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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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How fashion retailers are surviving COVID-19 on the long road back to normalcy – CBC.ca

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COVID-19 has slammed Canada’s fashion sector like a hurricane, causing serious damage and likely leaving a few casualties in its wake.

The mass closing of malls and offices along with the cancellation of celebrations and big events has been devastating, says the head of Harry Rosen, one of the country’s leading men’s clothing retailers.

“We’re surviving,” said company chairman and CEO Larry Rosen, adding that online orders have surged almost 500 per cent.

“It’s been very, very strong, but it still doesn’t make up for our national retail footprint.”

Rosen said the coronavirus has accelerated trends facing the sector, including the growing “casualization” of the workplace and e-commerce sales.

“I mean, people aren’t wearing a sports jacket when they’re working from home,” he said.

While some office-wear sales may never come back even after offices reopen, Rosen believes most will because there will always be times for people to dress up for business or special occasions.

“If people can sit at home and wear a pair of sweats, they’re going to wear a pair of sweats, but this will change. It will come back. How quickly no one’s really sure, but it will come back.”

The company has responded to the challenges by taking advantage of federal support programs, cutting costs, shoring up its liquidity and marking down products earlier, with the summer sale starting before Father’s Day.

Rosen said the 66-year-old company will continue but competitors that came into the crisis with a lot of debt will be at risk.

“I think a number of companies will seek statutory protection. I don’t believe it’s over. I believe there’s still more to go.”

Reitmans (Canada) Ltd. announced last month that it will close two of its retail chains and lay off roughly 1,400 workers as the company continues a restructuring amid the pandemic.

The Montreal-based retailer plans to shutter its 77 Addition Elle stores on Aug. 15 and 54 Thyme Maternity locations on July 18.

Well-run brands are feeling the pain but will likely survive, experts say. Many others that faced problems before the pandemic will not. (Hannah McKay/Reuters)

Modasuite Inc., which operates Frank and Oak, recently filed a notice of intention that it plans to file a proposal under the Bankruptcy and Insolvency Act.

Total retail apparel sales will decrease 28 to 32 per cent in 2020, while luxury apparel sales should drop 16.8 per cent, says Trendex, a marketing intelligence company specializing in the Canadian and Mexican apparel markets.

It expects 10 to 15 major apparel chains will either close or drastically reduce their retail footprint.

“Bottom line, apparel retailing five years from now will be almost the same as it is today,” it wrote in its monthly report, adding that sales will not revert to 2019 levels until 2023.

Luxury brands like Harry Rosen aren’t likely to be hurt as much as the mid- to lower-end apparel and footwear retailers, says Bruce Winder, a retail analyst and author of the book Retail Before, During and After COVID-19.

“Some of the losers will be sort of those folks who are living at the margin,” he said in an interview.

“They’re not the best brand, they have a bit of a weak value proposition and their balance sheet was a little weak before all this hit. All this is doing is it’s pushing them over the edge.”

Among the chains that are likely hurting is Hudson’s Bay, said Winder, which may be forced to reduce its national footprint by 30 to 40 per cent.

“They are hurting big time. The Bay is literally sinking quickly and we don’t see the carnage because they aren’t public anymore.”

The chain, which recently reopened its Canadian stores and Saks locations, didn’t respond to requests for comment.

Strong fashion retailers like Aritzia Inc., H&M and Zara have been hit but will survive, Winder added.

Vancouver-based Aritzia said while interest in casual wear has increased as clients adapted to working from home, it believes there will be an appetite to refresh wardrobes as social and work environments reopen.

“As warm weather arrives and office work gradually resumes, we’re seeing encouraging customer response to both our office wear and more casual styles for summer 2020,” founder and CEO Brian Hill wrote in an email.

He noted that e-commerce sales grew by more than 150 per cent after its 96 stores were closed in mid-March.

The virus’s impact on the retail industry has been “without precedent” but the company’s financial position is strong and the affinity for its brands will help it to weather the storm, Hall recently told analysts, adding he’s expected a “long slow ramp” to a new normal.

Working from home has also been positive for yoga pants maker Lululemon Athletica Inc,. which has seen one of the largest quarterly gains in market share in recent years, says CEO Calvin McDonald.

“A new normal emerged, and we were encouraged to see how quickly our guests were embracing both working and sweating from home,” he said during a quarterly earnings call.

Unlike some fashion retailers, Lululemon has a high percentage of core products with a shelf life beyond the current season and has limited markdown risk.

McDonald believes virtual workouts will continue even as studios reopen and be part of the lifestyle shift to less formal wear.

“I think the things that won’t change play to our strength, and that’s living an active, healthy lifestyle. And the things that will change equally play to our strength, and that is more work-from-home, looking for comfort.”

Roots Corp. said it experienced the same benefit from a change in individual habits as business shifted to work from home.

“We benefited from higher demand for our extensive sweats offering in our online channel. To capitalize on this demand, we created a new sweats focus section of our website,” said CEO Meghan Roach.

She said there was a little extra pickup in sales of sweats for men as they sought comfort “below the screen.”

One of the tools retailers have used to offset the challenges is to renegotiate monthly rents.

Roach said Roots didn’t pay its April rents and will assess each store’s profitability to determine “the right store footprint for us to have in Canada, and how we balance it off … with our e-commerce business.”

Rosen also expects to see its retail footprint reduce over time after closing one store when the lease expired.

“Over time, I think it’ll be reduced and particularly as online is becoming such a much bigger share of our business.”

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TSX Composite ends strong week on a down note – BNN

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TORONTO — Canada’s main stock index wrapped up a solid week on a down note while U.S. markets were closed for the Independence Day holiday.

Crude oil and gold prices were down a little bit but not enough to “really spook” the market so the Toronto Stock Exchange followed the path set in Europe where investors took some profits after recent gains, said Philip Petursson, chief investment strategist at Manulife Investment Management.

“It’s kind of one of those wishy-washy days where when you don’t have the leader, which is the U.S. equity markets, 1/8so 3/8 the market is searching for direction,” he said in an interview.

Petursson said the market is hitting that third phase of exhaustion after the prior two of a bear market and a sharp rebound.

“In this phase what we’re doing is we’re waiting for the results and it’s not necessarily just the economic results, more importantly its the earnings results or anything that leads to a positive earnings outlook in Q4 or into 2021 to really drive the market to that next leg higher.”

Second-quarter earnings, which start mid-month are expected to be very bad, said Petursson.

“No matter what the earnings look like the market is just going to shrug it off,” he said.

Rather than recent performance, investors are going to be looking for signs in company guidance that “baby steps” are being taken back to normal despite the increase in COVID-19 infections in the United States.

The S&P/TSX composite index closed down 25.65 points at 15,596.75. It ended the week up 2.7 per cent on a rise in oil and gold prices.

The Canadian dollar also appreciated with oil surpassing US$40 a barrel. It traded for 73.72 cents US compared with 73.61 cents US on Thursday.

Petursson expects the loonie will reach 75 to 77 cents as crude rises to US$45 per barrel, gaining to hit about US$60 over some 18 months.

On Friday, the August crude contract was down 33 cents at US$40.32 per barrel and the August natural gas contract was up 1.6 cents at US$1.75 per mmBTU.

Husky Energy Inc. was the weakest performer as its shares dropped 2.6 per cent, followed by Vermilion Energy Inc. at 2.1 per cent and Cenovus Energy Inc. off two per cent.

Nine of the 11 major sectors on the TSX were lower amid low trading because of the U.S. holiday.

Health care, real estate and materials decreased.

The August gold contract was down US$2.70 at US$1,787.30 an ounce and the September copper contract was down 2.75 cents at US$2.72 a pound.

Consumer staples and telecommunications were slightly higher.

The market choppiness should continue, rising one day and then dipping as investors take some profits, Petursson said.

“This is what I expect to happen until the fall where I think we will have a better picture on what the start of 2021 is going to look like, not only with respect to COVID, more importantly to earnings.

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Oil Prices Fall As Demand Outlook Worsens In U.S. – OilPrice.com

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Oil Prices Fall As Demand Outlook Worsens In U.S. | OilPrice.com

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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    Oil prices fell early on Friday amid surging new coronavirus infections in the United States, which had market participants worried about the U.S. oil demand recovery trend.

    As of 9:20 a.m. EDT on Friday, WTI Crude was down 1.28 percent at $40.13, and Brent Crude traded down 1.23 percent at $42.61. Prices recovered somewhat later in the afternoon but were still trading about 1% off.

    Oil prices were still headed for a weekly gain this week as low supply from OPEC, encouraging economic data from the U.S. and China, and a drop in U.S. commercial inventories had supported prices earlier this week.

    However, the U.S. reported on Thursday its highest level of new daily coronavirus cases so far—at more than 55,000, raising fears that a surge in infections will dent the gradual oil demand recovery in America, which consumers 20 percent of the world’s daily oil supply.

    Nearly half of the U.S. states have either paused or rolled back the easing of the restrictions, Texas governor Greg Abbot mandated statewide face-covering in public spaces, while Florida reported more than 10,000 coronavirus cases in a new grim record. Related: U.S. Shale Needs To Rethink Its Strategy To Survive

    Earlier this week, oil prices rallied after the EIA reported a draw of 7.2 million barrels in crude oil inventories in the United States in the week to June 26, down from an all-time high level of inventories reached the previous week.  

    A Bloomberg survey of OPEC’s crude oil production in June showed that the cartel’s output fell to a three-decade low of 22.69 million barrels per day (bpd), as Saudi Arabia fulfilled its promise to cut an additional 1 million bpd on top of its quota in the OPEC+ pact.

    Apart from tightening supply, oil prices were supported this week by optimistic economic news from the U.S. and China. In the United States, the economy regained 4.8 million jobs last month, data showed on Thursday, which sent equity and oil markets rallying. In China, the manufacturing sector conditions continued to improve in June, the Caixin China General Manufacturing PMI showed, while the Caixin China General Services survey showed on Friday that China’s services sector activity expanded at its fastest pace in a decade and business confidence improved to a three-year high.  

    By Tsvetana Paraskova for Oilprice.com

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