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Businesses see higher inflation, wages and job changes, Bank of Canada reports


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OTTAWA — Consumers and businesses expect increases in the cost of living to stay hot over the next year, the Bank of Canada says as part of surveys results that also show people more willing to search for new jobs, and businesses willing to pay more for workers.

The bank’s survey of consumer expectations shows the outlook for inflation over the next year hit a new high in the quarterly survey. Respondents expected inflation to be around 3.7 per cent over the next 12 months.

Still, consumers tell the bank they expect inflation will slow whenever the pandemic ends.

Meanwhile, almost half of businesses surveyed expect the pace of price increases to stay above three per cent over the next two years, fuelled by a combination of supply-chain bottlenecks, bumps in food and energy prices, and actions by the Bank of Canada and federal government to stimulate the economy.

And they also plan to pass on higher costs to consumers.

The Bank of Canada has let inflation run a little hot to help the economy recover from the hole dug by COVID-19, saying the elevated readings are temporary issues that should work themselves out.

“Were they to broaden and be sustained, that would be more of a concern. So to get a sense of if that is happening, we’re certainly looking at measures of expected inflation very closely,” bank governor Tiff Macklem told reporters following meetings in Washington, D.C., with his global counterparts.

The central bank has a scheduled rate announcement on Oct. 27, but has previously said its target overnight rate will stay at 0.25 per cent until the economy is healthy enough to handle a rate increase, which the Bank of Canada expects later next year.

“Despite the increases in business and consumer inflation expectations for the near-term, this report suggests that the Bank of Canada can comfortably continue pushing back against the hawkish pricing for (a) rate hike by markets,” CIBC senior economist Royce Mendes wrote in an analysis of the survey results.

A combination of pent-up demand set to be unleashed — respondents with extra savings said they planned to spend one-third of the funds by the end of 2022 — and the rollback of restrictions helped businesses sentiment grow in the third quarter.

If demand unexpectedly rises, as some experts worry could happen, the bank says “an unusually large portion of firms” say they would have problems handling any surprise spending surge.

The reasons are twofold: Labour shortages and supply-chain issues like shipping delays that firms don’t see abating until the second half of 2022, which the bank noted is longer than previously anticipated.

“If not resolved, these factors could weaken the pace of Canada’s economic recovery,” wrote TD senior economist Sri Thanabalasingam.

“Businesses are not expecting supply chain issues to fade any time soon. Labour shortages could also last for some time, due to mismatches between labour supply and demand. This is likely to lead to higher prices, and firms are recognizing that.”

Businesses are more willing to offer higher wages to attract and retain workers, with the upward pressure on wages expected to persist beyond the next 12 months.

The twin surveys show workers are more willing to retire or leave their jobs to look for new work, with the reported likelihood of leaving a job back to pre-pandemic levels.

Workers told the central bank they’re more likely to quit their jobs in the search for better hours and pay, or a change in industry, which was more often the case in lower-wage sectors hit harder by the pandemic.

This report by The Canadian Press was first published Oct. 18, 2021.

Jordan Press, The Canadian Press

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CFL leaves door open for Argos' quarterback Bethel-Thompson playing in East final

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TORONTO — The CFL has left the door open to McLeod Bethel-Thompson playing in the East Division final Sunday.

The Toronto Argonauts starting quarterback was held out of practice and sent home Friday after attending the Toronto Raptors 97-93 home win over the Milwaukee Bucks on Thursday night.

That violated the CFL’s COVID-19 protocol, which would’ve normally meant Bethel-Thompson having to quarantine for four days and provide two negative tests before being able to resume team activities.

But Toronto hosts the Hamilton Tiger-Cats in the conference final Sunday afternoon at BMO Field.

The CFL announced Friday afternoon Bethel-Thompson will be allowed to play Sunday if he produces negative COVID testing following a 48-hour quarantine at his residence.

Argos Dexter McCoil, Charleston Hughes, Llevi Noel and Jeff Richards also attended the basketball game and will be subject to the same requirements as Bethel-Thompson.

Toronto (9-5) finished atop the East Division standings to secure home-field advantage for the conference final.

Bethel-Thompson was 7-2 as Toronto’s starter this season.

Both the Argos and Raptors are owned by Maple Leafs Sports & Entertainment.

If Bethel-Thompson can’t play, Antonio Pipkin will start for Toronto on Sunday.

The six-foot-three, 225-pound Pipkin started Toronto’s season-ending 13-7 home loss to Edmonton on Nov. 16, completing 10-of-22 passes for 111 yards and an interception while rushing for 78 yards and a TD on nine carries.

Video of Bethel-Thompson holding his infant daughter at the NBA game was carried on the Argos’ Twitter account Thursday night but was no longer available Friday.

But it was present long enough for Hamilton receiver Brandon Banks to notice.

“Wow when I tried to go to raptors game the @cfl told me I couldn’t go!” Banks tweeted. “I ain’t snitching but shit fishy ! #Protocol #tier1.”

Bethel-Thompson also appeared on TSN’s broadcast of the Raptors-Bucks game.

TSN is the CFL’s broadcast partner.

“So lemme get this straight,” TSN’s Kayla Grey, who interviewed Bethel-Thompson during the broadcast, tweeted Friday. ” … a starting quarterback goes on a national broadcast to promote an East Final that he is now forced to miss because the league is forcing him to quarantine for going to a game to promote said East Final?

“Baby what a mess.”

This report by The Canadian Press was first published Dec. 3, 2021.

The Canadian Press

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Canada buying up to 1.5 million courses of oral antiviral drugs to fight COVID-19

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OTTAWA — Procurement Minister Filomena Tassi says Canada has signed agreements to buy up 1.5 million courses of oral antiviral treatment for COVID-19.

The government has signed up for an initial one million courses of antiviral treatment, once Health Canada endorses their safety and efficacy. 

Pfizer submitted a request for Health Canada approval earlier this week. 

Canada has also purchased 500,000 courses of Merck’s oral antiviral treatment for COVID-19, with the option to purchase another 500,000 once Health Canada approves the drug. 

The drugs are designed to block the enzyme essential for viral replication.

Merck’s clinical trial showed a 50 per cent reduced risk of hospitalization or death compared to placebo patients with mild or moderate COVID-19. 

This report by The Canadian Press was first published Dec. 3, 2021.

The Canadian Press

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