Connect with us

Business

Trudeau non-committal on airline bailout as Air Canada lays off thousands – CBC.ca

Published

on


Prime Minister Justin Trudeau says he plans to keep working with airlines hard hit by the COVID-19 pandemic but wouldn’t address whether a bailout of the beleaguered industry is on the table.

His comments came one day after Canada’s largest airline revealed it was preparing to slash its workforce by at least half.

“We’re going to continue to work with sectors and industries to try and support them as they get through this pandemic,” Trudeau said, referencing the federal government’s offer this week of bridge financing for large employers to keep workers on the payroll. 

“It is not a bailout, it is a loan that is going to help [businesses]…but we are still working with companies to see who is taking that up and how the format of it will be worked out.”

Travel restrictions put in place to limit the spread of COVID-19 across Canada — and the world —  have paved the way for a bleak summer for the country’s tourism and travel industry.

In a memo sent to staff Friday, Air Canada said it expects to lay off “approximately 50 to 60 per cent” of the company’s 38,000 employees in an effort to rebuild after the crisis. 

“COVID-19 has forced us to reduce our schedule by 95 per cent and, based on every indicator we have, our normal traffic levels will not be returning anytime soon,” the company wrote in a statement. “Our current workforce supports an operation transporting 51 million customers a year with 1,500 flights a day and 258 aircraft. With current realities, this is simply not sustainable going forward.”

The news follows the company’s efforts last month to rehire thousands of employees it had previously laid off because of the pandemic, after Ottawa confirmed the airline would qualify for the federal government’s wage subsidy program.

According to an internal bulletin to members from the Canadian Union of Public Employees obtained by The Canadian Press, the union is in talks with the company about continuing the emergency wage subsidy, which has been extended until the end of August.

Prime Minister Justin Trudeau said the federal government planned to speak with Air Canada and other airlines to help steer companies through the pandemic. (Justin Tang/The Canadian Press)

Air Canada has not disclosed whether it planned to access Ottawa’s bridge loan program, which comes with a number of conditions including requiring applicants to share their climate action plans and sustainability goals.

During his Saturday briefing, Trudeau acknowledged that the crisis was particularly difficult for companies tied to the travel and tourism industries. 

“I think we all know that this pandemic has hit extremely hard on travel industries and on the airlines particularly,” he said. “That’s why we’re going to keep working with airlines, including Air Canada, to see how we can help even more than we have with the wage subsidy.”

Health Canada approves first clinical vaccine trials

The prime minister also revealed that Health Canada has now approved the first clinical trials for a potential COVID-19 vaccine, work that will be undertaken at the Canadian Centre for Vaccinology at Dalhousie University.

“Research and development take time and must be done right, but this is encouraging news,” Trudeau said.

During his update, Trudeau highlighted the federal government’s one-time top-up to the Canada child benefit, which will see eligible families receive an extra $300 per child on Wednesday as part of their regular May payment.  

He added that starting July 20, the benefit will be increased for the upcoming year to keep pace with the cost of living.

The prime minister reiterated Ottawa’s pledge for $350 million in emergency funds to community groups and national charities, and announced an additional $100 million for the Red Cross to prepare for potential floods and wildfires on top of the organization’s COVID-19 response efforts.

Let’s block ads! (Why?)



Source link

Business

At the open: S&P 500 breaches 3000 mark for first time since early March – The Globe and Mail

Published

on


U.S. stocks surged at the open and S&P 500 breached a major technical barrier on Tuesday as business restarts and optimism about a potential coronavirus vaccine helped investors overlook Sino-U.S. tensions.

The S&P 500 rose 2.2% to 3,020 points at the open, rising above 3,000, a key psychological level for the first time since March 5.

The Dow Jones Industrial Average rose 316.68 points, or 1.29%, at the open to 24,781.84. The Nasdaq Composite gained 176.63 points, or 1.89%, to 9,501.21 at the opening bell.

Story continues below advertisement

The TSX, which rallied on Monday when U.S. markets were closed, was up 0.67% in early trading.

Also see: Market movers: Stocks seeing action on Tuesday – and why

Reuters

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Scotiabank profit plunges 40% as bad loans more than double amid COVID-19 – CBC.ca

Published

on


Scotiabank posted a profit Tuesday morning of $1.32 billion in the three months up to the end of April, a fall of more than 40 per cent from last year’s level as the bank set aside twice as much money for bad loans.

The bank’s provisions for credit losses totalled nearly $1.85 billion for the quarter. That’s up 111 per cent from the $873 million worth of bad loans the bank revealed in the same three months last year, well before the COVID-19 pandemic crushed the economy.

Higher loan loss provisions don’t necessarily mean that all of those loans will end up defaulting. Rather, it just means that they aren’t being actively being paid back as planned.

The bank revealed on Tuesday that 300,000 of its Canadian customers have applied for some sort of financial relief on the $60 billion they collectively owe to the bank. That would include mortgagees who asked for interest rate deferrals.

Scotiabank has a huge presence in Latin America, and the bank says it has processed two million applications for loan relief from its international customers.

Economic bellwether

Not all of those loans will necessarily end up defaulting, but some may. So the uptick in loan loss provisions is troubling.

Scotia is the first of Canada’s big banks to reveal its financial performance through the current pandemic, numbers which will be closely scrutinized as they are considered to be a bellwether for the broader economy. That’s because pain at other businesses tends to show up on the books of the banks that lend to them.

Canada’s other big banks — Royal, Toronto-Dominion, Canadian Imperial Bank of Commerce and Bank of Montreal — will report earnings in the next few days.

On an adjusted basis, Scotiabank’s profit for the quarter came in at $1.04 per diluted share. That’s well down from $1.70 per diluted share a year ago, but ahead of the 98 cents that analysts who cover the bank were expecting.

Not all bad news

But not all parts of the bank’s business saw tough times. Indeed, some did even better than usual.

Scotia’s global wealth management business posted a profit of $314 million, an increase of four per cent over last year’s level. That uptick came about with investors around the world becoming much more active than usual as global stock markets plummeted.

“This quarter saw record results for both new client account openings and trading volumes in Scotia iTRADE,” the bank said.

Similarly, the global banking and markets business posted a profit of $523 million, up 25 per cent from a year earlier.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Scotiabank's loan-loss provisions double on coronavirus risks – The Globe and Mail

Published

on


A Bank of Nova Scotia building stands in Toronto on Aug. 22, 2017.

Nathan Denette/The Canadian Press

Bank of Nova Scotia on Tuesday reported quarterly profit that beat analysts’ estimates due to a strong performance in the capital markets business, but the bank’s loan loss provisions jumped two-fold.

Provisions for loan losses at Scotia more than doubled to $1.85 billion from a year earlier as it set aside more money to meet future losses.

Canadian banks are expected to face loan defaults as the coronavirus pandemic drives the world into a recession, leaving small and medium-sized businesses scrambling to meet their debt payments.

Story continues below advertisement

The bank said commercial and corporate performing loan provisions increased by $275 million, hurt by the poor macroeconomic outlook and a plunge in oil prices that impacted the energy sector globally.

Adjusted net income at its global wealth management segment rose 3 per cent to $314 million, while profit at the global banking and markets business jumped 25 per cent to $523 million.

Canada’s third-biggest lender said net income fell to $1.24 billion, or $1 per share, in the quarter ended April 30, from $2.13 billion, or $1.73 per share, a year earlier.

On an adjusted basis, the lender earned $1.04 per share, compared with analysts’ estimate for profit of $0.98 per share, according to IBES data from Refinitiv.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending