IMF approves $3bn support package for Egypt | Canada News Media
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IMF approves $3bn support package for Egypt

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The deal aims to reduce government debt and strengthen the social protection network for citizens.

The International Monetary Fund has approved a deal that will provide a $3bn support package to cash-strapped Egypt over almost four years, with the agreement expected to draw in an additional $14bn in financing for the country.

The support package announced late on Friday – known as an Extended Fund Facility Arrangement – will not require the Egyptian government to cut spending on subsidies but will strengthen the social protection network for citizens, an Egyptian cabinet report released on Saturday said.

Egypt’s economy has been hit hard by higher oil and food prices following the coronavirus pandemic and the war in Ukraine, with the Egyptian pound losing 36 percent of its value against the dollar since March.

About a third of Egypt’s 104 million people live in poverty, according to government figures, and many Egyptians depend on the government to keep basic goods affordable through state subsidies and other similar schemes.

The package covers a period of 46 months and will give the Egyptian government immediate access to about $347m, which will help the debt-ridden nation bolster its balance of payments and budget, the IMF said in a statement.

It also aims “to catalyze additional financing of about $14 billion from Egypt’s international and regional partners” and introduce sweeping economic reforms, including a ‘’durable shift to a flexible exchange rate regime” and a ‘’monetary policy aimed at gradually reducing inflation”.

The announcement comes after a preliminary agreement was reached in October between Egypt and the fund, following reforms by Egypt’s central bank that included a hike in key interest rates by roughly 2 percentage points.

In a background document on Egypt, the IMF said the new programme would fund some of the country’s foreign currency financing gap, and that Cairo had secured $5bn in new financing for the fiscal year ending in June 2023.

Of that, $2bn would come from the sale of equity in private sector companies and $3bn from multilateral support, separate from the rollover of deposits by Gulf states in Egypt’s central bank.

The IMF said its programme aimed to support plans by authorities to reduce the state’s footprint in the economy, increase transparency around state-owned enterprises (SOEs), and create a level playing field for all economic actors.

Egypt has struggled to attract investment due to the prominent role of the state and the military in the economy and the advantages afforded to SOEs over private sector firms.

Egyptian authorities also committed to the publication of data including audit reports on fiscal accounts, procurement contracts of more than 20 million Egyptian pounds ($811,380), and an annual report on tax breaks, exemptions and incentives, the IMF added.

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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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