Economy

Mexican president pitches frugal economic plan against coronavirus – National Post

Published

5 years ago

April 5, 2020

MEXICO CITY — Mexico’s president unveiled a plan on Sunday to lift the economy out of the coronavirus crisis, vowing to help the poor and create jobs, but his promise of fiscal discipline sparked criticism that the measures fell far short of what was needed.

President Andres Manuel Lopez Obrador pledged Mexico would create 2 million new jobs in the next nine months and boost small business and housing loans. He also vowed to tighten public sector austerity to avoid debt.

Governments worldwide have unleashed unprecedented spending pledges to minimize damage to their economies from the coronavirus, including a $2-trillion package by Mexico’s top trading partner, the United States.

But Mexico’s leftist leader, targeting measures for the “most vulnerable,” said he would use a budget stabilization fund and cash from public trusts to fund plans to shield the poor from a slump economists expect to be severe.

“This crisis is temporary, transitory,” Lopez Obrador said in a televised speech. “Normality will return soon. We will defeat the coronavirus, we will reactivate the economy.”

Last week, Lopez Obrador said about $10 billion was available from various rainy day funds, while the finance ministry said “buffers” for the economy included a stabilization fund of about $6.6 billion available from the end of 2019.

Known by his initials “AMLO,” the president said Mexico would announced next week investments in the energy sector worth 339 billion pesos ($13.5 billion) to boost the economy, which some private analysts forecast to contract by up to 10% in 2020.

That sum is far less than $92 billion in energy investments the private sector has proposed to the president.

His speech coincided with growing calls for his government to emulate the United States and European nations with a major stimulus package to fight the recession.

“The mechanisms that AMLO is thinking about are going to be completely insufficient to deal with this type of recession,” said Viri Rios, a Mexican political analyst.

Gustavo de Hoyos, head of employers’ federation Coparmex, was scathing about the economic plan.

“No relevant measure to deal with the #COVID19 economic crisis was announced,” de Hoyos said afterwards on Twitter.

Lopez Obrador’s former finance minister, Carlos Urzua, called last week for Mexico to run a bigger deficit, saying it was “obvious” national governments should significantly increase public deficits in the crisis. The government’s latest estimate projects the economy could contract by up to 3.9% in 2020, though Lopez Obrador has said he does not agree, calling for more optimism on the economy, which was already contracting last year.

Without unprecedented measures, there could be “an economic depression and a deepening of poverty not seen in Mexico in many decades,” a group of economists, policymakers and politicians told Lopez Obrador in a letter urging quick government action.

One signatory, Rolando Cordera, a left-leaning economist at the National Autonomous University of Mexico (UNAM), applauded the president’s commitment to helping the poor, but said his initial response to the plan was one of disappointment.

Cordera was skeptical of how a struggling economy would generate hundreds of thousands of new jobs while the government stuck to its budget goals, and felt not enough was being done to protect workers and companies against a potentially huge blow.

“I didn’t see anything that would allow me to conclude that a change was starting to take shape in the vision and focus of current economic policy,” he told Reuters. (Writing by Drazen Jorgic; Editing by Daniel Wallis and Clarence Fernandez)

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

1 day ago

October 21, 2024

Anne Joseph

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

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

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.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

6 days ago

October 16, 2024

Anne Joseph

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.

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