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Budget 2021

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Budget 2021

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Coronavirus pandemic | Canada pumps Can$200 billion into virus-stricken economy

They followed an announcement that the Bank of Canada is lowering a key interest rate to 0.25 percent as part of a drive to cushion the impact of the coronavirus pandemic.

March 28, 2020 / 02:14 PM IST

Prime Minister Justin Trudeau on Friday announced a series of measures to boost the Canadian economy, almost doubling the amount of the aid pledged just two days ago to more than Can$200 billion. The measures include a 75 percent wage subsidy for small and medium business employees affected by the coronavirus crisis, and a series of grants, tax deferrals, lines of credit and low-interest loans to Canadian businesses.

They followed an announcement that the Bank of Canada is lowering a key interest rate to 0.25 percent as part of a drive to cushion the impact of the coronavirus pandemic.

The aid package was announced as a parliamentary report out Friday forecast a 5.1 percent contraction of Canada's economy in 2020, the worst since 1962, with a whopping 25 percent second quarter contraction.

"At present, the economic and fiscal outlook is extremely uncertain," read a summary of the parliamentary report. "The scenario under consideration is but one of many possible outcomes." The report assumes that the current COVID-19 social distancing and self-isolation measures "will remain in place through August, lasting roughly 6 months in total." It also assumes that oil prices will remain at the current low levels.

In this scenario, the federal deficit for the fiscal year starting April 1 would reach Can$112.7 billion, five times more than that forecast for 2019-20, the equivalent of 5.2 percent of Canada's GDP. The world's fourth-largest oil producer, Canada has been devastated by oil prices that have fallen as economies grind to a halt because of the coronavirus pandemic, as well as a price war between Russia and Saudi Arabia.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Its western oil-producing province of Alberta has been particularly hard hit.

The 75 percent wage subsidy for qualifying businesses -- up from 10 percent announced last week -- is for up to three months retroactive to March 15, Trudeau's office said. "Small businesses are the backbone of our economy, and... are facing economic hardship and uncertainty during the COVID-19 pandemic," Trudeau said.

"That is why we are taking action now to help them get the financial help they need to protect their workers and pay their bills." More than one million Canadians have lost their jobs since last week due to the brutal economic downturn caused by the killer pandemic sweeping the globe. The outbreak "is having serious consequences for Canadians and for the economy, as is the abrupt decline in world oil prices," the Bank of Canada said in an earlier statement explaining its "unscheduled" interest rate decision.

The goal of the rate cut "is to support the financial system in its central role of providing credit in the economy, and to lay the foundation for the economy's return to normalcy," the bank said.
PTI
first published: Mar 28, 2020 01:29 pm

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