• 2020-06-23 16:39

    By Greg Quinn

    OTTAWA (MNI) - Canadian Finance Minister Bill Morneau said Tuesday the government may shift into more long-term debt to avoid the risk of a squeeze on short-term securities, a need that has arisen amid unprecedented spending to halt Covid-19.

    "One of the things that we are making sure we do as we manage the treasury function of the government is to ensure that we have the balance between the risk of rollover and the risk of the cost of longer debt," Morneau told a Senate hearing in Ottawa.

  • 2020-06-22 11:00

    --New Governor Sticks To Script In First Speech

    OTTAWA (MNI) - The Bank of Canada will continue to use asset purchase programs over negative rates if needed in future, continuing with policies like the purchase of at least CAD5 billion a week in federal bonds until the recovery is well underway, Governor Tiff Macklem said in his first public speech as governor, sticking largely to his predecessor's toolkit.

    The economy faces an inconsistent recovery from Covid-19, though growth will return in Q3, and the BOC's big job is avoiding a slide in prices, Macklem said Monday, noting some industries "won't reopen until we have a vaccine or at least very effective anti-viral medications."

    Macklem said the next policy meeting on July 15 will restore only part of the

  • 2020-06-19 14:56

    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet topped the half trillion dollar mark for the first time as federal bond purchases continued to rise faster than the minimum target of CAD5 billion a week.

    Assets grew to CAD509 billion as of June 17 from CAD498 billion a week earlier, figures the Ottawa-based bank posted Friday showed. Federal bonds climbed CAD7 billion to CAD152 billion, and t-bills by CAD2.6 billion to CAD118 billion.

    Holdings of repos stalled at CAD211 billion, and the third week of a program to buy up to CAD10 billion of corporate bonds amounted to just CAD94 million. Provincial bond and bill holdings were CAD11.7 billion.

  • 2020-06-19 09:11

    By Greg Quinn

    OTTAWA (MNI) - Canadian retail sales rose 19% in May according to a flash estimate, a partial rebound from a record 26% fall in April, reflecting Covid-19 shutdowns followed by the slow re-opening of some stores, data published by Stats Canada Friday showed.

    The April decline reported Friday was bigger than both the 15% expected by analysts and the agency's 16% flash estimate given a month ago.

    Other reports on wholesaling, manufacturing and inflation have also shown greater-than-expected weakness, suggesting downside risk to a consensus for GDP to fall as much as 40% annualized in the second quarter.

    Retail sales have fallen 34% since mid-March when social distancing rules were first imposed.

  • 2020-06-18 13:32

    By Greg Quinn

    OTTAWA (MNI) - Bank of Canada Deputy Governor Larry Schembri said Thursday consumer spending will likely remain subdued until a Covid-19 vaccine is widely available, and policy makers are watching for rising insolvencies as relief checks and mortgage deferrals wind down.

    About 700,000 households have tapped into a program to defer mortgage payments for up to six months, and the government's CAD2,000 a month relief checks will likely wind down after a recent eight-week extension.

  • 2020-06-18 11:15

    --No Gov't Budget Seen Yet For FY That Began April 1

    OTTAWA (MNI) - Canada's parliamentary budget office on Thursday raised this year's deficit projection to a record wide CAD256 billion, or 11.8% of GDP, the day after Prime Minister Justin Trudeau said he can only offer a partial fiscal update on July 8 as Covid-19 rocks the economy.

    That's four times greater than the previous record deficit of CAD56.4 billion seen in 2009-10. As a share of GDP it also beats a post-war high of around 8% set in the early 1980s after a deep recession. The deficit peaked at 22.5% of GDP in 1943 during World War II.

    Canada's debt would rise to 44.4% of GDP under the budget officer's projection, the highest since 2001-02.

  • 2020-06-18 10:19

    By Greg Quinn

    OTTAWA (MNI) - Canadian wholesale sales fell a record 22% in April amid Covid-19 shutdowns that likely weren't as severe in May, the federal statistics agency said.

    Sales fell to CAD49.8 billion, the lowest since July 2013, Statistics Canada said Thursday from Ottawa. All seven major categories shrank for the first time since 2008.

    The decline almost doubled the median economist forecast of 12%, following other weaker-than-expected reports on manufacturing and inflation in recent days. The volume of sales, which track better with GDP, fell to the lowest since 2009.

  • 2020-06-17 14:27

    --Fiscal 'Snapshot' Coming July 8, Trudeau Says

    OTTAWA (MNI) - Canada may toughen regulation of tech companies and gig employers after spending tens of billions supporting low-paid workers who lacked savings to cover bills after being laid off during the pandemic, Prime Minister Justin Trudeau said Wednesday as he announced a delayed and partial budget update on July 8.

    "We've seen this crisis expose real vulnerabilities within our communities, within our employment systems," Trudeau said in response to a question from MNI. "We are responding to this emergency right now, but we are also reflecting very carefully on how we can build back better, build back fairer, build back greener."

    Trudeau said Wednesday his minority Liberal government will present a fisc

  • 2020-06-17 09:06

    By Greg Quinn

    OTTAWA (MNI) - Canada's consumer prices unexpectedly fell 0.4% on year ago levels in May as Covid-19 shutdowns weighed, the worst reading since the last recession in 2009.

    The result ran against economist forecasts for CPI to be unchanged after a 0.2% decline in April. The 0.3% monthly price gain for May also lagged the 0.7% median.

    The report showed more evidence of a broad decline in prices.

  • 2020-06-17 07:00

    --New Governor Signals More QE, Won't Restore Forecasts Like Fed

    OTTAWA (MNI) - Although Canada's economy likely bottomed out in recent weeks, it remains in a "deep hole", Bank of Canada Governor Tiff Macklem told lawmakers Tuesday, but said the central bank had plenty of room to expand asset purchases if necessary.

    Asked by a member of the House of Commons Finance Committee if he shares Stephen Poloz's view that GDP can quickly regain ground and move further ahead, Macklem was more restrained and said his optimism is more around the idea the economy hit bottom in recent weeks and should grow in the third quarter.

    "But I would stress that even the good case is still pretty bad.