Economy

Top central bankers: Economy needs help despite vaccine news – Investment Executive

Published

4 years ago

November 13, 2020

Powell said the main risk to the economy “is the further spread of disease here in the United States” and that people may lose confidence that it is safe to go out: “We have said from the beginning that the economy will not fully recover until people are confident it is safe to resume activities involving crowds of people.”

He said news about the vaccine was “certainly good for the medium term” but that it was “too soon to assess the implications for the path of the economy, especially in the near term. And I would say that with the virus spreading, the next few months could be challenging.”

Powell said that though stimulus efforts from Congress and the Fed in the U.S. had been “quite strong” thus far, “my sense is that we will need to do more, and Congress may need to do more as well in fiscal policy.”

The three spoke as virus numbers climb and raise pressure for governments and central banks to do more to help. Germany, France, the U.K. and others have added new measures such as closing bars and restaurants while states and cities around the U.S. are imposing new restrictions. All three central banks have deployed large-scale stimulus such as interest rate cuts and bond purchases that aim to keep borrowing costs affordable for businesses.

A multi-trillion-dollar stimulus, enacted in the spring, had helped sustain jobless Americans and ailing businesses but has since expired. The failure of lawmakers to agree on any new aid has clouded the future for the unemployed, for small businesses and for the economy as a whole. There is some hope, though, that a logjam can be broken and more economic relief can be enacted during a post-election “lame-duck” session of Congress between now and early January.

Bailey said that the vaccine news “is encouraging and we need encouraging signs” at the moment but pointed out that the vaccine “is not here yet.”

Lagarde said central banks and governments would need to continue to provide support to “help bridge over to the other side of the river” to avoid long-lasting damage to the economy. “I don’t want to be exuberant about this vaccination,” she said.

Powell said that technological change accelerated by the pandemic would leave some workers struggling to adapt. “We’re recovering to a different economy,” he said, and there will be a substantial number of workers who will need support as the economy is changed by the pandemic.

Lagarde has said there is “little doubt” the central bank for the 19 countries that use the euro would add more stimlulus at its Dec. 10 meeting, while Powell has said that policymakers discussed last week whether and how their bond buying program might be altered to provide more economic support. The Fed is buying $120 billion a month in bonds — $80 billion in Treasurys and $40 billion in mortgage bonds — to try to keep long-term borrowing costs low.

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Economy

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

Published

2 days ago

October 21, 2024

Anne Joseph

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

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Economy

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

Published

6 days ago

October 17, 2024

Anne Joseph

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.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

7 days ago

October 16, 2024

Anne Joseph

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.

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