The novel coronavirus pandemic is well underway worldwide, but it wasn’t until this month that Canadians started coming to grips with the economic pain it can bring, in addition to its heavy human toll.
Economists are struggling to come up with best guesses as to what might be coming. There’s still a lot that they — and we — don’t know. But the picture they’re painting for Canada’s financial future is already bleak.
GDP could significantly contract
At a minimum, the Conference Board of Canada is assuming that most industries across the country will be essentially shut down for at least six weeks.
If they take an optimistic view and assume that’s enough to contain the outbreak, even that short term pain will make a major dent in the country’s total output, a metric known as the Gross Domestic Product, or GDP.
Should this relatively mild scenario come to pass, Canada’s economy would eke out a tiny 0.3 per cent growth for 2020 as a whole as things ramp up in the latter half of the year. That’s far from booming — Canada’s economy grew by 1.6 per cent last year, for example — but it’s preferable to other alternatives.
Retail workers have been laid off in droves this month as lockdowns have caused a dramatic reduction in demand for the consumer goods they sell. (Matias Delacroix/The Associated Press)
Under a more pessimistic scenario, the board sees lockdowns and quarantines stretching for up to six months, until August. If that happens, the GDP hit would be massive — an annualized contraction rate of 9.6 per cent in the second quarter, which is worse than what we saw in the financial crisis of 2008 and 2009. The economy shrank at an annual pace of 8.7 per cent at its worst stage, in early 2009 before rebounding starting in the spring.
“Brace yourself for some horrible data in the near-term, as there’s little doubt that the second quarter will produce some painful and likely historic figures on … economic contraction,” the economics team at TD Bank said in a note to investors.
Joblessness fears escalate
Economists tend to focus on GDP in their modelling, but when you ask Canadian workers how they think the economy is doing, they tend to focus on whether they have jobs that pay the bills.
It already looks like the recession caused by COVID-19 will be one for the record books when it comes to joblessness.
In any given week, Canada gets about 45,000 claims for jobless benefits, according to the economics team at TD Bank.
David MacDonald, an economist with Ottawa think-tank the Canadian Centre for Policy Alternatives, said those numbers are likely just the start.
“The situation is still moving rapidly: people who may have been employed and surveyed on Monday could easily have been laid off by Wednesday,” he said. “It’s likely not until the April data is collected and released at the start of May that we will see the full picture of what happened in the second half of March.”
By the time all is said and done, MacDonald thinks roughly two million Canadians will at least temporarily lose their jobs in the current panic. That would cause the jobless rate to spike to more than 13 per cent.
TD’s forecast is only slightly more positive, predicting the rate to rise to nearly 12 per cent before hopefully levelling off to about half that by the end of the year.
But that’s only if the unprecedented steps being taken now do any good.
“If fiscal and monetary policies prove successful, and social distancing tactics gradually ease, the unemployment rate should level off after one to two months and quite possibly fall just as fast if workers are called back to work,” the bank said.
The extreme measures being deployed right now underline the fundamental economic paradox of COVID-19.
Catch-22 for the economy
The cure for the disease may be widespread shutdowns and social distancing efforts, but that underlines a fundamental paradox of the disease: the cure for the virus is precisely what makes the economy even sicker.
Even officials in Ottawa are willing to admit they’re expecting a record-setting flood of job losses to hit home, and soon.
“We have enormous job losses right now,” Finance Minister Bill Morneau told the Senate on Wednessday. “We hope and expect it will be temporary.”
The border between Canada and the U.S. has been shut to all but essential travel in an attempt to get the coronavirus that causes COVID-19 under control. (Alex Filipe/Reuters)
Not everyone is sure they will be.
The Canadian Federation Of Independent Business says its monthly measure of small business confidence fell to the lowest level in its 32-year history this week. Normally. a reading of 65 suggests an economy that’s basically operating close to its full potential. But the CFIB’s gauge fell to a record low of 30.8 in March. That’s lower than the 39 it hit in the depths of the 2009 financial crisis.
“March 2020 has turned out to be a month like no other in Canada’s economic history,” said Ted Mallett, CFIB’s chief economist.
The good news?
If there’s good news in these bleak numbers, it may be that the depth and breadth of the slowdown may be so sharp and sudden that it can’t help but spur a big rebound.
This recession is looking to be what economists described as “V-shaped” — meaning one that plunges quickly down and then quickly back up the other side. That differs from a “U-shaped,” which is slower and less dramatic in both directions, or even a dreaded “L-shaped” recession where the economy falls off a sudden cliff and never bounces back to its previous level.
New visitors to Canada, like this woman at Vancouver’s airport last week, are being asked to quarantine themselves for 14 days. (Jennifer Gauthier/Bloomberg)
Doug Porter at Bank of Montreal notes that numerous countries have been through economic shocks as bad as the Canadian economy’s current one. And they all emerged stronger on the other side.
Mexico’s peso crisis of 1995, Russia’s debt default in 1998 and South Korea the previous year during the Asian currency crisis all saw those economies shrink by more than 20 per cent.
“In all three cases, activity bounced and forcefully within two quarters,” Porter says.
“All different conditions, true,” Porter said. “But very rapid rebounds from hard stops have and can be done.”
Stocks may have hit bottom
If a rebound is coming, it’s likely to be fast. And stock market investors are tentatively showing signs of believing that could be the case. Since falling to its lowest level in more than a decade on March 23, the TSX has quietly jumped back up almost 20 per cent since then, including its best day in more than 43 years on Tuesday.
Stock markets tend to peak before recessions start but they also tend to bottom before they end, Manulife Investment Management said in a note to clients on Thursday. Which means anyone willing to buy in when things look this gloomy could be getting in on the buying opportunity of a lifetime.
“The economic data will get precipitously worse over the next month but don’t bother looking at that, it will only confirm what we already know,” the money manager said. “Rather, we believe now is the time to focus on the market fundamentals and start to take advantage of the valuation opportunities across asset classes as they present themselves.”
MONCTON, N.B. – New Brunswick RCMP say two youths have been arrested after an emergency alert was issued Monday evening about someone carrying a gun in the province’s southeast.
Caledonia Region Mounties say they were first called out to Main Street in the community of Salisbury around 7 p.m. on reports of a shooting.
A 48-year-old man was found at the scene suffering from gunshot wounds and he was rushed to hospital with non-life-threatening injuries.
Police say in the interest of public safety, they issued an Alert Ready message at 8:15 p.m. for someone driving a silver Ford F-150 pickup truck and reportedly carrying a firearm with dangerous intent in the Salisbury and Moncton area.
Two youths were arrested without incident later in the evening in Salisbury, and the alert was cancelled just after midnight Tuesday.
Police are still looking for the silver pickup truck, covered in mud, with possible Nova Scotia licence plate HDC 958. They now confirm the truck was stolen from Central Blissville.
This report by The Canadian Press was first published Sept. 16, 2024.
MISSISSAUGA, Ont. – Golf Canada has set an impressive stretch goal of having 30 professional golfers at the highest levels of the sport by 2032.
The World Junior Girls Golf Championship is a huge part of that target.
Credit Valley Golf and Country Club will host the international tournament from Sept. 30 to Oct. 5, with 24 teams representing 23 nations — Canada gets two squads — competing. Lindsay McGrath, a 17-year-old golfer from Oakville, Ont., said she’s excited to be representing Canada and continue to develop her game.
“I’m really grateful to be here,” said McGrath on Monday after a news conference in Credit Valley’s clubhouse in Mississauga, Ont. “It’s just such an awesome feeling being here and representing our country, wearing all the logos and being on Team Canada.
“I’ve always wanted to play in this tournament, so it’s really special to me.”
McGrath will be joined by Nobelle Park of Oakville, Ont., and Eileen Park of Red Deer, Alta., on Team Canada 2. All three earned their places through a qualifying tournament last month.
“I love my teammates so much,” said McGrath. “I know Nobelle and Eileen very well. I’m just so excited to be with them. We have such a great relationship.”
Shauna Liu of Maple, Ont., Calgary’s Aphrodite Deng and Clairey Lin make up Team Canada 2. Liu earned her exemption following her win at the 2024 Canadian Junior Girls Championship while Deng earned her exemption as being the low eligible Canadian on the world amateur golf ranking as of Aug. 7.
Deng was No. 175 at the time, she has since improved to No. 171 and is Canada’s lowest-ranked player.
“I think it’s a really great opportunity,” said Liu. “We don’t really get that many opportunities to play with people from across the world, so it’s really great to meet new people and play with them.
“It’s great to see maybe how they play and take parts from their game that we might also implement our own games.”
Golf Canada founded the World Junior Girls Golf Championship in 2014 to fill a void in women’s international competition and help grow its own homegrown talent. The hosts won for the first time last year when Vancouver’s Anna Huang, Toronto’s Vanessa Borovilos and Vancouver’s Vanessa Zhang won team gold and Huang earned individual silver.
Medallists who have gone on to win on the LPGA Tour include Brooke Henderson of Smiths Falls, Ont., who was fourth in the individual competition at the inaugural tournament. She was on Canada’s bronze-medal team in 2014 with Selena Costabile of Thornhill, Ont., and Calgary’s Jaclyn Lee.
Other notable competitors who went on to become LPGA Tour winners include Angel Yin and Megan Khang of the United States, as well as Yuka Saso of the Philippines, Sweden’s Linn Grant and Atthaya Thitikul of Thailand.
“It’s not if, it’s when they’re going to be on the LPGA Tour,” said Garrett Ball, Golf Canada’s chief operating officer, of how Canada’s golfers in the World Junior Girls Championship can be part of the organization’s goal to have 30 pros in the LPGA and PGA Tours by 2032.
“Events like this, like the She Plays Golf festival that we launched two years ago, and then the CPKC Women’s Open exemptions that we utilize to bring in our national team athletes and get the experience has been important in that pathway.”
The individual winner of the World Junior Girls Golf Championship will earn a berth in next year’s CPKC Women’s Open at nearby Mississaugua Golf and Country Club.
Both clubs, as well as former RBC Canadian Open host site Glen Abbey Golf Club, were devastated by heavy rains through June and July as the Greater Toronto Area had its wettest summer in recorded history.
Jason Hanna, the chief operating officer of Credit Valley Golf and Country Club, said that he has seen the Credit River flood so badly that it affected the course’s playability a handful of times over his nearly two decades with the club.
Staff and members alike came together to clean up the course after the flooding was over, with hundreds of people coming together to make the club playable again.
“You had to show up, bring your own rake, bring your own shovel, bring your own gloves, and then we’d take them down to the golf course, assign them to areas where they would work, and then we would do a big barbecue down at the halfway house,” said Hanna. “We got guys, like, 80 years old, putting in eight-hour days down there, working away.”
This report by The Canadian Press was first published Sept. 16, 2024.
NEW YORK (AP) — Fenway Park has the Ted Williams seat. And now Citi Field has the Grimace seat.
The kid-friendly McDonald’s character made another appearance at the ballpark Monday, when the New York Mets unveiled a commemorative purple seat in section 302 to honor “his special connection to Mets fans.”
Wearing his pear-shaped purple costume and a baseball glove on backwards, Grimace threw out a funny-looking first pitch — as best he could with those furry fingers and short arms — before New York beat the Miami Marlins at Citi Field on June 12.
That victory began a seven-game winning streak, and Grimace the Mets’ good-luck charm soon went viral, taking on a life of its own online.
New York is 53-31 since June 12, the best record in the majors during that span. The Mets were tied with rival Atlanta for the last National League playoff spot as they opened their final homestand of the season Monday night against Washington.
The new Grimace seat in the second deck in right field — located in row 6, seat 12 to signify 6/12 on the calendar — was brought into the Shannon Forde press conference room Monday afternoon. The character posed next to the chair and with fans who strolled into the room.
The seat is available for purchase for each of the Mets’ remaining home games.
“It’s been great to see how our fanbase created the Grimace phenomenon following his first pitch in June and in the months since,” Mets senior vice president of partnerships Brenden Mallette said in a news release. “As we explored how to further capture the magic of this moment and celebrate our new celebrity fan, installing a commemorative seat ahead of fan appreciation weekend felt like the perfect way to give something back to the fans in a fun and unique way.”
Up in Boston, the famous Ted Williams seat is painted bright red among rows of green chairs deep in the right-field stands at Fenway Park to mark where a reported 502-foot homer hit by the Hall of Fame slugger landed in June 1946.
So, does this catapult Grimace into Splendid Splinter territory?
“I don’t know if we put him on the same level,” Mets executive vice president and chief marketing officer Andy Goldberg said with a grin.
“It’s just been a fun year, and at the same time, we’ve been playing great ball. Ever since the end of May, we have been crushing it,” he explained. “So I think that added to the mystique.”
