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Sri Lanka's prime minister tackles thorny finances, economy – ABC News

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COLOMBO, Sri Lanka — Sri Lanka’s new Prime Minister Ranil Wickremesinghe has been sworn in as finance minister as this Indian ocean island nation confronts its worst economic crisis in memory.

President Gotabaya Rajapaksa named Wickremesinghe minister of Finance, Economic Stability and National Policies in an apparent bid to regain Sri Lanka’s credibility as the government negotiates a bailout package with the International Monetary Fund.

Sri Lankans have been enduring shortages of food and fuel, power outages and other privations. The country lacks the financial wherewithal to buy imported necessities and pay its debts, and the economic crisis has fueled political turmoil, with protesters demanding Rajapaksa’s resignation.

Wickremesinghe’s appointment followed a government announcement that Sri Lanka was hiring two international firms to restructure its $51 billion external debt. Lazard of France will provide financial advice and Clifford Chance LLP will assist with legal help in restructuring Sri Lanka’s debts to international creditors.

A five-time former prime minister, Wickremesinghe was appointed to the post two weeks ago after his predecessor Mahinda Rajapaksa — who is the president’s elder brother — resigned following violent attacks by his supporters on peaceful anti-government protesters.

Sri Lankans for months have been forced to stand in long lines to buy scarce essentials, with many returning home empty-handed. There is a severe shortage of many goods, from food, cooking gas, medicine and fuel to toilet paper and matchsticks.

The economy has suffered under the pandemic, which has kept tourists away, and surging costs for most imports.

Nearly bankrupt, the country and has suspended repayments of $7 billion in foreign loans due this year. The IMF has said any short or long-term assistance will hinge on talks with creditors on restructuring loans. Sri Lanka must repay about $25 billion in foreign loans by 2026.

The finance ministry said earlier this month that the country’s usable foreign reserves had plummeted to $25 million.

Wickremesinghe, 73, has been in Parliament for 45 years. His political party split in 2020 amid a leadership crisis and its most senior members left to form a new party, which is currently the country’s main opposition.

He said last week that petrol stocks had dwindled to a single day, but shipments of gasoline paid for by an Indian credit line started arriving over the weekend.

Protesters have been occupying the entrance to the president’s office for more than 40 days demanding Rajapaksa’s resignation.

Attacks on peaceful protesters by government supporters triggered countrywide riots in which nine people died including a lawmaker and 200 were hurt. Homes and properties of government ministers and their supporters were burned down. The violence has nearly dismantled the Rajapaksa dynasty after Mahinda Rajapaksa resigned as prime minister.

Apart from being tasked with reviving the economy, Wickremesinghe is working on a constitutional amendment to dilute presidential powers and better empower the Parliament.

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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