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Interest rates will stay low as Canada faces 'long climb out' of COVID-19 hole, central bank says – CBC.ca

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Canada’s central bank opted to keep its benchmark interest rate right where it was on Wednesday, at 0.25 per cent.

It’s the first rate decision under the stewardship of Tiff Macklem, who took over as governor of the Bank of Canada last month after Stephen Poloz’s seven-year term as governor ended.

The final months of Poloz’s tenure featured a sudden and dramatic series of rate cuts as central banks around the world moved in unison to slash lending rates to near zero to encourage borrowing and investment to stimulate the economy walloped by the COVID-19 pandemic.

The bank’s rate decision suggests there are no short term plans to deviate from that strategy any time soon.

“It’s going to be a long climb out,” Macklem said at a press conference following the announcement on Wednesday. “We are being unusually clear that interest rates are going to be unusually low for a long time.”

Move was expected

The decision was in line with expectations of economists who monitor the central bank polled by Bloomberg. The bank’s next decision is scheduled for Sept. 9 and no change is expected at that meeting either.

In addition to the interest rate decision, the bank also released its quarterly Monetary Policy Report, which outlines the bank’s outlook for the economy.

The bank calculates that lockdowns and other physical distancing efforts across Canada in the April-to-June period shaved off about 15 per cent of Canada’s GDP.

That makes for the worst quarter for Canada’s economy since the Great Depression, but it’s actually better than the worst-case scenario the bank was tracking when the pandemic began.

“There are early signs that the reopening of businesses and pent-up demand are leading to an initial bounce-back in employment and output,” the bank said.

Economy won’t get back to normal until 2022

For 2020 as a whole, the central bank is now expecting Canada’s economy to shrink by 7.8 per cent but then rebound by 5.1 per cent in 2021 and 3.7 per cent in 2022.

While that’s better than it could have been, it does mean the central bank doesn’t think the economy will get anywhere close to back to normal for another two years.

The Bank of Canada has slashed its benchmark interest rate to stimulate the economy in the wake of COVID-19. (Scott Galley/CBC)

And that outlook hinges on one rather uncertain development: It assumes Canada’s economy will be spared a second wave of COVID-19.

“We have assumed there is no widespread second wave and hence there’s no widespread second lockdown,” Macklem said. “But we do anticipate there will be localized flare ups and localized restrictions.”

Sherry Cooper, chief economist of Dominion Lending Centres, says that view may prove to be overly optimistic.

“The last few weeks have shown that numbers can bounce back even faster than the numbers went down and a second wave is a very real possibility in the fall,” Cooper said.

In addition to signaling it has no plans to change rates any time soon, the bank also said it plans to continue its bond buying programs, to support credit markets. 

Economist Brian DePratto of TD Bank said there were “no surprises” in the bank’s decision.

“With uncertainty still extremely elevated, the Bank of Canada is not taking any chances, maintaining stimulus, and reminding us again that they can and will do more to support the economy if needed.”

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Ontario reports slight increase in COVID-19 cases, record high for Toronto – 680 News

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Ontario is reporting 1,746 new cases of COVID-19 on Monday.

This is only a slight increase from the 1,708 cases reported a day earlier, however it comes with a much lower number of completed tests.

The province completed over 50,000 tests the previous three days. This number dropped to 39,400 completed tests reported Monday.

The provinces seven-day average reached a new high with Monday’s report.

There were 8 new deaths reported. This is a significant drop as the number has hovered around 20 in the past week.

There are 1,320 more resolved cases.

There is now a total of 116,492 confirmed cases in the province since the onset of the pandemic with 3,656 deaths. 98,639 cases have been resolved.

The number of COVID related hospitalizations in the province spiked to over 600.

Among active cases, 618 people are currently in the hospital compared to 586 the day before. Among the hospitalized, 168 are in the ICU and 108 are currently on ventilators.

Over the past week there’s been an average of just over 2,000 patients being treated in hospitals across the country. That number has nearly doubled since the end of October.

New modelling suggests that the number of Canadians hospitalized with COVID-19 will soon surpass the peak of the first wave.

Locally, Toronto reported over a third of all cases. The 622 new cases represents a single-day record for the city.

All regions in the GTA reported an increase except for Peel. After four straight days of over 500 cases Peel reports 390 on Monday.

York Region increased to 217 from 185. Durham is up to 108 from 73, a new single-day high. Halton reports 35 compared to 31 the day prior.

Ottawa saw a significant drop, reporting 29 cases compared to 79 a day earlier.

COVID-19 in schools

Ontario is reporting 102 new cases in schools.

Among the cases in schools, 86 are related to students, while 15 are linked to staff.

RELATED: 19 cases of COVID-19 discovered at Thorncliffe Park PS after asymptomatic testing

670 schools in the province currently have a reported case. Four schools in Ontario are currently closed as a result of COVID-19.

You can find which schools are reporting cases on the province’s website, when it is updated daily at 10:30 a.m.

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Freeland to deliver Liberal plan to revive Canada's post-pandemic economy today – CBC.ca

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The federal government will release its long-awaited fiscal update today — a spending plan to help Canadians cope with COVID-19 while recharging the national economy and key sectors battered by the global crisis.

Deputy Prime Minister and Finance Minister Chrystia Freeland will rise in the House of Commons at 4 p.m. ET today to outline details of her plan to both boost job creation and cut greenhouse gas emissions.

Government sources have told CBC News the plan will include new but time-limited spending measures to support hard-hit industries and vulnerable Canadians, while laying the groundwork for the policy priorities presented in September’s speech from the throne.

CBC will have live coverage of today’s fiscal update starting at 4 p.m. ET. Watch it on CBC News Network, listen to it on CBC Radio One or stream it on CBC Gem or our CBC News app.

The update comes in the wake of optimistic reports suggesting promising vaccine candidates could roll out early in the new year — and as COVID-19 caseloads continue to grow alarmingly in some parts of the country. Numbers have reached record highs in some regions, prompting new or extended restrictions and business closures.

The measures in today’s economic statement are expected to include:

  • Support for airlines and the tourism and hospitality sector, hit hard by heavy losses due to border closures and lockdowns. The sources suggest the update will include assistance for airlines, hotels and restaurants, and for the companies that supply them.
  • Money to help long-term care homes stop the spread of infections.
  • Support to help women return to work.
  • Stimulus spending for infrastructure projects tied to the government’s promise to reduce greenhouse gas emissions as part of the economic recovery.

Record deficit projected

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that projected the deficit would hit a record $343.2 billion.

The Trudeau Liberals last delivered an actual budget in March 2019, when they were still in their first mandate.

The Trudeau government has pushed back at calls to deliver an economic forecast since the current health crisis began, maintaining that the pandemic made it impossible to accurately predict economic growth or the scope of necessary emergency spending.

Conservative Leader Erin O’Toole said the government’s delays in procuring rapid testing and vaccines have put workers and the economy in a “risky” situation.

“There is no plan for the economy if we don’t have rapid testing and vaccines as swiftly as possible,” he said during a news conference in Ottawa Sunday.

“We’re already seeing small businesses teetering on the edge. That is leading to the uncertainty and the concern out there about the wellbeing of tens of thousands of Canadian families that have invested everything in their restaurant or their autoshop or a range of businesses that are close to bankruptcy.”

WATCH | What to expect in the long-awaited fiscal update:

CBC News’s David Cochrane breaks down what Finance Minister Chrystia Freeland is expected to announce in Monday’s federal fiscal update, including details on the deficit and new pandemic spending. 1:16

NDP Leader Jagmeet Singh said today’s update is the perfect opportunity to announce “bold measures” to address the needs of the Canadians most severely affected by the pandemic.

“The COVID-19 pandemic has shown how fragile the services that were supposed to help people are, and the importance of strengthening our social safety net so that no one is left behind,” he told CBC News.

NDP pushes for child care support

The NDP is calling on the federal government to fund child care services that would allow more parents to return to work safely. It’s also pressing the government to launch a universal pharmacare program.

Green Party Leader Annamie Paul said it’s not enough for the government to present a “laundry list” of spending today. With a vaccine expected next year, she said, it must present a green recovery plan with economic and social investments.

“With a glimmer of hope on the horizon, it is vital that we seize this moment to prepare a green recovery plan that will engage every possible innovation, technology and resource at Canada’s disposal to enhance our ability to face challenges,” she said. 

The Green Party is calling for a guarantee that any supports the Liberals offer carbon-intensive sectors are “responsible and conditional.” It also wants to see larger investments in projects and sectors that speed up progress toward a net-zero emissions economy.

Business hopes to see long-term growth plan

Business groups say they hope to see a plan today that charts a course through the ongoing crisis to long-term economic recovery and growth.

Canadian Chamber of Commerce president and CEO Perrin Beatty said he wants to see a shift from broad supports to smaller, more targeted federal programs to help the most vulnerable Canadians and sectors, including the restaurant, accommodation, arts and entertainment and retail sectors.

He said he hopes to see a plan that will boost Canada’s business investment and competitiveness — and not a suite of “unaffordable” new permanent programs.

“Even as we navigate our way through this second wave of the pandemic, Canada needs its government to set the conditions for a strong, business-led recovery. Canadian families and businesses continue to pay a high price because of COVID-19, and the hard work of getting Canada’s economy ready for recovery must start now with a clear and coherent plan,” he said in a media statement.

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question in the House of Commons Monday, November 23, 2020. (Adrian Wyld/The Canadian Press)

Cash-strapped municipalities are also looking for good news in today’s statement.

Federation of Canadian Municipalities president Garth Frizzell said he hopes to see “clear successor arrangements” to the safe restart agreement, which saw the federal government set aside $19 billion for the provinces to help them weather the second wave and drive job growth post-pandemic.

“The fall economic statement is an opportunity to build on the federal-municipal partnership that has kept Canadians safe, and essential front line services running strong, since the beginning of the pandemic,” he said.

“They rely on us to keep doing that through 2021, and that’s why municipalities need to see a clear commitment that the federal government will continue to work with us to ensure support for municipal operating and transit costs.”

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Moderna says will request US, Europe vaccine authorisation Monday – Aljazeera.com

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Authorisation requests in the US and Europe to come after results confirm a high efficacy estimated at 94.1 percent.

US firm Moderna said it would ask US and European regulators on Monday to allow emergency use of its COVID-19 vaccine as new study results confirm the shots offer strong protection — ramping up the race to begin limited vaccinations as the coronavirus pandemic worsens.

“Moderna plans today to request EUA (Emergency Use Authorization) from the US FDA (Food and Drug Administration),” Moderna said in a statement, adding it would also “apply for a conditional marketing authorization with the European Medicines Agency (EMA).”

Multiple vaccine candidates must succeed for the world to stamp out the pandemic, which has been on the upswing in the US and Europe.

US hospitals have been stretched to the limit as the nation has seen more than 160,000 new cases per day and more than 1,400 daily deaths.

Since first emerging nearly a year ago in China, the virus has killed more than 1.4 million people worldwide.

Moderna is just behind Pfizer and its German partner BioNTech in seeking to begin vaccinations in the US in December.

Across the Atlantic, British regulators also are assessing the Pfizer shot and another from AstraZeneca.

Moderna created its shots with the US National Institutes of Health and already had a hint they were working, but said it got the final needed results over the weekend that suggest the vaccine is more than 94 percent effective.

Of 196 COVID-19 cases so far in its huge US study, 185 were trial participants who received the placebo and 11 who got the real vaccine.

The only people who got severely ill — 30 participants, including one who died — had received dummy shots, said Dr. Tal Zaks, the Cambridge, Massachusetts, company’s chief medical officer.

When he learned the results, “I allowed myself to cry for the first time,” Zaks told The Associated Press.

“We have already, just in the trial, have already saved lives. Just imagine the impact then multiplied to the people who can get this vaccine.”

Moderna said the shots’ effectiveness and a good safety record so far — with only temporary, flu-like side effects — mean they meet requirements set by the US Food and Drug Administration for emergency use before the final-stage testing is complete.

The European Medicines Agency, Europe’s version of FDA, has signaled it also is open to faster, emergency clearance.

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