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Six-week wait for wage subsidy may be too long for some businesses and their employees caught in coronavirus crisis

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Canada’s tight-knit group of large banks can be a well-oiled machine in times of crisis, and may have been the logical choice to administer the federal government’s $71-billion program to pay a 75-per-cent wage subsidy to help small and medium-sized businesses weather the coronavirus crisis.

Instead, Canada opted to build an entirely new system within the Canada Revenue Agency, and it is anticipated that payments won’t flow to business operators for six weeks, on top of the three weeks many have been closed with no wage subsidy at all.

The decision has drawn criticism from business groups, including the Ontario Chamber of Commerce, whose officials say the wait is far too long to avoid layoffs on a scale that economists suggest will leave many businesses unable to operate once the economy restarts.

John Ruffolo, co-founder of the Council of Canadian Innovators, is urging Ottawa to change the way it will manage wage subsidies to help business operators with less than 500 employees in Canada.

“I recommend the banks (do it),” Ruffolo said. “They could have done it in 48 hours.”

Canada’s Big Five banks would be the “best distribution channel” for the new program because it could be carried out simply through “know your client” processes already in place for bank customers, said Ruffolo, who is also former chief executive of OMERS Ventures, a unit of one of the country’s largest pension funds.

Since any portion of loans granted to cover wages would be backstopped by the government and forgiven, the banks would not even need to perform credit adjudication, he said.

The scope is so different from 2008 and 2009. This is an elephant — the government — sitting on the economy

Mitch Frazer, Torys LLP

In the United States, hundreds of large and community banks have been tapped to deliver similar wage-related aid for small businesses. Although there have been some early backlogs and complaints, payments are already flowing under the eight-week US$349-billion program backed by the U.S. Treasury and approved by Congress last week.

Treasury Secretary Steven Mnuchin took to Twitter Friday morning to say the system was up and running and that community banks in the U.S. had already processed more than 700 loans for US$2.5 million.

The 12-week Canada Emergency Wage Subsidy, unveiled last week, boosted a previously planned 10-per-cent wage subsidy with a promise to cover 75 per cent of a worker’s pay up to $847 a week. It is for firms that have lost 30 per cent of revenue or more and retroactive to March 15, though it could be May before the money is disbursed. 

The Canadian Federation of Independent Business polled businesses and released survey results Monday that show just  29 per cent of firms say the program will help them avoid further layoffs or recall staff.

Mitch Frazer, chair of the pensions and employment practice at law firm Torys LLP in Toronto, said Canada’s big banks may have been a logical choice to manage the payroll subsidy system, as they were efficient in handling aspects of the financial crisis a decade ago.

But he noted the banks are already swamped with new, time-consuming work resulting from the pandemic and resulting business shutdowns, including responding to large volumes of business and retail clients who are suddenly unable to service their debts such as mortgages.

“I just don’t think it’s practical. I think what people are looking at is, in an ideal world, who can deliver this most efficiently … (but) this is an unprecedented economic event,” Frazer said, noting that 44 per cent of Canadians reported two weeks ago that they had at least one family member out of work.

“The scope is so different from 2008 and 2009,” he added. “This is an elephant — the government — sitting on the economy.”

Frazer said the decision to create the wage subsidy system within the CRA, rather than using the banks, may also have been the result of horse-trading as the government divvies up the responsibility for managing different aspects of the crisis.

He said he believes the wage subsidy program is workable, even if it takes longer without the banks. Since the money is guaranteed by the government and will eventually flow, it gives businesses and their employees some comfort to make decisions and cut deals with landlords, he added. 

As well, some businesses will be able to tap an interest-free emergency loan of up to $40,000 to help them bridge the gap until they receive funds through the emergency wage subsidy program.

“You can use the loan to pay for the payroll costs and then get reimbursed,” Frazer said, adding that he has seen no prohibition on tapping these emergency funds to pay employees. 

However, he noted businesses that don’t have a payroll of between $50,000 and $1 million won’t qualify for the emergency loan, of which $10,000 is forgivable if the rest of the loan is repaid by the end of 2022.

Frazer said he believes the government is working with financial institutions, the Business Development Bank of Canada and Export Development Canada, to establish more loans to help businesses beyond the funds and guarantees available under the two previously announced multi-billion-dollar programs.

The big banks are already part of those programs and Canada’s six largest banks have said they will give temporary relief to hard-hit credit card customers, including lowering interest rates, something the federal government is understood to have been pushing for.

“It is my understanding that there will be (more loans) from the BDC and EDC, but (I’m) not sure about what the details are yet,” Frazer said. 

• Email: bshecter@nationalpost.com | Twitter:

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What Most People Fail To Understand About Money: Tips For Better Financial Health

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Managing your personal finances need not be as tricky as you may expect. It becomes more achievable once you have your broader objectives in place. While focusing on your life goals, you can plan ahead to secure your financial future. 

Does Chasing Money Resolve Financial Woes?

Merely accumulating wealth at the cost of neglecting your loved ones and pursuing your passions is not the answer. To lead a comfortable life, a steady monthly income that pays for your necessities and other expenses is sufficient. Ultimately the funds you have to fall back on before your next paycheck reveals your financial independence. 

How to Manage Monetary Resources?

Money is a necessity that determines the quality of life you lead. Improving your financial position may sound daunting but conscientiously working towards it step-by-step, makes the ride less stressful. Adopt these measures to secure your future: 1. Practice Saving  The instant gratification you get on spending your earnings may be more tempting than setting aside a part as savings. Your savings can cover you for even emergencies like an illness or job loss. Once you get into the habit of saving regularly not conveniently, it becomes second nature. 2. Get a Head-start An earlier start to securing your financial future allows you greater flexibility. Priorities change as life progresses and your retirement is one of the many landmarks to cater towards. You can achieve bigger goals by indulging in financial planning from a young age. 3. Think Before Spending Excessively The fact that you have acredit card no credit checkshould not make you throw caution to the wind. Eventually, your excessive purchasing comes back to haunt you, especially when there are more pressing needs to fulfil. As you are aware, your credit card dues when not cleared on time and paid in full attracts interest.  4. Invest Through a Financial Advisor A qualified professional who understands the financial markets can guide you on making lucrative investments. There are plans and funds which when you invest in, yield fruitful dividends for you. Give your capital time to grow and consider it locked-in for the period it needs to multiply. 5. Limit Your Debt The cycle of debt sets of a chain reaction, especially when you divert your savings to clear all pending dues. It is not wise to dig into funds set aside for contingencies as rebuilding them is a massive exercise. You invest and save for your future, but one wrong move and the entire purpose stands defeated. 

Should Financial Health Be A Priority?

All your monetary decisions and steps are taken to achieve that end, impact your financial health. Once you focus on the latter, your stress levels automatically subside in favour of your emotional and physical well-being. To develop a sound financial plan, begin by monitoring your petty expenses as these tend to add up quickly. Subsequently, examine your higher costs and cautiously add to your payment list to avoid derailing your financial progress. 

The tips suggested here help you focus on your financial health by building a sturdy foundation:

1. Calculate Your Net Worth Subtract your assets from your liabilities to determine your net worth. Being aware of what you owe against what you own gives you a reality check. Tracking your net worth helps you check your progress by identifying secure areas and those that need improving. 

2. Draft a Realistic Personal Budget Having a budget for reference is a useful financial tool that serves as an estimate of your income and expenses. It helps you to spend wisely, reduce your expenses, prioritise saving and cater for emergencies.  When your expenses exceed your income, you must work towards reducing your outgoings and identifying ways of generating funds. In the reverse scenario, you can save more by investing the surplus wisely. Even if you make more money, excessive spending is often the root cause of overwhelming debt, so stay alert. 3. Identify Needs and Wants Better spending choices are possible when you can successfully differentiate between your needs and wants. For survival, you need to spend on food, healthcare, clothing, transport and shelter whereas wants do not help you survive. Prioritise your primary needs and budget for luxury indulgences only when you have resources at your disposal. 

4. Create an Emergency Fund Regularly setting aside money for emergency purposes does not leave you stranded when an unexpected situation arises. A sudden job loss, injury or illness takes a massive toll on your existing finances. Consistently building and maintaining this emergency fund is an ongoing mission and prepares you to face the worst storm.

5. Pay Off Your Debts A good credit score keeps your financial health intact so to achieve it, repay your debts within the stipulated duration. Even lending institutions you may approach to sanction a loan will first do their due diligence. Paying off accumulated debts without incurring interest on them improves your credit rating and reduces your financial stress.

6. Become an Informed Consumer Having clarity on your investments and recurring liabilities like interest rates and insurance premiums, make you an informed consumer. You do not have to be a financial whiz but certainly, need to be familiar with whatever impacts you directly. Educate yourself on how to check credit score so you can confidently approach banks knowing you are not a defaulter. 

7. Maintain Up-To-Date Records Systematically maintaining your financial records serves you well in times of need. For instance, you can quickly sift through your documents and provide the necessary proof to file your returns. Your tax consultant can be of greater help when all your relevant details are accessible and updated.

8. Seek Professional Help A financial advisor whom you can trust with your finances will do a thorough job of managing your funds. They can recommend investment options that best suit you and even help you understand the risks involved. Approaching a professional who can steer you towards achieving your financial goals is the best strategy to adopt.

Conclusion Building wealth takes time yet, crossing that threshold assures your financial wellness. Adopt healthy money habits and strengthen your monetary position by consistently inching towards your financial goals. 

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The Spanish company that spied on Assange investigated whether he had been father during his confinement in London

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The actor and friend of Julian Assange, Stephen Hoo, entering the ecuadorian embassy with one of the sons of Assange that was passed through his, in a video capture of 2017.
The actor and friend of Julian Assange, Stephen Hoo, entering the ecuadorian embassy with one of the sons of Assange that was passed through his, in a video capture of 2017.

The espionage to which he was subjected, the founder of Wikileaks, Julian Assange, by the Spanish company security Undercover Global SL during his confinement of seven years in the Embassy of Ecuador in London included their most intimate relationships. We watched all the visits you received during your stay and we investigated the possibility that it had been a parent during the running of the bulls, one of their biggest secrets, and as now has just revealed its partner, the lawyer Stella Morris. The an ex military man David Morales, owner of the security company, is being investigated by a court of the National court for spying on the meetings of Assange with his legal counsel and deliver supposedly this material to the CIA.

In English

The suspected Morales was a minor who entered the Embassy of Ecuador in London hanging in a backpack baby carrier charged by the actor Stephen Hoo could be the son of the cyberactivist (48 years old) and Morris (37 years old), for what was recorded during all of your visits to the legation diplomatic. Morales came to ordering the theft of the diaper to analyze the feces, and be able to clarify their research, even though later was not necessary the removal of the remains. Were also reports about his mother and about Hoo, the friend of the couple who came to visit the founder of Wikileaks with the baby, according to videos and documents which had access THE COUNTRY.

An employee of the Spanish company warned the lawyer of the intentions of Moral: “they Wanted to prove that it was his son to try to harm him. They came to talk with three laboratories of Madrid to see how they could prove the theme parental. One of the laboratories told us that the stools could not obtain the DNA. Then he tried to get his pacifier,” explains a extrabajador of Undercover Global SL.

A company report about the visits of Stephen Hoo, dated October 27, 2017, is an example of the obsession of Morales and his team for unveiling the best kept secret of the cyberactivist and know the most intimate details of his personal life during his confinement in the ecuadorian Embassy in London.

The document is entitled Usual visit of the guest (Assange) with a baby and he emphasises that his friend Hoo whenever you go to the Embassy with a minor “who claims to be his own security team”, and that had not been identified “for being under age.” The editor of the text he noted that they have unsuccessfully requested a document certifying the identity of the child and stresses that after the actor always appears Stella Morris, “which arrives minutes before and up minutes after Stephen Hoo, when usually it stays during the day with the guest and even spends entire nights with them”. After the notice of the worker to Morris, the visits of the baby ended.

“Stella Morris arrives at the Hotel (the embassy) to 13.49 and up-to 16.11 while Stephen Hoo arrives at 14.06 and up-to 15.56 on the 25th of November,” the report details, in the enclosed two photographs of Hoo entering the hall of the embassy and carrying in a sling to one of the sons of Assange. Then, it describes details about the actor picked up from the british press, and speculates with the idea that it is not the father of the child.

And finally concludes: “On the basis of the information related to the possibility that the host (Assange) has been able to be a father during his confinement in the Embassy, and the recent visits that we are getting this baby the same, always accompanied by Stella Morris, raised the possibility that due to the emotional ties that it maintains with the host, does not rule out that the baby might have some kind of relationship between the two. Even so we can not confirm with the data obtained from this to be so, so that we continue to work on obtaining evidence that might give us a result more successful”.

Morris, who has declared that intend to marry Assange, just to reveal the secret of who is the mother of two children with Assange to british newspaper Mail on Sunday after you’ve done it before the judge who ordered the provisional release of the cyberactivist with the argument of their family roots. Since his expulsion from the embassy, Assange remains a prisoner in a jail in london. The US demands his extradition for 18 alleged crimes that raise the penalties up to 178 years in prison.

Morales was arrested last October, is on probation and is being investigated for alleged offences against privacy, against the secrecy of the communications, attorney-client, misappropriation, bribery and money laundering. The investigation was ordered by the judge José de la Mata and began weeks after THE COUNTRY revealed the videos, audios and reports which show that this company, based in Jerez de la Frontera spied the meetings of the Wikileaks founder with his lawyers and co-workers.

Due to the exceptional circumstances, THE COUNTRY is offering free of charge to all their digital content. The information related to the coronavirus will remain open for the duration of the severity of the crisis.

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U.S. bank earnings suggest coronavirus-driven rough patch for earnings of Canadian lenders

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Canada’s biggest banks are right in the thick of a tough quarter, judging by the rocky results their American cousins are posting this week.

JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. all reported big drops in earnings for the three months ended March 31, as the lenders were forced to set aside piles of cash in case consumers and businesses are forced to default on their loans because of the coronavirus crisis.

The parallel isn’t perfect, but the biggest U.S. lenders can herald what’s to come for Canada’s Big Six. All of the largest Canadian banks have operations south of the border, and the trends in the results from JPMorgan, the biggest bank in the U.S., are “also very relevant to the Canadian marketplace,” National Bank Financial analyst Gabriel Dechaine wrote Tuesday.

“We expect to see similar outcomes in terms of credit performance, margin compression, trading revenue generation and loan growth” in Canada, Dechaine wrote in a report. “On the latter item, we are hearing of the same trend in Canada.”

Like their counterparts in the U.S., Canadian banks are facing interest rates that have been lowered to essentially zero, squeezing what they can charge for loans. Customers are also losing their jobs, threatening their ability to keep up with debt payments.

Still, loans have been growing, with JPMorgan’s corporate clients borrowing more than US$50 billion from existing lines of credit as the crisis ramped up and companies scrambled to get cash. Growing loan balances could mean more revenue from interest payments on those loans, but during the current crisis, the ability of some borrowers to repay has suddenly come under threat because of the closure of non-essential businesses and a drop in consumer demand.

Banks must also hold a certain amount of capital relative to the size of their loans, and set money aside for possible losses.

JPMorgan reported provisions for credit losses of almost US$8.3 billion for its first quarter, which included US$6.8 billion to further build up its reserves. For the same quarter of 2019, the bank’s credit costs had been about US$1.5 billion, with the additional money socked away this quarter reflecting “deterioration in the macro-economic environment as a result of the impact of COVID-19 and continued pressure on oil prices,” the lender said.

If the biggest bank in the U.S. feels the need to set aside a massive amount of money to cushion the blow of the COVID-19 recession, then Canada’s banks likely will too, as their accounting similarly requires earmarking funds for expected loan losses. Those expectations are influenced by the economic outlook.

“So you can take a look at the U.S. banks and say, ‘this is a roadmap for what the Canadian banks are going to have to put up in similar fashion,’” Barclays analyst John Aiken said in an interview.

Exactly how much Canada’s banks will have to set aside could vary given the uncertainty about the duration of the pandemic and the recession. But credit provisions are “the biggest swing factor in bank earnings,” Aiken said, because they can be big and there is no offset for them. Items such as trading revenue do have offsets, though, such as bonuses paid to stock and bond traders.

“The benefit they receive from trading is not going to be enough to stabilize earnings,” Aiken said.

It is very likely we will see a rise in bankruptcies and a permanent decline in economic activity and a prolonged increase in unemployment

Charles St-Arnaud, chief economist, Alberta Central

Big Canadian banks will report results in May for the quarter covering February, March and April, meaning there is likely to be a heavier COVID-19 influence on the results than those of the U.S. banks, which still booked profits. Canadian households and businesses were also carrying a relatively higher level of debt going into the crisis.

“As such, it is very likely we will see a rise in bankruptcies and a permanent decline in economic activity and a prolonged increase in unemployment,” wrote Charles St-Arnaud, chief economist at Alberta Central, the central banking facility and trade association for the province’s credit unions, in a report published Wednesday.

Nevertheless, the expectation is that the large Canadian lenders will be able to weather the storm, even if their near-term profits take a hit. The Bank of Canada said in the monetary policy report it released on Wednesday that the stress-testing it does on the big lenders shows they are “well positioned” to ride out a sharp economic and financial downturn.

Canadian regulators are also giving banks a break when it comes to deferred loan payments, which the lenders are granting to customers facing financial hardship during the pandemic. Those deferrals could keep borrowers from defaulting on their obligations.

While there is going to be an increase in loan-loss allowances, “I don’t think it’s going to be the fire and brimstone that some investors may be envisioning,” Aiken said.

The payment deferrals are similar to what the banks did with energy companies in the wake of the shock to oil prices five years ago, Aiken said. At that time, the lenders worked with the borrowers to rejig their arrangements, ultimately allowing the banks to recover some losses for which they had initially provisioned when oil prices rose again.

“They do not want to put companies and individuals into bankruptcy, because they’re just going to be stuck with assets that they don’t want to manage,” Aiken said.

• Email: gzochodne@nationalpost.com | Twitter:

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