Months after having their babies, some parents are still waiting to receive benefits from Canada’s employment insurance program, which has been overloaded during the COVID-19 pandemic.
“It’s been a complete financial change and strain for us,” said Alanna Los of Brandon, Man., who had her second child July 1. “I’ve been literally on the phone every day almost for the past three months.”
Normally, people applying for parental benefits should expect to wait only about one month for their first payment, according to the federal government’s website. But with millions of Canadians unemployed or under-employed during the pandemic, strain on the employment insurance (EI) system is likely causing delays.
While she was pregnant, Los was on sick leave from her job as a nurse after she was rear-ended in a car crash. Two days after her daughter was born, she called Service Canada to switch over her sick leave payments to her parental leave benefits. The agent with whom she spoke confirmed the change was made and said she was approved, Los said.
Months later, Los said, she hasn’t received any support from the government.
She has had to dip into her savings to pay bills, she said.
Los isn’t alone. When she posted about her issues on a Facebook group, several mothers shared similar stories, she said.
“This is a system you’re supposed to be dependant on, but it’s not there for moms right now,” Los said.
‘I’m completely broke’
Leta Jonasson had her son Aug. 12, and has maxed out her credit card waiting for her parental benefit since his birth, she said.
“It’s been pretty stressful,” said the Winnipeg mom, whose spouse was also laid off during the pandemic.
Jonasson, 26, who also has another child, worked as a retail store manager, but she’s been off since March because of the pandemic. She had been receiving support from the Canada Emergency Response Benefit (CERB), but those payments stopped when she applied for parental benefits, she said.
“I’m completely broke until I get my maternity leave benefit,” Jonasson said.
She said she feels lucky to have family and a partner who support her as much as possible and can’t imagine what others who don’t have that safety net would do.
“If I didn’t have their help, I’d really be in a bad spot because of bills and everything,” Jonasson said.
Two mothers in Ontario also told CBC News they’ve been waiting more than two months for their parental benefits.
CBC News reached out to Service Canada, but the agency declined to answer questions about ongoing service delays.
“The department understands the difficulties that any delay in benefit payments can cause to claimants and their families, and is working to address the issue as soon as possible,” spokesperson Marie-Eve Sigouin-Campeau said.
‘System is not designed for this’
Service delays are likely due to the strain the government is under having to pay emergency benefits to four million Canadians who are unemployed or under-employed because of the pandemic, one expert says.
At the time, the government said it was working to increase the number of agents taking calls and pursuing additional measures to increase the automation of calls.
There’s likely still a backlog in trying to deal with the high number of people collecting CERB, EI and other government benefits, said Moshe Lander, a lecturer in the department of economics at Concordia University in Montreal.
“I think it’s just the nature of trying to process this many claims in extremely irregular circumstances,” said Lander. “The system is not designed for this. And so, of course, it’s not going to work properly.”
Bureaucratic hurdles are putting added stress on a demographic that’s already facing a great deal of hardship because of the pandemic, said Katherine Scott of the Canadian Centre for Policy Alternatives.
Women have been disproportionately affected by the economic fallout of the pandemic, and months after the onset of the crisis their return to employment lags behind that of men, Scott wrote in a report earlier this month.
“Women continue to be unemployed in greater numbers and are still working reduced hours in the jobs they do have,” she said. “This has certainly been a she-cession, as it’s been coined.”
WATCH | Manitoba mothers on the financial impact of waiting for parental benefits:
On top of that, the glitches with accessing CERB, EI and parental benefits mean some people are falling through the cracks, she said.
“It’s just crazy-making in the face of acute stress for many, many families,” Scott said.
Scott said the delays could persist or even increase as the government transitions from CERB to EI.
“The stress on the system will actually magnify,” she said.
“If you’re an expectant parent, you’ve got to wonder, will your claim proceed in a timely fashion? And it may well not.”
For parents such as Jonasson and Los, that means more calls to Ottawa, and more stress on their families.
Canadian economic growth cools to 1.2% in August – CBC.ca
The Canadian economy grew in August as real gross domestic product rose by 1.2 per cent in August, Statistics Canada reported Friday.
That marked the fourth straight month of growth following the steepest drops on record back in March and April amid pandemic lockdowns. August’s figure was down from the 3.1 per cent expansion seen in July.
The August number was still ahead of what forecasters had been expecting. According to financial data firm Refinitiv, economists had been predicting growth of 0.9 per cent for the month.
Despite the recent string of growth, overall economic activity is still about five per cent below February’s pre-pandemic level, Statistics Canada said.
September growth is forecast
Preliminary information from Statistics Canada indicates real GDP was up 0.7 per cent in September, with increases seen in the manufacturing and public sectors, as well as in mining, quarrying and oil and gas extraction.
“This advanced estimate points to an approximate 10 per cent increase in real GDP in the third quarter of 2020,” Statistics Canada said. Back in the second quarter, the country’s GDP shrank by 11.5 per cent in the three-month period between April and June.
Assuming the economy contracts in October and November as a result of a resurgence of coronavirus cases, fourth-quarter GDP looks likely to undershoot the Bank of Canada’s “tepid” forecast for a seasonally adjusted annual rate of one per cent, said CIBC Capital Markets senior economist Royce Mendes.
“It appears that the economy was slowing more than expected heading into the fourth quarter, and the most likely outcome now suggests that GDP barely advanced during the period,” Mendes said in a commentary.
BMO chief economist Doug Porter said the way forward has been deeply clouded by the second wave and renewed restrictions, so growth will cool considerably in the fourth quarter.
“However, we suspect that with ongoing massive fiscal support, less restrictions than earlier, and, simply, that consumers and businesses have learned to operate in this new environment, the late-year setback should be relatively mild,” Porter said. “In fact, we continue to expect modest growth overall for [the fourth quarter].”
The TSX Composite Index Fell Almost 5%: Is the Stock Market Crash 2.0 Here? – The Motley Fool Canada
For a long time, billionaire investors like George Soros and Warren Buffett have been saying that a second stock market crash is in the making. The TSX Composite Index surged 30% between April 1 and September 1 after falling 34% in March. The market crashed when the COVID-19 pandemic struck, and the market rallied on the back of the government stimulus package.
There were fears that the second wave of pandemic after the reopening of the economy would repeat the March sell-off. These fears are materializing. The increasing COVID-19 cases in the U.S., Canada, and Europe are recreating conditions of a lockdown. But this time, there won’t be a complete nationwide lockdown but tighter travel restrictions. Governments are better prepared to handle a coronavirus outbreak than they were in March.
Is the stock market crash 2.0 here?
George Soros stated that the free money coming from the fiscal stimulus package created a liquidity bubble, which drove stock valuations to new highs. When the valuations are high, there is more downside than upside.
The stock market was already bearish when the Canada Revenue Agency (CRA) delayed Canada Recovery Benefit (CRB) payments because of a technical glitch. The liquidity coming from the stimulus package was drying up. The COVID-19 resurgence accelerated the bearish tone. The TSX Composite Index has fallen 4.7% in the last three trading days and 6.2% in 13 trading days. In the March-sell off, the Index fell 11.8% in three trading days and 18.7% in 13 trading days.
The potential of another wave of pandemic hurt Air Canada (TSX:AC) and Suncor Energy (TSX:SU)(NYSE:SU) the most. Their stock prices fell 11.6% and 10.2%, respectively, to their March lows. Even virus stocks like Shopify, Lightspeed POS, and Kinaxis dipped single digits this week.
Companies are releasing their third-quarter earnings. The TSX Composite Index decline was partially offset by earnings surprises. For instance, better-than-expected third-quarter earnings sent RioCan REIT stock up 2.46%.
Stocks in the red
AC and Suncor are already struggling with sluggish air travel and oil demand. Another wave of tighter restrictions dampened any hopes of a recovery this year. The stock price momentum of AC and Suncor was range-bound since the pandemic. The recent dip pushed their stock prices to the lower end of their price range. AC stock has found support at $15. But Suncor stock lost its support and fell below $15. Warren Buffett exited airline stocks but retained his investment in Suncor in April.
A prolonged sector weakness leads to consolidation. The oil and gas industry has been in crisis for six years, and the pandemic has made things worse. Moreover, interest rates are near zero, creating an opportunity to acquire companies with strong assets at an attractive price.
The Canadian oil and gas industry saw its first mega-merger; Cenovus Energy agreed to acquire Husky Energy for $3.8 billion. Analysts believe that this could be the beginning of a mergers and acquisition supercycle. Suncor is in a far better position than most oil and gas companies because of its integrated business model. Its third-quarter earnings gave a snapshot of its liquidity, which will help it withstand crisis and operating efficiency that will help it return to profit when the oil price recovers to US$45/barrel.
The airline industry is already consolidated. It might undergo further consolidation, or some airlines might declare bankruptcy. For instance, AC slashed the Transat A.T. bid price by more than 70% to $190 million. But this deal could fall in jeopardy if AC faces the risk of bankruptcy.
What should you do in this stock market pullback?
The recent dip in the stock market has created an opportunity to buy post-pandemic stocks at discount. Suncor has growth potential, but its growth comes with risks. There are better stocks like Enbridge and RioCan, which have dividend yields of over 8.86% and 9.97%, respectively. These stocks are also reporting profits and positive cash flows. The stock market pullback has created an opportunity to lock such high-dividend yields for a lifetime.
Here are some more quality stocks to buy in the recent stock market pullback.
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Fool contributor Puja Tayal has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Enbridge, Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends KINAXIS INC.
Gold price off its lows as ECB signals further stimulus in December – Kitco NEWS
(Kitco News) – Gold prices remain under pressure, but well off their session lows after the European Central Bank (ECB) signaled it would unleash new monetary policy stimulus measures in December as the European economy continues to feel the devastating effects of the COVID-19 pandemic.
ECB president Christine Lagarde said in a press conference following the ECB ’s monetary policy decision that it is clear the European economy will need further support as a second wave of the coronavirus forces countries to institute new lockdown measures.
“We have little doubt that circumstances will warrant a recalibration and implementation of monetary policy,” she said.
The dovish outlook is helping gold prices recover from Wednesday sharp selloff. Panic selling has swept through financial markets this week as investors shift their expectations on global growth. December gold futures last traded at $1,871.80 an ounce, down 0.39% on the day.
The comments come as the ECB continues to see significant risk to the European economy heading into the new year. Wednesday, both France and Germany announced new lockdown measures as both countries have seen a surge in new COVID-19 infections.
“The risks surrounding the euro area growth outlook are clearly tilted to the downside,” Lagarde said in her opening remarks. “This largely reflects the recent resurgence in COVID-19 infections, the associated intensification of containment measures and a highly uncertain timeline of the pandemic and its implications for economic and financial conditions.”
Lagarde said that the staff are currently analyzing its programs ahead of December ’s meeting. The December meeting will also see the release of the central bank ’s updated economic projections. She added that this recalibration will touch on all of the central bank ’s tool to find the best mix to support lending conditions and the European economy.
“On the basis of this updated assessment, the Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favorable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path,” Lagard said.
Lagarde ’s dour outlook came after the ECB said that it maintained its interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25%, and -0.50%, respectively.
The central bank also said that it would maintain the current pace of its emergency stimulus measures.
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