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Economic News from Canada

4 March 2020 - The Bank of Canada has reduced its interest rates from 1.75 to 1.25 in order to soften the economic effects of the COVID-19 outbreak. This decision was made after the Organization for Economic Co-operation and Development (OECD)  announced that coordinated government action was needed to prevent an extreme scenario. 

The US Federal bank made a decision to cut interest rates a day before the Bank of Canada. Other banks in Canada followed the lead of the Bank of Canada and cut their interest rates too.  The spread of the virus disrupted supply chains and reduced business activity in some regions of Canada, which hurt the prices of commodities and also reduced the value of the Canadian dollar. The cutting of interest rates is expected to reduce the economic impact of the COVID-19 virus. What is your current expenditure on goods and services?

25 February 2020 Income inequality in Canada has been on a decline. Minimum wage hikes and policies created to help low-income earners have been given credit for this success. Reports suggest that in 2018, after-tax incomes for the bottom 40% earners grew by 2.5%, while those for families and people living alone remained unchanged. The bottom 40% of earners have seen a 10.4% increase in their after-income taxes since 2012, as compared to the 6.5% growth experienced by other Canadians in the same time period. This reduction in income inequality is attributed to various actions. Ontario, in 2018, increased its minimum wage from CAD11.60 to CAD14 an hour. The Canada Child Benefit policy, which reduces taxation of Canadian families with children, is also thought to have played a major role. These two, combined with healthy labour market growth, have thought to have played an important role in shrinking income inequality. Learn more about jobs and salaries in Canada!

19 February 2020 Canada saw its inflation rate increase by 2.4% in January 2020. This is an increase of 0.2 percentage points from December's level. An increase in gasoline prices, tomato prices and the prices of clothes contributed to this increase in cost of living.  The price of gasoline was 11% higher at the start of January 2020 as compared to 2019 levels. However, the outbreak of the novel coronavirus (COVID-19) in China has led to the price of gasoline dropping by 12% on average in February 2020. The increase in the prices of fresh vegetables also played a role in the rise in inflation rate. The price of tomatoes increased by 10.8% as compared to the prices in 2019. The price of new clothes increased by 3.9% till the end of January 2020, the highest rate of increase since 1991.  How much do you pay for the items mentioned in the article?

4 February 2020 Homeowners in Toronto, Canada will have to earn an average amount of CAD 94,000 pre-tax to get by comfortably, according to studies. Those who own a house, as well as a car, need to earn at least CAD 68,576. Those who use public transport will have to earn a little less, CAD 64,988; CAD 88,000 pre-tax. The study took into consideration spending on transport, housing, food, phone, internet, entertainment, health and fitness. A separate study by Scotiabank found that people in Canada (especially those between the ages of 18-35) spent at least two hours a day worrying about finances. Employees, on a monthly average, tend to spend CAD 4,223 on homeowner housing, CAD 533 on food and CAD 155 on cellphone and internet services.  How much do you spend on the above-mentioned goods and services?

23 January 2020 Studies report that despite having the same education and experience, men in Canada earn significantly higher salaries than their female counterparts. It was found that men on average earned 12% more than women one year after graduating. This gap increases to 25% five years after post-graduation. The study found that men with a PhD earned an average salary of CAD 101,700 while women with the same degree earned approximately CAD 85,500. Findings were similar for those with a Bachelors’ degree; women earned nearly CAD 10,000 less than their male counterparts five years after graduating. Andrea Gunraj, vice-president of the Canadian Women’s Foundation, explained this as the “pink ghetto” phenomenon. She explains it as a phenomenon that occurs when more women enter a certain field, it is then seen as a women’s sector which leads to the pay decreasing. Learn more about the Gender Wage Gap

22 January 2020 A report from Statistics Canada states Canada’s inflation rate in 2019 held steady at 2.2%. Although the economy witnessed higher inflation rates in energy prices, it was balanced out by a slower rise in the prices of food and cars. The report also stated that the consumer inflation rate in 2019 was 1.9%, lower than the rate of 2.3% in 2018. Energy prices in December 2019 increased 5.5% as compared to the price in December 2018. Mortgage interest rates increased by 7.6% in 2019, which primarily drove the inflation rate. This was balanced out by the price of gasoline falling by 6.1% at the same time. The prices of vegetables increased by 12.7% in 2019.  How much do you pay for the commodities mentioned in the article?

10 January 2020 - The Canadian economy added 35,000 new jobs in the month of December 2019. Economists call this an improvement after the economy lost nearly 71,000 jobs in the month of November 2019. The increase in December’s numbers means that the Canadian job market grew by 1.7% in 2019, which is an improvement on the 2018 rate of 0.9%. Based on the numbers for November, economists had expected an addition of 25,000 jobs. However, the number of jobs added exceeded their expectations. The provinces of Ontario and Quebec generated the largest number of jobs (25,000 and 21,000 respectively), which were offset by a few job losses in other provinces. The increase in jobs in December reduced the jobless rate of Canada by three points to 5.6%. Learn more about jobs and salaries in Canada

6 January 2020 - A report published by the Royal Bank of Canada (RBC) states that climate change and an ageing population would be two of the biggest challenges the Canadian economy would have to face in the coming decade. The proportion of working-age Canadians to youth and senior citizens is expected to fall from 2.3 in 2010 to 1.7 in 2030. This may lead to an increase in the cost of healthcare and eldercare. With regards to climate change, Canada’s climate warmed by 1.7 degrees Celsius between 1948 and 2016, twice the global rate. The report states that Canada will have to invest more in its efforts to abate pollution. It also predicts a reduction in the use of fossil fuels and a shift towards more renewable sources of energy. It estimates that the use of solar and wind energy will increase by 50% in the next decade.  What are your current expenses on healthcare and fuel?

17 December 2019 - Canadian Health Minister Ted Flemming announced a professional reclassification for paramedics, which will recognise the complexities and specialisations in this line of work. This change could move paramedics to a new union and higher pay. The job of a paramedic will be reclassified as one of a medical-science professional, which recognizes the specialised work they do and the high educational training they receive to be applicable for the job. The change  will be applicable April 2020. How much do people in the medical field get paid?

7 December 2019Canada’s unemployment rate rose to 5.9% in December 2019, the highest it has faced since August 2018. Canada lost over 71,000 jobs in the last month, which led to the rise in unemployment rates. The manufacturing and services sectors, in particular, saw a high number of losses in jobs. This rate of unemployment has gone against the expectations of economists, who had expected a gain of 10,000 jobs, and for the unemployment rate to hold steady at 5.5%. The rise in unemployment has affected both part-time as well as full-time workers. Experts hope that the Bank of Canada will reduce its interest rates and loosen its monetary policy to combat the current economic slowdown.  Jobs and Salary

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