Premier Doug Ford says Ontario is preparing for the “gradual” reopening of the economy as new modelling shows the province has likely reached its peak in the COVID-19 pandemic, even as the situation in long-term care homes continues to worsen.
Mr. Ford said Monday that his jobs and recovery committee, made up of key cabinet ministers, has begun to develop a framework for a “gradual, measured and safe” reopening of the province, while cautioning that physical distancing and self-isolation measures must remain in place for weeks if not longer.
“Absolutely in no way is this fight over,” the Premier said at Queen’s Park. “We aren’t there yet. … But we want to make sure we give people hope.”
New projections, released by provincial health officials on Monday, say Ontario is now expected to have fewer than 20,000 cases of the novel coronavirus, substantially lower than the 80,000 projected by previous models.
Matthew Anderson, president and CEO of Ontario Health, said the new projections show that physical-distancing measures implemented weeks ago are working at reducing the spread of COVID-19 in communities.
“We’ve been very successful – you’ve been very successful – in helping us to control the spread and maintain capacity within our acute-care system.”
The numbers in long-term care homes, however, continue to grow.
According to the latest model, at least 367 of the province’s 591 deaths have been in long-term care – more than 60 per cent. The numbers do not include group homes or retirement homes.
There are now 127 outbreaks at the province’s 626 long-term care homes, according to official numbers, but the number is much higher if suspected outbreaks and those not yet reported to the province are included.
New research has found that nursing-home residents over the age of 69 were 13 times more likely to die of COVID-19 than people in the same age group living elsewhere.
David Fisman, an epidemiologist at the University of Toronto’s Dalla Lana School of Public Health, and four of his colleagues analyzed confirmed and suspected coronavirus outbreaks at 272 of the province’s 626 long-term care homes as of April 7.
They then compared COVID-19 death rates in long-term care facilities with rates outside of long-term care.
Along with the thirteenfold difference in COVID-19 death rates among people 70 and older, the researchers discovered that people 80 and older were eight times more likely to die of COVID-19 if they lived in long-term care.
The research also found the COVID-19 deaths in nursing-home residents most often followed confirmed infections in staff. The more workers tested positive, the likelier the home was to record a death soon after.
Ontario recently passed an order limiting long-term-care staff to working in one home, but it does not apply to temporary or contract workers. The province also says it is sending in hospital “SWAT” teams of medical professionals to help homes, including 70 volunteers from Toronto’s University Health Network, and says guidelines for personal protective equipment are also being followed. On the weekend, 21 homes received “much needed supports,” the Ministry of Long-Term Care said.
On Monday, NDP Leader Andrea Horwath called on the government to immediately take over direct management of long-term care facilities where residents are not being protected, to restrict all workers in congregate-care settings – including temp agency workers – to one facility only, and to raise wages to $22 an hour for care-home staff.
But Merrilee Fullerton, Minister of Long-Term Care, has rejected calls to take over such facilities, including two of the hardest-hit homes in the province. At Eatonville Care Centre in Toronto and Anson Place Care Centre in Hagersville, at least 58 residents have died and 185 have been made ill by COVID-19.
“Since Day 1, we’ve been on this. And it is not a lack of preparation from my perspective,” Dr. Fullerton said Monday.
Health officials across Canada introduced physical-distancing measures, including closing schools and non-essential businesses, last month to slow the spread of COVID-19 infections. The goal was to prevent the health care system from becoming overwhelmed with a surge of patients, and while Ontario continues to see hundreds of new cases each day, officials and experts say that, over all, the outbreak appears to be largely under control in communities.
But officials and experts say it is still too early to relax physical distancing, as doing so would lead to a spike in new cases.
“Everyone needs to continue to stay home as much as possible, maintain physical distancing, to ensure that the province continues to stop the spread of COVID-19 and flatten the curve,” said Barbara Yaffe, Ontario’s associate chief medical officer of health.
In order for provinces to begin opening back up, Dr. Fisman said they will need to figure out ways to maintain suppression of new COVID-19 cases. This will hinge on widespread testing and better surveillance, such as entry screening at hospitals and monitoring infection risk in children if schools open again, he said.
With reports from Carly Weeks and Kelly Grant.
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Canadian regulator lifts banks’ capital buffer to record, priming for post-pandemic world
Canada‘s financial regulator raised the amount of capital the country’s biggest lenders must hold to guard against risks to a record 2.5% of risk-weighted assets, from 1% currently, in a surprise move that could pave the way for them to resume dividend increases and share buybacks.
The new measures, which take effect on Oct. 31, is a sign that the economic and market disruptions stemming from the coronavirus pandemic have abated and banks’ capital levels have been resilient, the Office of the Superintendent of Financial Institutions (OSFI) said in a statement.
But the regulator acknowledged that key vulnerabilities, including household and corporate debt levels, as well as asset imbalances caused by steep increase in home prices over the past year, remain.
In a sign of concern about the housing market, OSFI and the Canadian government raised the benchmark to determine the minimum qualifying rate for mortgages, starting June 1.
The increase in the Domestic Stability Buffer (DSB) to the highest possible level raises the Common Equity Tier 1 (CET1) capital – the core bank capital measure – to 10.5% of risk-weighted assets; a 4.5% base level, a “capital conservation buffer” of 2.5%, and a 1% surcharge for systemically important banks, plus the DSB.
The change “gives OSFI more leeway to loosen a restriction down the road, namely the freeze on buybacks and dividend increases,” National Bank Financial Analyst Gabriel Dechaine said.
OSFI felt it was “useful for the banks to understand what our minimal capital expectations are and to give them time to adjust to that… ahead of any lifting of the temporary capital distribution restrictions,” Assistant Superintendent Jamey Hubbs said on a media call.
Even with the higher requirement, Canada‘s six biggest banks would have excess capital of about C$51 billion, dropping from C$82 billion as of April 30, according to Reuters calculations.
That was driven in part by a moratorium on dividend increases and share buybacks imposed by OSFI in March 2020, although a pandemic-driven surge in loan losses has so far failed to materialize.
The Canadian banks index slipped 0.25% in morning trading in Toronto, while the Toronto stock benchmark fell 0.1%.
The increase is the first since the last one announced in December 2019, which did not come into effect as planned in April 2020, as OSFI made an out-of-schedule change https://www.reuters.com/article/canada-mortgages-regulation-idUSL1N2B636J that dropped the rate to 1% in March. It has maintained that level at its twice yearly reviews.
Prior to that, OSFI had raised the required level by 25 basis points at every twice yearly review since it was introduced at 1.5% in June 2018.
($1 = 1.2326 Canadian dollars)
(Reporting By Nichola Saminather; Editing by Marguerita Choy and Jonathan Oatis)
Canada Economic Indicators
The economic indicators used to gauge the performance of an economy and its outlook are the same across most nations. What differs is the relative importance of certain indicators to a specific economy at various points in time (for instance, housing indicators are closely watched when the housing market is booming or slumping), and the bodies or organizations compiling and disseminating these indicators in each nation.
Here are the 12 key economic indicators for Canada, the world’s 10th-largest economy:1
Statistics Canada, a national agency, publishes growth statistics on the Canadian economy on monthly and quarterly bases. The report shows the real gross domestic product (GDP) for the overall economy and broken down by industry. It is an accurate monthly/quarterly status report on the Canadian economy and each industry within it.2
Employment Change and Unemployment
Key data on the Canadian employment market, such as the net change in employment, the unemployment rate, and participation rate, is contained in the monthly Labour Force Survey, released by Statistics Canada. The report contains a wealth of information about the Canadian job market, categorized by the demographic, class of worker (private sector employee, public sector employee, self-employed), industry, and province.3
Consumer Price Index
Statistics Canada releases a monthly report on the consumer price index (CPI) that measures inflation at the consumer level. The index is constructed by comparing changes over time in a fixed basket of goods and services purchased by consumers. The report shows the change in CPI monthly and over the past 12 months, on an overall and core (excluding food and energy prices) basis.4
International Merchandise Trade
This monthly report from Statistics Canada shows the nation’s imports and exports, as well as the net merchandise trade surplus or deficit. The report also compares the most current data with that for the preceding month. Exports and imports are shown by product category, and also for Canada’s top ten trading partners.5
Teranet – National Bank House Price Index
This composite index of house prices across Canada was developed by Teranet and the National Bank of Canada and represents average home prices in Canada’s six largest metropolitan areas. A monthly report shows the change in the index monthly and over the past 12 months, as well as monthly and 12-month changes in Canada’s six and 11 largest metropolitan areas.6
RBC Manufacturing Purchasing Managers’ Index – PMI
Released on the first business day of each month, this indicator of trends in the Canadian manufacturing sector was launched in June 2011 by Royal Bank of Canada, in association with Markit and the Purchasing Management Association of Canada. RBC PMI readings above 50 signal expansion as compared to the previous month, while readings below 50 signal contraction. The monthly survey also tracks other information pertinent to the manufacturing sector, such as changes in output, new orders, employment, inventories, prices, and supplier delivery times.7
The Conference Board’s Consumer Confidence Index
The Conference Board of Canada’s Index of Consumer Confidence measures consumers’ levels of optimism in the state of the economy. It is a crucial indicator of near-term sales for consumer product companies in Canada, as well as an indicator of the outlook for the broad economy since consumer demand comprises such a significant part of it. The index is constructed on the basis of responses to four questions by a random sampling of Canadian households. Survey participants are asked how they view their households’ current and expected financial positions, their short-term employment outlook, and whether now is a good time to make a major purchase.8
Ivey Purchasing Managers Index – PMI
An index prepared by the Ivey Business School at Western University, the Ivey PMI measures the monthly variation in economic activity, as indicated by a panel of purchasing managers across Canada. It is based on responses by these purchasing managers to a single question: “Were your purchases last month in dollars higher, the same, or lower than in the previous month?” An index reading below 50 shows a decrease; a reading above 50 shows an increase. Panel members indicate changes in their organization’s activity over five broad categories: purchases, employment, inventories, supplier deliveries, and prices.9
Canada Mortgage and Housing Corporation (CMHC) issues a monthly report on the sixth working day of every month, showing the previous month’s new residential construction activity. The data is presented by region, province, census metropolitan area, and dwelling type (single-detached or multiple-unit). The indicator is an important gauge of the state of the Canadian housing market.10
This key indicator of housing activity is compiled by the Canadian Real Estate Association (CREA) and is based on the number of home sales processed through the MLS (Multiple Listing Service) Systems of real estate boards and associations in Canada. The monthly report from the CREA shows the change in home sales across Canada, as well as for major markets, from month to month. The report also includes other important housing-related information, such as the change (as a percentage) in newly listed homes, the national sales-to-new listings ratio, months of housing inventory, the change in the MLS Home Price Index, and the national average price for homes sold within the month.11
Statistics Canada releases a monthly report on retail sales activity across Canada, with changes shown on month-over-month and year-over-year bases. The headline number shows the percentage change in national retail sales on a dollar basis; the percentage change in volume terms is also shown. The retail sales figures are shown by industry and for each province or territory, and provide insights into Canadian consumer spending.12
The building permits survey conducted monthly by Statistics Canada collects data on the value of permits issued by Canadian municipalities for residential and non-residential buildings, as well as the number of residential dwellings authorized. Since building permit issuance is one of the very first steps in the process of construction, the aggregate building permits data are very useful as a leading indicator for assessing the state of the construction industry.13
The Bottom Line
The 12 economic indicators briefly described above show the health of key aspects of Canada’s economy: consumer spending, housing, manufacturing, employment, inflation, external trade, and economic growth. Taken together, they provide a comprehensive picture of the state of the Canadian economy.
Canada adds jobs for fourth straight month in May
Canada added 101,600 jobs in May, the fourth consecutive month of gains, led by hiring in the education and health services sector as well as in professional and business services, a report from payroll services provider ADP showed on Thursday.
The April data was revised to show 101,300 jobs were gained, rather than an increase of 351,300. The report, which is derived from ADP’s payrolls data, measures the change in total nonfarm payroll employment each month on a seasonally-adjusted basis.
(Reporting by Fergal Smith; Editing by Alex Richardson)