Some of the world’s top business people and politicians – plus a smattering of celebrities – will gather in Davos, Switzerland, for the World Economic Forum (WEF) this week.
US President Donald Trump, teen climate activist Greta Thunberg and Uber boss Dara Khosrowshahi are among the guests.
Here are five things to look out for:
1. Trump trade tensions directed at Europe
The China-US trade ceasefire last week should hold temporarily, if only because it was so modest. So expect President Trump, facing an impeachment trial back home, to ramp up the pressure on the European Union, who he has long viewed as treating the US “unfairly”.
This cold trade war has taken on a number of forms over the past year from Airbus and Boeing to steel and aluminium, the EU response to renewed sanctions on Iran, Carbon tax, digital tax and the willingness to deploy technology from the Chinese tech giant Huawei.
What we know is that the White House believes that European goods trade surpluses with the US are an example of an unfair rip off, especially car imports.
The new EU team was pretty aggressive in hitting back last week at the White House “Sabre rattling”, “bluff” and “short term thinking”. The stage is set for a turbulent new backdrop for world trade tumult.
2. The UK turns up, but which one?
Into this storm enters the UK, just about to reassert itself as an independent player on the world stage.
After some bluster about banning ministers from attending Davos, the Chancellor of the Exchequer, though not the PM, will be here with a message that “Britain is back”, after three years of uncertainty with a government empowered with a healthy majority to act decisively.
But in what way, exactly? The World Economic Forum will host many of the sorts of British businesses most sceptical about the chancellor’s plan for the UK to pull away from European regulations and standards.
If there is a vision for UK-specific regulations, divorced from the three global superpowers – EU, US & China – then it should be able to be sold to some of the players with billions to invest here. Then what about the bigger geopolitical picture?
Downing St has tried very hard to navigate between the EU and US on Iran, for example. But some choices are required on the trade-offs between maintaining existing business forged in the EU, and new trade links with the US.
The government believes it can skilfully leverage a great deal from both, simultaneously. The opposite might well be true, particularly if EU-US tensions truly flare up. Davos is the sort of place where such high wire acts fly or fall.
3. Climate honesty
Net zero carbon by 2050 is now being wired into the part of the global economy which matters most – the financial system.
Greta Thunberg is being given top billing in this year of crucial talks, but all around the world now, the banking and insurance systems that have financed carbonisation, are being turned to decarbonisation.
It seems a serious endeavour, stretching from changes to banks’ capital requirements to the way government borrowing is calculated. The world’s biggest companies will talk about going beyond being carbon neutral to being net carbon negative.
But how politically sustainable is it? Is the public really being taken along on the ride beyond high profile protest movements?
All across the world there has been a backlash against global trade, and yet that has benefited most countries’ earnings.
Serious action against climate change required by 2050 net zero will involve lifestyle and livelihood changes that will look like up front sacrifices to benefit future generations or, at first, other regions of the world from the Ganges delta to Australia.
Are business and political leaders capable of being straight with their people about fewer flights, pricier fuel and energy, and perhaps higher taxes?
4. Tech titans toil
A decade ago the tech companies were the great capitalist hope at a place like this.
The sunny vision of technology connecting the world, and helping both to enlighten and to democratise, shone through from the speeches here of the Zuckerbergs, Pages and Gates.
It was a marked contrast to the post crisis backlash against the bankers. We are in a very different place right now. Tech companies making billions from your data have proved elusive for the world’s top tax systems.
Their innovative business models are designed to put others out of business. These two facts have created a backlash, then given further fuel by deep concerns about the health impacts of mass consumption of social media on young minds in particular.
On top of that, for some at least, it is the targeting by factories of fake news through social media that has fuelled populism and political instability around the world.
Essentially, data is now a powerful traded commodity and factor of production in the global economy.
The tech giants’ billions of wealth and impact across the globe has been created out of an era of immense innovation with little regulation. The nation states of the world asserted themselves over the past year, for example over the attempt by Facebook to create a currency.
There will be more of this to come, starting here. The rollout of 5G technology may offer an opportunity to tilt the scales.
5. Economic ammo shortage
The world economy is now a decade on from the financial crisis. We are due another crisis, though perhaps not quite so severe.
Except this time, the major central banks of the world have rather more limited room for manoeuvre on base interest rates at least, especially after providing further support to the economy in 2019.
Exceptionally low borrowing rates for major governments are sending a message to them to spend more, wisely, on helping productive investments.
It is a message that has been heard, for example, in the UK. And yet, the need for stimulus arises partly because of the brakes on growth from rising trade barriers.
One idea floating around policy circles, and so here in Davos, is that advanced economies prepare “contingent” stimulus packages of productive public spending, as well as more general investment in climate change alleviation.
There are some win-wins available here, but the sort of global cooperation required to achieve them is proving more rather than less difficult in this zero sum world.
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.
