After yesterday’s heavy economic calendar (see yesterday’s daily note on the 9 percent decline of the Canadian economy in March and the Bank of Canada’s expanded bond purchase program), today was very light on data. Statistics Canada reported that manufacturing sales rose 0.5 percent in February, but we know the economy plunged in March so it is very old news.
The main events of the day were new fiscal announcements.
Prime Minister Trudeau announced a further expansion of the Canada Emergency Business Account (CEBA) eligibility criteria. The program will now be accessible to any business that has spent between $20,000 and $1.5 million in total payroll in 2019. This addresses concerns of the business community that some small and medium enterprises (SMEs) may not meet the prior criteria. The government reported that 195,000 loans have been approved under the CEBA with a total value of $7.5 billion of credit.
A new federal program was announced today: Canada Emergency Commercial Rent Assistance (CECRA). This program is aimed at helping small businesses with their commercial rent for months of May and June. Although the matter is a provincial responsibility, the federal government and provinces will be working together on this initiative. Much like the change in the CEBA, the CECRA is a response to business concerns. At a time that many small businesses have little or no revenues, relief on the rental payments can be important to address cash flow and balance sheet strains.
The Prime Minister also spoke about the Canada/US border saying that it will be “many weeks” before the two countries can loosen restrictions that are keeping the frontier closed to all but goods and a small number of essential workers. This follows comments by US President Trump that he’s prepared to support easing travel restrictions along the Canada-U.S. border sooner rather than later. A disagreement over the timing of the opening of the border poses political risks that could create economic consequences—so we are monitoring this risk closely.
Today we had news that US jobless claims moderated slightly last week but still stood at an enormous 5.25 million for the week of April 11. The decline suggests that the US’ Paycheck Protection Program (PPP) is helping to keep workers on payrolls. Nevertheless, 22 million claims have been filed over the last four weeks—roughly 13 percent of the US labour force.
Announcement: Join us on Tuesday, April 21 for the first of our Economics weekly webinar. I will provide and economic update and we will be discussing the question: “Is China’s recovery for real?” I will be joined by Deloitte China’s Chief Economist Sitao Xu, and Clients & Industries Leader for Asia Pacific Vivian Jiang.
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Craig Alexander is the first Chief Economist at Deloitte Canada. He has over twenty years of experience in the private sector as a senior executive and leading economist in applied economics and forecasting. He performed macroeconomic research, regional and sector analysis, and fiscal market forecasting and modelling. Craig is a passionate public speaker and holds a graduate degree in Economics from the University of Toronto.