Friday July 16th, 2021 Newsletter

Bank of Canada maintains policy rate and forward guidance, adjusts quantitative easing program

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance on the path for the overnight rate. This is reinforced and supplemented by the Bank’s quantitative easing (QE) program, which is being adjusted to a target pace of $2 billion per week. This adjustment reflects continued progress towards recovery and the Bank’s increased confidence in the strength of the Canadian economic outlook.

In Canada, the third wave of the virus slowed growth in the second quarter. However, falling COVID-19 cases, progress on vaccinations and easing containment restrictions all point to a strong pickup in the second half of this year. The Bank now expects GDP growth of around 6 percent in 2021 – a little slower than was expected in April – but has revised up its 2022 forecast to 4 ½ percent and projects 3 ¼ percent growth in 2023.

Consumption is expected to lead the recovery as households return to more normal spending patterns, while housing market activity is projected to ease back from historical highs. Stronger international demand should underpin a solid recovery in exports.

The Bank of Canada Governing Council judges that the Canadian economy still has considerable excess capacity, and that the recovery continues to require extraordinary monetary policy support. The Bank remains committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved.

Second intake of Green Infrastructure stream now open

Starting today, Tuesday, July 13, eligible municipalities, First Nation communities and Local Services Boards can begin applying for funding through the second intake of the Green Infrastructure stream.

The Green Stream is part of the joint federal and provincial Investing in Canada Infrastructure Program (ICIP). Up to $240 million in joint federal and provincial funding is available for this intake, including $110 million from the Ontario government.

Eligible applicants will have up to 8 weeks with a deadline of September 9, 2021 to submit applications for provincial review and nomination to the federal government through the Transfer Payment Ontario website.

Albert Einstein once said, The definition of genius is taking the complex and making it simple. He also said, Everything should be made as simple as possible, but not simpler.

Yet, making things simpler is not for the faint of heart, because ultimately it means everyone should be able to understand and use the knowledge, plan, or resource being shared regardless of their experience, cultural background, literacy, or learning style. In other words, it needs to be described simply, so it can be used simply.

That’s not to say simplicity is easy because getting to simplicity rarely comes without a lot of teeth grinding, a willingness to work hard, and a whole lot of tenaciousness.

Regardless, I thought of the Einstein quotes when I recently came across the graphic below explaining an approach to economics that was brilliant in its simplicity. Hard to believe that one graphic and a name like “Doughnut Economics” explains new, leading-edge thinking about a topic as complicated as economics.

The woman providing the brilliance is Kate Raworth and her book (which I highly recommend) entitled,  Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist.

Unlike the other economic theories covered in my university studies that took far too many dull pages to explain, Kate Raworth simply descibes the doughnut economy as being based on the premise that, “We need to meet the needs of all within the means of the planet. In other words, to ensure that no one falls short on life’s essentials (from food and housing to healthcare and political voice), while ensuring that collectively we do not overshoot our pressure on Earth’s life-supporting systems, on which we fundamentally depend – such as a stable climate, fertile soils, and a protective ozone layer. The Doughnut of social and planetary boundaries is a new framing of that challenge, and it acts as a compass for human progress this century[i].”

In our increasingly complex world of more, better, and faster, the simplicity of this model explains that good economics is about balancing financial growth with human values that reflect care and concern for people and the planet. It also illustrates that getting to simplicity is worth the effort because ultimately it makes the complex possible.

Doughnut Economics is a wonderful, user-friendly framework that provides a better way for how we can move toward a better future.

Ontario increases funding, streamlines application process for Second Career

As of today, laid-off and unemployed workers will experience a faster Second Career application process. The program is increasing weekly basic living supports for rent, mortgage and other expenses up to $500 a week, and transportation and child care supports are being enhanced.

Second Career funding helps laid-off, unemployed workers pay for the tuition of training programs of 52 weeks duration or less, including eligible university and college courses, micro-credential programs and other vocational training programs.

Interested parties can contact an Employment Ontario service provider here.