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Millions of Canadians will be maxing out their 16 weeks of CERB soon. Then what? – CTV News

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OTTAWA —
By the first week of July and through the summer, millions of Canadians will come to the end of their 16-week eligibility period to claim the Canada Emergency Response Benefit. This is prompting serious questions about what will happen to those who have been on the program since it first launched, but are still out of a job and without income due to COVID-19.

In an interview on CTV’s Question Period airing on Sunday, Employment Minister Carla Qualtrough says the federal government will not abandon those who are set to run out in three weeks, but it remains unclear whether their eligibility will be extended or amended and what the government is offering to those who will have already accessed the full $8,000 available through CERB.

“We will be supporting Canadians. We’re working on the best way to do that, perhaps through CERB in a way that doesn’t disincentivize work and keeps supporting people, because there won’t be many jobs but we want people to take the ones that are going to be out there,” she said.

As of June 4, the federal government has spent a total of $43.5 billion sending more than 8.4 million Canadians the $2,000 monthly payments. Qualtrough said an extension—as the NDP have called for— would amount to approximately $17 billion each month the program remains in place under the current parameters. 

According to Qualtrough’s office, close to 1.2 million Canadians have dropped off the program before maxing out their 16-week eligibility, meaning they have either gone back to work or have been moved onto the wage subsidy program through their employer.

The first application period opened in early April, and Canadians are able to claim the benefit for a maximum of 16 weeks between March 15 and October 3, meaning there will still be Canadians receiving funding for weeks to come, but others are soon going to run out.

The government tried to pass changes to the program that would allow the flexibility for people to apply for two-week periods instead of the current four, as well as to add a new requirement to make a reasonable return to work if that’s offered, but a partisan battle over the proposal in the House of Commons prevented the bill from moving forward.

Already, more than 190,000 Canadians have had to repay the money they received from CERB to the Canada Revenue Agency because they were not eligible for the benefit. It could have been that they were unknowingly covered under another COVID-19 federal aid program, had been rehired during the time they were still receiving CERB, or had applied out of confusion during the early days of the program.

Further, the CRA says it has received 600 tips of alleged misuse of CERB claims that it is investigating.

The defeated bill would have also brought in tough new penalties for those who knowingly scammed, or tried to scam the system, and not those who may have double-dipped as an “honest mistake,” as the prime minister has put it. 

In the interview, Qualtrough was asked how pervasive she thinks fraud has been through the CERB program and she said the estimate is about one to two per cent of applicants, based on fraudulent behaviour in other government programs.

“But the reality is because of the way we’re doing our integrity and following up on applications, we’ll have a much better sense once we do all the backend work. In the meantime though, we are not going after vulnerable people as it’s being suggested by some parties. In fact we’re trying really hard to go after the people who are preying on vulnerable people,” she said.

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DavidsTea to close 82 Canadian stores amid coronavirus pandemic – Global News

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Insolvent beverage retailer DavidsTea is closing 82 stores in Canada and all 42 of its stores in the U.S. as it focuses on its e-commerce business and supplying grocery stores and pharmacies.

The Montreal-based company announced Thursday that it is sending notices to terminate the leases at the 124 stores to take effect in 30 days. The move would affect about half of its workforce of nearly 2,500, including all 366 employees in the United States.

It will also seek more favourable lease terms for the remaining 100 stores in Canada and may permanently shut additional locations if landlords are unwilling to negotiate suitable leases.

Read more:
DavidsTea files for bankruptcy protection while negotiating with landlords

It had warned in mid-June that it could begin a formal restructuring depending on the outcome of its talks with landlords.

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The company said at the time that it hadn’t paid rent on any of its stores for April, May and June.

The store closures are part of its restructuring plan after it obtained court protection from creditors under the Companies’ Creditors Arrangement Act and Chapter 15 in the United States Bankruptcy Court for the District of Delaware.

“With the upcoming closure of 124 unprofitable stores across North America, we are certainly making good progress in creating a stronger business model for the future and ensuring the long-term success and sustainability of DavidsTea and our beloved brand,” company founder and interim CEO Herschel Segal said in a news release.






3:14
$343-billion deficit projected for 2020-2021 fiscal year


$343-billion deficit projected for 2020-2021 fiscal year

Chief financial officer Frank Zitella said that with the closure of “a significant number of money-losing stores” it will focus exclusively on e-commerce sale which had a penetration rate of close to 43 per cent in the market before COVID-19.

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“All 100 remaining DavidsTea stores have been closed since March 17 due to the COVID-19 pandemic and will remain so until further notice,” he stated.

DavidsTea last month reported that it lost $23.2 million last year on $146.5 million in revenues. That includes a US$4.3 million loss in its fiscal fourth quarter on US$54.8 million of revenues.

The move by DavidsTea comes three years after Starbucks announced the closure of all of its Teavana brand stores. The coffee giant acquired Teavana Holdings in 2012 for US$620 million.

© 2020 The Canadian Press

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Crude Oil Shortages Beginning To Bite In Key Markets – OilPrice.com

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Crude Oil Shortages Beginning To Bite In Key Markets | OilPrice.com

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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    Last monthOPEC and its non-OPEC allies, known as OPEC+, agreed to extend their deep production cuts through July in an effort to rebalance oversupplied markets in the face of pandemic-hit demand. The cuts were supposed to take ~10% off the markets with July’s cut clocking in at 9.6 million bpd.

    But now there are signs that the pendulum could have swung a bit too far, with the markets beginning to experience shortages of key crude grades.

    There are growing signs that the markets are undersupplied with Urals and Arab Light thanks to continuing deep production cuts as well as a rebound in demand by key customers such as China and Northern Asia.

    The price of Urals, Russia’s flagship grade, has flipped to record premiums to the Brent crude benchmark, briefly changing hands at $2.40 a barrel above Dated Brent last week to reflect the undersupply. 

    That marks a sharp turnaround compared to a discount of more than $4.50 a barrel recorded in April. Urals for delivery to Rotterdam, the main oil refinery hub in northwest Europe, were selling at a premium of $1.90 by the end of June, matching a prior record high. This, in effect, means that Rotterdam Urals were selling at ~$45 a barrel, a far cry from the $15 a barrel they commanded in early April.

    Oil markets in backwardation

    A similar pattern is being observed for other sour crude grades, which are commanding premium prices even with global oil demand still 10% below normal levels.

    Under ordinary circumstances, medium-sour crude that Saudi Arabia and its OPEC partners pump is usually cheaper than light sweet crude with a lower sulfur content. However, OPEC, which mostly pumps medium-sour crude, has dramatically cut output to its lowest level since 1991. Further, Iran and Venezuela, which also supply medium and heavy sour crude, have both seen production severely curtailed due to U.S. sanctions as well as a lack of investment.

    Consequently, Saudi Aramco has been able to raise the price of the crude it sells to refiners for three months in a row. And now for the first time ever, Aramco is selling its most dense crude, known as Arab Heavy, at the same price as its flagship Arab Light, a clear indication of strong demand for medium-heavy sour grades. Under normal circumstances, Arab Heavy sells at a discount of $2-to-$6/barrel to Arab Light. Related: Big Oil’s Investment Risk Is Spiking

    To make matters even more interesting, medium-heavy sour crude for immediate delivery is commanding premiums to forward contracts, a situation known as backwardation. That’s a 180-degree turn from the situation just two and a half months ago when oil markets were in deep contango, meaning forward contracts were selling at a big premium to near-term contracts.

    Production cuts working

    CME data shows that oil futures in general are beginning to flirt with backwardation— a positive sign for oil markets. Back in May, the markets were in super-contango with futures for June delivery trading at just half the value of January 2021 futures; the situation is far less dramatic with futures for August delivery trading at $40.90/barrel compared with $41.54 for January 2021 futures.

    These data sets are encouraging signs that OPEC+ members could largely be sticking to their pledges. Last month, Saudi Arabia and Russia warned members of the cartel that there was no room for noncompliance whatsoever after May compliance clocked in at just 74% of agreed cuts. Notably, Iraq cut just 38% of its promised cuts while Nigeria fared even worse, cutting a mere 19% of its commitments. That said, the importance of dramatic cuts by U.S. producers cannot also be overstated. In May, Reuters reported that North American producers were on course to cut 1.7 million barrels per day by the end of June with the U.S. Energy Secretary Dan Brouillette estimating that U.S. production would drop by 2 to 3 million bpd by the end of the year.

    But more importantly, the latest oil price trends are confirmation that, indeed, the production cuts are working as intended by helping to rebalance the markets.

    The coronavirus pandemic has caused global oil demand to fall off a cliff, with U.S. consumption falling to levels last seen nearly four decades ago. With global oil production at record highs, supply quickly overwhelmed demand leading to an acute storage crunch that triggered the historic oil price crash into negative territory. 

    Source: Quartz

    Oil prices have recovered ever since but remain a long way off the $60/bbl level they were trading at last December. The current oil price of ~$40/bbl could be around the breakeven that Russia needs to balance its books but far from satisfactory for Saudi Arabia, which needs ~80/bbl or majority of U.S. shale producers who need $50-$55 per barrel to break even. 

    With the current level of cuts set to lapse at the end of July, it’s going to be interesting to see whether “OPEC+ is until death do us part,” as Prince Abdulaziz famously quipped a month ago.

    By Alex Kimani for Oilprice.com

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      Monteregie virus infections top 60; hundreds of people overwhelm testing centre – CTV News Montreal

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      MONTREAL —
      A new testing clinic in the town of Mercier reached full capacity within two hours of opening on Thursday—a sign of how seriously Montérégie is taking its new COVID-19 outbreak, including its younger residents.

      Many of the hundreds who lined up were young and were connected with people who attended the two teenage house parties that started the outbreak.

      They admitted that having parties right now may be a bad idea.

      “The young people [saw] each other too fast,” one told CTV. “We didn’t wait.”

      People around Mercier have good reason for their anxieties. The outbreak has now infected more than 60 people, leading to the closure of many businesses.

      “It was a little bit everywhere in Mercier, so I decided to be tested just to be sure,” said one person who arrived to be tested Thursday morning.

      The region’s outbreak first started at two house parties held by teens, but it had some time to spread—in workplaces, bars and homes—before health authorities realized what was happening.

      Now people are second-guessing their health and trying to figure out if their symptoms match up.

      “The first day I was constantly tired,” said one young man, who said he’s been feeling sick for two days.

      While they were overwhelmed by the lineup, health authorities said they’re happy to see the demand and will set up another clinic for Saturday.

      “People are concerned about their health, and the health of their family, so it’s a good thing they come and get tested,” said Jade St-Jean, the spokesperson for the health district of Montérégie West.

      Officials say the testing will help give them an idea of the scope of the outbreak.

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