they said they would.

It was just over a month ago that the federal government was able to answer a previous panic with earlier-than-expected approvals and shipments of the new vaccine. If the Liberals were only too happy to bask in that good news, this interruption feels like the universe’s way of telling them to not get cocky.

Canada vs. other countries

In the meantime, even the definition of success will be up for debate.

On Monday, for instance, Conservative MP Pierre Paul-Hus complained that Canada was not doing as well as the Seychelles, which had delivered at least a first dose to 20.22 per cent of its population through January 25. By comparison, Canada’s rate of vaccination was 2.23 per cent.

But the tiny island nation has a population of 98,000 people (roughly the equivalent of Red Deer, Alta). In absolute terms, the number of people who had received a dose in the Seychelles was 19,889. Canada, meanwhile, had administered doses to 839,949 people.

WATCH | Ottawa offers assurances about COVID-19 vaccine supply:

Prime Minister Justin Trudeau is trying to reassure Canadians about the COVID-19 vaccine supply after the European Union raised the possibility of imposing export controls on vaccines leaving the EU. Canada’s Pfizer-BioNTech shots are made in Belgium. 1:44

On Tuesday, Deputy Prime Minister Chrystia Freeland countered that Canada was ahead of Germany, France, Japan, Australia and New Zealand. But three of those countries — Japan, Australia and New Zealand — haven’t yet begun their vaccination programs. And in two of those countries — Australia and New Zealand — COVID-19 is almost non-existent. 

‘This is pure nonsense’

During the emergency debate on Tuesday night, the NDP’s Don Davies said Canada ranked 16th per capita in doses administered. He meant it as a complaint. But it could just as easily be framed as a compliment — if Canada ends up being the 16th fastest country to vaccinate its population, it will have finished ahead of 174 other countries. Among the 32 OECD countries who have begun vaccinations, Canada ranks 12th in doses administered per capita.

A few countries — the United States, United Kingdom and Israel — seem to be benefiting from their own unique circumstances. The U.S. and U.K., for instance, have access to domestic production of the available vaccines.

In every other country, there might be some version of the Canadian debate playing out; Trudeau said last week that he and German Chancellor Angela Merkel had commiserated about the similar criticism that they were each facing. 

WATCH | COVID’s one year anniversary in Canada:

One year after the first confirmed case of COVID-19, are we really all in it together? A PSW speaks about the reality of working the front lines in long-term care homes, and an artist questions life after CERB. PLUS, why first-world countries like Canada are being accused of hoarding vaccines. 45:36

But all of this might underline the questions of whether an every-country-for-itself scramble to acquire vaccines from a limited number of private manufacturers is the sensible way to go about vaccinating the human race.

“‘Could Canada have done more?’ The problem for me is that this is not the right question. What we’ve been seeing, for me, is a bit of a catastrophe,” said Marc-Andre Gagnon, a political science professor at Carleton University who focuses on pharmaceutical policy.

“You end up with a handful of companies that are developing their own vaccines, each by themselves, working in silos. So then you have a product with a patent, so monopoly rights on the product. And then you end up with this vaccine nationalism of all countries basically doing a free market negotiation in terms of who can jump the queue in order to get faster access to the vaccines. In terms of priorities of global public health, this is pure nonsense.”

A better approach, Gagnon suggests, would have focused on collaboration, data sharing and making use of all available manufacturing capacity around the world. 

Pfizer’s new deal with Sanofi, a rival producer, might at least be a step in that direction. But any serious rethinking of global vaccination policy might have to wait for the next pandemic.

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