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How much damage will coronavirus wreak on the global economy? – Financial Times

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In just a few months Covid-19 has ballooned into a global pandemic, leading governments to close borders and lock down entire cities. Economists have struggled to come up with estimates of the economic damage, but their projections, such as they are, are becoming grimmer.

According to Ethan Harris, head of global economics research at Bank of America, global growth in gross domestic product is set to drop to zero this year, with the US and Europe sinking into a recession and China growing at just 1.6 per cent. At the end of January, Mr Harris’s team had expected the global economy to grow 3.1 per cent and China 5.6 per cent.

Gregory Daco, chief US economist at Oxford Economics, believes the US is already in recession and will experience a 12 per cent contraction in output in the second quarter before bouncing back to end the year flat. Such an outcome could lead to about one million job losses, he said.

“The coronavirus pandemic will lead to profound, pervasive and persistent, but not permanent, reductions in activity,” said Mr Daco.

Policymakers have rushed to limit the worst of the economic pain, with central banks announcing broad-based stimulus programmes and governments committing to multi-trillion-dollar fiscal initiatives.

But given the uncertainty surrounding just how many people will become infected and how long businesses will stay shut, it remains unclear if these measures will be sufficient.

As Michael Feroli, chief US economist at JPMorgan, cautioned in a recent note: “The current environment is one of pervasive ‘Knightian uncertainty’ — that is, an unknown for which we cannot even quantify the odds of various outcomes.” Colby Smith

How quickly can China rebound from its outbreak?

As the pandemic has moved from China to Europe, some analysts have taken heart in apparent progress made by Beijing in containing the virus. But the coming week is unlikely to lend much comfort to investors hoping the worst has already passed.

After a poor performance in 2019, heavy industry in China looks set for its worst start to a year since the global financial crisis. Industrial profits data for January and February, due to be released on Friday, will provide insights into the depth of the nation’s economic gloom.

Industrial output fell by 13.5 per cent in January-February from the same period a year earlier, which was the weakest reading on record. Profits at big industrial firms were already on a downward spiral thanks to the US-China trade war, dropping 6.3 per cent year on year in December, which helped drag profits for Chinese industry during 2019 down 3.3 per cent.

And while industrial profits data may confirm what many reasonably suspect was a terrible start to 2020, more frequently updated data do not provide much to cheer.

The FT’s own China Economic Activity index — a weighted measure of six daily data series tracking the country’s economic recovery — has stalled at about 60 per cent of pre-outbreak levels in recent weeks.

Western investors banking on a quick recovery in Europe and the US may therefore want to think twice about buying the dip based on China’s recovery story. Hudson Lockett

What next for the Bank of England after rate cuts?

Bank of England policymakers were unable to wait until a scheduled meeting this Thursday, instead announcing another interest rate cut last week that took the UK’s key benchmark to 0.1 per cent. However, this week’s meeting could still give some clues to the central bank’s next steps.

RBC Capital Markets strategists say that, for now, the BoE is not likely to attempt to support the economy by pushing rates into negative territory. But, while governor Andrew Bailey has said he is not a fan of negative rates, he has not ruled out the option.

Mr Bailey said last Thursday, a day after offering unlimited support to big companies through a new commercial paper facility, that the situation was “absolutely unprecedented” and that the government bond market was “bordering on disorderly”. Interest rates on gilts were swinging wildly, and the pound appeared to be in freefall, as investors sought to flee UK assets.

Turmoil in financial markets could therefore force the central bank into more unconventional areas, akin to the European Central Bank’s long-running negative rates policy.

On Friday sterling clawed back more than 2 per cent against the dollar but it remained below $1.18, down more than 10 per cent over the previous fortnight.

“Unless markets calm down, $1.10 can no longer be ruled out,” said Petr Krpata, a currency strategist at ING Bank in London. Eva Szalay

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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