OTTAWA – Canada’s top central banker gave MPs a detailed defence of the Bank of Canada’s buying spree of government debt Thursday, saying it is aimed at lowering borrowing costs across the country.
The Bank of Canada has launched an unprecedented bond-buying program that effectively lowers borrowing costs for the federal government as its racks up a historic deficit.
It now holds just under one-third of federal debt, with the bank believing it can scale up those purchases before throwing a wrench into credit markets.
But the purchases have put Bank of Canada governor Tiff Macklem in a political hot seat, with Conservatives on Parliament Hill warning the central bank about appearing too cosy with the governing Liberals.
During an appearance at the House of Commons finance committee Thursday, Macklem said the bank isn’t financing the federal government, but is reducing the cost to borrow for households and businesses.
He said the central bank will stop buying government bonds once the recovery is well underway, which is likely to happen before inflation gets back to the Bank of Canada’s two per cent comfort zone.
“Our actions by lowering interest rates and by buying government bonds are lowering the cost of financing the government. In fact, they’re lowering the cost of borrowing for everybody,” Macklem said.
“We’re not financing the government.”
The bond-buying program is the central bank’s first foray into what’s known as quantitative easing, which is a way for central banks to pump more money into the economy.
The central bank started the program as it dropped its trendsetting policy rate to 0.25 per cent to drive down interest rates. The purchasing program was designed to drive down rates even more on things like mortgages.
What the bank has done is buy up government bonds to spur demand and time lower interest rates, particularly for borrowers using terms of between three and 10 years like homeowners, homebuyers and businesses.
The bank’s balance sheet has swelled since March and now holds about $344 billion in government debt, or roughly 30 per cent of federal debt, after purchasing about $163 billion in bonds.
Macklem said central banks generally can hold between 50 and 70 per cent of debt before it begins to impair credit markets.
The bank has taken its foot off the gas recently for its purchasing program as the market conditions have improved, allowing it to reduce its total minimum weekly purchases to $4 billion.
Conservative finance critic Pierre Poilievre argued the purchases were inflating financial assets, and enriching the mostly affluent people who own them to push up inflation.
“Inflationary costs are borne disproportionately by the poor and the disadvantaged,” Poilievre said. “So you’re effectively transferring an enormous sum of wealth to those who have financial assets, while diluting the wages of working-class people.”
Pressed by Conservatives on the committee for a date when the buying will come to end, Macklem said the uncertain path of the pandemic prevents him from being able to circle a day on the calendar.
Blunder puts seniors' lives at risk – Winnipeg Free Press
There’s a major flaw in Manitoba’s COVID-19 immunization plan for personal-care homes that has caught the province off guard.
Newly arrived seniors at care homes where residents have already been vaccinated may have to wait up to a month for their first shot, with no plan on when their second dose will be administered.
Under the province’s rollout, immunization teams visit long-term care homes and vaccinate eligible candidates, usually the same day. Teams will return several weeks later to administer booster shots.
However, seniors who miss the first round, including new or re-admitted residents (or those too ill to be vaccinated at the time), have to wait for the immunization team to return to get their first shot. That could take up to four weeks. In a pandemic, that could be life or death.
“Residents admitted between the two scheduled doses may be able to receive their first dose when the team arrives to administer the second dose,” a provincial spokesperson said in an email.
What’s more, there appears to be no plan in place to administer their second injections.
“It is preferred that the site arrange for the second dose to be administered,” the spokesperson said.
This is a major oversight.
Dr. Joss Reimer, medical lead with the vaccine implementation task force, has emphasized repeatedly how important it is for everyone to get their second dose within the manufacturer’s timeline (21 days for the Pfizer-BioNTech vaccine and 28 days for the Moderna version).
The second dose is required for maximum protection and long-term efficacy. That’s especially important for seniors living in congregate settings such as personal-care homes, Reimer said.
“This population is our top priority,” she said Wednesday. “It is critical that we offer them that second dose.”
Yet the province has still not figured out how to avoid lengthy delays for first doses, or how to administer followup shots for many care-home residents. (There is a steady stream of residents arriving at care homes every week, including many from hospital who were awaiting placement).
When pressed further, provincial officials would say only that they’re still working on the problem.
“With vaccination now underway for Manitoba’s PCH residents, we are reviewing plans to ensure we include new admissions or re-admissions to PCH within our immunization schedules,” the provincial spokesperson said.
In other words, there is no plan. If they had one, they would make it public.
The province continues to blame the recent Pfizer shipment delays for many of its vaccine-rollout troubles. However, this has nothing to do with delivery schedules. The oversight is another example of poor planning.
All jurisdictions were aware last summer that vaccines could be approved for emergency use as early as the end of 2020. A vaccine team, led by someone experienced in large-scale logistical planning, should have had detailed plans months ago.
Instead, the province is making decisions on the fly, without experienced leadership. (Doctors who specialize in public health and government bureaucrats whose jobs normally include drafting budgets do not necessarily have backgrounds in logistical planning).
“With vaccination now underway for Manitoba’s PCH residents, we are reviewing plans to ensure we include new admissions or re–admissions to PCH within our immunization schedules.” –Provincial spokesperson
What Manitoba needs now are mobile vaccination teams that can do followup at long-term care homes to ensure all residents get timely first and second doses. Arranging for booster shots should not be left up to individual facilities, as the province has proposed. There is far too much room for error and neglect (given the track record of some nursing homes) to leave it in their hands.
Immunizing the most vulnerable as quickly as possible is the key to mitigating death and protecting hospital capacity. Nearly half of Manitobans who have died of COVID-19 were residents of care homes.
Premier Brian Pallister said last week he hopes the media doesn’t focus on every “hiccup” of his government’s immunization plan. This isn’t a hiccup; it’s a major blunder that could cost lives. It needs to be rectified immediately.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.
Two pending COVID vaccines could boost Canada's rollout efforts, but they're not yet approved – National Post
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AstraZeneca did a separate clinical trial last year that other countries have relied on to approve the vaccine. That trial, however, had a dosing error, where some participants were given two full doses while some were given a half dose combined with a full dose.
Overall, the vaccine was shown to be 70 per cent effective at preventing people from developing COVID, but the company started a second trial to gather more data without the error.
Dr. Isaac Bogoch, an infectious disease physician and member of Ontario’s vaccine task force, said the dosing error is something that needs to be closely scrutinized.
“Health Canada is doing the right thing by clearly taking their time to evaluate the vaccine. They’ve got it right. There should be no external pressure and no political interference,” he said. “That study was actually conducted in a very sloppy manner, and reported in a very sloppy manner.”
If people don’t have trust in the process or trust in the product, they’re not going to take the vaccine
Bogoch said Canadians have to have confidence in the vaccines, because a shot people are reluctant to take doesn’t help the situation.
“These vaccines will only work if people take it and if people don’t have trust in the process or trust in the product, they’re not going to take the vaccine.”
Steven Kerfoot, an associate professor of immunology at Western University, Ont., said the problem with AstraZeneca’s trial is that it wasn’t complete and the regulators need a full picture.
“And so the expectation from Canada’s understanding is that they want to see a complete trial with efficacy and safety data built in.”
Restaurant owners call on Alberta to release COVID-19 transmission data, ease restrictions – CTV Toronto
With personal grooming services now open in Alberta, other industries are pushing the provincial government to reopen next — and they also want the data to back up claims from officials about the source of COVID-19 transmission.
On Monday, Dr. Deena Hinshaw, Alberta’s chief medical officer of health, said the province eased restrictions based on data showing which industries would be safest to reopen without increasing the spread of the virus. But that information isn’t being shared publicly — at least not yet.
“What we’ve seen is that the number of cases attributed to those environments — restaurants, fitness being the two you specified — are higher than the activities that we have eased open this week,” Hinshaw said.
On Wednesday she said the province was working to release the data “in the coming weeks.”
That’s not good enough, according to people operate businesses in the hospitality industry. Although bars and restaurants can offer food for take out and delivery, dine-in service is not allowed in Alberta.
“It’s an extremely frustrating situation,” said Jeff Jamieson, who is with the Alberta Hospitality Association (AHA) and owns several Calgary restaurants, including Donna Mac and Proof.
“We’ve been repeatedly asking (the province) for data and fact-based rationale,” he said.
Alberta’s contact tracing system does track COVID-19 transmission, but the information made public is limited. Nearly 43 per cent of current cases have an unknown source. The data is not broken down into detail of where specifically the virus was transmitted.
The AHA has a plan it is submitting to the province it believes would allow restaurants and bars to reopen safely, while maintaining proper COVID-19 safety measures.
Jamieson said the province has promised to provide at least a week’s notice for when restaurants can reopen for dine-in service. So far, that hasn’t happened.
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