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Monday, 22 February, marks the official start date of the COVID-19 vaccine rollout in Australia as more than 142,000 Pfizer vaccines touched down at Sydney Airport – an endeavour that has been dubbed Australia’s biggest peacetime operation.

The shipment, delivered by Singapore Airlines cargo, is the first of 20 million doses that the Government has secured as part of the COVID-19 Vaccine and Treatment Strategy.

“It was March the 11th last year that the pandemic was declared and now on Aussie soil we have the Pfizer vaccine and it’s ready to go,” Pfizer’s Medical Director Krishan Thiru told the Today show this morning.

“Our focus is on delivering the vaccine to the points of use where the Government asks us to deliver them. That’s what we’re focused on and that’s what we’ll do.”

The vaccine rollout is due to begin next week with the first Australians to begin receiving the vaccine from 22 February.

“The vaccine has landed and we’re stepping up our fight against the pandemic,” Prime Minister Scott Morrison said.

“Once the final safety checks are completed we can start rolling out the vaccine to our most vulnerable Australians and to our frontline border and health workers.

“The hard work of Australians has meant we’re in an enviable position in our fight against the pandemic, so we’ve been able to take the time to properly assess our vaccine decisions and give our world-class regulator the time they need to review the safety of the jabs.

“While we’re taking the time to get the rollout right, I am confident all Australians who wish to be vaccinated against COVID-19 will receive a vaccine this year.”

Who gets first dibs on the vaccine?

As part of the ‘Phase 1a’ vaccine rollout, 80,000 doses will be administered in the first week. 50,000 doses have been allocated to quarantine and border workers and frontline healthcare workers, while 30,000 are reserved for aged care and disability care staff and residents. 62,000 will be set aside for second doses which will be given 21 days after the first dose.

Supplied: Australian Government

The Government’s goal is to eventually deliver 150,000 jabs per day and have the entire adult population vaccinated by late October.

The vaccine will be administered in hospital ‘hubs’ across Australia as well as in residential aged care and disability facilities.

How will the vaccine be stored?

Logistics company DHL has stepped in to tackle the complex task of getting the vaccine to Australians around the country.

The company will employ a network of 200 portable ultra-low-temperature freezers to ensure the vaccine, which needs to be stored at minus 70 degrees, can be delivered safely.

Dr Thiru said the vaccines had been shipped to Australia on specially-designed thermal shippers and were kept in refrigerated containers.

“Our company has a rich heritage in cold chain vaccine storage and distribution. We’ve so far got a 99.9% success rate from delivering the vaccines from the factory door to where they’re used with the quality and integrity interact,” he said.

Will the vaccine stop virus transmission?

Although the vaccine is designed to protect against COVID-19 and its variants, it is too early to tell if it will stop the transmission of the virus.

“You’d need to see a larger proportion of the population vaccinated before you can tell whether it’s going to stop transmission or not and whether you’re going to see a downturn in the rates,” Dr Thiru said.

He explained that laboratory testing results were promising and indicated that the vaccine could be effective against some of the newer COVID-19 strains including the UK, South African, and Brazilian variants.

“If sometime in the future it becomes apparent it’s not effective, you can easily tweak the formula for the vaccine.”

Why has the vaccine rollout taken so long?

When asked why Australia has been slower than other countries in the vaccination rollout, Dr Thiru explained that “every country’s situation is different.” A vaccine, he said, could not start production until it was given the go-ahead by certain authorities.

“Vaccinations can’t start until the vaccine has been fully and thoroughly evaluated by the independent regulatory agency and approved,” he said.

“The TGA is one of the world’s most respected agencies. They get a full evaluation.

“They didn’t have that emergency situation we’ve seen in some other countries.”

The Therapeutic Goods Administration (TGA) is conducting batch tests on the first of the Pfizer vaccine arrivals to ensure they meet quality standards before they are deployed next week.

“Australians can be reassured this vaccine has gone through rigorous, independent testing by the Therapeutic Goods Administration to ensure it is safe, effective, and manufactured to a high standard,” Minister for Health and Aged Care Greg Hunt said.

“These vaccines will now go through further batch testing to further check for quality and efficacy, ensuring all Australians have confidence in the vaccines they receive.”

Why did Pfizer get first preference?

The Pfizer/BioNTech vaccine is the first to be provisionally approved for use in Australia by the TGA with a 95% efficacy score from a clinical trial last year.

Despite the promising results, there have been ongoing concerns over the vaccine’s safety and effectiveness.

33 Norwegian officials aged 75 and older died a short time after receiving the Pfizer vaccine in mid-January and other countries have since reported further deaths and side effects.

A World Health Organization (WHO) committee said this was “in line with the expected, all-cause mortality rates and causes of death in the sub-population of frail, elderly individuals” and that the risk-benefit balance of the vaccine “remains favourable in the elderly.”

The TGA said that, although no concrete link has been established between the deaths and the vaccine, it would work with international authorities and Pfizer to get more information.

Chief Medical Officer Dr Brendan Murphy told Nine News that he was not unduly concerned about the Pfizer vaccine rollout, which he says is part of a “diversified vaccine strategy.”

“That’s why we’ve bought more than one vaccine and I still think the Pfizer vaccine will be okay but we just have to wait and see,” he said.

In addition to the Pfizer vaccine, Australia has approved 53.8 million AstraZeneca vaccine doses and 51 million Novavax vaccine doses.

The Government has also signed up to the international COVAX Facility which provides access to a range of vaccines to immunise up to 50 per cent of the Australian population.

The full press release for the vaccine rollout can be found here.


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CIBC economist Benjamin Tal on why the pandemic-fuelled recession hasn’t had as big a mark on housing in Canada

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CIBC Deputy Chief Economist Benjamin Tal speaks with Financial Post’s Larysa Harapyn about why the pandemic-fuelled recession hasn’t had as big a mark on housing in Canada.

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The World Economic Forum’s Global Risks Report 2021 has unveiled an alarming risk outlook of short-term healthcare battles and long-term environmental damage and social fragmentation.

“The immediate human and economic cost of COVID-19 is severe. It threatens to scale back years of progress on reducing poverty and inequality and to further weaken social cohesion and global cooperation,” wrote the report.

“The ramifications—in the form of social unrest, political fragmentation and geopolitical tensions—will shape the effectiveness of our responses to the other key threats of the next decade: cyberattacks, weapons of mass destruction and, most notably, climate change.”

The most imminent threats identified – occurring within the next two years – were health related. For instance, fighting infectious diseases topped the list of clear and present dangers in the short-term.

Source: World Economic Forum

In the next three to five years, the report predicts widespread economic risks such as asset bubbles, price instability, commodity shocks and debt crises. Technology is also predicted to break down, as IT infrastructure is tested and cybersecurity threats increase.

The biggest existential threats were geopolitical, singling out weapons of mass destruction and state collapse as the top long-term global risks.

Economic fragility

Working hours equivalent to 495 million jobs were lost in the second quarter of 2020 alone, which wreaked havoc across the global economy.

World output is expected to have shrunk by 4.4 per cent in 2020. In comparison, the 2008-09 Global Financial Crisis caused a 0.1 per cent contraction in the global economy.

Only 28 economies are expected to have grown in 2020. The only G-20 country predicted to grow is China.

Source: World Economic Forum; John Hopkins University & Medicine

The fall out from this economic disruption is expected to hit the most vulnerable hardest. The global recession is expected to force as many as 150 million more people into extreme poverty, increasing the total to 9.4 per cent of the world’s population. This will be exacerbated by gaps in public health and educational disparities.

Businesses have also been shaken up by changing consumer behaviours and technological transformations in the workplace and at home.

Digital divides

Automation, information suppression and gaps in regulation threaten to stymie the progress promised by the digital revolution we are currently in.

“COVID-19 has accelerated and broadened the Fourth Industrial Revolution with the rapid expansion of e-commerce, online education, digital health and remote work. These shifts will continue to dramatically transform human interactions and livelihoods long after the pandemic is behind us,” wrote the report.

“However, these developments also risk exacerbating and creating inequalities. Respondents to the Global Risks Perception Survey (GRPS) rated “digital inequality” both as a critical threat to the world over the next two years and the seventh most likely long-term risk.”

Biases may reduce the accessibility and capacity of automation. This could mean that health diagnostics, investing, education and legal disputes are susceptible to manipulation through algorithmic manipulation.

The control of information and public discourse will be a growing social concern, as governments and tech giants struggle over tech regulation and data protection.

Climate change

A failure to address climate change is one of the most impactful long-term risks identified in the Global Risks Report.

Global CO2 emissions fell by 9 per cent in the first half of 2020, however this will need to be maintained to limit global warming to 1.5 degrees Celcius.

“There is only a short window to redress these disparities. A shift towards greener production and consumption cannot be delayed until economies are revived,” the report stated.

Source: World Economic Forum

Youth disillusionment

Environmental degradation, rising mental health concerns and a disrupted jobs market have heaped pressure onto the global youth.

“Young adults (ages 15–24) around the world are experiencing their second major global crisis within a decade: they entered youth in the throes of the financial crisis, and are now exiting at the outset of a pandemic not seen in generations,” the report wrote.

The rise of the gig economy means that young people now jump between low-paid and short-term jobs.

During the first wave of pandemic lockdowns, about 80 per cent of students shifted to online learning. However this disadvantaged students who lacked the technology or family resources to participate in digital learning, aggravating youth inequalities.

Young people are also leading the fight against systemic issues such as corruption, racial inequality and economic injustice. This creates a risk of intergenerational frictions and greater social divisiveness if different groups are unwilling to work together.

The report draws upon the responses of 650 members of the World Economic Forum. Responses were collected in the annual Global Risks Perception Survey, and was developed in partnership with Marsh McLennan, Zurich Insurance Group and SK Group.


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It’s been very strong, and that strength can’t be sustained forever

Stephen Brown, Capital Economics

Yet those trends won’t last forever. Cities such as Halifax and Montreal have absorbed the effects of lower mortgage rates quickly, Brown said, and others such as Toronto and Vancouver are still dealing with weaker immigration levels, which weigh on rents and investor interest. 

“It’s been very strong, and that strength can’t be sustained forever,” Brown said. “So, the housing market will start to lose some momentum for that reason.” 

The economics unit at Bank of Montreal said it sees housing sales cooling nationally, but home prices being supported by the lack of supply and still-low interest rates.

BMO’s economists forecast the MLS Home Price Index would increase seven per cent this year, “with the first half of the year still characterized by outsized strength in single-detached homes, especially in smaller markets, partly offset by sluggish condo prices,” they wrote. 

A lot of demand is being pulled forward due to low rates and distorted buyer psychology

Shaun Hildebrand, Urbanation

“Whether or not that rotation persists after the vaccine is widely administered is probably a question for the 2022 outlook, but we suspect core urban markets will ultimately find a solid footing again after further underperformance in the meantime,” they added in their Dec. 23 outlook.

Downtown Toronto condo sales actually rose in December to their highest level since May 2019, increasing by 26 per cent month-over-month and 102 per cent year-over-year, according to Shaun Hildebrand, president of research firm Urbanation Inc.

Yet for the Greater Toronto Area housing market more broadly, Urbanation also sees a slowdown coming later this year.

“A lot of demand is being pulled forward due to low rates and distorted buyer psychology as many that weren’t planning on moving are now wanting a change and others think they need to get into the market now before it’s ‘too late,’” Hildebrand said in an email. “An eventual recovery in the economy and immigration will be important for the market as vaccines are introduced — but they will have a lagged effect and we could be dealing with a bit of a hangover later this year, specifically for (Toronto’s suburban) houses.”

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“A potential explanation for this phenomenon is that consumers with mortgages in areas with high house price growth have been shielded from insolvency over the past few years by the growing value of their home (e.g. the ability to extract home equity to consolidate their debts or sell their home to pay their debts),” it states. “Conversely, non-mortgage holders in hotter housing markets have missed out on the benefits of house price appreciation, while still bearing the costs associated with living in affordability-challenged areas (e.g. higher rents).”

In line with this possible explanation, the memo says, is that in British Columbia and Ontario, home to the pricey real estate markets of Vancouver and Toronto, the share of insolvencies filed by mortgage-bearing consumers had fallen sharply. Meanwhile, in the rest of Canada, those insolvencies had remained steady.

Recent public-opinion surveys have suggested that consumers have not forgotten about the risks posed by rising rates either.

A Royal Bank of Canada “Home Buying Sentiment Poll” found 45 per cent of those polled were concerned about interest rates in the coming year. And a recent poll conducted by the Credit Counselling Society, a non-profit that aims to help consumers manage their finances better, found that 31 per cent of Canadians it surveyed were having trouble paying down their debt, even with interest rates so low.

“If consumers don’t make a concerted effort to reduce their … non-mortgage debt over the next two to four years, and then rates start to go up — that could have a material impact on mortgage rates, which could have an impact on rental rates — then consumers will put themselves in difficulty,” said Scott Hannah, chief executive of the CCS, in an interview. “So that’s the challenge that we throw out there for consumers is, if you don’t get your financial house in order over the next three to five years, pay off your consumer debt, set aside three to six months’ worth of living expenses for emergencies, you’re going to be susceptible to the next thing, whatever that is.”

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Furthermore, the largesse of the federal government might have helped many Canadians from packing on more debt, but any savings could be used to pay those liabilities down.

CIBC on Dec. 29 released the findings of a survey that found paying down debt was the top financial priority for Canadians for the 11th straight year, at 20 per cent, with “keeping up with bills/getting by” coming a close second, at 18 per cent.

A spending boom driven by savings could also have consequences beyond the immediate gains realized by certain businesses, such as an increase in prices.

Pedro Antunes, chief economist at the Conference Board of Canada, likened the increase in disposable income to a “slingshot” that’s being pulled back. Some of that money will be saved and some of it will be spent elsewhere, he said, since travel restrictions remain in place and COVID-19-caused economic uncertainty lingers.

Yet when the world changes, so, too, will people’s spending plans. This could boost some businesses, such as those in the travel industry, but weigh on others that have gained from the stay-at-home trend, like those specializing in home renovations.

“But nonetheless … that slingshot that’s been pulled back, there’s a lot of capacity for continuing to spend into 2021, and even in the year after,” Antunes said in an interview. “As things normalize, people are going to, I think, open their wallets a little bit more.”

The federal government certainly wants Canadians to spend some of their savings, as part of its intention to pump $100 billion in stimulus money over three years into the economy.

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Lenders closely monitor the financial situation of borrowers in Canada, and have historically been “proactive” by offering modifications and working with borrowers to make payments affordable, Fitch said.

Other pressures expected to drive house prices down in the coming year include declining rents and a significant drop in immigration, largely due to the pandemic.

“Rents that have recently declined by 10 per cent to 15 per cent in major cities are making home ownership less attractive while immigration was down by 41 per cent year-on-year in the first seven months of 2020,” Hosterman wrote, adding that the ratings agency expects immigration to remain low through next year.

A mortgage affordability stress test is expected to put further pressure on home prices.

The ratings agency expects a quick recovery in the housing market in 2022, provided economic activity returns to pre-pandemic levels.

Canada’s residential real estate prices have been on a tear this year after pent-up demand in the early months of the pandemic led to a surge. Sales were driven, in part, by a large number of people working from home and generally spending more time there as everything from travel to restaurant dining remained restricted to control the spread of COVID-19.

Average home prices in October were down slightly from September, but still up 15.1 per cent from a year earlier.

Rishi Sondhi, an economist at Toronto-Dominion Bank, said in a Nov. 16 report that the trends were likely to continue for the balance of the year, but warned that affordability pressures were mounting in expensive markets such as Toronto, which would make sustaining the growth difficult in the longer term.

“Notwithstanding the dip in October, tight markets and the shift in buying towards larger, more expensive properties should keep price growth positive in the fourth quarter overall,” Sondhi wrote.

Fitch is projecting an increase of seven per cent for all of 2020, but suggests the forces weighing on home prices will lead to a decline of three to five per cent next year.

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Consumer debt in Canada rose 3.8 per cent in the third quarter to $2.041 trillion, driven by the surging housing market and new auto loans, Equifax Canada’s latest report reveals.

Mortgage balances were up 6.6 per cent from the year before and the average new mortgage loan rose 8.6 per cent to exceed $300,000 for the first time.

“Homebuyers are largely the reason why we’ve crossed over the $2 trillion threshold,” said Rebecca Oakes, AVP of Advanced Analytics at Equifax Canada.

New auto loans were also up 11.7 per cent from last year and average auto loan amounts are at their highest level in four years. Oakes said car prices have increased as manufacturers have not been able to keep up with a rise in demand during the pandemic. There is speculation that consumers are buying more cars to avoid public transportation.

Overall average consumer debt rose to $74,897, up 3.3 per cent from the same period last year.

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Frugal Canadian households and businesses have accumulated a minimum of $170 billion in excess cash throughout COVID-19 and are currently sitting on the largest cash hoard in recorded history, according to CIBC.

In a report published on Tuesday, CIBC deputy chief economist Benjamin Tal and economist Katherine Judge wrote that the disparity is a result of a spike in disposable income not being met with increased consumer spending.

In the second quarter, labour income fell by over $100 billion, but that number was offset by government transfers, which grew by $225 billion and what’s described as “other benefits” — pandemic emergency programs — rising by $151 billion. Instead of spending that money, Canadians hoarded the extra cash, leading to the savings rate increasing from 3.6 per cent to 28.2 per cent as of June.

Tal and Judge estimate that Canadian households, mostly those made up of mid-income and high-income Canadians, are sitting on $90 billion in excess cash, which they’ve dutifully pumped into their chequing and savings accounts.

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The story changes, though, if the escalation in bond yields is signalling a turn in momentum that could lead to multiple hikes over the next few months.

Except for a brief blip in June, when they hit 0.52 per cent for a day before crashing back down to 0.37 per cent, yields have hovered between 0.35 per cent to 0.40 per cent since April. In January, before COVID-19 hammered the bond market, yields sat at 1.3 per cent. The proceeding plunge led to a similar fall for five-year fixed mortgage rates. CanWise was offering a 2.49 per cent rate on a five-year fixed mortgage that is now 100 basis points lower.

Should Pfizer’s vaccine hit the market, Laird expects bond yields will rapidly recover, giving lenders the ability to hike mortgage rates alongside them. In a post-pandemic world, with inflation on the table, a much faster and more powerful escalation could occur.

And so while Canadians have long favoured variables rates, Eisner said they may want to consider locking in a five-year fixed rate now before the momentum turns against them.

“I personally have a rental property and obviously I check mortgage rates several times a day…. I locked in my rental property today,” Eisner said. “Now’s the time, if you’re on the fence.”

Financial Post

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