Majority of Gen Z Canadians close to insolvency amid coronavirus pandemic, poll finds

Kerri Breen 

© Global News Files A new poll found that just under half of Canadians are $200 away from insolvency or already insolvent.

Canadians are experiencing the economic effects of COVID-19 very differently — and it largely depends on how vulnerable they were prior to the pandemic, a new poll suggests.

The youngest people in the workforce — those in Generation Z — appear to be struggling the most, according to the poll, which was commissioned by insolvency firm MNP.

Nearly 70 per cent are $200 or less away from insolvency, which includes 39 per cent who are already insolvent, meaning their financial resources aren't enough to cover their current obligations.

Other groups among the hardest hit in the pandemic include renters — 57 per cent who are in that same position — about half of women, and 67 per cent of households earning under $40,000.

"The younger generation, those still with student loans, Z generation ... renters, they're feeling the pinch," said Grant Bazian, president at MNP LTD.

Canada is starting to see a K-shaped recovery, Bazian said.

That's when the economy bounces back after a recession, but instead of the growth being uniform, different sectors and groups recover more quickly than others.

Young people, renters and lower-income Canadians are not the only ones who could be left out of the recovery. Throughout the pandemic, advocates and experts have also highlighted the disparate impact of COVID-19 on seniors, racialized Canadians and those with disabilities.

Read more: Racialized groups in Canada will ‘lose’ in the post-pandemic economy. Experts aren’t surprised

The poll findings come from the MNP Consumer Debt Index, a quarterly survey that takes the temperature of Canadians' finances. The index is currently at its second-lowest result of 94 points (the weaker the score, the worse Canadians are feeling about their debt).

Overall, the poll found that just under half of Canadians are $200 away from insolvency or already insolvent.

That figure is on the rise, having increased four points since July, the last time the poll was published.

Canada's bankruptcy and insolvency statistics suggest the billions in government supports rolled out this year are saving people from having to take such action — at least in the short term. In August, consumer filings were down more than 40 per cent compared with the previous year.

Federal income supports have recently been extended for many, and jobs are recovering. Canada added 378,000 positions last month, a stronger result than economists expected but still 720,000 jobs shy of pre-pandemic levels.

Read more: Canada adds 378K jobs in September, beating expectations

Insolvency trustees across the country, however, are starting to hear from more people who are struggling, Bazian said. He also expects an uptick in inquires come tax time, because benefits like CERB are taxable.

His advice is to get in touch with a professional to learn about the options before your finances reach a tipping point.

"Reaching out earlier — sooner than later — will help people decide what course of action take when it gets really bad for them," he said.

The MNP Consumer Debt Index was compiled by Ipsos on behalf of MNP LTD between Sept. 1 and 3, 2020. For this survey, a sample of 2,001 Canadian adults were interviewed. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled.

Italian woman in Vatican financial scandal investigation arrested

ROME (Reuters) - A 39-year-old Italian woman was arrested on Tuesday in connection with the Vatican's latest financial scandal, police said.

© Reuters/GUGLIELMO MANGIAPANE FILE PHOTO: 

Cardinal Giovanni Angelo Becciu speaks to the media in Rome

Cecilia Marogna had worked for Cardinal Angelo Becciu, a top Vatican official who was fired by Pope Francis last month and accused of embezzlement and nepotism. Becciu has denied all
wrongdoing.

An Italian finance police official told Reuters Marogna was arrested in Milan. Italian media reports said she was arrested under an international warrant issued by Vatican magistrates.

In recent days, Italian media have run interviews in which Marogna said she had received 500,000 euros ($587,350) from Becciu to run a "parallel diplomacy" to help missionaries in conflict zones. She has denied wrongdoing in the interviews.

Her purported work for the Vatican's Secretariat of State, where Becciu held the number two position until 2018, was not previously known.

Becciu's lawyer Fabio Viglione, has said the cardinal knew Marogna but that his dealings with her had been "exclusively about institutional matters".

Marogna, who like Becciu is from Sardinia, has said that the funds she allegedly received from Becciu went through a company she started in Slovenia.

(Reporting by Philip Pullella; Editing by Mark Heinrich)

India frees top Kashmir politician after more than a year in detention

By Fayaz Bukhari 

© Reuters/Fayaz Kabli FILE PHOTO: Mehbooba Mufti, president of People's Democratic Party, speaks after police stopped her protest march in Srinagar

SRINAGAR, India (Reuters) - Indian authorities released a top Kashmiri politician late on Tuesday, the last major leader held since August last year when the federal government withdrew the troubled region’s autonomy and arrested politicians.

© Reuters/Danish Ishmail FILE PHOTO: Mufti president of PDP speaks with media during a protest rally in Srinagar

Mehbooba Mufti, a former Chief Minister of the state, was released late on Tuesday, government spokesperson Rohit Kansal said on Twitter. He did not give a reason for her release.

A government order seen by Reuters said Mufti's detention under the Public Safety Act, which allows for detention without trial for up to two years, was being revoked with immediate effect.

© Reuters/DANISH ISMAIL FILE PHOTO: Former Jammu and Kashmir Chief Minister Mehbooba Mufti speaks during an interview with Reuters at her residence in Srinagar

Prime Minister Narendra Modi’s government said at the time that ending Kashmir’s special status was necessary for closer integration of the Muslim majority territory into the rest of India.

The government imposed a communication blackout with mobiles phones, internet links and landlines down and detained scores of people including Mufti to prevent large scale protests from erupting over the loss of autonomy for Kashmir.

Top politicians Farooq Abdullah and his son Omar Abdullah, both former Chief Ministers of the state, were released earlier this year.

Mufti's daughter had filed a habeas corpus petition in the country's Supreme Court, challenging her mother’s detention under the Public Safety Act. The case is scheduled to come up for hearing on Thursday.

(Reporting by Fayaz Bukhari, writing by Shilpa Jamkhandikar; editing by Philippa Fletcher)

Women in states with fewer reproductive health restrictions have healthier babies, study finds

By Lauren Mascarenhas, CNN 

Women in states with fewer reproductive health restrictions deliver healthier babies, at least as measured by birth weight, researchers reported Tuesday.

© Ian Waldie/Getty Images AsiaPac/Getty Images SYDNEY, NSW - JUNE 07: A pregnant woman holds her stomach June 7, 2006 in Sydney, Australia. Australia is currently enjoying a baby boom, with the Australian Bureau of Statistics registering a 2.4% increase in births from 2004 to 2005, which represents the highest number of births since 1992. The Australian Federal Government has been encouraging people to have more babies, with financial incentives and the slogan by treasurer Peter Costello to "have one for mum, one for dad, and one for the country". The Federal Government has identified falling fertility rates and the ageing population as long-term problems for Australia's growth and prosperity. (Photo by Ian Waldie/Getty Images)

When states did less to restrict a woman's reproductive health rights, babies were more likely to be born at healthier weights, the researchers reported in the American Journal of Preventive Medicine.

The researchers suggest that systematic racism may be at play.

"The U.S. has a long history of oppressive reproductive policies and ideologies that results in the devaluation of certain lives, mainly racial/ethnic minorities," the research team wrote.

May Sudhinaraset, an associate professor at the UCLA School of Public Health, and colleagues analyzed the records from 3.9 million births across the US in 2016.

They assessed the restrictiveness of each state's reproductive health policies by looking at indicators such as mandatory waiting periods for abortion services, expanded eligibility for Medicaid family planning services, and the percentage of women living in counties with abortion providers.

The researchers found that that women living in states with the least restrictive reproductive health policies were 7% less likely to deliver a baby with low birth weight than those in the most restrictive states. Black women in those states were 8% less likely to have a child with low birth weight than their counterparts in the most restrictive states.

According to the US Centers for Disease Control and Prevention, babies born under 5 lb. 8 oz. are considered to have low birth weight. This can place some babies at greater risk for health problems, including breathing issues and infection.

"We know that compared to normal weight babies, low birth weight babies are more at risk for a number of different problems, including developing infections in the first few days of their lives, to more long-term outcomes, like delayed social development or learning disabilities," Sudhinaraset told CNN.

The study shows that the birth weights of babies born to Black women who had themselves been born outside of the US appear to be less impacted by restrictive policies. These women "may have had less time exposed to the historical and contemporary features of structural racism that restrict access to health promoting resources and opportunities among people of color in the U.S.," the researchers note.

The team categorized 20 states, including Texas, Colorado and Louisiana, as having the most restrictions on reproductive rights and called for further research into the impact of reproductive health policies as they change over time.

"Reproductive rights policies can inhibit women from achieving their full health potential, and that in turn can cause chronic stress that results in worse birth outcomes," Sudhinaraset said.

She added that these policies can play a large role in determining whether women have access to reproductive health services that they critically need.

"This study really speaks to the real and important ways that reproductive rights policies are critical social determinants of health," Sudhinaraset said. "To really address issues of health inequity, we need to enact policies for women to be able to make decisions for their own bodies, and their lives and their children, if they want to have them."

© Elsevier This map indicates the reproductive rights policy climate for each state plus the District of Columbia in the year prior to when women gave birth in 2016 (i.e., preconception year). Data were compiled in 2014 and 2015.

CRIMES AGAINST HUMANITY 

'We Need to Take Away Children': Startling Details from Internal Report on Family Separation Under Trump

Diane Herbst 


Trump administration officials have denied that they systematically carried out a policy of separating migrant children — including infants and toddlers — from their parents or adult family members who had arrived at the southern border to enter the country illegally.

© Provided by People John Moore/Getty

But a draft of a forthcoming report by the Justice Department's internal watchdog, obtained by The New York Times and NBC News, indicates they were not telling the truth.

In May 2018, public outcry immediately began to grow over President Donald Trump's newly announced "zero tolerance" policy of seeking federal prosecutions for all migrants who illegally cross into the U.S., which is a misdemeanor, rather than seeking immigration proceedings against them.© John Moore/Getty “Don’t bring them in," one prosecutor wrote in a note. "Won’t give amnesty to people with kids”

Around the same time, five federal prosecutors stated they were "deeply concerned" about the practice of family separation and tried to push back against the order, reports the Times, citing the draft from the Justice Department's inspector general.

Then-Attorney General Jeff Sessions conveyed a message to the prosecutors from Trump: "We need to take away children," Sessions said, according the draft of the report as described by the Times.

The paper further reports that one prosecutor scribbled this note: “If care about kids, don’t bring them in. Won’t give amnesty to people with kids.”

A week later, according to the Times, Rod Rosenstein, then the deputy attorney general, had a call with the same prosecutors in which he "went even further in a second call about a week later, telling the five prosecutors that it did not matter how young the children were. He said government lawyers should not have refused to prosecute the two cases simply because the children were barely more than infants."

NBC News reported that, according to the draft report, a federal prosecutor told his colleagues at one point that Rosenstein also said "per the [attorney general's] policy, should NOT be categorically declining immigration prosecutions of adults in family units because of the age of a child."

By that June, some medical experts were calling the separations "child abuse" while the United Nations declared the practice was illegal, violating the children's human rights.

At the time, federal government officials publicly denied they actively separated families.

On June 17, 2018, then-Homeland Security Secretary Kirstjen Nielsen, who has largely borne the blame for the policy, falsely tweeted: “We do not have a policy of separating families at the border. Period.”

The draft of the watchdog report not only refutes this, it undercuts Sessions' previous public comments that the Justice Department was not so directly involved in the separation policy and was more focused on prosecutions.

Rather, the inspector general found that Justice officials "were aware that full implementation of the zero-tolerance policy would result in criminal referrals by [the Department of Homeland Security] of adults who enter the country illegally with children and that the prosecution of these family-unit adults would result in children being separated from families," according to the Times.

The paper reports that various government officials viewed the separation policy as a successful deterrent of the migrants Trump had campaigned against stopping.

© Provided by People Win McNamee/Getty Jeff Sessions (left) and Rod Rosenstein


The policy, in place until a federal judge ordered the end of the practice on June 26, 2018, resulted in the separation of more than 4,200 children since 2017, according to the ACLU, which has filed lawsuits to stop family separations.

The youngest child was 4 months old, according to the Times.

The inspector general's draft report described the Justice Department as having a "single-minded focus on increasing prosecutions" which "came at the expense of careful and effective implementation of the policy, especially with regard to prosecution of family-unit adults and the resulting child separations," according to the Times.

A Justice Department spokeswoman told the Times that the draft it reported on "contains numerous factual errors and inaccuracies."

The spokeswoman also seemed to shift scrutiny back to border officials under Homeland Security: "While D.O.J. is responsible for the prosecutions of defendants, it had no role in tracking or providing custodial care to the children of defendants. Finally, both the timing and misleading content of this leak raise troubling questions about the motivations of those responsible for it.”

The Justice Department did not immediately respond to a request for comment from PEOPLE.

Sessions declined to speak with the inspector general, though Rosenstein did, according to the Times. In a statement to the paper, Rosenstein insisted that he had "never ordered anyone to prosecute a case.”

“If any United States attorney ever charged a defendant they did not personally believe warranted prosecution, they violated their oath of office,” he said.

According to the Times, the timeline for the watchdog report's release is unclear and it "could change," though the inspector general "had been preparing to release his report since late summer."

President Trump, who campaigned on limiting both legal and illegal immigration, made the border prosecutions and resulting separations a key and widely controversial part of fulfilling that promise — drawing international backlash.

The 86-page draft report contains other revelations.

One government prosecutor, according to the Times, wrote to his supervisors of a pilot program at the border in 2017, predating the more official family separations: “We have now heard of us taking breastfeeding defendant moms away from their infants. I did not believe this until I looked at the duty log.”

Additionally the Times reported that, according to the draft report, a Texas prosecutor told Justice Department officials in 2018 that due to the focus on detaining and prosecuting migrants, Border Patrol missed more serious criminal cases and "sex offenders were released" as a result.

No jet orders, more 737 MAX cancellations for Boeing as crises drag on

DON'T CRY FOR BOEING THEY ARE ROLLING IN DEFENSE DEPARTMENT WARBUCKS

By Eric M. Johnson 

© Reuters/LINDSEY WASSON FILE PHOTO: 

A Boeing 737 MAX aircraft lands during an evaluation flight in Seattle

(Reuters) - Boeing Co lost another three orders for its grounded 737 MAX jetliner in September, and delivered 11 total aircraft to customers, less than half the number from the same month a year ago, company data showed on Tuesday.

The closely watched monthly snapshot also shows that quality flaws on the 787 Dreamliner continue to hamper efforts to develop an alternative cash cow to the 737 MAX, grounded after two fatal crashes in 2018 and 2019.As Boeing works to win regulatory approval, potentially early next month, to fly the 737 MAX again in the United States, the coronavirus pandemic continues to hurt demand for jets from both Boeing and European rival Airbus .

Boeing said it lost orders for two 737 MAX jets from leasing company BOC Aviation and another jet from an unidentified customer in September.

For 2020 through September, the number of MAX orders canceled, or removed from Boeing's official backlog when it applies stricter accounting standards, stood at 1,006 aircraft.

Canceled MAX orders, including those where buyers converted one type of jet to a different model, was 436 jets - and 448 for all jets across Boeing's portfolio, Boeing said.

On the delivery side, Boeing handed to airline customers 10 twin-aisle jets in September, down from 25 a year earlier and 12 in August.

That brings total deliveries to 98 for the first nine months of 2020, down from 301 aircraft for the same period a year ago.

Deliveries are a closely watched metric for investors since airlines hand over the bulk of the money for an order when they pick up their planes at Boeing.The September delivery tally included one P-8 maritime patrol aircraft, and three freighters: one 747 to United Parcel Service , one 767 to FedEx Corp and one 777 to Lufthansa Cargo, Boeing said. It also included seven 787 Dreamliner jets: one for leasing company AerCap Holdings , three for United Airlines , two for Turkish Airlines and one 787-10 to Taiwan's EVA Air, the planemaker said. Boeing will face largest inventory of built new aircraft in its 104-year history, as "the number of cancellations is increasing literally by every week," Air Lease Corp Executive Chairman Steven Udvar-Házy said on an Aviation Week podcast on Tuesday.

"Boeing has to make some tough decisions by the end of the year on how to deal with this," Udvar-Házy said.

(Reporting by Eric M. Johnson in Seattle; Additional reporting by Allison Lampert in Montreal and Tracy Rucinski in Chicago; Editing by Matthew Lewis and David Gregorio)

 TRANSITIONING FROM CAPITALISM TO SOCIALISM

Why companies need to make sustainability a priority and treat it like the next stage of digital transformation

insider@insider.com (Junta Nakai, Databricks)


Why companies need to make sustainability a priority and treat it like the next stage of digital transformation

© Junta Nakai Junta Nakai is the global industry leader for financial services at Databricks

Junta Nakai is the global industry leader for financial services at Databricks, a big data and AI company valued at $6.2 billion.

In this op-ed, Nakai details the benefits of companies undergoing a sustainable transformation that will allow for a more future-proof business model to be built. 

Digital transformation has become a major focus for CEOs over the last decade. Defined as the adoption of technology to replace manual processes, digital transformation promised to fundamentally change how businesses delivered value to customers.

But for years, digital transformation was more hype than reality, and the vast majority of companies failed to successfully 'transform' their businesses. As recently as October 2018, a McKinsey study found less than 30% of companies had succeeded in digitally transforming their businesses.

One good thing about 2020 is that this year is shaping up to be a transformative one for digital transformation. The pandemic and the resulting economic volatility has accelerated the adoption of the various technologies that are foundational to driving transformation, especially with respect to cloud adoption.

At the beginning of 2020, a KPMG study found 67% of CEOs expressed concern about migrating all of their business to the cloud. Now, that hesitation has nearly vanished. Changing consumer behaviors, work from home, and volatile economic conditions necessitate a new generation of digital solutions for customers and employees alike.

While digital transformation finally seems to be transitioning from buzzword to reality for many corporations today, CEOs must start preparing for the next big transformation on the horizon — a kind of transformation that may require an even more fundamental reorganization and rethinking of what it means to be a business: sustainable transformation.
Stakeholder capitalism

Sustainable transformation goes hand in hand with stakeholder capitalism, an idea that has gone from fringe to mainstream over the last few years, with prominent supporters such as Marc Benioff, CEO of Salesforce.

Stakeholder capitalism is the idea that companies should serve the interests of all stakeholders, not just shareholders. While simple in principle, it is quite a departure from the kind of capitalism that has prevailed in the post-war era. Stakeholder capitalism at its core is about sustainability.

The long-term viability of a corporation depends not just on maximizing profits for shareholders, but making sure the interests of consumers, employees, and the environment are maximized as well.

While results so far have been mixed, proponents believe stakeholder capitalism is good business. They believe companies can generate sustainable profits while simultaneously practicing a 'kinder form of capitalism' and avoiding risks that may pose existential threats to their businesses.

For example, consider a mining company harvesting materials underground on an island. If the company solely focuses on maximizing short-term profits by digging in the most efficient manner possible, they will soon run out of minerals to extract.

After the last ton of earth is extracted, there is no more source of profits. The land is bare. The negative externalities of the digging are severe for inhabitants and for the environment. So after maximizing short-term profits, there is no more business for the mining company and all stakeholders are worse off.

Stakeholder capitalism is about thinking about the broader constituents of a corporation, not just its equity shareholders, in making decisions. The idea is that by taking a wider range of stakeholders into consideration, companies become more viable over the long run.

It impacts duration as companies plan for the next quarter century, not just the next quarter. It impacts actions, as companies think through second and third derivative consequences of their activities.

Going back to the mining example, without digging sustainably, the company will run out of fertile mines or productive miners. Without considering the environment, residents and employees alike will be left with an uninhabitable land. Without engaging community groups, archaeologically significant sites may be accidentally destroyed and elicit negative feedback from customers, regulators, and the media.

Beyond the negative headlines, doing such a thing will likely have long-term impacts on operations as mining businesses are fundamentally dependent on local government licenses. While destroying historically important sites for profit may seem extreme, it isn't. A mining company was recently accused of doing just that after failing to engage all stakeholders. The CEO resigned as a result.
Digital transformation is a necessary condition for sustainable transformation

If you distill to the core what digital transformation was about, it was about efficiency and agility. Despite the challenges associated with moving from a legacy technology stack to a digital one, it still fits neatly into a narrow paradigm of profit maximization.

Sustainable transformation builds on top of efficiency and agility by also mandating operational changes, organizational realignment, and expanding the dimensions of strategic planning. Simply put, the challenge for CEOs is that sustainable transformation is harder than digital transformation because it is a departure in terms of both mindset and prioritization.

The good news is that the foundational building blocks of digital transformation (cloud, big data, open source, and AI) are also the critical components necessary for building a more sustainable business.

However, while businesses were given a decade to undergo their digital transformations, CEOs do not have the same luxury for sustainable transformation.

Recent events have shown that taking a comprehensive, stakeholder-driven approach to your business is a 'must have', not a 'nice to have.'

For example, the CEO of Lululemon recently told Fortune CEO Alan Murray that the company had to shut more stores in the US due to climate issues (fires and hurricanes) than they did for Covid-19. The systemic risks associated with climate change, geopolitical risks, and shifting consumer/employee expectations will require transformation on a much shorter timeline.
Sustainable transformation requires rethinking and reorganization

Consider a bank that makes housing loans.

Let's say that the bank holds onto the loans until maturity. Today, the mortgage underwriting and risk management process relies on data tools and human processes that digital transformation enabled. The underwriters analyze data about the customer (credit score, income history, etc) as well as basic data about the home itself (single family home, value of nearby homes, etc) to make decisions.

But going forward, this paradigm is likely not robust enough. Simply put, a lot of things can change during a typical 30-year duration of a fixed-housing loan (rising sea levels, changing weather patterns, wildfires, etc).

For this bank to remain viable and to manage risks effectively, it must bring sustainability to the core of its operations.

Sustainable transformation happens when the bank leverages the tech infrastructure gained from digital transformation to convert millions of addresses tied to mortgages into geo coordinates. The bank then merges the latitude and longitudes with topographical information at scale to index how many feet above sea level each home is. Finally, the bank runs billions of simulations on how changing weather patterns (from rising sea levels to hurricanes to wildfires) impacts the default probabilities or the underlying collateral values of those loans.

Sustainable transformation is when underlying mortgage risk no longer just about credit scores or income levels. It requires new ways of thinking and processes. It changes the mindset and skill sets required for an underwriter to make better decisions. It's not about just short-term profits, but about building a more sustainable and viable business model so that the bank can continue to underwrite profitable mortgage loans into the future.
Conclusion

Digital transformation was about efficiency and agility. Sustainable transformation adds duration and action to the matrix.

It is about thinking through the multi-dimensional impacts of a business decision and having the technological tools to analyze and act on them. It's about building a future-proof business model.

CEOs can take comfort in knowing that digital transformation has created the building blocks for sustainable transformation. The on-going efforts of the last decade enable it when paired with the right human capital, priorities, and data tools.

But time is not on their side. Consumer expectations, shifting environmental patterns and investor demand will necessitate that business leaders move quickly. Sustainable transformation is the next big thing, but the amount of time afforded to companies to achieve it will not be as large.

Junta Nakai is the global industry leader for financial services at Databricks. In his capacity, he is responsible for driving the world wide adoption of the Unified Data Analytics Platform across Capital Markets, Banking/Payments, Insurers and Data Providers. Prior to joining Databricks, Junta spent 14 years at Goldman Sachs, where he most recently served as the Head of Asia Pacific Sales for the Americas in the Equities Division.

Read the original article on Business Insider

Global economy's recovery hinges on stimulus, virus battle, officials say

By David Lawder and Jan Strupczewski 

© Reuters/FLORENCE LO IMF Managing Director Kristalina Georgieva speaks at a news conference following the "1+6" Roundtable meeting at the Diaoyutai state guesthouse in Beijing

WASHINGTON/BRUSSELS (Reuters) - Global finance leaders on Tuesday said the world economy had escaped a coronavirus-triggered collapse so far, but warned that failure to conquer the pandemic, maintain stimulus and tackle mounting debt among poor nations could crush a fragile recovery.

At the start of the annual meetings of the International Monetary Fund and World Bank, the IMF issued slightly improved growth forecasts spurred by unexpectedly stronger rebounds from coronavirus lockdowns in the wealthiest countries and China.

The IMF said it now expected global gross domestic product to shrink 4.4% in 2020, compared to the 5.2% contraction it predicted in June, when business closures were at their peak. Some $12 trillion in stimulus supplied largely by advanced economies limited the damage, but poor countries and other emerging market economies faced a worsening picture, the global lender said.

"The story is less dire than we thought three months ago, but dire nonetheless," IMF Managing Director Kristalina Georgieva said during a panel discussion that was held virtually.

Georgieva said governments needed to stay focused on their healthcare responses to the coronavirus and must not withdraw stimulus prematurely.

"If we cut these lifelines that have been extended to families and businesses before we are out of the health crisis, this could be catastrophic in terms of bankruptcies, unemployment and undoing all that has been done so far," she added.Underscoring concerns that it could take longer to develop promised treatments for the virus, U.S. drug companies Eli Lilly and Johnson & Johnson said they were pausing clinical trials of an antibody treatment and vaccine, respectively, over safety concerns.

The Group of 20 major economies, in a draft communique seen by Reuters, said the outlook was "less negative" due to the positive impacts from actions already taken, but the recovery will be "uneven, highly uncertain and subject to elevated downside risk."

"We will sustain and strengthen as necessary our policy response, considering the different stages of the crisis, to secure a stable and sustainable recovery," G20 finance ministers and central bank governors said in the draft ahead of a meeting on Wednesday.

DEBT FREEZE EXTENDED

The draft also said the G20 will agree to extend a freeze on the servicing of official bilateral debt for poor countries for another six months beyond the end of this year.

That is well short of the year-long extension sought by the IMF, the World Bank and many emerging market nations, but the G20 agreed to review the debt situation in April to determine whether another six-month extension would be warranted.

The freeze aims to free up billions of dollars that poor countries can divert to their pandemic health and economic responses.

Some emerging market leaders said more needed to be done to avert defaults in fragile economies from Africa to Latin America.

Kenneth Ofori-Atta, Ghana's finance minister and the chairman of the Group of 24 developing nations, said stronger participation from private-sector creditors, who have so far shunned debt suspensions, was required for efforts that include restructurings of emerging market debt.

"It's going to take a very synchronized and coordinated effort by all parties so we don't get into a world of cascading defaults," Ofori-Atta said at a G24 news conference. "I think all of this could be avoided if we can begin real and honest discussions as to the cash-flows capacity of all of these countries."

(Reporting by David Lawder and Andrea Shalal in Washington, Jan Strupczewski in Brussels, Leigh Thomas in Paris and Tom Arnold in London; Writing by David Lawder; Editing by Paul Simao)

CANADA
Pandemic exposes need for basic-income program, expert says


OTTAWA — A leading Canadian expert on government-funded basic incomes says the oft-debated idea could have averted much of the economic effects of COVID-19.

© Provided by The Canadian Press

Evelyn Forget says a basic-income program would have provided help to hard-hit Canadians automatically instead of forcing governments to set up emergency aid in a rush.

Basic income is essentially a no-strings attached benefit governments provide to citizens that sets a financial floor for individuals and families.

Advocates of such a program have pointed to the Canada Emergency Response Benefit as an example of how the country could make basic income a reality.

But Forget says the CERB, for all its innovation, wasn't a basic-income program, and neither is the replacement known as the Canada Recovery Benefit.

"We're still thinking about this in terms of a patchwork — different programs for different groups of people — and as soon as you start doing that, you start creating gaps that people fall through," Forget said in an interview late last week.

"One of the opportunities with a basic income is to think a little bit more holistically about how we can provide income support across the board, recognizing that people have different needs."

The University of Manitoba professor lays out her pandemic-related analysis in an update to her book, "Basic Income for Canadians," released Tuesday, which also argues such a program is neither a silver bullet nor a replacement for social programs like health care.

A basic income would act as an automatic stabilizer, meaning it would expand payments when incomes crash and then roll back when things rebounded. Those who needed ongoing support would get it.

The cost of such a program would be based on any number decisions, including the value of benefits and how steeply governments clawed payments as earnings rose, she writes.

The parliamentary budget office estimated a six-month basic income program this year could cost between $47.5-billion and $98.1-billion. Some of that could be covered by redirecting funding from existing anti-poverty programs, and the price would be further offset by what the budget office said was $15 billion in anti-poverty tax measures that could be repealed.

Add in provincial benefits that could also be replaced by one benefit and Forget suggests the country could afford a permanent program.

The most recent figures for the CERB show that as of Oct. 4, just after it started winding down, the program had paid out more than $81.6 billion since March to 8.9 million people.

Federal officials scrambled to set up the program when some three million people lost their jobs in March and April and it became clear the decades-old employment insurance program wasn't up to meeting the needs created by a historic crash in the labour market.

"That greater awareness of the limitations of the programs we had led many of us to start thinking about ideas that used to be thought of as far-out fringe ideas, and basic income I put into that category for a lot of people," Forget said.

"Now, maybe it's an opportunity to think about basic income in the context of a lot of other programs and ideas about how we can build back better, if I can use the cliché."

Forget writes that a basic income program wouldn't rely on governments to quickly make good decisions during economic upheaval and it would take economic burdens off the shoulders of workers who have little control over events.

The country has so far recouped all but 720,000 of the jobs lost earlier this year, Statistics Canada reported Friday.

The jobs report noted the proportion of Canadians receiving federal income support fell to 13.5 per cent from 16.1 per cent between August and September, but also noted that 42 per cent of CERB recipients said they lived in households having difficulty paying the bills, an increase of 4.3 per cent from August.

Prime Minister Justin Trudeau noted on Tuesday that the need hasn't abated. Some 240,000 people asked for the new recovery benefit on Monday when applications opened.

This report by The Canadian Press was first published Oct. 13, 2020.

Jordan Press, The Canadian Press

CANADA 

Rich get richer, poor poorer: Two reports say pandemic intensifying inequalities

A pair of new reports say Canada is undergoing a "K-shaped recovery," with working-class Canadians going deeper into debt while those at the top prosper.

© Provided by The Canadian Press

The two reports released Tuesday said the uneven recovery is amplifying economic disparities that existed pre-pandemic and widening the gap between the haves and have-nots.

With the second wave of COVID-19 intensifying across the country, both reports suggest the divide between the rich and poor in Canada could worsen.

The affordability index by BDO Canada Ltd. estimates that nearly two in five Canadians said their personal finances deteriorated during the first wave, while one in five Canadians are better off,

The index, based on polling data by the Angus Reid Group, found that respondents who were worse off are nearly four times more likely to say their debt load is overwhelming.

Meanwhile, the latest MNP Ltd. consumer debt index said the pandemic recession is putting a spotlight on inequalities between the well-off and those dealing with job losses, debt, eviction and food insecurity.

Grant Bazian, president of MNP, said his firm's index "highlights the divergent experiences of Canadians during COVID."

"While some are fortunate enough to be able to continue working in their present jobs, but from home, others continue to struggle with financial uncertainty and not knowing whether their job will still be around after the pandemic,” Bazian said in a statement.

The MNP index, based on polling data by Ipsos, found that over half of the millennials surveyed said they regret the amount of debt they’ve taken on in life.

Many households reported being just hundreds of dollars away from bankruptcy, a sign they're living paycheque to paycheque.

MNP said 44 per cent of households earning $40,000 to $60,000 are $200 or less away from insolvency, including 22 per cent who are already insolvent.

Both reports underscore a yawning chasm between Canadians who are losing ground and those whose financial situation has improved during the pandemic or hasn't changed.

Doug Jones, president of BDO Debt Solutions, said the firm's affordability index shows Canadians are struggling more and more with the cost of living.

He said COVID-19 has prompted Canadians to cut back on spending and save more, but that people are also finding it more difficult to keep up with debt.

"These factors will likely put long-term stress on families and the economy," Jones said in a statement. "Now is the time to keep a close eye on household budgets and avoid debt whenever possible."

The survey found that two-thirds of Canadians with debt cannot keep up with their debt payments or have had to make sacrifices in their budgeting.

While this typically involves foregoing non-essential “nice-to-have” purchases like entertainment or recreation, the survey found that nearly a quarter of Canadians forego essentials like food or clothing.

The survey also showed that residents of British Columbia, Alberta and Ontario were more likely to have added debt during the pandemic.

Meanwhile, Canadians who are saving more tend to be young, university educated and earn more than $100,000, the survey found.

This cohort tended to shift spending away from non-essentials such as restaurants and travel into savings — reducing concerns about debt.

The Angus Reid online survey, in partnership with BDO Canada, included 2,047 Canadian adults surveyed between Sept. 1 and Sept. 8.

The Ipsos online poll, conducted for MNP between Sept. 1 and Sept. 3, included 2,001 Canadians.

According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.

This report by The Canadian Press was first published Oct. 13, 2020.

Brett Bundale, The Canadian Press