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Canada extends financial aid for millions for two more months
- tomrod 6y agoThis is the right move. This is how you do a V-shaped recovery.
- brianwawok 6y agoWait, don’t we want ^ not V ?
- sfgweilr4f 6y agoSome would argue the economy is actually running O.
- notatoad 6y agoWe already had the crash - the \ side of the V is not negotiable. Our options are \/ or \_
- deleted 6y ago[deleted]
- jussij 6y agoI surely hope this point in time does not turn out to be the best it's ever been.
- trollski 6y agoto the moon!
- gentleman11 6y agoThey are also starting to threaten jail time for people who collect but who aren’t supposed to. They should really just do helicopter money
- toomuchtodo 6y ago> They should really just do helicopter money Central banks should be delegated the authority to issue deposit accounts and debit cards to all citizens, but apparently the world hasn’t ended enough for us to do that yet (which would make helicopter money super simple).
- jariel 6y agoWow, no way. This is way outside the bounds of what central banks do. Remember that 'helicopter money' from central banks is not actually 'free money giveaway' it's just talked about like that. When the Federal Government gives away money like this to citizens, it's more literally free money and it has to come from somewhere: either taxpayers or from debt.
- toomuchtodo 6y agoThe US Federal Reserve is buying individual corporate bonds now (and has already put about $7 trillion [!!!] on its balance sheet). Bank of England is straight up printing pounds, directly financing the deficit, to pay for the U.K. economic support for the COVID response. Remember, fiat is an artificial construct, and we can change the rules and how monetary and fiscal policy works at any time. It’s just a complex spreadsheet and cell formulas with enormous impact. When a government gives away money, it’s borrowed or taxpayer money. When a central bank does it, it devalues the currency (behold the value of a reserve currency!). Regardless of the hangover, you still do it if it’s necessary. I digress; central banks can do whatever we need them to as a society. It’s their job to responsibly pull the macroeconomic levers to meet their mandates.
- jariel 6y ago"central banks can do whatever we need them to as a society." Not really, Central Banks are not part of the government and they can't do things outside the very narrow scope of authority we give them. Especially the Fed, which is a privately owned entity run by the banks themselves. The Fed is the last place we want to manage social security programs. That job is for the government. Now, it just so happens as you point out they have some magic levers such as the ability to take on stuff onto their balance sheet, but using that outside the scope of their policy is another thing altogether. So yes, we can make 'money, financing and banking' do what we want, but if we do - it will absolutely not be 'The Central Bank' - it will be some other new kind of entity, designed differently, with different power structures and different objectives.
- cycop 6y agoThis is how you do a W-shaped recovery , the economic fallout of giving money away will have a secondary recession effect. Can't just print money and give it to your citizens for an extended time, otherwise all economic theory should just be tossed out the window.
- WrtCdEvrydy 6y agoMoney printer goes brrr - USA.
- designium 6y agoBeing in Canada, I think that helped a lot of my friends who had expensive rent to pay in Downtown Toronto. But, it's not clear how the financial aid will help the small businesses; I can see that a lot of the restaurant in Downtown are not going to recover and those people who eventually weaned off from the government support, won't have a job to go back. Expecting that some other business will fill those gaps won't happen suddenly.
- tomrod 6y agoThe people they employ will more likely be available?
- designium 6y agoNot sure if I understood your comment, but for sure the employees once having nowhere to go back will be more "available" in the market just like many others in similar situation.
- flyingcroissant 6y agoWhat about the support available for businesses (ie. https://www.canada.ca/en/department-finance/economic-response-plan.html#businesses https://www.canada.ca/en/department-finance/economic-respons...)?
- coopsmgoops 6y agoInitially at least it was mostly loans but I know a lot of owners would rather closer now than close later and have a loan to pay off
- designium 6y agoThere are support for business to pay up to 75% and for small businesses a $40K loan with $10K forgivable. At least in Downtown Toronto, those support won't do much specially because the rent is super expensive. Expensive in the range of $5000 and up for a small restaurant in downtown area. You can also find news from BC, where the rent relief for landlords are not being adopted because landlords are not willing to register for the support and the business tenants are not getting support because of that. News don't say why that is happening but it's something interesting to think about.
- ww520 6y agoUBI somehow is realized after a disaster. Interesting to see what economic impact will be in one or two years.
- identity0 6y agoThe CERB is all the downsides and expenses of UBI without any of the benefits---no incentive to find work, bureaucracy hell, Canada has to worry about and invesigate fraud, doesn't help poor workers working minimum wage jobs (which are almost all essential)
- notatoad 6y ago>bureaucracy hell Not sure how you figure this. It's a pretty painless application process and everybody is getting approved.
- tenpies 6y agoYes, they've made it highly abusable and pretended this was a "feature", then backloaded all the bureaucracy into the Canadian Revenue Agency (CRA) who will have to determine how many millions of people received aid when they didn't qualify. It would honestly be better if they just said "free money for everyone, just click here" because the CRA will now have to spend the next decade trying to collect fraudulent benefits. The cost of the entire program would probably be 25% higher if you factor in what this will cost to audit and attempt to collect from fraudulent claimants in the future, plus the lawsuits from tax payers because Canadian leaders literally instructed people to just claim it even if they didn't qualify.
- jeromegv 6y agoNo Canadian political leaders instructed people to claim it when they don't qualify.
- lwansbrough 6y agoAh yes, total bureaucratic hell having to spend a total of 30 seconds to sign into the CERB site and confirm your eligibility, then receive payment directly into your bank account in 2 days.
- runawaybottle 6y agoPertinent satire: https://youtu.be/wz-PtEJEaqY https://youtu.be/wz-PtEJEaqY You are subsidizing landlords by giving this stimulus. It’s not that bottom up.
- deleted 6y ago[deleted]
- toomuchtodo 6y agoWhy would landlords take a haircut for a pandemic? In most cases, they have mortgages to pay as well. If you want to cut out the middleman, Canada could’ve paid mortgage bondholders directly through mortgage servicers on behalf of tenants and landlords.
- cheez 6y agoEconomic crises are a way to redistribute wealth from spenders to savers. This prevents that natural function.
- designium 6y agoOnly issue in your rationale is that the savers are usually the ones who own the "Capital". I'm not in the circle but my boss social economic strata, his type of people are buying Ferraris during Covid. Not sure how can an average household can afford to spend $250K for a car like that now. But there are MANY of those in Canada doing it NOW. Not trying to insinuate anything here, but I'm giving you some data points to show that it's not just a matter of moving money from spenders to savers, but there are other things involved.
- cheez 6y agoMy point is that those people are protected from economic crisis while the rest are not.
- phone8675309 6y ago
- kitcar 6y agoA little more context: What's not mentioned in this article is that the Liberal party, currently in power, has a minority government, and therefore needs the support of either the NDP (left of the Liberal Party) or the Conservatives (right of Liberal Party) to get things done. NDP was pushing for extending the financial aid, which is likely a significant political reason why the liberals chose to extend CERB (in addition to not wanting a massive number of evictions to occur all at once...). Here is some more info on the give-and-take going on: https://www.cbc.ca/news/politics/cerb-bill-impasse-1.5605937 https://www.cbc.ca/news/politics/cerb-bill-impasse-1.5605937
- designium 6y agoYour point is correct. There is no way the Liberal gov wants to get a fight at this point with both Conservatives and NDPs.
- tonyarkles 6y agoAs much as it pains me to say, the liberals are in a relatively strong minority position right now. If there were a non-confidence vote, they would likely come back in a stronger position. The NDP is in about the same position they were before, but the conservatives are in a pretty bad spot. Their leader is stepping down, but no replacement has been chosen yet.
- tempestn 6y agoYeah, the Liberals have gained a ton of support from their handling of the virus. In a normal situation they'd call an election at this point to gain a majority, but that would be an incredibly bad look in the middle of a pandemic, obviously. If the other parties took down the government and forced an election though, most of the blame would fall on them, and I'd expect the Liberals to clean up.
- simlevesque 6y ago> needs the support of either the NDP (left of the Liberal Party) or the Conservatives (right of Liberal Party) to get things done That's simply not true. They can do anything they want without the agreement of any of them. Check the seats, you missed some.
- lux 6y agoAs a Canadian business owner, we're super lucky to be in Canada right now, and for the supports that have been put into place for people and businesses alike. Our company was luckily not hit badly enough to qualify for the 75% support on salaries (we did get a line of credit!), but I know several others who needed it and got the support they needed which is great! It's not perfect - rent supports for storefronts, restaurants, bars, etc. could be better, for example - and it won't save everyone or every business, but it's made a difference in many lives and helped us stay home and quarantine more effectively without so much worry about making ends meet. I just hope more Canadians remember it was the NDP fighting for a lot of these supports come election time :)
- alexashka 6y agoIn the short term, it's great. It really doesn't take much to tell banks to add numbers to people's bank accounts. What it's really doing is subsidizing everybody that works in or is tied to non-essential face-to-face service industry, by everyone else. It's really not even that interesting, other than seeing how easily frazzled people are by the slightest calamity - why is non-essential services taking a vacation for a few months at the expense of everyone else supposed to be a major event with long-lasting consequences? Imagine you have a family and you lose your job. If you have savings for a couple of years, you can take it easy for a while and then go look for a job and find one 6 months later. Was anything other than your ego bruised by the loss of the job? No, not really. Why doesn't this analogy translate to what's happening with covid? I'm guessing because not only have you lost your job, but you owe tens of millions in gambling debts and spent half your waking hours convincing various factions to give you some extra time to come up with the money. That's what the economy looks like to me and I find it difficult to be sympathetic - people need a reality check and get back to living a simpler life with less shit being bought and sold all the time. It is within my lifetime that I've gone from owning 2 t-shirts to 20 and I have no idea why. I can go back to wearing 2 and my life will be the same - I just hope others can see the silver lining in all this and not go back to living frivolously.
- tempestn 6y agoIt's reasonable for individuals to aim for a few months of emergency funds. It's not reasonable to expect main street businesses to have cash on hand to cover many months of near zero revenue. Most small businesses just don't have the margins for that to be viable. If you expect every individual restaurant to be able to weather a period of months when no one goes to restaurants without any kind of assistance, the only restaurants you'll get will be large chains. Much like running government 'like a business', the analogy of running a business 'like a household' only takes you so far. They're fundamentally different things.
- davidg109 6y agoLandlord here. Someone else said it best. We have mortgages to pay too. The province also shut down the possibility to evict in order to pay it (for now). CERB nullifies what would have been an explosive, shitty situation for everyone.
- tonyedgecombe 6y agoWe have mortgages to pay too. Oh you poor things.
- hello_friendos 6y agoLandlords complaining about being unable to evict people during a pandemic really shows how unnecessary landlords are.
- nlitened 6y agoFrom time to time landlords have to go bankrupt after taking too much leverage. If landlord’s mortgage is risk-free, it means that the landlord is leveraged at the expense of people who don’t have home — which is rather unfair economically, and leads to more inequality. Wealthy risk-free landlords get passive income and re-invest it into more leveraged assets, poor people pay taxes to bail-out their landlords.
- davidg109 6y agoI’m not sure where you are going with this. Are you saying CERB shouldn’t exist? For the inequality issue you mention, what solution would you propose? A socialist state?
- usaar333 6y agoThe regional variance in covid infection rates in Canada is high. Covid has always been at a relatively low level in BC, but severe in Quebec. (15x the death rate). One wonders if you'll consequently see very difficult economic recoveries in different provinces.
- peeters 6y ago> Covid has always been at a relatively low level in BC BC was actually the hardest hit early on, but they were quick on their feet and the first to see a real response to curve-flattening changes.
- nickff 6y agoBC is also much younger and healthier than QC; in addition, Western regions of North America are generally doing much better than the Eastern for some reason. It's really difficult to be sure what's going on right now.
- randomdata 6y ago82% of the deaths in Canada have been in long term care homes. These people were not economically productive on their own, so the impact should largely come down to the secondary effects their existence produced.
- taxmoneythrow 6y agoHappy to pay for extended vacations for so many... I personally know several people who refuse to go back to work under the guise of “we don’t feel safe” so that they continue to get this free vacation. The debt hole that’s being dug on this fraud is incredible...
- fatbird 6y agoSo what? Those people aren't hoarding the money, they're circulating it through consumer spending, and they're far, far from a significant minority, let alone a majority of people. Every system has freeloaders. Keeping freeloaders in business during this crisis has more than enough downstream benefits that we really shouldn't care if some lazy assholes get to be moreso for a few months.
- mynameisvlad 6y agoPersonal safety is not something to joke with. Those people might be immunocompromised or otherwise have risk factors that would make Covid a potential death sentence.
- jeromegv 6y agoAh yes, all those workers that just got infected at Home Depot definitely felt safe being at work. Employers are working hard for their safety!
- bregma 6y agoIt's not helping. I still have millennial kids in my home. "But dad if I moved back to my place I'd have to buy my own groceries." sigh
- blaser-waffle 6y agoIf they're residents you have to evict them... but no one said you have to feed them.
- 12bits 6y agoAs someone who works at a university in Alberta who is on furlough, this worry’s me because they will delay recalling us even longer. Since our provincial government is hell bent on destroying any form of non Christian learning institutions. Post secondaries have the covid front and the government cut front. Multiple people have volunteered for buyouts but the schools can’t afford the union mandated abolishment terms, being in education in Alberta right now is a career death sentence. Anyone worried about the debt from this needs to relax the majority of this money goes right back into the economy for food, clothing and shelter, and They’re clearly not relying on it for their families survival, it’s a tough nut to casually pivot elsewhere right now.
- macu 6y agoThe only thing that gets me is that unlike EI, CERB is not taxed up front, so many low-income Canadians claiming it are going to owe taxes on it next year. I would rather it be taxed up front or tax-free for the recipients. People are really going to struggle when it comes back on them. About the original 4-month term (with 2 additional months at 0.15% tax, $12000 works out to $1800 to pay back): "A recipient who earns the maximum benefit of $8,000 will have to repay $1,200 at tax time." https://www.ctvnews.ca/health/coronavirus/don-t-spend-it-all-cerb-recipients-will-owe-income-tax-on-it-next-year-1.4908256 https://www.ctvnews.ca/health/coronavirus/don-t-spend-it-all...
- aledalgrande 6y agoI think it's better to have more cashflow during the pandemic and pay the taxes later. Taxes can also be payed in installments. Obviously, all this doesn't matter if someone is not good at managing cashflow.