Prime Minister Justin Trudeau, seen here on May 22, 2020, had one-on-one discussions with the heads of Canada’s six big banks for the first time since the start of the novel coronavirus pandemic.
Adrian Wyld/The Canadian Press
Prime Minister Justin Trudeau has reached out to the heads of Canada’s six big banks to get their reading on the state of the economy and how COVID-19 relief efforts are faring, banking sources and federal officials told The Globe and Mail.
It was the first time that Mr. Trudeau has had one-on-one discussions with the CEOs since the start of the novel coronavirus pandemic, multiple banking-industry sources say, adding that the calls took place around the Victoria Day long weekend.
The consultations with the CEOs were high-level check-ins rather than deep policy discussions, intended to take the pulse of the efforts to deal with the economic effects of COVID-19, the sources said. They covered topics such as how relief efforts rolled out jointly by government and banks might need adjusting, where bank clients are feeling pressure most acutely, and which parts of the economy may need further support to recover.
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The Trudeau government, federal officials say, has largely finished rolling out its emergency response to the pandemic and is now starting work on the “recovery” phase that will aim to salvage sectors of the economy that are most damaged by the crisis.
The officials say the government is preparing a diagnosis of the economic damage inflicted by COVID-19 and has started to determine the sectors of the economy that will need the most help in the next phase.
The Globe is not identifying the banking and federal sources who spoke about the recent discussions with the bank CEOs because they were not authorized to comment publicly on the matter. Spokespeople for Canada’s six largest banks and for the Canadian Bankers Association declined to comment.
Although Mr. Trudeau has called the bank CEOs on occasion in the past, such direct discussions are not common. In the fall of 2018, Mr. Trudeau briefed them in separate calls at a key juncture in negotiations to redraw the North American free-trade agreement.
The Prime Minister and his top ministers have been engaged in a series of talks with corporate figures, union leaders and academics to determine the country’s economic needs now that provincial governments are allowing businesses to resume operations, albeit at varying speed across the country.
Up until now, Ottawa publicly emphasized the emergency response to the short-term effects of the economic crisis, such as direct payments to workers and families, as well as wage subsidies and rent relief for businesses. Inside Ottawa, that phase was known as “contain and survive,” according to a senior federal official.
“As provinces start to slowly reopen, our goal is always to ensure that the federal government is a strong partner in the economic recovery,” said Ann-Clara Vaillancourt, a spokeswoman for the Prime Minister’s Office.
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University of Saskatchewan professor Janice MacKinnon, a former provincial finance minister, said Mr. Trudeau is doing the right thing by consulting widely with bankers and others to target the sectors that need help on the path to recovery.
“If you look at specific sectors of the economy – petroleum, tourism, airlines, agri-food – they have unique problems that are significant and longer term,” she said. “If those sectors flounder, the workers won’t have jobs to go back to.”
Don Drummond, a former federal Department of Finance official and later a bank economist, said the uncertainty facing the country requires constant consultations between government officials and the private sector to shape future federal action.
“They are operating in a black box,” Mr. Drummond said.
He added that “the banks saved the government” by overseeing new lending programs to businesses, lowering credit-card interest rates and offering deferrals on mortgage payments.
Hassan Yussuff, the president of the Canadian Labour Congress, said he hopes that governments will ensure the safety of workplaces as the economy starts to reopen, and find longer-term solutions for jobless Canadians who have been relying on emergency benefits and wage subsidies. Eventually, he said, the Canadian government will have to step in and save the worse-hit sectors of the economy.
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“If you are simply relying on the private sector right now, I don’t think that will get the economy back on its feet,” he said. “The federal and provincial governments will have to collaborate really strongly and they will have to spend money.”
Finance Minister Bill Morneau held weekly calls with bank CEOs starting in mid-March. He will soon launch consultations on the future of the 75-per-cent wage subsidy.
“We will soon consult with key business and labour representatives over the next month on potential adjustments to the program to incentivize jobs and growth, including the 30-per-cent revenue decline threshold,” said Pierre-Olivier Herbert, a spokesman for Mr. Morneau.
Other ministers involved in consultations on the federal role in the economic recovery include Treasury Board President Jean-Yves Duclos, who has been speaking with business leaders and academics.
“As much as our focus is currently set on helping each and every Canadian get through these challenging times, as a government, we also have a duty to look ahead,” said Karl Sasseville, a spokesman for Mr. Duclos.
Banks have been in close and frequent contact with policy makers to co-ordinate the response to COVID-19. That has primarily been through Mr. Morneau and staff at the Department of Finance, as well as officials at the country’s banking regulator, the Office of the Superintendent of Financial Institutions, and at the Bank of Canada.
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Globe health columnist André Picard examines the complex issues around reopening schools and businesses after the coronavirus lockdown. He says whatever happens as provinces reopen, there’s also a second wave of COVID-19 illnesses looming in the fall. André was talking via Instagram Live with The Globe’s Madeleine White.
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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
