I'll leave this right here:
Fitch Ratings has downgraded Canada's credit rating to AA+ from AAA, citing the federal government's move to borrow about a quarter of a trillion dollars to prop the economy up during the pandemic lockdown.
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Canada's oil production fell nearly 20% in the first half of 2020 from its average last year of 5.5 million barrels per day (b/d), battered by the oil demand-destroying economic crisis set off by COVID-19, the U.S. government's Energy Information Administration (EIA) said on Thursday. (The U.S. produces around 10-12 million b/d of crude oil.)
Between March and April alone, Canada's production of oil and other petroleum liquids fell from 5.6 million b/d to 4.9 million b/d, the EIA said. The last time it suffered a drop of that speed and magnitude was when wildfires swept into the Fort McMurray area in Alberta in 2016, forcing evacuations and shutdowns of oil sands projects.
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As one can see, Canada does not have financial wiggle room at the moment:
The Trudeau Liberals’ favourite counter-tool when increased debt had critics getting edgy was to use their debt-to-GDP ratio where a chugging-along economy could easily handle the added constraint.
In his last budget, then finance minister Bill Morneau boasted he would be looking at maintaining an acceptable ratio of 31%.
He lied.
A quick reminder: A debt-to-GDP ratio of 60% is quite often noted as a wise limit for developed countries, a warning zone strongly suggesting that crossing this limit will threaten fiscal sustainability.
Canada is now at 88.01%.
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Cabinet cannot cut spending without risking an economic depression, says Treasury Board President Jean-Yves Duclos. This year’s deficit is near $400 billion: “Doesn’t that mean there is no ceiling then on the spending?”
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More than four months after the federal government announced its program offering emergency loans to the country’s largest businesses amid the novel coronavirus pandemic, none of the applications have been approved and no money has been allocated.
The Large Employer Emergency Financing Facility (LEEFF) was announced by the Liberals on May 11, as part of the federal government’s emergency economic response to the COVID-19 outbreak.
The loans, starting at $60 million, were to be made available to companies that employ large numbers of Canadians and have at least $300 million in annual revenue, to provide short-term assistance to help them weather the pandemic.
On Wednesday, the ministry of finance confirmed it has received “more than a dozen” applications to the LEEFF so far.
But none have been approved.
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Cabinet will march in lockstep with the European Union on climate change regulations, Environment Minister Jonathan Wilkinson said yesterday. One E.U. directive commits to double the rate of renewable energy use seen in Canada: “There’s a whole range of things.”
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Cabinet yesterday approved another pandemic relief measure for Canada Student Loan borrowers. Students forced to take temporary leave of their studies due to illness or parenting are granted a reprieve from payments: “More students may experience illnesses including mental health challenges.”
Is there a reason why the deputy of the Bank of Canada is leaving the sinking ship?
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