Riot police pass flames rising from the tents of the anti-government protesters, in Beirut, Lebanon, on Jan. 18, 2020.
Hussein Malla/The Associated Press
The mass demonstrations in Lebanon that brought down the government in October entered a new, dangerous phase over the weekend when battles erupted between protesters and police, pushing the economy another step closer to collapse.
Various media reports said the clashes Saturday night, near Beirut’s main police station, and Sunday night at the parliament buildings injured about 400 protesters, with 120 taken to hospital. Dozens were arrested. Police used water cannons to clear the streets and fired tear gas canisters and rubber bullets.
Human Rights Watch accused the riot police of “launching tear gas canisters at protesters’ heads, firing rubber bullets in their eyes and attacking people at hospitals and a mosque.”
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Lebanon has been on the edge of anarchy since mid-October, when the nearly bankrupt government announced a series of new taxes, including one on WhatsApp calls, that sent hundreds of thousands of people from all sects into the streets.
Within two weeks, Saad Hariri, the Sunni prime minister who was struggling to come up with an economic salvation plan, and his cabinet resigned, just as the Lebanese economy and the banking system were falling apart.
The protests were largely peaceful. That changed last week, when commercial bank outlets and the Banque du Liban, the central bank, were attacked. Over the weekend, the protests expanded and turned into pitched battles between protesters and police. “Another day without a government, another night of violence and clashes,” said Jan Kubis, the UN’s special co-ordinator for Lebanon, in a tweet Sunday.
The protesters want the appointment of a new cabinet composed of independent technocrats who can launch a crisis plan to stabilize the economy. As the demonstrations turn violent, the pressure is mounting on the political blocs controlled by the Sunni, Shia, Christian and Druze parties to put their differences aside and appoint a cabinet under prime minister-designate Hassan Diab, an engineer and academic who has won the parliamentary support of the big Christian and Shia coalition, including Hezbollah, Iran’s powerful political and paramilitary proxy in Lebanon.
The political stalemate has pushed the economy and the banking system into turmoil. A senior Lebanese government technocrat, who is not being identified by The Globe and Mail, said: “We have clearly reached the point where the system is financially, economically and politically dead. The protests will be violent.”
When the weekend protests erupted, geopolitical tensions in Lebanon were already high. The U.S. assassination on Jan. 3 of Qassem Soleimani, Iran’s top military commander, brought Iran and the United States to the brink of war and put Hezbollah on high alert. After the killing, Hezbollah leader Hassan Nasrallah, whose militia is more powerful than the Lebanese army, called for attacks on U.S. military sites.
The Lebanese economy suffers from endemic corruption, lack of capital investment – Beirut’s roads and power plants are crumbling, and the city has no public transportation system – and an unbalanced financial system that is running short of U.S. dollars, which are used to support the fixed peg between the dollar and the Lebanese pound (also known as the lira). The peg is becoming unsustainable, and the pound, whose fixed rate is 1,500 per dollar, is now trading on the black market at about 2,300.
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The financial crisis has triggered a run on the dollar, which has drained the liquidity of the commercial banks. To stem the outflow, the banks recently implemented informal capital controls, which have squeezed the supply of the currency to families and businesses, many of which are going broke. The anger over the short supply of dollars helped spark the protests in October. Lebanese social media is full of videos showing fights between security guards and irate bank customers.
On Monday, a note published by the economics team at Byblos Bank said the financial crisis is severely damaging the economy. New car sales fell more than 33 per cent last year, and the hotel occupancy rate in Beirut in November, a month after the protests started, was a mere 18 per cent; a year earlier, it was 69 per cent.
In a note published earlier this month, the Carnegie Middle East Center, led by Maha Yahya, said the crisis has left the banks “effectively insolvent and illiquid” and will push Lebanon into deep recession, trigger high inflation and push up poverty rates dramatically. “The consequences of the current path are catastrophic,” it said.
It recommended a 10-point plan to reverse Lebanon’s fortunes that would include debt restructuring, recapitalizing the banks and a sovereign bailout of as much as US$25-billion that would be overseen by the International Monetary Fund. Many Lebanese think such a bailout is inevitable but fear that IMF demands for government spending controls – austerity – might push the economy into a long, Greek-style recession.
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OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
