Canada

  • 2020-05-26 17:06


    By Greg Quinn

    OTTAWA (MNI) - Following are BOC Governor Stephen Poloz's opening remarks to the Senate Banking Committee on Tuesday:

    "Good afternoon, Mr. Chairman and committee members. Senior Deputy Governor Wilkins and I welcome the opportunity to appear before you to discuss the Bank of Canada's actions in response to the coronavirus pandemic.

    Since the pandemic began, the Bank has had two goals in mind. In the short term, we have been working to help Canadian households and businesses bridge the crisis period. Our longer-term goal is to provide a strong foundation for economic recovery.

    Both of these goals require a well-functioning financial system to ensure the success of the extraordinary fiscal response that has been put in place.

  • 2020-05-25 13:55


    By Greg Quinn

    OTTAWA (MNI) - Governor Stephen Poloz said Monday the risk of a "giant deflationary crater" justifies unprecedented asset purchases and the Bank of of Canada may go further if record government deficits add new strains in financial markets amid Covid-19.

    The BOC learned to "eschew gradualism" following the 2008-09 financial crisis and Poloz repeated his quip that a firefighter is never criticized for using too much water.

  • 2020-05-22 14:53


    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet grew to a record CAD442 billion from CAD417 billion led by federal t-bills, with Governor Stephen Poloz saying this week that aggressive moves will help the economy recover from Covid-19 shutdowns.

    Federal t-bill holdings led the increase in the week ending May 20 to CAD91.7 billion from CAD79.8 billion. Canada government bond holdings rose to CAD125 billion from to CAD119 billion, keeping on the BOC's pledge to buy at least CAD5 billion a week until the recovery is well underway.

    The balance sheet now equals 19% of fourth-quarter GDP, a figure likely to rise next Friday with a report showing how much first quarter output shrank as health shutdown began.

  • 2020-05-22 09:13


    By Greg Quinn

    OTTAWA (MNI) - Canadian retail sales dropped a record 15.6% in April according to a flash estimate, following a 10% fall in March led by auto sales as health officials shut businesses to control the coronavirus.

    Statistics Canada said it provided the April figure "given the rapidly evolving economic situation," and warned that "owing to its preliminary nature, this figure should be expected to be revised." It didn't break out further details by industry.

    The March decline is the biggest on record and sales of CAD47.1 billion are the lowest since November 2016. Statistics Canada said the decline is comparable to the 7.1% fall recorded in the U.S.

  • 2020-05-20 14:01


    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada said the consumer price index anchoring its mandate has likely overestimated the extent of falling prices amid Covid-19, and policymakers must focus on the potential for longer-term weakness in an economy facing permanent damage.

    In the short run, consumer inflation has likely declined less than indicated by the CPI report, Deputy Governor Tim Lane said in the text of a speech Wednesday. Statistics Canada today said CPI fell 0.2% in April from a year earlier, the first such decline since 2009 and well outside the BOC's 1%-3% target range.

    "In this setting, monetary policy needs to be even more forward looking than usual, seeing beyond the shutdown to its potential implications for the subsequent recovery," Lane said.

  • 2020-05-20 10:48


    By Greg Quinn

    OTTAWA (MNI) - Canada's finance minister said Wednesday that large public companies seeking emergency government loans to cope with Covid-19 may have to give the government a 15% equity stake and an observer's seat on the board of directors.

    The money also can't be used for big dividends, share buybacks or executive compensation, or to restructure firms, Bill Morneau told reporters in Toronto. There is no cap on the cost of the program for firms with revenues of CAD300 million seeking at least CAD60 million in financing.

    The loans will be at a 5% rate for the first year, 8% in the second, and rise further after that.

  • 2020-05-20 08:57


    By Greg Quinn

    OTTAWA (MNI) - Canada's inflation rate fell 0.2% in the 12 months ended April, the first decline since the last recession in 2009, as Covid-19 kept people from clothing stores and taking travel tours.

    The consumer price index also fell 0.7% from March, the biggest decline since 2014, Statistics Canada reported Wednesday from Ottawa. Both declines matched the median in an MNI economist survey.

    Transportation costs fell 4.4%, and gasoline prices dropped a record 39% as people needed to drive less and there was a global supply glut, StatsCan said. Clothing and footwear prices fell 4.1%, including a record monthly drop of 5.9%.

    The figures are well outside the BOC's 1%-3% target band.

  • 2020-05-19 11:10


    --Also Lays Out Terms For CAD10B Corporate Bond Purchase Plan

    OTTAWA (MNI) - The Bank of Canada said Tuesday it has bought CAD727 million of provincial government bonds within the first week of the new program to support local finances amid the pandemic, breaking out each province's share of the portfolio in a newly expanded public disclosure report.

    The first four operations from May 7-13 all took up less than the maximum amount of bonds the BOC offered to buy, according to data published on its website. The previous report Friday showed CAD229 million of provincial bonds as balance sheet assets.

    The BOC said each province's share of the program's benchmark portfolio will be updated monthly.

  • 2020-05-15 14:03


    --Debut of Provincial Bond Purchases Is Small At CAD229M

    OTTAWA (MNI) - The Bank of Canada's balance sheet grew to a record CAD417 billion led by federal t-bills, while the start of a CAD50 billion provincial bond purchase program was for a modest CAD229 million.

    Federal t-bill holdings led the increase, rising to CAD79.8 billion from CAD65.8 billion, and government bonds rose to CAD119 billion from CAD112 billion. The BOC plans to buy at least CAD5 billion of Canadian government bonds a week until the recovery from Covid-19 is well underway.

    Repos remained the biggest holding at CAD194 billion, up from CAD189 billion.

  • 2020-05-15 10:17


    By Greg Quinn

    OTTAWA (MNI) - Canadian home sales fell a record 57% in April with showings upended by the coronavirus pandemic, and prices that had shown resiliency through a long boom also dropped an unprecedented 11% on the month.

    New listings plunged by more than half as health restrictions kept people from gathering, the Canadian Real Estate Association said Friday from Ottawa.

    The Covid-19 pandemic adds a new problem to Vancouver and Toronto housing markets that were a chief risk to the financial system through a decade-long boom. BOC officials said Thursday mortgage arrears may climb when regulations allowing six months of mortgage forbearance end, and the federal housing agency that handles most mortgage insurance has suspended regular financial projections.