National economic shutdown to last weeks longer, Trudeau says

OTTAWA _ Prime Minister Justin Trudeau says the partial shutdown of Canada has to last weeks more to get COVID-19 under control, using his strongest warning yet against loosening economic restrictions too soon as he unveiled expanded help for hard-hit workers.

In the last month, the national economy has contracted sharply as businesses have been ordered closed and Canadians told to stay home.

Preliminary data from Statistics Canada on Wednesday showed economic activity collapsed in March, suggesting the drop could be a record nine per cent.

In a fierce warning from in front of his residence in Ottawa, Trudeau says the country is still contending with the first wave of the novel coronavirus pandemic.

Loosening controls too quickly could mean the country gives up the ground gained, he says.

That could cause even greater economic damage than the pandemic has already inflicted.

“With spring coming, people are looking outside, wanting to get out, wanting to this to be over  I understand that. It will be weeks more before we can seriously consider loosening the restrictions,” he said.

“As impatient as people are getting all across the country, we need to continue to hold on if what we’re doing as sacrifices are going to be worth it.”

To help, the federal government is loosening the eligibility criteria for emergency federal pandemic aid to cover seasonal workers without jobs and workers whose hours have been drastically cut but who still have some income.

The details announced this morning will allow people who are making up to $1,000 a month to qualify for the Canada Emergency Response Benefit for COVID-19.

And those whose employment insurance benefits have recently run out will also qualify for the $2,000-a-month benefit.

Some six million people have applied for the help since the middle of March when businesses were ordered closed and workers to stay at home as a public health precaution.

For those doing jobs deemed essential, Trudeau says the federal government will top up their pay to encourage them to keep going into work during the health and economic crisis.

The Bank of Canada is warning that the downturn tied to COVID-19 will be the worst on record and that the economic recovery will depend on the effectiveness of current measures to bring the pandemic under control.

The bank announced that it is keeping its key interest rate target on hold at 0.25 per cent, saying that it is effectively as low as it can go to combat the economic impacts of COVID-19.

If conditions improve quickly, the economic shock is likely to be “abrupt and deep, but relatively short-lived” and followed by a strong rebound for most, but not all, sectors of the economy.

A more severe scenario would likely see a “significant number” of businesses closing for good and longer spells of unemployment as workers look for new jobs.

A longer downturn would also mean households, businesses and governments could have higher debt by the time the recovery takes hold.

No matter the scenario, all the possibilities suggest “the near-term downturn will be the sharpest on record,” the report reads.

“The outlook is highly conditional on how long the containment measures remain in place, and how households and firms adapt,” governor Stephen Poloz said in his opening remarks during a morning teleconference.

He added that  “substantial monetary stimulus needed to be in place to lay the foundation for the post-containment economic recovery.”

The monetary policy report is the last one that Poloz is to be a part of, with his tenure at the head of the central bank scheduled to come to a close on June 2.

He was involved in the first monetary policy report published 25 years ago. Poloz said that he wished the circumstances for his last were “more favourable.”

Fairfax Financial warns of US$1.4 billion net loss in the first quarter

TORONTO _ Fairfax Financial Holdings Ltd. is warning that it expects to lose US$1.4 billion in the first quarter because of the COVID-19 pandemic.

The Toronto-based holding company says its preliminary result will also mean about a 12 per cent decrease in book value adjusted for the $10 per common share dividend paid in quarter.

Chief executive Prem Watsa says that despite the unprecedented turbulence its insurance companies continued to have strong underwriting performance in the quarter.

Net losses on investments currently estimated at about US$1.5 billion primarily reflect unrealized losses in the fair value of our common stock and bond portfolio from the sudden shock of COVID-19, he said. That reverses a significant portion of the US$1.7 billion net gains on investments reported in 2019.

Watsa says in a statement that the company has drawn on its credit facility solely to ensure that it maintains high levels of cash. It had about US$2.5 billion in cash and marketable securities in its holding company at March 31.

Fairfax will also absorb its share of US$200 million in losses related to its investments in Quess, Resolute Forest Products and Astarta.

Nearly 5.4 million receiving emergency federal aid

OTTAWA — The federal government says nearly 5.4 million Canadians are now receiving emergency aid to replace incomes lost due to COVID-19.

The figures this morning show 5.38 million applications have been processed since March 15, a figure that includes people who were previously on employment insurance before being moved over to the Canada Emergency Response Benefit.

During the first week it was available, there were just under 3.5 million claims for the $2,000-a-month benefit, including nearly 172,000 over the past two days.

n all, the government has received 5.97 million claims for financial help since the crisis began about one month ago.

More help is to arrive next week in the form of a new loan program to help eligible small businesses cover costs.

And more federal aid from a 75-per-cent wage subsidy program, approved by Parliament on Saturday, will be available by early May.

Conservative finance critic Pierre Poilievre is calling on the government to rejig the credit program that runs through banks and credit unions to increase the value of loans and allow small businesses to use it to pay wages.

He says that would help companies pay workers now instead of waiting a few weeks for the wage-subsidy program to pay out.

When the government is able to pay the subsidy to eligible businesses, Poilievre is proposing that companies take the first tranche to pay off the increased loans.

The Opposition Conservatives are also calling on the Trudeau Liberals to come up with a plan specifically to help the nation’s restaurant, hospitality and tourism sectors.

Many of those businesses were either among the first to close due to public health concerns related to COVID-19, or have seen dramatic declines as consumer spending drops.

A handful of Conservative critics say in a statement this morning that the government must give these businesses the tools to open their doors again, and to retain workers through the pandemic, especially in areas with historically high unemployment.

Among the ideas being proposed are temporarily allowing owner-operators to qualify for the federal wage-subsidy program as well as refunding a year’s worth of GST remittances to small businesses.

A report last week by the parliamentary budget officer estimated that refunding federal sales tax to small businesses would cost Ottawa’s coffers about $12.9 billion

IBC: Insurers reducing insurance costs for Canadians

To help Canadians cope with the financial impact of COVID-19, the Insurance Bureau of Canada (IBC) member companies are offering substantial consumer relief measures. For consumers whose driving habits have changed significantly, IBC member companies are offering reductions in auto insurance premiums to reflect this reduced risk. IBC expects this could result in $600 million in savings to consumers. The reductions will continue for the next 90 days. Additionally, insurers have supported Canadians and businesses who are most adversely affected by honouring requests to defer premiums. Thousands of Canadians have had their premiums deferred.

“This is an incredibly challenging and uncertain time for many Canadians, and insurers want to help alleviate some of the financial burden for the most vulnerable. Insurers understand that many drivers are no longer commuting or using their vehicle as regularly, which could result in savings,” said Don Forgeron, President and CEO, IBC.

Insurance customers whose driving habits have changed significantly or who are facing financial hardship as a result of the pandemic should contact their insurance representative. As it relates to savings on auto insurance premiums, savings will vary depending on individual driving habits.

Many insurers have transitioned their employees to work from home, and insurers ask for your patience as service levels may be strained.

In addition to adjusting premiums for drivers, IBC member companies have also committed to the following measures to help Canadians, which will also apply for the next 90 days:

  • Explore flexible payment options for consumers who are in a vulnerable position or facing financial hardship as a result of COVID-19;
  • Waive the NSF fees they would have charged if you have insufficient funds to cover your premium. You remain responsible for any fees your bank may charge you; and
  • If you are temporarily using your car or home differently (for example, you may be using your car to commute to work instead of taking public transit, or you may be working from home) it will not affect your premium or your ability to make a claim.

Insurers are also working with small business and commercial clients to help businesses manage their costs.

Insurers are supporting communities across the country, and some have made substantial donations to help those impacted.

About Insurance Bureau of Canada

Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

Car insurance premiums should be cut during pandemic

The excerpted article was written by

Finance Minister Rod Phillips is calling on insurance companies to lower auto rates while motorists are driving less due to the COVID-19 pandemic.

Phillips — who was tapped by Premier Doug Ford on Thursday to lead a new cabinet committee on economic recovery strategies — met last week with executives from the major insurance companies and their industry association.

“The point I made to all of them … that we are in unprecedented times and there’s unprecedented pressure on Ontario families,” the treasurer said Thursday during a Queen’s Park teleconference.

“And the reality, which I hear all the time from my riding in Ajax and from people around the province, is that people just aren’t driving as much. They’re obviously are fewer accidents,” said Phillips, noting millions of people are staying home to stop the spread of the virus.

“So I’m looking forward to seeing fully what it is that the auto insurance sector does,” he said. “But I think the initial response has to be one that reflects the challenges people are facing.”

The opposition New Democrats have been urging the governing Progressive Conservatives to give all Ontario drivers a 50 per cent break on auto insurance payments for three months.

The NDP would also like to see insurance payments deferred for anyone who has lost their job or much of their income due to the pandemic.

“As Ontarians listen to public health experts and stay home as much as possible, there’s little driving and few accidents happening in the province,” said NDP MPP Tom Rakocevic (Humber River-Black Creek).

Economical Insurance is committed to supporting Canadians throughout COVID-19

he family of brands provides flexibility and digital operations for
customers, brokers, and employees while giving back to communities in need

WATERLOO, ON, April 8, 2020 /CNW/ – Economical Insurance is responding to the hardships COVID-19 creates for individuals, communities, and businesses across the country with a mix of consumer relief and community impact efforts to provide support for Canadians as we work together to find a way forward. This includes exploring flexible payment options for personal insurance customers, solutions for brokers and business owners, a safe work environment for employees, and funding for community organizations that support the front lines of this unprecedented crisis.

“Our business has supported customers through world wars, the depression, and other more recent crises, and our commitment remains focused on the customer first through the challenges we are faced with today,” said Rowan Saunders, President and CEO of Economical. “We are working collaboratively with our dedicated employees and valued broker partners to bring solutions to customers during a situation that none of us have ever experienced. This is the first time we, and the entire industry, have supported customers through this type of global pandemic and I’m proud to see how everyone is adapting together.”

Options for customers in need
Economical has proactively taken the following steps for the next 90 days, or as otherwise deemed appropriate based on ongoing assessment.

Personal insurance customers with Economical, Family Insurance, and Sonnet who are impacted financially by COVID-19 are advised to connect with their broker, visit the website, or contact a customer service representative to review support currently available to offer relief, which may include the following:

  • Flexible payment options, including payment deferrals and waived NSF fees

  • Payment plans adjustments to update the method or frequency of payments

  • Reduction of auto insurance premiums by limiting coverage or reducing the number of kilometres driven to support those with significantly changed vehicle use

  • No impact to premiums if customers temporarily use their cars or homes differently, such as efforts to support community goodwill or migrate to remote work

To support its commercial insurance customers:

  • Economical has made appropriate changes to the rating approach for commercial insurance customers to acknowledge the challenging circumstances many of them are facing

  • For small and mid-sized businesses that have been directly impacted by COVID-19 and are experiencing temporary closures and significant decreases in revenues, and changes in operations, Economical is working with its broker partners to adjust premiums

  • Economical will also provide flexible underwriting solutions for businesses that have made changes to their operations to adapt and support the current crisis

Petline, a subsidiary of Economical, is equally committed to supporting pet owners with pet insurance options through its affordable, simplified Peppermint offering. Additionally, customers have been provided with information on how to safely care for a pet during this pandemic, including managing visits to the vet and adjusting to a new routine.

Investment in technology and digitization during the past few years enabled Economical to launch Sonnet, Canada’soriginal digital direct home and auto insurance offering, and Vyne, a dynamic broker offering for Economical, in addition to digital pet insurance offerings. These innovations are helping customers and brokers navigate insurance more easily, from anywhere at any time, during a truly disruptive period.

Giving back to communities
For almost 150 years, Economical and its workforce have maintained a strong tradition of giving back to communities across Canada through corporate giving and volunteerism.

Economical has adjusted its social responsibility efforts to focus its impact on the national needs of pandemic response in alignment with its existing community giving pillars:

  • Health & Wellness: Acknowledging the brave and necessary work of health care workers on the front lines of this pandemic, Economical is investing $200,000 to provide front-line support in cities across Canada

  • Safety & Security: Economical will extend its long-standing partnership with Canadian Red Cross by providing an additional $100,000 donation for COVID-19 support measures, particularly at a time when flood and fire risks emerge, and response teams are operating under new physical distancing measures

  • Youth & Education: To support vulnerable populations in our communities, Economical employees will be given remote volunteer opportunities through organizations in need of assistance such as Kids Help Phone and Junior Achievement

From the onset of the COVID-19 pandemic, Economical employees quickly rallied to support urgent needs through a corporate matching campaign totaling more than $50,000 in donations to-date for Food Banks Canada.

Supporting employees
Economical and its subsidiaries have a resilient workforce that mobilized early in the COVID-19 pandemic to adopt new working practices designed to ensure business continuity. As nearly 95 per cent of the Economical workforce is now working remotely, Economical has provided flexible work options to help employees manage the needs of work and the personal impacts of this pandemic, as well as maintaining a safe work environment for those who are required in the office.

Economical will continue to evaluate the situation and assess these measures to ensure customers, brokers, employees, and communities are provided with the best help and advice we can offer.

About Economical Insurance
Economical Mutual Insurance Company (“Economical” or “Economical Insurance”, which includes its subsidiaries where the context so requires) is a leading property and casualty insurer in Canada, with $2.5 billion in gross written premiums and approximately $6.0 billion in assets as at December 31, 2019. Economical is a Canadian-owned and operated company that services the insurance needs of more than one million customers.

SOURCE Economical Insurance

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