There was despair and elation in northeastern Nova Scotia Saturday as the fallout of a pulp mill’s coming closure is rippling through the homes and lives of families in the region.
Premier Stephen McNeil announced on Friday he would keep a pledge he made five years ago that Northern Pulp wouldn’t be permitted to continue piping its effluent into Boat Harbour, near Pictou Landing First Nation, after Jan. 31.
The company then announced the closure of the pulp mill in Abercrombie, N.S., and predicted the loss of thousands of forestry jobs.
In Pictou Landing First Nation, Warren Francis, a lobster fisherman, says he’s saddened by job losses, but excited and pleased his community can expect the flow of effluent will stop after 52 years.
However, in nearby New Glasgow, Northern Pulp co-workers Kim MacLaughlin and Wanda Skinner say they are fearful for their families’ well being.
MacLaughlin and her husband, Derek — who is a harvester — are both facing layoffs because of the closure, while Skinner, a single mother, wonders how she’ll support her daughter.
McNeil has acknowledged his decision not to grant Northern Pulp an extension would cause pain to families dependent on the pulp mill.
However, he has announced a $50 million forest industry fund that will be used for retraining, education and emergency funding for workers in immediate need of help.
On Friday he said the Liberal government “will help and support” workers in their transition.
Don MacKenzie, the president of the Unifor union local that represents more than 300 Northern Pulp workers, said this will be only a fraction of what’s needed to help the rural economy recover.
McNeil has said the company has had five years under 2015 legislation to come up with a way to cease putting its waste into Boat Harbour, yet is still far from a solution.
The mill, in operation since 1967 under various owners, has faced consistent criticism for its poor environmental record.
It has been dumping treated effluent into lagoons near Pictou Landing for decades, and successive provincial governments have reneged on promises to clean up the once-pristine estuary.
A former Nova Scotia environment minister once referred to the toxic mess at Boat Harbour as one of the worst cases of environmental racism in Canada.
Bank of Canada keep key rate at 0.25 per cent, warns of economic decline in 2021 – CTV News
The Bank of Canada says the national economy will go in reverse for the first quarter of 2021, hammering the hardest-hit workers again on the path to a recovery that rests on the rollout of vaccines.
Workers in high-contact service industries will carry the burden of a new round of lockdowns, which the central bank warns will exacerbate the pandemic’s uneven effects on the labour market.
Governor Tiff Macklem, in his opening remarks at a late-morning news conference, warned the first-quarter decline could be worse than expected if restrictions are tightened or extended.
As a result, the bank announced it is keeping its key interest rate on hold at 0.25 per cent, citing near-term weakness and the “protracted nature of the recovery” in its reasoning.
But the short-term pain is expected to give way to a brighter outlook for the medium-term with vaccines rolling out sooner than the central bank expected.
Still, the bank warns in its updated economic outlook that a complete recovery from COVID-19 will take some time.
Nor does the Bank of Canada see inflation getting back to its two-per-cent target until 2023, one year longer than previously forecast.
“There is clear reason to be more optimistic about the direction of the economy over medium-term. But we are not there yet,” reads part of Macklem’s opening statement.
“The resurgence in COVID-19 cases weighs heavily on the near-term economic outlook. And this underlines the ongoing need for extraordinary fiscal and monetary policies.”
The bank’s latest monetary policy report, which every quarter lays out its expectations for economic growth and inflation, forecasts that COVID-19 caused the economy to contract by 5.5 per cent last year.
Despite an upswing over the summer and fall that may have spared the country from a worst-case economic scenario, the drive to a recovery will hit a pothole over the first three months of 2021.
The bank forecasts real gross domestic product will decline by 2.9 per cent in the first quarter of 2021 compared to the same period in 2020 before improving thereafter if severe restrictions start easing in February.
The bank is forecasting growth of four per cent this year, then 4.8 per cent next year, and finally 2.5 per cent in 2023.
Getting there will be like riding a roller-coaster as the bank warned that resurgence in COVID-19, or new, more virulent strains, could weigh down a recovery in one quarter before leading to strong upswing in the next.
Inflation may be equally rocky.
Gasoline prices, which have weighed down the consumer price index this year, will by March be “well above their lows of a year earlier,” the bank’s report said, even if prices hover around where they are now. That should significantly bump inflation, possibly pushing the headline reading to roughly two per cent in the second quarter.
The bump will even out over the rest of the year with the bank forecasting inflation for 2021 at 1.6 per cent. The outlook for subsequent years estimates 1.7 per cent in 2022 and 2.1 per cent in 2023.
Separately Wednesday, Statistics Canada reported the annual pace of inflation slowed in December as the consumer price index was up 0.7 per cent compared with a year earlier.
The agency also reported that the average last month of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 1.57 per cent.
All the numbers in the bank’s lookahead rest on efforts to vaccinate Canadians by the end of the year without any hiccups in that timeline, which would mean broad immunity six months sooner than the bank previously assumed.
The bank says the shorter timeline should mean less scarring overall for the economy in the form of fewer bankruptcies and fewer workers out of jobs for long stretches, which makes it more difficult for them to get back into the labour force.
The long-term unemployment rate, capturing those who have been out of a job for six months or more, reached 2.4 per cent last month, which the central bank noted was a “serious concern” because those workers may eventually drop out of the labour force altogether.
Recent restrictions will harm low-wage workers, who by December had employment levels four-fifths of what they were pre-pandemic, as well as youth and women who are more likely to work in hard-hit sectors like accommodations and food services.
The central bank’s report warned the longer restrictions remain in place, the more difficult it may be for these workers to find new jobs since the majority move to a new job but in the same industry.
This report by The Canadian Press was first published Jan. 20, 2021.
Bank of Canada holds rate steady at 0.25% even as it expects economy to shrink until March – CBC.ca
The Bank of Canada elected to keep its benchmark interest rate steady at 0.25 per cent on Wednesday, reiterating its pledge to keep it there “until the recovery is well underway.”
Eight times a year, Canada’s central bank meets to set its benchmark interest rate, known as the target for the overnight rate, which impacts the rates that Canadians get on things like mortgages and savings accounts at banks.
All things being equal, the bank slashes its rate when it wants to stimulate borrowing and investing and raises it when it wants to cool things down.
The bank slashed its rate a number of times starting in March of last year, as the COVID-19 pandemic was just starting.
There had been some speculation prior to Wednesday that the bank may decide to cut again from its current level of 0.25 per cent, as virus numbers have been moving higher for several weeks now.
But in a statement, the bank said it’s going to stay the course for now.
“Canada’s economy had strong momentum through to late 2020, but the resurgence of cases and the reintroduction of lockdown measures are a serious setback,” the bank said.
“Growth in the first quarter of 2021 is now expected to be negative,” the bank said, forecasting that GDP will shrink by another 2.5 per cent in the first quarter of 2021, compared to where it was at the end of December. This comes after the economy already shrank by 5.5 per cent last year.
The short term looks gloomier than it did a few months ago, but the bank said it still thinks the deployment of vaccines this year will help power a strong bounceback for the economy. The bank thinks the economy will grow by four per cent for 2021 as a whole, and by another 4.8 next year.
“The outlook for Canada is now stronger and more secure than in the October projection, thanks to earlier-than-expected availability of vaccines and significant ongoing policy stimulus,” the bank said.
No change to QE program for now
The bank decided not to cut its rate, and it also elected to keep its bond-buying program unchanged at $4 billion a week.
The bond-buying program, known as quantitative easing, is another tool at the bank’s disposal that allows it to stimulate the economy because by buying up government bonds, the bank is lowering interest rates even more — putting more cash into the system that’s available to be spent.
While it says it won’t be scaling back those bond buys for now, slowing that pace of buying is clearly on the table.
We’re moving in the wrong direction right now, so the hole is going to be a little bit deeper.– Tiff Macklem on Canada’s economy
“We’re going to need this program for some time,” Bank of Canada Governor Tiff Macklem said in a press release to discuss the bank’s quarterly Monetary Policy Report.
Many economists have been suggesting the bank needs to start tapering those purchases back, simply because the impact is so large on the overall market.
Economist Taylor Schleich with National Bank noted in a report last week that at its current pace of bond buying, the central bank is on track to own half of all Canadian government bonds by the end of the year. “Our bond market simply isn’t large enough to accommodate such a significant absorption of bonds from the central bank,” Schleich said.
Macklem left the door open to slowing those purchases at some point. But the expectation that the economy is still shrinking suggests that won’t be happening any time soon.
“We’re moving in the wrong direction right now, so the hole is going to be a little bit deeper, [so] there’s farther to climb back from.”
But, he said, “as we gain confidence in in the strength of our recovery, we will begin to adjust our QE purchases.”
Price pressure on gold as Biden set to lead U.S. – Kitco NEWS
(Kitco News) – Gold and silver futures prices lost overnight gains and then regained them and are trading modestly higher in early U.S. trading. U.S. stock indexes that are back near their record highs are a restraining element for the safe-haven metals at mid-week. However, gold and silver prices have rebounded well off this week’s lows, and more price gains this week would suggest both metals have put in near-term bottoms. February gold futures were last up $7.00 at $1,847.00 and March Comex silver was last up $0.04 at $25.36 an ounce.
The highlight of the U.S. trading day will be the presidential inauguration of Democrat Joe Biden. Look for Biden to hit the ground running by reversing many of outgoing President Trump’s executive orders. Biden and his Democrat-controlled Congress are also set to roll out big spending plans that could further lay the seeds for problematic price inflation down the road. Incoming U.S. Treasury Secretary Janet Yellen on Tuesday told lawmakers that going “big” on spending is needed to begin to repair the severe economic damage caused by the pandemic.
Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Aside from the inauguration, it’s a big corporate earnings week in the stock market.
In overnight news, the Euro zone December consumer price index came in at up 0.3% from November and down 0.3%, year-on-year. Those numbers are not anywhere close to suggesting rising inflation, and even hint that deflation may become the problem.
The key “outside markets” today see the U.S. dollar index slightly lower as bulls are fading this week following the recent good rebound from a 2.5-year low scored earlier this month. Meantime, Nymex crude oil futures prices are higher, trading around $53.50 a barrel and near a 10-month high. The yield on the benchmark 10-year U.S. Treasury note stands at 1.12%.
U.S. economic data due for release Wednesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NAHB housing market index.
Technically, the February gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,767.20. First resistance is seen at the overnight high of $1,856.80 and then at last week’s high of $1,864.00. First support is seen at the overnight low of $1,838.70 and then at $1,825.00. Wyckoff’s Market Rating: 5.0.
March silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the January high of $28.105 an ounce. The next downside price objective for the bears is closing prices below solid support at the November low of $21.96. First resistance is seen at the overnight high of $25.63 and then at $26.00. Next support is seen at the overnight low of $25.24 and then at $25.00. Wyckoff’s Market Rating: 5.0.
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