Canada to reveal huge COVID-19 deficit, make ‘down payment’ on national childcare By Reuters



© Reuters. FILE PHOTO: Canada’s Prime Minister Justin Trudeau attends a news conference in Ottawa

By Julie Gordon and Steve Scherer

OTTAWA (Reuters) – Canada next week will reveal the breadth of the emergency spending it has made during the pandemic and lay the groundwork for future stimulus and social measures, like a national childcare program, government sources told Reuters.

Canada did not release a budget for this fiscal year, which began in April, because of the economic uncertainty created by COVID-19, but in July projected a C$343.2 billion ($263.8 billion) deficit, the largest since World War II.

The new fiscal document, dubbed the Fall Economic Statement, will be released on Monday and will include several scenarios for future spending and growth, and an update on this year’s deficit, which one source said would be greater than the July estimate.

Much of the emphasis in Finance Minister Chrystia Freeland’s first fiscal planning document will be focused on support during the current surge in coronavirus cases, including possible new measures. But there will also be a “down payment” on a national childcare plan announced in September, two government sources said.

“It won’t be the full program,” one of the sources said of the daycare plan. “It will be more a case of laying the groundwork rather than announcing billions in spending.”

There will also be “initial elements” of Liberal Prime Minister Justin Trudeau’s ambitious plans to fight climate change, one source said without providing any details.

“I think most of what we’ll see in Monday’s update will have a pandemic bend,” said Colin Guldimann, an economist with RBC Economics.

Freeland, who became finance minister in August, said last month that the fiscal update would include targeted aid to sectors hard-hit by the coronavirus pandemic.

Five economists said the deficit would most likely be higher than projected in July, with two putting it in a range from C$370 billion to C$425 billion.

Canada’s pandemic response has created the highest deficit-to-GDP ratio amid major industrialized countries for the year, according to an IMF report, but its net debt to GDP ratio remains the lowest in the G7.

“We had more fiscal room than most and we’re using it,” said Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Economics.

While economists do not expect the government to introduce a new “fiscal anchor” on Monday, Freeland has previously said there is no “blank check” for spending.

The government document will expand upon the idea of “fiscal guardrails” and plot what the government considers a sustainable path forward by focusing investments on measures that are most likely to spur growth, two sources said.

With emergency aid still the key focus, much of the bigger stimulus spending is expected to come in the 2021/22 budget, likely in March or April, which potentially could come out at the same time as a national vaccine campaign.

One thing not expected on Monday is an airline aid package, one source said.

“Those negotiations need to keep going… (the airlines) need to open up their books,” said the source.





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EU delays rules on carbon market permit handouts By Reuters


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© Reuters. European Union flags flutter outside the European Commission headquarters in Brussels

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By Kate Abnett

BRUSSELS (Reuters) – The European Commission will confirm in February rules to calculate industries’ free carbon permits over the next five years, it said on Friday, pushing back a plan to finish the regulations this year.

The EU’s carbon market forces polluters to buy permits to cover their emissions, but gives some free permits to industry to deter companies from relocating to outside of Europe to avoid carbon costs.

Draft versions of the rules, seen by Reuters, suggest most industries would see free credits cut by the highest possible rate over the next five years, as the EU seeks to curb pollution and meet climate goals. That could cost the biggest polluters millions of euros.

The Commission said on Friday it would finalise in February the “benchmarks” to determine industries’ free permits over the 2021-2025 period.

The Commission said it was still verifying data from the 11,000 factories and power plants covered by the carbon market, which will help determine the rules.

Once that is completed this year, countries will inform the EU how many free permits they intend to give their industries.

If countries plan to hand out too many free permits, the Commission could apply a “correction” mechanism, curbing all factories’ free permits by the same amount, before approving the final amount in the second quarter of 2021.

“The distribution of free allowances in 2021 will take place after this decision is adopted,” the Commission said in a statement.

Companies will be required to surrender permits to the EU in April 2022, to cover the emissions they produced in 2021.

 

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Brexit negotiations restart in person as clock ticks down By Reuters


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© Reuters. EU chief Brexit negotiator Barnier is seen in London

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LONDON (Reuters) – Face-to-face negotiations between Britain and the European Union over a trade deal restarted on Saturday, in a last-ditch attempt to find agreement with just five weeks to go before their current relationship ends.

EU negotiator Michel Barnier arrived for talks in London on Saturday morning. He said on Friday night that he was “very happy” to be back in the city and would keep working with “patience and determination”.

Barnier and Britain’s chief negotiator David Frost are working to secure a deal before the UK’s transition period with the EU ends on Dec. 31. Both sides are calling for the other to compromise on the three main issues of contention – fishing, state aid and how to resolve any future disputes.

Britain left the bloc on Jan. 31 this year and a “no-deal” final exit would snarl borders, spook financial markets and disrupt delicate supply chains that stretch across Europe and beyond — just as the world grapples with the vast economic cost of the COVID-19 outbreak.

British Prime Minister Boris Johnson spoke to Irish Taoiseach Micheal Martin on Friday evening. Johnson underlined his commitment to reaching a deal that respects the sovereignty of the UK, according to a UK statement.

On the major sticking point of fishing, some media reports on Friday suggested that Britain had rejected an EU proposal on the value of fish quota that European fleets catch in British waters that are due to be restored to the UK.

The Telegraph newspaper reported that the EU was set to concede on Brexit fishing rights.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Big banks think new furniture is innovation, but they are wrong By Cointelegraph



Big banks think new furniture is innovation, but they are wrong

When banks finally come to improve their technology experience, they go no deeper than changing the front end. They’ll make a button blue instead of green or create rounded edges on buttons instead of square ones. They think in terms of their interfaces, not the back end. If a bank were to truly innovate its technology, it’d dig deeper into the back end and transform its legacy technical infrastructure, which has been the same for decades. Few today even know how to work on those old programming languages of yesteryear, such as COBOL, so they’re stuck with upgrades that turn the software into a Frankenstein-esque abomination.

The big banks don’t do innovation in house. Big tech conglomerates don’t even innovate. They acquire new ideas, innovations and teams that have done the innovation already. When they want a new, undeveloped technology as part of their internal technology portfolio, they sometimes speak to journalists about it so that they start covering it, which gains interest from the market. And then startups begin working on the problem. They see the opportunity and start raising funds in an attempt to execute, and big tech companies just observe. And then, one or two years later, they acquire the best company in the space and make it a part of their conglomerates.

Roman Potemkin is the founder and CEO of Trastra. Over the past 15 years, he has been known for successfully launching tech-first, user-friendly digital banking products that are currently used by millions of people.