As the Bank of Canada’s new governor, Tiff Macklem, reminded us last week, the lockdown to stop the coronavirus epidemic has been costly. And the battle is not over yet.
Those who once thought shuttering the economy to corral COVID-19 was too expensive now merely have to look south, where a strategy of whistling past the graveyard has led to an economically devastating second round of the disease.
Even while some COVID-deniers continue a bizarre refusal to follow simple steps to defeat the pandemic, Canadian businesses may be able to profit from lessons learned abroad.
Using the innovation for which capitalism is famed and the power of good science, it may be possible to have the best of both worlds. Instead of waiting for a vaccine — which some scientists doubt will be as effective as hoped — businesses and policy-makers are seeking strategies to reopen the economy without launching an even more costly renewed outbreak.
From the slightly wacky to the eminently practical, here are some ways Canada might be able to have its cake and eat it too.
Despite increasing scientific evidence that masks are effective, Georgia Gov. Brian Kemp, seen greeting U.S. President Donald Trump last week, is trying to prevent cities from making mask-wearing compulsory. (Jonathan Ernst/Reuters)
1. Drinking helmets
From Japanese whisky-producer Suntory comes one of the most interesting COVID-19 business proposals: a specialized drinking helmet that allows the up-close socializing typical in pubs without sharing the virus. The company has not yet revealed prototypes.
Along with Plexiglas barriers, vastly improved ventilation and increased table spacing, the drinking helmet would just be a slightly more eccentric innovation to keep patrons feel safe while showing authorities that bars and restaurants need not be sources of contagion.
2. Automation
As agricultural economist and farmer Philip Shaw told me recently, automation was already sweeping the industry — even in such difficult tasks as tomato picking — before COVID-19 precautions began adding to the costs of temporary foreign workers. Shaw, who worries farmers have not had enough government support during the crisis, says profits depend on imported labour.
But every time costs rise, new technology becomes more feasible. Now, after repeated outbreaks of the disease in meat-packing plants, companies including Tyson Foods are struggling to get machines to do processing jobs that have traditionally been thought to require the finesse of human manual dexterity.
3. Raise wages
Improbable as it may seem, while some traditional business voices are calling for the end of the Canada emergency response benefit — so that employers can persuade workers to come back to lower wage jobs — others insist now is the time to increase employee incomes.
A crisis is an ideal time to raise pay <a href=”https://t.co/xczCEPb6ID”>https://t.co/xczCEPb6ID</a>
Management research shows investing in people pays off in the long run. Usually businesses can’t afford to wait. But since businesses aren’t expecting immediate returns in this period, this may be a perfect time to hire only essential workers and pay them well.
While his suggestions have often been ignored by his boss, on Friday Dr. Anthony Fauci, a leading member of the U.S. president’s coronavirus task force, had some sound advice on how businesses can “carefully and prudently” open the economy, as he told the U.S. Chamber of Commerce, without suffering a new outbreak.
One of his pieces of advice is to use a “dial up, dial down” strategy — instead of opening businesses everywhere all at once, do it in incremental steps, ready to take a step back if cases begin to increase and avoid the risk of a costly return to lockdown.
5. Some businesses reopen first
It is inevitable that some self-interested businesses including the entertainment and airline industries have been lobbying hard to get back to normal.
“Let’s go fly for God’s sake,” American Airlines boss Doug Parker told the Wall Street Journal just as the U.S. was hitting new COVID-19 case records.
But it is clear that different businesses have different risk levels.
In the absence of drinking helmets, for example, bars have been contagion hot spots. Businesses in regions, such as the Atlantic provinces, that have been relatively virus free get to go first while health authorities prepare to pounce on local outbreaks.
6. Listen to science
Last week Air Canada’s chief medical officer Jim Chung called on governments to adopt a “science-based approach” to reopening the travel industry.
While the appeal was clearly aimed at getting more paying bums in seats, the idea of businesses listening to science seems like one that could have prevented the U.S. second wave and could stop one from happening in Canada. The newness of the disease has meant that medical experts seem to have repeatedly got it wrong.
But as scientists learn more about the disease — and masks, and whether airports and travel, or something else, actually contribute more to the spread of the disease — business leaders may be learning that by accepting scientific advice and adopting innovative techniques, they can maximize profits and bring the economy back without unleashing a disastrous new U.S.-style spike in cases.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
