United States Treasury Secretary Steven Mnuchin has denied that he is attempting to limit the choices President-elect Joe Biden will have to promote economic recovery by ending several emergency loan programmes being run by the Federal Reserve.
Mnuchin said his decision was based on the fact that the programmes were not being heavily utilised. He said on Friday that Congress could make better use of the money by reallocating it to support grants to small businesses and extended unemployment assistance.
“We’re not trying to hinder anything,” Mnuchin said in a CNBC news interview. “We don’t need this money to buy corporate bonds. We need this money to go help small businesses that are still closed.”
However, critics saw politics at play in Mnuchin’s decision, saying the action would deprive the incoming administration of critical support the Fed might need to prop up the economy as coronavirus infections spike nationwide.
“There can be no doubt, the Trump administration and their congressional toadies are actively trying to tank the US economy,” Senator Sherrod Brown, D-Ohio, said in a prepared statement on Friday. “For months, they have refused to take the steps necessary to support workers, small businesses and restaurants. As the result, the only tool at our disposal has been these facilities.”
Mnuchin had on Thursday written to Federal Reserve Chairman Jerome Powell announcing his decision not to extend some of the Fed’s emergency loan programmes, which had been operating with support from the Treasury Department. The decision will end the Fed’s corporate credit, municipal lending and Main Street Lending programmes as of December 31.
The decision drew a rare rebuke from the Fed, which said in a brief statement on Thursday that the central bank “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy”.
The US Chamber of Commerce also criticised the move. “A surprise termination of the Federal Reserve’s emergency liquidity program, including the Main Street Lending Program, prematurely and unnecessarily ties the hands of the incoming administration and closes the door on important liquidity options for businesses at a time when they need them most,” said Neil Bradley, the chamber’s executive vice president, in a prepared statement.
Private economists argued that Mnuchin’s decision to end five of the emergency loan facilities represents an economic risk.
“While the backstop measure have been little used so far, the deteriorating health and economic backdrop could shine a bright light on the Fed’s diminished recession-fighting arsenal and prompt an adverse market reaction,” said Gregory Daco, chief US economist at Oxford Economics.
People wearing protective face masks wait in line outside a CityMD Urgent Care in the Bronx, New York, United States [File: Shannon Stapleton/Reuters]
Under the law, the loan facilities required the support of the Treasury Department, which serves as a backstop for the initial losses the programmes might incur.
In his letter to Powell, Mnuchin said he is requesting that the Fed return to Treasury the unused funds appropriated by Congress.
He said this would allow Congress to reappropriate $455bn to other coronavirus programmes. Republicans and Democrats have been deadlocked for months on approval of another round of coronavirus support measures.
In public remarks on Tuesday, Powell made clear that he hoped that the loan programmes would remain in effect for the foreseeable future.
“When the right time comes, and I don’t think that time is yet, or very soon, we’ll put those tools away,” he said in an online discussion with a San Francisco business group.
The future of the Main Street and Municipal Lending programmes has taken on greater importance with Biden’s victory. Many progressive economists have argued that a Democratic-led Treasury could support the Fed taking on more risk and making more loans to small and mid-sized businesses and cash-strapped cities under these programmes. That would provide at least one avenue for the Biden administration to provide stimulus without going through Congress.
Neither programme has lived up to its potential so far, with the Municipal Lending programme making just one loan, while the Main Street programme has made loans totalling nearly $4bn to about 400 companies.
Republicans including Senate Banking Committee Chairman Mike Crapo of Idaho and Senator Pat Toomey of Pennsylvania supported Mnuchin’s move.
“Congress’ intent was clear: These facilities were to be temporary, to provide liquidity and to cease operations by the end of 2020,” Toomey said in a statement. ”With liquidity restored, they should expire, as Congress intended and the law requires, by December 31, 2020.”
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
