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News Releases | COVID-19 Bulletin #208 – news.gov.mb.ca

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Bank of Canada will maintain current level of policy rate until inflation objective is achieved, recalibrates its quantitative easing program – Bank of Canada

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The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program. The Bank is recalibrating the QE program to shift purchases towards longer-term bonds, which have more direct influence on the borrowing rates that are most important for households and businesses. At the same time, total purchases will be gradually reduced to at least $4 billion a week. The Governing Council judges that, with these combined adjustments, the QE program is providing at least as much monetary stimulus as before.

The global and Canadian economic outlooks have evolved largely as anticipated in the July Monetary Policy Report (MPR), with rapid expansions as economies reopened giving way to slower growth, despite considerable remaining excess capacity. Looking ahead, rising COVID-19 infections are likely to weigh on the economic outlook in many countries, and growth will continue to rely heavily on policy support.

In the United States, GDP growth rebounded strongly but appears to be slowing considerably. China’s economic output is back to pre-pandemic levels and its recovery continues to broaden. Emerging-market economies have been hit harder, especially those with severe outbreaks. The recovery in Europe is slowing amid mounting lockdowns. Overall, global GDP is projected to contract by about 4 percent in 2020 before growing by just over 4 ½ percent, on average, in 2021–22.

Oil prices remain about 30 percent below pre-pandemic levels. Meanwhile, non-energy commodity prices, on average, have more than fully recovered. Despite continued low oil prices, the Canadian dollar has appreciated since July, largely reflecting a broad-based depreciation of the US dollar. 

In Canada, the rebound in employment and GDP was stronger than expected as the economy reopened through the summer. The economy is now transitioning to a more moderate recuperation phase. In the fourth quarter, growth is expected to slow markedly, due in part to rising COVID-19 case numbers. The economic effects of the pandemic are highly uneven across sectors and are particularly affecting low-income workers. Recognizing these challenges, governments have extended and modified business and income support programs.

After a decline of about 5 ½ percent in 2020, the Bank expects Canada’s economy to grow by almost 4 percent on average in 2021 and 2022. Growth will likely be choppy as domestic demand is influenced by the evolution of the virus and its impact on consumer and business confidence. Considering the likely long-lasting effects of the pandemic, the Bank has revised down its estimate of Canada’s potential growth over the projection horizon.

CPI inflation was at 0.5 percent in September and is expected to stay below the Bank’s target band of 1 to 3 percent until early 2021, largely due to low energy prices. Measures of core inflation are all below 2 percent, consistent with an economy where demand has fallen by more than supply. Inflation is expected to remain below target throughout the projection horizon.

As the economy recuperates, it will continue to require extraordinary monetary policy support. The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In our current projection, this does not happen until into 2023. The Bank is continuing its QE program and recalibrating it as described above. The program will continue until the recovery is well underway. We are committed to providing the monetary policy stimulus needed to support the recovery and achieve the inflation objective.

Information note

The next scheduled date for announcing the overnight rate target is December 9, 2020. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on January 20, 2021.

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Boeing to cut 20% of workforce by end of 2021 – BBC News

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Boeing to cut 20% of workforce by end of 2021

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.css-evoj7m-Imagedisplay:block;width:100%;height:auto;A Boeing 737 MAX 8 airplane is pictured outside the company's factory.

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.css-14iz86j-BoldTextfont-weight:bold;Boeing is to cut another 7,000 jobs as its losses mount in the pandemic.

The US planemaker, which had already announced deep cuts, said its staff would be down to just 130,000 by the end of next year – 20% down on the 160,000 it employed before the crisis.

The coronavirus pandemic and safety concerns about its 737 Max jet have contributed to a slump in orders.

The firm posted a loss of $466m (£354m) for the three months to 30 September, its fourth straight quarterly decline.

However, it reaffirmed its expectation that US deliveries of the 737 Max would resume before the end of the year, albeit at deeply reduced production rates.

The fleet has been grounded since March 2019 after 346 people died in two separate air crashes.

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Pressure

The pandemic added to the crisis, causing a huge drop in air travel, pushing major airlines to the brink of bankruptcy and forcing them to cut staff and drop plans for new aircraft.

As a result, Boeing has slashed production and also cut jobs. The firm announced a 10% reduction this spring and .css-yidnqd-InlineLink:linkcolor:#3F3F42;.css-yidnqd-InlineLink:visitedcolor:#696969;.css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visitedfont-weight:bolder;border-bottom:1px solid #BABABA;-webkit-text-decoration:none;text-decoration:none;.css-yidnqd-InlineLink:link:hover,.css-yidnqd-InlineLink:visited:hover,.css-yidnqd-InlineLink:link:focus,.css-yidnqd-InlineLink:visited:focusborder-bottom-color:currentcolor;border-bottom-width:2px;color:#B80000;@supports (text-underline-offset:0.25em).css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visitedborder-bottom:none;-webkit-text-decoration:underline #BABABA;text-decoration:underline #BABABA;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-skip-ink:none;text-decoration-skip-ink:none;text-underline-offset:0.25em;.css-yidnqd-InlineLink:link:hover,.css-yidnqd-InlineLink:visited:hover,.css-yidnqd-InlineLink:link:focus,.css-yidnqd-InlineLink:visited:focus-webkit-text-decoration-color:currentcolor;text-decoration-color:currentcolor;-webkit-text-decoration-thickness:2px;text-decoration-thickness:2px;color:#B80000;warned of the likelihood of deeper cuts through attrition, buyouts and layoffs over the summer. It does not expect travel to return to pre-crisis levels until about 2023.

It said its revenues were down 30% in the first nine months of the year, at $42bn.

Its third quarter loss, meanwhile, compares with a $1.2bn profit in the same period last year.

Boeing president and chief executive Dave Calhoun said the pandemic had “continued to add pressure” to the business .

But he added: “Our diverse portfolio, including our government services, defence and space programmes, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic.”

The planemaker said it was making “steady progress” towards the safe return to service of the 737 Max, including “rigorous certification and validation flights” conducted by the US, Canadian and EU regulators.

It said the jet had now completed around 1,400 test flights and more than 3,000 flight hours.

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Varcoe: Oilpatch workers ponder leaving sector as megamerger triggers layoffs – Calgary Herald

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With a drop in global oil prices and the fallout of the pandemic, the jobless rate in Alberta sat at 11.7 per cent in September.

The Conference Board of Canada projects Calgary’s unemployment rate will fall to 10.4 per cent next year, slowly easing to 8.6 per cent in 2024.

Yet, that is still higher than it was entering the pandemic.

The pressure for energy companies to consolidate isn’t going away, either.

“This is a global phenomenon. This is happening everywhere around the world,” Doug Schweitzer, Alberta’s minister of jobs, economy and innovation, told reporters Tuesday.

“Companies are having to reposition themselves, find efficiencies so they can survive in a very difficult time.”

Doug Schweitzer, Alberta’s minister of Jobs, Economy and Innovation Photo by Jim Wells/Postmedia

We can’t underestimate the turmoil this is causing, and governments at all levels — hello, Ottawa — shouldn’t either.

In September, the oil and gas sector provided a paycheque to more than 160,000 workers across the country. That’s down 14 per cent — or nearly 26,000 jobs lost — over the past year, reports the PetroLMI Division of Energy Safety Canada.

“A lot of the service sector jobs have been impacted, certainly since February,” PetroLMI vice-president Carol Howes said Tuesday.

“Now we will see a lot of the impact on those other (corporate) roles . . . that will be certainly under scrutiny in terms of a merger.”

At Precision Drilling Corp., CEO Kevin Neveu said the company has reduced the staff at its corporate offices to about 450 from 1,000 earlier this year, with job losses spread across North America. About half of those positions were eliminated in Canada.

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