Author: Consultant

A fertilizer shortage, worsened by war in Ukraine, is driving up global food prices and scarcity

A fertilizer shortage has added to growing concerns about the Ukraine war’s impact on the price and scarcity of certain basic foods.

Combined, Russia and Belarus had provided about 40% of the world’s exports of potash, according to Morgan Stanley. Russia’s exports were hit by sanctions. Further, in February, a major Belarus producer declared force majeure — a statement that it wouldn’t be able to uphold its contracts due to forces beyond its control.

Russia also exported 11% of the world’s urea, and 48% of the ammonium nitrate. Russia and Ukraine together export 28% of fertilizers made from nitrogen and phosphorous, as well as potassium, according to Morgan Stanley.

Disruptions of those shipments due to sanctions and war has sent fertilizer prices skyrocketing. High grain prices are rising even more. WATCH NOWVIDEO03:53The global shortage of fertilizer is a huge problem, says CF Industries Holdings CEO

“It is a huge problem,” said CF Industries CEO Tony Will in a recent CNBC appearance. He said global fertilizer supplies are very tight. CF manufactures and distributes fertilizers.

“It’s a confluence of factors, unprecedented demand coupled with a huge fall off in supply availability, only just exacerbated by the war in Ukraine and what’s going on with exports coming out of Russia and Ukraine,” Will added.

A contributor to higher costs and shortages

“All of this is a double whammy, if not a triple whammy,” said Bart Melek, global head of commodity strategy at TD Securities. “We have geopolitical risk, higher input costs and basically shortages.” 

“Agriculture is absolutely going to get hit. In the case of Canada, it’s good for Saskatchewan, which is the largest producer of potash in the world, but farmers are going to get hurt because per acre they’re going to pay a lot more,” Melek said. “They’re going to get lower yield simply because they’re economizing, particularly in emerging markets.”

Grain shortages will drive up the cost of basic foods and other commodities. “That’s going to lead to higher input costs for producing everything from grains, wheat and corn. The input costs are higher now because you’re going to have scarcity that bids the price up as well,” Melek said. Meanwhile, prices for cows, steers and pork bellies have also climbed significantly, he added.WATCH NOWVIDEO02:33We’re not just concerned about food prices but also availability, says Ospraie’s Anderson

Some fertilizers have more than doubled in price. For instance, Melek said potash traded in Vancouver was priced at about $210 per metric tons at the beginning of 2021, and it’s now valued at $565. He added that urea for delivery to the Middle East was trading at $268 per metric ton on the Chicago Board of Trade in early 2021 and was valued at $887.50 on Tuesday.

Will said CF Industries is running its plants around the clock, foregoing some maintenance and trying to expedite shipments to areas in need. “There are no new tons to make. It’s just a matter of trying to get them there as quickly as we can into the marketplace,” he said.

Just as the price of fertilizers has jumped, the price of agricultural commodities has also been soaring, amid fears of shortages.

“We are absolutely facing a problem of catastrophic proportion here,” said Will. “Not only is the issue lack of availability and affordability of nutrients and inputs, but Russia and Ukraine have historically exported about 30% of the global wheat trade and 20% of global corn trade.” He added that there are stocks of those commodities that are not getting out to the market because the Black Sea is closed.

Rising prices for wheat, corn and soy

Wheat futures for July were down slightly Wednesday. They rose about 4% Tuesday on worries about Ukraine but also on worse-than-expected U.S. crop conditions. Corn futures prices are up nearly 30% year-to-date and inched downward Wednesday on the Chicago Board of Trade. Soybean futures were also slightly lower.

Morgan Stanley expects grain prices to remain above last year’s levels until 2023.

“Before the Ukraine war, the dry weather in [Latin America] took inventories to levels that would already keep grain prices high,” wrote the Morgan Stanley analysts in a report.

“The war adds uncertainties related to Ukrainian corn/wheat supply, and, more important to fertilizer use and global yields,” they said. “Due to this, our base crop price scenario implies a 2-3% reduction of yields in higher-cost regions, with risks of larger disruptions depending on fertilizer availability and weather.”

The Morgan Stanley analysts said they expect higher prices in 2022 and 2023, but after that they expect inventories should normalize with more supply from Latin America. They also anticipate prices will align closer with production costs and drop 15% to 20% below longer-term soy and corn contracts.

Melek said corn rose 57% in 2021, and it could be volatile this year, averaging up 25% higher on the year. Live cattle prices rose 19% last year and could gain another 15% in 2022. Wheat was up 27% in 2021 and could tack on another 22% this year, he said.

Melek said the high prices are being driven by tight supplies and shortages.

“We’re talking about an erosion of food security on a scale we have not seen for a long time, and I think it will touch people in the lower income distribution in North America,” he added. Melek said farmers are likely to consider rotating in less fertilizer-intensive corps and will economize on the amount of nutrients they use.

“Consumers are going to make choices too,” he said.

Fertilizer production relies on natural gas, and that has made a difference to U.S. producers. The biggest buyers of the top three types of fertilizers are Brazil, India, the U.S. and China, according to Morgan Stanley.

“Being a North American producer is huge for us. We pay somewhere in the neighborhood of $5 to $6 per million British thermal unit [MMBtu] of natural gas,” CF’s Will said. “Europe pays $35 to $38 per MMBtu…That is a huge spread between low cost production, and it’s one of the reasons why fertilizer price is what it is. It’s not only a lack of availability, but the high-cost producers are very high cost.”

For some farmers, the high-priced or unavailable fertilizer will mean crops may not get as much nourishment this year. In turn, yields could be lower.

“In close contact with a number of our customers in Latin America, we’re going to begin exporting on a humanitarian basis just to get nutrients down there to a region that is a rich growing area but also starved for nutrients right now,” said CF’s Will.

Fed officials plan to shrink the balance sheet by $95 billion a month, meeting minutes indicate

Federal Reserve officials discussed how they want to reduce their trillions in bond holdings at the March meeting, with a consensus amount around $95 billion, minutes released Wednesday showed.

Officials “generally agreed” that a limit of $60 billion in Treasurys and $35 billion in mortgage-backed securities would be allowed to roll off, phased in over three months. That total would be about double the rate of the last effort, from 2017-19, and represent part of a historic switch from ultra-easy monetary policy.

In addition to the balance sheet talk, officials also discussed the pace of interest rate hikes ahead, with members leaning toward more aggressive moves.

At the meeting, the Fed approved its first interest rate increase in more than three years. The 25 basis point increase — a quarter percentage point — lifted the benchmark short-term borrowing rate from the near-zero level where it had been since March 2020.

The minutes, though, pointed to potential rate hikes of 50 basis points at upcoming meetings, a level consistent with market pricing for the May vote. In fact, there was considerable sentiment to go higher last month. Uncertainty over the war in Ukraine deterred some officials from going with a 50 basis point move in March.

“Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified,” the minutes said.

Stocks fell following the Fed release while government bond yields held higher.

The minutes were “a warning to anyone who thinks that the Fed is going to be more dovish in their fight against inflation,” said Quincy Krosby, chief equity strategist at LPL Financial. “Their message is, ‘You’re wrong.’”

Indeed, policymakers in recent days have grown increasingly strident in their views about taming inflation.

Governor Lael Brainard said Tuesday that bringing prices down will require a combination of steady hikes plus aggressive balance sheet reduction. Markets expect the Fed to hike rates a total of 250 basis points this year.

The Fed’s relative hawkishness extended to the balance sheet talk. Some memissuesbers wanted no caps on the amount of monthly runoff, while others said they were good with “relatively high” limits.

The balance sheet rundown will see the Fed allowing a capped level of proceeds from maturing securities to roll off each month while reinvesting the rest. Holdings of shorter-term Treasury bills would be targeted as they are “high valued as safe and liquid assets by the private sector.”

While officials did not make any formal votes, the minutes indicated that members agreed the process could start in May.

Whether the runoff actually will hit $95 billion, however, is still in question. MBS demand is muted now with refinancing demand low and interest rates rising. Officials acknowledged that passive runoff of mortgages likely may not be sufficient, with outright sales to be considered “after balance sheet runoff was well under way.”

Also at the meeting, Fed officials sharply raised their inflation outlook and lowered their economic growth expectations. Surging inflation is the driving factor behind the central bank tightening.

Markets were looking to the minutes release for details about where monetary policy heads from here. Specifically, Fed Chairman Jerome Powell said in his post-meeting news conference that minutes would provide details on the thinking about balance sheet reduction.

The Fed expanded its holdings to about $9 trillion, or more than double, during monthly bond purchases in the wake of the pandemic crisis. Those purchases ended only a month ago, despite evidence of roaring inflation higher than anything the U.S. had seen since the early 1980s, a surge that then-Chairman Paul Volcker quelled by dragging the economy into a recession.

Stocks fall for a second day as rates jump, with the Fed set to tighten policy aggressively

Stocks dipped for a second day on Wednesday and rates soared to new heights as investors bet the Federal Reserve is about to aggressively tighten policy to fight inflation, and in turn slow the economy.

The Dow Jones Industrial Average traded 170 points lower, or 0.5%. The S&P 500 slid 1%, and the Nasdaq Composite pulled back by 2% after shedding about 2.3% on Tuesday.

Investors awaited minutes from the Fed’s most-recent meeting, which are slated for release at 2 p.m. The minutes could impact investors’ outlook and offer new clues on the Fed’s plan to reduce its balance sheet. At its March meeting, the Fed hiked rates for the first time in more than three years and indicated six more increases were coming in 2022.

The minutes come as comments from Fed officials put pressure on stocks.

The 10-year Treasury yield jumped above 2.65% on Wednesday, hitting a three-year high and continuing its rapid climb this week. The rate ended Monday at 2.40%.

Philadelphia Federal Reserve President Patrick Harker said that he is “acutely concerned” about rising inflation, noting that he expects “a series of deliberate, methodical hikes as the year continues and the data evolve.”

His comments come less than a day after Fed Governor Lael Brainard indicated support for higher interest rates and said a “rapid” reduction of the central bank’s balance sheet could come as soon as May. Brainard’s remarks pushed stocks lower in the previous session.

“It is of paramount importance to get inflation down,” Brainard said during a Minneapolis Fed webinar. Brainard has been nominated to be vice chair of the Federal Open Market Committee. San Francisco Fed President Mary Daly echoed similar sentiments toward inflation on Tuesday.

“What that means for the markets are continued volatility around the uncertainty to higher rates and lower-income cash flow stocks, growth type stocks probably continuing to get discounted as rates rise,” Cliff Corso of Advisors Asset Management told CNBC’s “Worldwide Exchange.”

Tech shares fell again on Wednesday following Tuesday’s losses, as investors rotated out of the group and braced for higher rates to slow the economy. Apple, Microsoft, Amazon and Tesla contributed to the sector’s decline and the Nasdaq’s fall. Chipmakers Nvidia and Marvell Technology also continued their descent, falling 7% and 5%, respectively.

As the Fed hikes rates, investors have begun searching for stocks with stable profits and shying away from those offering future growth. That includes the utilities, health care and consumer staples sectors — which continued to climb Wednesday, with Amgen and Johnson & Johnson rising about 2%. Consumer staples such as Walmart, Coca-Cola and Procter & Gamble also inched slightly higher.

“Today and yesterday you’re really starting to see the equity market catch up with the bond market,” said Chris Zaccarelli, CIO at Independent Advisor Alliance. “And by that, I mean equities are starting price in a more aggressive Fed. You’re starting to see a bid for safety, you’re seeing that classic risk-off move.”

Earnings ahead

Traders were also bracing for the start of the corporate earnings season.

Goldman Sachs chief U.S. equity strategist David Kostin said Wednesday on CNBC’s “Squawk on the Street” that stocks with “resilient margins” are better prepared to weather the current environment. That includes names such as Alphabet and Nike — which have maintained “high and stable margins” even amid the pandemic, he said.

“Overall, the U.S. equities market maybe has 5% upside from these likes between now and the end of the year,” he said. “Should we be going into a recession it will be meaningful downside, but that’s not the base case right now.”

UK has detected a new Covid variant. Here’s what we know so far about omicron XE PUBLISHED WED, APR 6 20228:35 AM EDTUPDATED 3 HOURS AGO

LONDON — A new omicron subvariant has been detected in the U.K. as the country faces a renewed surge in Covid-19 hospitalizations.

The XE variant, as it is known, has so far been detected in 637 patients nationwide, according to the latest statistics from the U.K. Health Security Agency, which said there is currently not enough evidence to draw conclusions on its transmissibility or severity.

XE contains a mix of the previously highly infectious omicron BA.1 strain, which emerged in late 2021, and the newer “stealth” BA.2 variant, currently the U.K.’s dominant variant.

It is what’s known as a “recombinant,” a type of variant that can occur when an individual becomes infected with two or more variants at the same time, resulting in a mixing of their genetic material within a patient’s body.

XE’s transmissibility, severity not yet conclusive

Such recombinants are not uncommon, having occurred several times during the coronavirus pandemic.

Data on the new variant’s severity and ability to evade vaccines is not yet clear, though early estimates suggest it could be more transmissible than earlier strains.

UKHSA data shows XE has a growth rate of 9.8% above that of BA.2, while the World Health Organization has so far put that figure at 10%.

Health authorities have said they are continuing to monitor the situation.

“This particular recombinant, XE, has shown a variable growth rate and we cannot yet confirm whether it has a true growth advantage. So far there is not enough evidence to draw conclusions about transmissibility, severity or vaccine effectiveness,” UKHSA’s chief medical advisor, professor Susan Hopkins, said.

The earliest confirmed XE case in Britain has a specimen date of Jan. 19 of this year, suggesting it could have been in circulation in the population for several months. It has also been detected beyond the U.K. in Thailand.

Surging cases

It comes as the U.K. faces a new surge in infections. Still, the XE variant currently accounts for less than 1% of total Covid cases that have undergone genomic sequencing there.

According to the Office for National Statistics, 4.9 million people in Britain, or 1 in 13, were infected with Covid as of March 26 — a record high since its survey began in April 2020. Hospitalizations, meanwhile, have risen more than 7% in the last week to over 16,500.

Older adults have proven particularly susceptible to the latest wave amid waning booster immunity and easing Covid restrictions.

According to Imperial College’s latest React study, an estimated 8.31% of the over-55 age group tested positive as of the end of March — nearly 20 times the average prevalence recorded since the survey started in May 2020. Cases among children and younger adults, meanwhile, appear to be plateauing.

The findings mark the 19th and final round of the study as Covid restrictions and surveillance systems are unwound in the U.K. and beyond.

IEA member countries to tap 60 million barrels of oil on top of U.S. release

Member countries of the International Energy Agency besides the United States have agreed to release 60 million barrels of oil from storage, an official from the U.S. government and an IEA member country official told Reuters.

The amount will be matched by the United States as part of Washington’s pledge last week to tap 180 million barrels of oil from storage, they added.

The massive releases are aimed at cooling prices and easing supply concerns as sanctions and buyer aversion disrupts Russian oil supplies in the wake of its invasion of Ukraine.

“After around the clock diplomacy by the U.S. and of course our allies and partners, the IEA countries have agreed to release an additional 60 million barrels,” a U.S. official said.

“This will be the largest release from both the U.S. and other countries in IEA history. This will supplement our 1 million barrels per day for six months and of course will serve as a bridge until the end of the year when domestic production ramps up.”

The move by the U.S.-allied IEA countries, which represent 31 mostly industrialized countries but not Russia, would be their second co-ordinated release in a month and would be the fifth in the agency’s history to confront oil market outages.

Monday April 4

China markets closed

Germany trade surplus

(8:30 a.m. ET) Canadian building permits for February. Analyst estimate is a rise of 5.5 per cent from January.

(10:30 a.m. ET) Bank of Canada Business Outlook and Survey of Consumer Expectations for Q1.

(10 a.m. ET) U.S. factory orders for February. The Street expects a decline of 0.6 per cent from January.

—

Tuesday April 5

China markets closed

Japan household spending and PMI

Euro zone PMI

(8:30 a.m. ET) Canada’s merchandise trade balance for February.

(8:30 a.m. ET) U.S. goods and services trade deficit for February.

(9:45 a.m. ET) U.S. Markit services and composite PMI for March.

(10 a.m. ET) U.S. ISM Services PMI for March.

Earnings include: Novagold Resources Inc.

—

Wednesday April 6

China PMI and foreign reserves

Euro zone PPI

Germany factory orders

(10 a.m. ET) Canada’s Ivey PMI for March.

(2 p.m. ET) U.S. Fed minutes from March 15-16 meeting released.

—

Thursday April 7

Euro zone retail sales

(8:30 a.m. ET) U.S. initial jobless claims for week ending April 2. Estimate is 200,000, down 2,000 from the previous week.

(3 p.m. ET) U.S. consumer credit for February.

(4 p.m. ET) Canada’s federal budget is released.

Earnings include: Constellation Brands Inc.; Richelieu Hardware Ltd.

—

Friday April 8

China aggregate yuan financing, new yuan loans and money supply

Japan current account surplus and consumer confidence

(8:30 a.m. ET) Canadian employment for March. The Street expects a rise of 0.3 per cent, or 65,000 jobs, from February with the unemployment rate falling 0.1 per cent to 5.4 per cent.

(10 a.m. ET) U.S. wholesale inventories for February.

Earnings include: Corus Entertainment Inc.

China’s widening COVID-19 curbs are exacting a mounting economic toll, business group warns

China’s top European business group warned on Wednesday that its “zero-COVID” strategy was harming the attractiveness of Shanghai as a financial hub, echoing analysts voicing caution over the mounting economic toll of the country’s coronavirus curbs.

China has for the past month been tackling multiple outbreaks with an elimination strategy that seeks to test, trace and centrally quarantine all positive COVID-19 cases.

Nomura estimated on Tuesday that a total of 23 Chinese cities have implemented either full or partial lockdowns, which collectively are home to an estimated 193 million people and contribute to 22 per cent of China’s GDP.

The European Union Chamber of Commerce in China said that the strategy was causing growing difficulties transporting goods across provinces and through ports, harming factory output.

Chamber President Joerg Wuttke told a media round table that this would likely impact China’s ability to export, which could eventually stoke inflation.

“In China, COVID is still associated as if it were the plague. I think there needs a bit more education from the Chinese authorities, to take the fear away in order to make people more comfortable to live with this kind of uncertainty,” he said on Wednesday.

China, which has severely restricted international travel for the last two years, shows little inclination to ease up on its approach for now.

On Wednesday, Wu Zunyou, chief epidemiologist at the Chinese Center For Disease Control and Prevention, said that the epidemic situation would improve soon if China strictly implements existing COVID measures.

A handful of economists have lowered growth forecasts for the first half of 2022, as the COVID surge, coming amid persistent property weakness and global uncertainties, makes it harder for China to hit its full-year target of around 5.5 per cent.

Shanghai-based Bank of Communications cut its forecast for China’s first-quarter GDP growth from 5 per cent to 4 per cent, with the drop coming solely from slowing activity in March, said senior economist Tang Jianwei.

Shanghai has put strict movement curbs on its 26 million residents, barring them from even leaving their front doors other than for COVID tests.

Dan Wang, chief economist at the Hang Seng Bank China in Shanghai, said the primary ripple effect for now from the city’s lockdown was in the financial and legal services sector.

For example, companies looking to go public typically have to work in person with legal teams based in Shanghai – but current travel restrictions make that impossible.

“Macro confidence will collapse if this lockdown continues like this, and it will be reflected in the stock market,” she said. “I expect monetary easing happening pretty soon in the second quarter.”

Enbridge looking at carbon capture and storage opportunities in U.S. Gulf Coast and Ontario

Canadian energy infrastructure company Enbridge Inc ENB-T +0.69%increase is looking at carbon capture and storage opportunities in the U.S. Gulf Coast and Sarnia, Ontario, Chief Executive Al Monaco said on Wednesday.

Last week the Alberta government picked Enbridge’s plans for a carbon storage hub near Edmonton as one of six open-access hub proposals to move forward in the Canadian province.

Carbon capture and storage is a costly technology that involves capturing climate-warming emissions produced during industrial processes and sequestering them permanently underground.

Canada’s 2022 federal budget

When will the 2022 federal budget be announced?

Finance Minister Chrystia Freeland will deliver the 2022 federal budget on April 7 at 4 p.m. ET, the government announced during question period on March 29.

This will mark the first budget announcement since the 2021 federal election.

What will the federal budget cover?

Thursday’s budget is expected to have three principal themes: measures to address climate change, housing affordability and Canada’s role in the world. The latter is a late addition that will see Ottawa boost defence spending in response to Russia’s invasion of Ukraine. It will also include money for cybersecurity to combat foreign disinformation campaigns.Canada’s changing definition of defence spendingCanada’s defence spending as a percentage of GDP, by fiscal year Without accounting change Including spending by departments outside of Defence

The 2022 federal budget will also be an opportunity for the government to outline how it intends to wind down the massive emergency spending related to the COVID-19 pandemic, while delivering on the billions in promised new spending from last year’s Liberal Party election platform and the recently announced parliamentary co-operation agreement with the NDP.

Other potential items to look for in the budget:

• Housing: The Liberal election platform promised $4-billion to build 100,000 new homes by 2025, with Ottawa giving money directly to municipalities to speed up new residential construction. It also pledged another $2.7-billion to repair and build affordable housing units. Rachelle Younglai reports that Ottawa is facing pressure to address Canada’s affordable-housing problem in Thursday’s budget.
• Climate change: Other big-ticket items include $9-billion for a range of climate programs and billions for green economy initiatives, such as clean technology and investments in manufacturing zero-emission vehicles.
• Defence: A Scotiabank report that offers a primer ahead of the federal budgetalso expects another $12-billion to top up defence spending. Steven Chase and Patrick Brethour report that Canada’s defence spending could see a boost to fulfill its NATO promises and protect Arctic sovereignty.
• Electric vehicles: The budget will also include about $2-billion on a strategy to accelerate Canada’s production and processing of critical minerals needed for the electric vehicle supply chain.

What is the projected federal budget deficit for 2022?

During the December fiscal update, Ms. Freeland projected that the size of the federal deficit would decline from $327.7-billion in 2020-21, to $144.5-billion in 2021-22 and $58.4-billion for the 2022-23 fiscal year that begins on April 1. That was, however, beforethe war in Ukraine began and the Liberal-NDP deal was announced.

The massive spending during the COVID-19 pandemic has led to a near doubling of the federal debt, which is projected to reach $1.25-trillion in 2022-23.

Ms. Freeland’s December fiscal update said the debt-to-GDP ratio would decline slightly over the next five years, reaching 44 per cent by 2026-27, despite climbing from 30.7 per cent to 47.6 per cent between 2019-20 and 2020-21.

What will Canada’s soaring inflation mean for the federal budget?

Canada’s inflation rate hit a new three-decade high in February, rising 5.7 per cent from a year earlier. That was the highest inflation rate since August 1991, and it marked the 11th consecutive month that inflation has surpassed the Bank of Canada’s target range of 1 per cent to 3 per cent.

Households are especially feeling the pinch on several fronts. Shelter costs rose 6.6 per cent, the largest annual increase since 1983. Groceries rose 7.4 per cent, the most since 2009. And gas prices jumped 6.9 per cent in a single month.Consumer Price IndexYear-over-year percentage change-101234567%198919952001200720132019Nov. 20031.58%THE GLOBE AND MAIL, SOURCE: STATSCANDATASHARE×

Russia’s invasion of Ukraine is also fuelling economic uncertainty with the soaring costs of fuel prices and rampant supply chain issues.

Economists say Ottawa will likely benefit in the short term from stronger-than-projected revenues for economic growth, inflation and the higher price of oil – due to strong corporate balance sheets and soaring commodity prices – but those gains will be largely offset by the added spending from election platform commitments and other recent promises. High inflation also helps the government’s bottom line in the short term, even though expected increases in Bank of Canada interest rates are a source of concern over the longer term.

Robert Fife, Bill Curry and Steven Chasereport that Ms. Freeland is readying another big-spending federal budget amid fears of rising inflation. Business executives say the risk of pumping more money into an already hot economy could fan inflation even further, forcing the Bank of Canada to further hike rates. “What we can’t afford is another round of new spending that is paid for with borrowed money,” said Canadian Chamber of Commerce president Perrin Beatty.

What does the Liberal-NDP deal mean for the federal budget?

In March, 2022, Prime Minister Justin Trudeau announced an agreement had been struck with the NDP to prop up the minority Liberal government until 2025 in exchange for parliamentary co-operation and progress on key NDP policies, including an income-based dental care program, pharmacare, housing and increased federal transfers to the provinces for health care.

The agreement specifically states the NDP will support four Liberal budgets as part of the deal.

On Tuesday, NDP Leader Jagmeet Singh said he received an advance briefing on the federal budget and expects to see “first steps” toward national dental care and other NDP priorities:

• The March agreement included pledges to launch a new dental care program for low-income Canadians, starting with under 12-year-olds in 2022 and full implementation by 2025.
• It also committed the government to pass a Canada Pharmacare Act by 2023 and provide the provinces with “additional ongoing investments” for health care.
• Mr. Singh said he also expects to see measures that address housing shortages and climate change, given they were also mentioned in the deal with the Liberals.

The recent agreement between the Liberals and the NDP did not include any costing estimates. Though a recent Scotiabank report estimates the Liberal-NDP pact will add another $15-billion to $20-billion over the life of the three-year agreement – and potentially $40-billion by 2027. Meanwhile, according to a report released Tuesday by Desjardins economist Randall Bartlett, the Parliamentary Budget Officer has estimated the NDP’s proposed national pharmacare plan would cost more than $11-billion a year.

What’s the feeling from business leaders?

Many CEOs and senior figures in Canadian business are looking for signs that the government is ready to use Thursday’s federal budget to act on economic policy – not just talk about it. James Bradshaw and Andrew Willis report that top executives are increasingly concerned that Canada is missing a chance to set itself up for long-term success. They worry the country is sending the wrong signals, failing to encourage businesses to spend on expansion and missing out on investments from foreign companies.

“Some of the challenges are ideology challenges,” Royal Bank of Canada chief executive Dave McKay said. “And what we’re hoping to see in the budget is a shift in ideology from tax-and-spend, which does not create sustainable growth, to an incentive to take risks, and innovate, and grow and solve problems.”

“Tax and spend to me is like eating Sugar Pops for breakfast. You feel really good for an hour and you feel crappy by noon, at the end of the day. And that’s what tax-and-spend gives you. It doesn’t give you sustainable prosperity.”

Will Chrystia Freeland continue the tradition of finance ministers buying budget day shoes?

There is an ongoing tradition that states the Minister of Finance should wear new shoes when the federal budget is delivered, a practice that dates back to the 1950s. In 1955, Walter Edward Harris was the first minister of finance to don new shoes on budget day.

Ms. Freeland, the first woman to ever present Canada’s federal budget, continued the tradition during the last budget unveiling on April 19, 2021. She wore black leather pumps from Toronto footwear label Zvelle and chose to unbox the design on her Twitter page.