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Japan's Economy Surges, but Covid-19 Looms – The New York Times

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The world’s third largest economy capped off a terrible year with a sharp rise in activity. Still, analysts say trouble lies ahead.

TOKYO — Japan’s economy rebounded sharply in the last three months of 2020, government data showed Monday, extending its recovery from the coronavirus’s devastating impact in the first half of the year.

But the growth was fragile and could be easily disrupted, analysts warned, at least in the short term. A second state of emergency declared at the end of last year is likely to drag the economy down again, and — as with many countries — it will most likely take years for certain business sectors, such as tourism, and consumer confidence to recover.

Japan’s economy, the world’s third largest after the United States and China, grew 3 percent during the October to December period, for an annualized growth rate of 12.7 percent. It was the country’s second consecutive quarter of growth.

The economy had jumped 5.3 percent in the fiscal third quarter as the country emerged from a national emergency and regained a semblance of normalcy.

“The biggest drivers of this quarter’s growth were exports and consumer spending,” said Toshihiro Nagahama, senior economist at the Dai-Ichi Life Research Institute, as economies released pent-up demand for Japanese goods that had built up during the early months of the pandemic.

The Japanese economy had entered 2020 in a weakened state brought about by a rise in the national consumption tax, a stark drop in trade with China and a devastating typhoon. The pandemic then struck a major blow. As other economies crashed, Japan’s shrank in its worst performance since 1955, when the country began using gross domestic product to measure its economy.

But thanks in large part to the country’s efforts to keep the pandemic under control, Japan avoided the worst of the economic damage that savaged the United States and much of Europe.

This fall, while many consumers in the West sheltered in place, people in Japan were traveling, eating out and going to movies. One film, “Demon Slayer: Mugen Train,” set a domestic box-office record, outpacing the former champion in a few short months. Government subsidies for travel lifted domestic tourism, although such travel may have also spread the virus.

At the same time, huge government stimulus efforts helped keep people in jobs and companies in business. Japan’s unemployment rate stood at just 2.9 percent by the end of December versus 2.1 percent at the same time the year before. Bankruptcies actually dropped 6.5 percent in 2020, according to Teikoku Databank, a credit research company.

Still, the past two quarters of growth did not make up for the damage wreaked by the pandemic. The economy ended down 4.8 percent for the year, the first annual contraction since 2009, when the country was suffering from the fallout of the global financial crisis.

While people in Japan are not facing the same level of short-term economic peril as those in the United States, growth is expected to contract again in the first three months of this year.

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After a steep rise in daily infection counts, Japan declared a second, albeit more limited, state of emergency at the end of December. Initially announced for one month, the edict was extended through early March partly in response to the appearance of new, more contagious variants of the coronavirus.

“Because of the emergency declaration, consumer spending, particularly on services, is going to fall” in the first three months of the year, said Akane Yamaguchi, an economist at the Daiwa Institute of Research.

But, she said, the damage will not be nearly as severe as last spring, when lockdowns destroyed demand for exports and Japan’s national emergency extended across the whole country.

Further complicating the economic picture for 2021, Japan has been slow to start vaccinations.

On Sunday, the Pfizer shot became the first to receive approval from Japanese regulators. Frontline health care workers are expected to receive their first doses this week, but it will be months before the public is eligible.

The pandemic’s effects have been much less severe in Japan than in the West. Total deaths are under 7,000, and daily infection levels peaked in early January at around 8,000. But a robust vaccination program could give more people the confidence to return to shops and restaurants, said Mr. Nagahama, of Dai-Ichi Life Research.

To get the economy back on track in the long run, “increasing vaccination rates is the only option,” he said. “Without that, any monetary or fiscal measures you take are pointless.”

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A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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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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