OTTAWA to replace CERB with new benefit, simplified EI program at cost of $37B | Canada News Media
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OTTAWA to replace CERB with new benefit, simplified EI program at cost of $37B

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Jordan Press, The Canadian Press


Published Thursday, August 20, 2020 2:44PM EDT


Last Updated Thursday, August 20, 2020 8:05PM EDT

OTTAWA – The federal Liberals are rolling out a $37-billion income-support plan for workers whose earnings have crashed during the pandemic, providing a hint of future changes to the social safety net – and igniting a debate about what should stay.

The details released Thursday outline what the Liberals intend for some four million workers receiving the $500-a-week Canada Emergency Response Benefit, which is set to wind down starting next month.

The CERB will be extended another four weeks, and a new benefit that pays $400 a week for up to 26 weeks will replace it for those ineligible for employment insurance, such as contract, self-employed and “gig” economy workers.

Anyone eligible for EI will get the same minimum for at least 26 weeks and will need to have worked 120 hours to qualify, well below current EI requirements, since many Canadians have been unable to work to the pandemic.

There will also be $500-a-week sickness benefit and caregiving benefit for anyone who has to stay home because they’re ill, or because school or daycare is closed.

Changes are also coming to people to keep more of their benefits even while they’re working, eliminating the earnings cliff created under CERB that acted as a disincentive to work.

Employment Minister Carla Qualtrough said the changes were designed to give Canadians a longer-term view of the support they could receive, while also acknowledging the outlook beyond 2021 is uncertain.

She said the government’s upcoming throne speech will outline plans to close the gaps in the decades-old EI system, and redesign it to reflect how Canadians work now and into the future.

“If there’s anything this pandemic has shown us, it is that our EI system hasn’t kept up with the way work has evolved and we now have a chance to fix that for the better,” Qualtrough said.

The three new benefits are expected to cost $22 billion and will be brought in through legislation once the House of Commons returns after being prorogued this week.

The extension to the $80-billion CERB is expected to cost a further $8 billion, and $7 billion more to the EI system, and can be done through powers that Qualtrough already has to create temporary EI measures.

The costs are for one year, but are dependent on the course of the pandemic and how the labour market rebounds from historic job losses.

“It is all about keeping things smooth,” TD senior economist Brian DePratto wrote in a note. “The last thing the Canadian economy needs right now is for a large group of people to experience a sudden drop in incomes (and by extension, spending) that could disrupt the recovery process.”

Hassan Yussuff, president of the Canadian Labour Congress, and Unifor national president Jerry Dias, said this will provide relief to worried workers, but emphasized the need for more permanent changes.

Ricardo Tranjan, a senior researcher with the Canadian Centre for Policy Alternatives, said the changes address problems identified in the safety net: “There’s actually no good reason for not making them permanent right now,” he said in an interview.

The Canadian Federation of Independent Business voiced concerns about how any permanent changes could increase costs for small businesses in the long run, which could also slow an economic recovery.

“EI changes that may make sense during a worldwide pandemic may have massive unintended consequences in ordinary times,” CFIB president Dan Kelly said in a statement.

EI premiums for employers and workers will be frozen for the next two years, which newly minted Finance Minister Chrystia Freeland said is intended to ease costs on employers to prod them to rehire workers.

Parliament is to resume Sept. 23 with a speech from the throne, leaving only a few days for legislative debate before the CERB expires. NDP employment critic Daniel Blaikie said that means the people who need these benefits won’t know for weeks if these changes will pass.

“If job No. 1 was to give Canadians some meaningful certainty about their financial future, I’m not sure they achieved that,” he said in an interview.

Conservative employment critic Dan Albas said shuffling Canadians between programs wasn’t a viable plan, and criticized the Liberals for being too slow to act.

“This includes the Liberals’ refusal to fix the EI system for new and expecting parents, which they could have made months ago,” Albas said in a statement. “Canadians are rightly concerned about falling through the cracks during this transition.”

Bloc Quebecois Leader Yves-Francois Blanchet said in a statement the proposed changes seem to meet his party’s demands, but they should have been passed before Parliament was prorogued. He warned Trudeau against “holding workers and businesses hostage” to the throne speech being adopted.

The government estimates about one million people will need the new workers’ benefit that replaces the CERB. A further three million will go on the simplified EI program, which one federal official said is a number more typical to what would be seen over one year or two.

Officials spoke at a media briefing Thursday provided on the condition they not be identified. They also noted that 400,000 people will receive benefits who otherwise wouldn’t have qualified for EI.

Since mid-March, the CERB has paid almost $69.4 billion in benefits to 8.61 million people, of which 4.1 million have since returned to the labour market.

This report by The Canadian Press was first published Aug. 20, 2020.

– With files from Mia Rabson

Source: – CP24 Toronto’s Breaking News

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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Dollarama keeping an eye on competitors as Loblaw launches new ultra-discount chain

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Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.

“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.

“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”

Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.

However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.

The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.

Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.

“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.

Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.

“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.

The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.

The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.

The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”

“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.

Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.

Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.

She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”

Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.

To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.

“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”

The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.

“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.

“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:DOL)

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U.S. regulator fines TD Bank US$28M for faulty consumer reports

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TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.

The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.

It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.

CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.

TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.

The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:TD)

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