Ottawa needs to redirect stimulus from social programs to growth: AIMCo chair Mark Wiseman

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When Wiseman brings up taking action on natural resources, he means completing pipelines, particularly the $12.6 billion Trans Mountain expansion. Enbridge’s Line 3 replacement, which is supposed to be completed by the end of the year is also being built. Keystone XL, meanwhile, is expected to be complete by 2023.

Of course, AIMCo would stand to benefit greatly from the completion of pipelines due to the fact that it invests heavily into Alberta’s oil and gas sector and for years, analysts have pointed to pipelines being the key to unlock value there.

A renewed focus on pipelines would also certainly clash with the Liberals’ climate-friendly approach and perhaps even dissuade some of the party’s voters, but with Alberta struggling in the manner that it currently is, Wiseman said the country has no choice.

“For us to stand up and say we’re no longer going to produce oil — that’s not an option,” said Wiseman, who said that transporting crude in pipelines is more efficient and environmentally friendly than doing so by rail. “That wasn’t an option before COVID and it’s not an option in a post-COVID world.”

As far as investing in the tech sector goes, Wiseman would like to see the government create the conditions for startups and SMEs to thrive over the next few years while directly investing in areas where Canada is already strong, primarily IT, agra-tech and clean energy.

“The government isn’t going to create the next Shopify, but it can help create the conditions where the next 10 flourish in this country,” he said.

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Lawmakers race to pass gov’t spending, stimulus, and more ahead of November election

House Speaker Nancy Pelosi of Calif., walks to her office, Monday, Sept. 14, 2020, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

OAN Newsroom
UPDATED 12:08 PM PT – Monday, September 14, 2020

With the November election looming just two months ahead, Congress is racing to push forward major legislation.

While the Senate reconvened last week, the House reconvened for the first time since their month-long August recess on Monday. This is the last work period left before the election with just 12 working days scheduled.

First on the agenda is avoiding a government shutdown. Both chambers face a September 30 deadline to pass a stopgap government funding bill. They are expected to use a continuing resolution in order to continue funding at the 2020 fiscal year levels.

Democrats and Republicans have agreed not to include any controversial aspects in the legislation to avoid a stalemate and ensuing shutdown. Therefore, leaders of both chambers have decided not to include the next coronavirus relief bill in the spending legislation.

The fifth stimulus package has proven extremely difficult to reach a deal on as Congress and the White House have been at odds over the legislation for months now.

Last week, Republicans pushed a $500 billion package in the Senate in an attempt to provide some aid to struggling Americans, but Democrats shot the bill down.

“It doesn’t help state and local workers at all,” claimed House Speaker Nancy Pelosi. “Our heroes, hence the name HEROES Act, health care workers, first responders, police, fire, transportation, sanitation, teachers, teachers, teachers, food workers who meet the needs of people will be fired.”

GOP senators have given a dire prediction for any future hopes for relief and have said it’s up to Speaker Pelosi to drop the costly Democrat demands holding up the legislation.

Sen. Ron Johnson, R-Wis., rides the elevator after a vote in the Senate chamber, Tuesday, Sept. 8, 2020, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

Meanwhile, the Senate Homeland Security and Governmental affairs Committee is conducting a broad investigation into the transition period between the Obama administration and Trump administration.

On Wednesday, Sen. Ron Johnson is holding a vote to authorize subpoenas for several officials in his probe into the Obama administration.

Additionally, the House is pushing multiple non-discrimination bills forward. The legislation being considered includes bills aimed at protecting pregnant women from work place discrimination, promoting diversity in education and condemning “all forms of anti-Asian sentiment” tied to COVID-19.

Finally, the Senate is gearing up to vote on several judicial nominations throughout the week.

RELATED: President Trump says Pelosi, Schumer do not want deal on pandemic relief

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Finland has directed nearly 60% of energy-related coronavirus stimulus at fossil fuels

THE GOVERNMENT of Prime Minister Sanna Marin (SDP) has allocated well over a half of its coronavirus-related stimulus funding for energy to uses promoting the consumption of fossil fuels.

Energy Policy Tracker, a database tracking pandemic-related policy responses from a climate and energy viewpoint, reveals the Finnish government has targeted nearly 58 per cent of the 2.7 billion euros it has allocated for energy production and consumption since the onset of the coronavirus pandemic at the so-called fossil economy.

What is noteworthy is that none of the funding for fossil fuel – be it in the form of capital, direct subsidy or loan guarantee – is conditional on emission cuts, despite the government’s objective of ensuring the recovery effort facilitates its departure from fossil fuels.

The government outlined in its second supplementary budget of the year that the stimulus effort should be designed to support its objectives of becoming carbon-neutral, reducing the reliance on fossil fuels and transitioning toward a carbon-free circular economy.

The funding allocated for the fossil economy consists of funding for road repairs and maintenance, financial support for shipyards and shipping companies, and the capital and state guarantees granted to Finnair. The largest share of the total has been allocated to rescuing the majority state-owned airline, according to the Finnish Independence Fund (Sitra).

Sitra has calculated that, excluding support for the airline, fossil energy would account for only about 10 per cent of the funding for energy.

“Although Finland is strongly committed to sustainable development, most of the funding disbursed so far has trickled directly or indirectly to the fossil economy,” summarised Oras Tynkkynen, a senior advisor at Sitra.

Less than a third (29%) of the stimulus funding has contrastively been allocated for green energy. Such uses include developing the rail and light transport infrastructure, expediting the permit processes for wind power, supporting the development of the charging network for electric vehicles, and promoting the production of battery chemicals and development of the local battery cluster.

Fourteen per cent of the 2.7 billion has been targeted at other energy projects, such as nuclear and first-generation biofuels.

Tynkkynen, formerly a representative of the Green League, admitted that the support for air and sea travel can be justified in the unusual circumstances but pointed out that the funding for clean energy is at a considerably lower level.

Canada, South Korea, the United Kingdom and the United States have all allocated at least 70 per cent of energy-related stimulus on economic activities based on fossil fuel, according to the data showcased on Energy Policy Tracker. China, France, Germany and India have contrastively targeted a smaller share of their stimulus funding at fossil energy than Finland.

The data is gathered from official sources to showcase how public funds around the world are committed to different energy types to counteract the effects of the pandemic.

Aleksi Teivainen – HT
Source: Uusi Suomi

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Early tax cuts would be windfall to high income earners but ‘ineffective stimulus’, report says | Australia news

Bringing forward the next phase of income tax cuts will deliver a windfall to high-income earners, with 91% of the benefits going to just 20% of taxpayers, according to The Australia Institute.

The progressive thinktank released research on Monday that suggested the bottom half of taxpayers would gain just 4% of the revenue from the second phase of income tax cuts. The institute challenged the government and Labor to find a fairer form of stimulus.

The Coalition’s tax cuts, which were legislated with Labor and crossbench support, will lift the upper threshold of the 32.5% tax rate from $37,000 to $45,000 and the 37% bracket from $90,000 to $120,000, replacing the low and middle income tax offset in the second phase from July 2022.

The Australia Institute paper found that the second phase tax cuts “will only benefit 40% of taxpayers” – mostly in the top three income deciles – and a small group earning between $37,000 and $48,000. Most taxpayers (60%) would receive “no benefit”.

Someone earning a very high income of $200,000 would receive a $2,430 a year tax cut, while a person on the median income of $60,000 gets nothing, and a minimum wage earner on $40,000 receives $110.

“The top 20% of taxpayers will get 91% of the benefit and the top 10% will get 52% of the benefit.”

In the third phase, tax rates are flattened on incomes between $45,000 and $200,000 from 32.5% to 30% from July 2024.

If both the second and third phases are brought forward to 2021-22, a person on a very high income will receive a tax cut of $11,505 a year, while a person on the median income receives $380 and a person on the minimum wage gets $110.

The top 20% of taxpayers will get 79% of the benefit of the two phases combined, while the bottom half of taxpayers receives just 3%.

The Australia Institute paper, by senior economist Matt Grudnoff, concluded that bringing forward the income tax cuts was an “ineffective stimulus”.

He cited the “simple fact of economics that high income earners are more likely to save or pay down debt with the tax cuts, rather than spend the extra funds to help stimulate the domestic economy”.

“A more effective way to stimulate the economy would be to invest heavily in direct employment programs or focus on supporting those who are doing it tough by maintaining or increasing the current rate of the jobseeker supplement.”

After Australia officially entered recession on Wednesday for the first time in 30 years, the treasurer, Josh Frydenberg, held out tax relief as a fresh form of stimulus to be delivered in the October budget.

Business groups including AiGroup and the Business Council of Australia have both called for tax cuts to be brought forward to boost the economy.

When it helped pass the tax cuts in July 2019, Labor supported the second but not the third phase.

The shadow treasurer, Jim Chalmers, said on Wednesday that Labor has offered to “keep an open mind” about the second phase because it understands “middle Australia needs help now”. But rather than a hard proposal the government had offered only “smoke signals”, he said.

On Friday, Scott Morrison refused to buy into speculation that the stimulus will bring forward the already legislated increases.

Asked if the government should restructure the tax cuts or else high income earners will bank $11,000 while low income earners receive $255 a year, Morrison told reporters in Canberra the question was “speculative”.

“I understand what the current legislative program is and that is the legislative program, and any changes we might make to that will be announced in the budget, and that’s in October.”

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S.Korea ramps up economic stimulus as coronavirus restrictions bite

People walk past closed pubs and restaurants as tougher social distancing rules to prevent the coronavirus disease (COVID-19) that have been announced on the last Friday continue, in Seoul, South Korea, August 31, 2020. REUTERS/Kim Hong-Ji

September 1, 2020

By Josh Smith and Hyonhee Shin

SEOUL (Reuters) – Measures imposed in South Korea to blunt a surge in coronavirus cases will hurt Asia’s fourth-biggest economy, the government warned on Tuesday, after unprecedented restrictions went into effect in Seoul and surrounding areas.

South Korea’s economy shrunk by a seasonally adjusted 3.2% in the April-June period from the previous quarter, revised central bank data showed, the sharpest contraction since the final quarter of 2008. South Korean exports fell for a sixth straight month in August.

The government unveiled plans to increase spending aggressively for the next few years and said it was prepared to boost policy support should the rate of infection worsen significantly.

“(Some) downturns are inevitable in the real economy due to the tightened preventive measures,” Vice Finance Minister Kim Yong-beom said at a policy meeting.

Daily cases have dropped slightly for five straight days, although they have remained in the low-hundreds for nearly three weeks as a second wave of infections sweeps through densely populated Seoul and spreads around the country.

South Korea on Friday restricted the operation of restaurants, coffee shops and so-called cram schools in the greater Seoul area. Churches, nightclubs and most public schools had already been ordered to close.

The Korea Centers for Disease Control and Prevention (KCDC) reported 235 new coronavirus cases as of midnight Monday, bringing the country’s total to 20,182 cases and 324 deaths.

To counter a slump in exports and the retail sector, the government said it planned to boost spending on welfare and jobs by 10.7%, and allocate 11.9% more on social infrastructure projects.

The central bank kept interest rates steady on Thursday, but sharply downgraded its 2020 growth outlook. The Bank of Korea said gross domestic product would likely shrink 1.3% in 2020 – the biggest contraction in more than two decades – from a previous forecast for a 0.2% decline.


The second wave has depleted medical facilities, with less than 3% of beds, or a total of nine, available for critical cases in greater Seoul, down from 22% about 10 days ago, according to the health ministry.

The KCDC reported 104 patients are in serious condition as of midnight Monday, more than an eightfold growth from two weeks before.

The ministry and Seoul city authorities said dozens more hospital beds will be ready this week.

“We’re in a very difficult situation especially due to the increase in the number of older patients,” Vice Health Minister Kim Gang-lip said.

In the latest blow to economic activity, a minor league baseball pitcher tested positive for the coronavirus on Monday, the Korea Baseball Organisation (KBO) said, casting doubt on the rest of the sport’s season.

The KBO said all of the 42 people who came in contact with the player had tested negative and gone into isolation, and it had cancelled two minor league games planned for Tuesday.

In late July, fans had been allowed to attend baseball games in limited numbers, but with the rising number of infections, stadiums were once again closed to fans by mid-August.

(Reporting by Josh Smith, Hyonhee Shin, Joori Roh and Cynthia Kim; Editing by Stephen Coates)

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European stocks nudge higher as stimulus hopes outweigh virus woes

August 26, 2020

(Reuters) – European stocks inched higher on Wednesday as hopes of additional stimulus for Germany and France outweighed worries about rising cases of COVID-19 across the continent.

The German DAX <.GDAXI> rose 0.3% after coalition parties agreed to extend measures to cushion the effects of the coronavirus crisis, including prolonging a short-time work scheme and a freeze on insolvency rules.

Finance Minister Olaf Scholz said the additional measures could cost Germany 10 billion euros ($11.81 billion).

Neighbouring France is also set to present its economic recovery plan on September 3, Prime Minister Jean Castex said. Paris-listed shares <.FCHI> were flat.

The pan-European STOXX 600 index <.STOXX> rose 0.2% but held back fears after two European patients, confirmed to have been re-infected with COVID-19, raised concerns about people’s immunity to the virus.

Swedish radiation therapy equipment maker Elekta jumped 14.1% after it reported a bigger-than-expected first-quarter profit.

(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)

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‘There’s going to be a selloff in the stock market’ if Congress doesn’t pass more stimulus

If you’ve watched the stock market mount its breathtaking recovery over the past few months even as the country languished in a pandemic and recession, it might be easy to think, Nothing can stop this rally. Well, it looks like Congress could.

The $2.2 trillion fiscal stimulus package passed by Congress in March, which helped nourish a 51% trough-to-peak rebound in the S&P 500 and prevented a deeper economic crisis, has largely dried up. And economists and analysts tell Fortune it’s critical to pass more stimulus (and soon); otherwise another stock market correction and economic contraction could be looming.

Negotiations for another round of massive stimulus are stuck in a political stalemate: Democratic leaders haven’t come down from their ask of $3.4 trillion, and the White House won’t budge on its offer of around $1 trillion. The parties are in disagreement on items including a steep increase in federal aid to state and local governments, which Democrats support, and COVID-19 lawsuit immunity for businesses, which Republicans support. And with both the House and Senate on recess, a stimulus deal before September looks unlikely.

Yet analysts argue that stock markets have already largely priced in continued stimulus support from Capitol Hill and the Federal Reserve.

“A lot of the market rebound is based on the premise of continued stimulus,” Edward Jones’ Nela Richardson recently told Fortune. On the flip side, she notes, “if there’s a hole in that argument for the markets, you might see a pullback or more volatility.”

Indeed, when the CARES Act was passed back in March, things were grim, and U.S. stocks had just registered the fastest bear market on record. But the urgency lawmakers felt back in March doesn’t seem to endure now, despite underlying data that shows continued signs of suffering.

To put the contrast in perspective: When the 96-0 CARES Act vote in the Senate came, the S&P 500 was trading below the 2,500-mark. Now, as Congress debates a new round of stimulus in August, the S&P 500 has not only reclaimed its pre-pandemic highs, but booked new all-time records over the past week.

At those levels, “some lawmakers are … taking some solace in the stock market and certainly the President is,” argues Mark Zandi, chief economist at Moody’s Analytics. “And that is a huge error because the market is taking its cues from lawmakers expecting them to pass a rescue package.”

And therein lies the Catch-22: “Every forecaster that does this for a living on Wall Street is expecting $1.5 trillion to $2 trillion in fiscal rescue,” Zandi asserts. “If that doesn’t happen, and the odds of that happening continue to decline, there’s going to be a selloff in the stock market.”

How big of a selloff?

Dan Ives, managing director of equity research at Wedbush Securities, tells Fortune he expects a 5% to 10% correction in the stock market if Congress fails to pass more stimulus in the next month. Ives says the macroeconomic picture is getting choppy, and without more stimulus, the party is going to stop. “The soap opera in the Beltway is a major speed bump in the rally we’re  seeing,” Ives says.

But if Congress does come through with stimulus of around $2 trillion, the market could take off again, Ives suggests. “A stimulus of that magnitude [over $2 trillion] would tack on a 15% to 20% rally, especially in tech stocks,” Ives estimates. But he adds: “This is a fork in the road moment: This market is either going to correct or go higher.”

More must-read finance coverage from Fortune:

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Secy. Mnuchin urges Democrats to resume stalling stimulus talks

President Donald Trump listens as Treasury Secretary Steven Mnuchin speaks at a news conference in the James Brady Press Briefing Room at the White House, Monday, Aug. 10, 2020, in Washington. (AP Photo/Andrew Harnik)

OAN Newsroom
UPDATED 1:23 PM PT – Tuesday, August 18, 2020

Treasury Secretary Steven Mnuchin is calling on Democrat Party officials to resume talks on a new round of coronavirus relief.

During an interview Tuesday, he said President Trump’s latest proposals focus on encouraging employment and helping small businesses that create some 50 percent of all jobs in the U.S.

“He wants us to provide money for kids and jobs,” Mnuchin explained. “And the second round of PPP and direct payments are a clear part of that.”

The secretary also noted that Democrats must come to the table to advance the economic recovery.

“The good news is despite Congress not acting because (Chuck) Schumer and (Nancy) Pelosi aren’t willing to sit down and strike a reasonable deal, the president moved forward with the EO to help people who are still unemployed,” he continued.

Mnuchin noted that Democrats have yet to reduce the size of their proposed $3.5 trillion relief bill, but they seem unwilling to compromise so far.

“The good news is we’re moving forward,” he stated. “The president’s EO on unemployment, we now have many states moving through that process. ”

RELATED: U.S. may see mass evictions as coronavirus relief talks stall in Congress

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