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October 12, 2021

LONGER PAID LEAVE SUGGESTED

A study published by the Institute for Research on Public Policy calls for permanent reforms to provide access to short-term paid and protected sickness and caregiving leaves to all working Canadians. The authors ‒ Eric M. Tucker, a professor of law at Osgoode Hall Law School, York University; and Leah F. Vosko, fellow of the Royal Society of Canada and professor of politics and Tier 1 Canada Research Chair at York University ‒ recommends that workers be eligible for 15 days of paid leave to cover both sickness and caregiving needs, which would bring Canada in line with its international peers. “This is very much in keeping with employment standards seen elsewhere around the world. In fact, Canada is a laggard in this regard; we have a lot of catching up to do,” says Vosko. “Prior to COVID, less than half of workers in Canada had access to employer-provided paid and protected leaves.” As was shown during the pandemic, when workers decide not to take time off because of inadequate leave protections and benefits, it can have major repercussions not just for those individuals and their employers, but for society at large. Sick people who go to work can spread infection to their co-workers. In addition, neglecting one’s health can lead to longer absences, more serious problems, and lower productivity. The authors also emphasize that women are disproportionately affected by inadequate paid sickness and caregiving leaves. Indeed, women are more likely to be primary caregivers and to be in precarious jobs, as are racialized workers or recent immigrants.

October 12, 2021

FUNDED POSITION DETERIORATES

Over the month of September, the funded position of a typical pension plan deteriorated on the solvency basis whereas it improved on the accounting basis, says the LifeWorks ‘Pension Indices, September 2021’ report. Investment returns were negative, falling by around 2.5 per cent. Bonds sold off in tandem with domestic and foreign equity markets as investors weighed the prospects of rising inflation and interest rates. Non-indexed long-term Government of Canada bond yields increased by around 19 bps (basis points), whereas the equivalent indexed bond yield increased by around 12 bps, an indication that market expectations for long-term inflation increased over the period. With credit spreads remaining broadly stable, corporate bond yields increased across the yield curve. The accounting pension expense index continues to register a significant fall in next year’s anticipated pension expense compared to the start of the year.

October 12, 2021

RISKS SHIFT MARKEDLY

The skew of risks around global growth has shifted markedly in recent months from widespread optimism and upside risks to a more sober assessment of the outlook, says AllianceBernstein’s ‘October 2021 Global Economic Outlook.’ China’s property market, the U.S. debt ceiling, and soaring energy prices in Europe all cloud the outlook. It also expresses concern that supply-side dislocations stemming from COVID-19 could be more pervasive and persistent than expected. So, while its numbers haven’t changed all that much, it expects the global economy to grow by 5.9 per cent this year before slowing to 4.2 per cent in 2022. Of particular concern is the spectre of a more challenging growth/inflation mix and a less certain outlook for monetary policy, one in which the only choices available to central banks are hard ones. It expects inflation to fall back next year, but upward pressure on prices has already been less transitory than expected, perhaps hinting at a more fundamental shift in inflation dynamics. Central banks will respond according to their tolerance for higher inflation and the extent to which inflation expectations remain well anchored. That’s likely to mean greater dispersion. Some smaller central banks have already started to tighten. But the key focus is the Fed. As things stand, it doesn’t expect a U.S. rate hike until 2023. But rapid tapering would, in theory at least, leave the door open for an earlier move, something else for markets to fret about, it says.

October 12, 2021

INVESTORS PROTECT AGAINST INFLATION

Institutional investors and wealth managers are planning to invest in strategies which provide a hedge and protection against inflation rising, says research from European fixed income ETF provider Tabula Investment Management Ltd. It found 95 per cent of wealth managers and institutional investors interviewed are already investing in products that provide some hedge and protection against inflation. Nine out of 10 expect to make changes to their asset allocation to increase inflation protection while seven out of 10 wealth managers and institutional investors expect to increase their allocation to inflation-linked fixed income ETPs and eight out of 10 to inflation-linked fixed income bonds (36 per cent dramatically).

October 12, 2021

CDPQ REDEFINES FINANCING SOLUTIONS

The Caisse de dépôt et placement du Québec (CDPQ) is launching Ambition ME, a redefined suite of financing solutions and support services for Québec mid-market companies. These offerings were designed to support high growth-potential companies requiring between $5 million and $75 million financing in order to take them to their next stage of growth. While continuing to invest in growth and continuity plans that are vital to a company’s expansion and long-term future, it will broaden the pool of businesses that it supports so as to invest more in companies that are particularly innovative in their industry. By adding an “innovation” component to its investment offerings for mid-market companies, it seeks to support companies that are breaking with past technology, ESG (environment, social, and governance), or management practices.