EDMONTON – It was a speech that symbolized Alberta’s pandemic politics in 2021: Premier Jason Kenney’s boastful, bullhorn-loud, first-out-of-the-gate victory whoop over COVID-19 preceding a crushing hospital crisis.
In 2022, Kenney and his United Conservative government aim to forge ahead on the economy and catch up on the thousands of surgeries cancelled when hospitals were overwhelmed during the fourth wave of COVID-19 in the fall.
Health Minister Jason Copping said it will take some time. The goal is to catch up on the pre-pandemic surgery waiting list of 68,000 by the middle of next year.
“That is my job No. 1 apart from the response to COVID, of course,” Copping said earlier this month, announcing that the number of cancelled surgeries had stabilized at about 81,000. “We are going to bring that waiting list down.”
The wind is in the UCP’s sails, at least in the short term, with a late-year bounty of oil and gas revenues slashing the projected budget deficit by two-thirds to under $6 billion.
There was other good economic news.
Tech-giant Amazon Web Services announced in November it had broken ground on a $4.3-billion cloud-computing server hub in Calgary.
Alberta’s unemployment dropped below eight per cent.
Big budget film productions leveraged tax credits to shoot in the province — including HBO’s “The Last of Us” — and pumped millions of dollars into local economies.
“Albertans are natural optimists. They just need a reason for their optimism. Well, there are lots of reasons right now including the fact that we are leading Canada by far in economic growth,” Kenney told the Calgary Chamber of Commerce this month.
There was a $3.8-billion deal with the federal government that will see daycare costs start to drop in January and fall to $10 a day by 2026.
Doug Schweitzer, minister for jobs, economy and innovation, announced: “This was the year that Alberta got our swagger back.”
Kenney struck a similar triumphant tone on June 18 in his speech on a sunlit day near Edmonton’s river valley.
He announced Alberta would end almost all COVID-19 health restrictions as of July 1 — in time for Alberta’s signature Calgary Stampede rodeo and festival.
It was the fastest reopening in Canada, but one Kenney said was justified by sufficient vaccination rates.
Kenney said his government wasn’t planning for a worst-case scenario and chided reporters and medical experts for suggesting it could even happen. His party sold it as “the Best Summer Ever” and marketed hats trumpeting the feel-good slogan.
COVID-19 didn’t get the memo.
The government then failed to act as cases spiralled in August and didn’t change course until September. Deaths mounted, officials scrambled to double the intensive care unit capacity, army medics were called in and 15,000 reported surgeries across the province, including cancer operations, were delayed.
Kenney introduced a form of vaccine passport and other restrictions that boosted vaccinations and reduced hospital cases. It seemed to help pull the system back from the brink.
The premier took responsibility, saying “the buck stops with me.”
But the mea culpa had asterisks: other provinces had problems, too; he didn’t act sooner because he wasn’t sure COVID-19 weary-Albertans would follow the rules; he would have acted sooner, but he was waiting for Dr. Deena Hinshaw, the chief medical officer of health, to propose changes.
COVID-19 conflicts and controversies sent Kenney’s popularity numbers plunging and opened deep and, at times, public rifts within his caucus and party.
Critics said Kenney was late to impose health rules for the last three waves, endangering health-system capacity, because he feared alienating anti-vaccination elements in his party.
Kenney tried to contain the internal strife. Dissidents Todd Loewen and Drew Barnes were voted out of caucus. Cabinet minister Leela Aheer became an ex-cabinet minister.
Kenney, under pressure from cabinet and later by about two dozen constituency associations, agreed to move up a review of his leadership to a one-day vote April 9 in Red Deer from late 2022.
Problems remain, starting with his former UCP leadership rival Brian Jean.
Jean, one of the party’s co-founders, won the nomination to represent Fort McMurray-Lac La Biche in an upcoming byelection. He’s running on a platform to end Kenney’s time as leader, saying Kenney’s top-down style and bungled decisions on COVID-19 can’t be redeemed and that the party needs a new leader if it hopes to win the 2023 election.
“Kenney’s pinning everything on (oil and gas prices),” said political scientist Duane Bratt of Calgary’s Mount Royal University. “The other story of 2021, obviously, is COVID.
“At almost every step of the way, the government acts later than anybody else in the country and responds weaker than everybody else in the country, is defiant about what they’re doing, and then gradually reverses course. We’ll have to see what occurs in January if Omicron (variant of COVID-19) does become as serious as some believe.”
This report by The Canadian Press was first published on Dec. 29, 2021.
Ahead of election, Macron banks on rosy French economy, new jobs – Financial Post
PARIS — President Emmanuel Macron will on Monday tout 21 new foreign investment projects in France and a booming economy as proof his economic reforms have been bearing fruit less than three months before a presidential election in which he is expected to run.
During a visit to Alsace in the east, Macron will announce a 300-million-euro ($342 million) industrial project by German chemical giant BASF, one of 21 new projects worth 4 billion euros and 10,000 jobs as part of a drive to attract foreign investors, his office said.
As the presidential race heats up, his aides are keen to shift the debate away from immigration and law-and-order issues and put the spotlight on the economy, which has been recovering strongly from the COVID-19 pandemic.
“This is the result of all the reforms that were carried out since the start of the mandate,” a presidential aide told reporters.
“Three months before an election, we could have expected investors to be in wait-and-see mode because of the uncertainty of an election. Instead, we see very strong confidence from foreign investors in the president’s economic policy,” he said.
Since 2017, Macron has pushed through a cocktail of supply-side economic reforms meant to boost businesses’ competitiveness, cut taxes on investors and loosen strict labor market rules.
Critics say he has acted as “president of the rich” who wants to do away with France’s cherished social safety nets and has cut welfare benefits for some of the poorest.
But three months ahead of the April election, indicators show the French economy is booming, with growth expected to have hit 6.7% in 2021 and France having returned closer to pre-pandemic levels than any G7 peer bar the United States.
Macron supporters also received an unexpected boost from economist Paul Krugman on Friday.
“In fact, among major advanced economies, the star performer of the pandemic era, arguably, is … France,” he wrote in his New York Times column https://www.nytimes.com/2022/01/14/opinion/france-economy-pandemic-socialism.html. ($1 = 0.8761 euros) (Reporting by Michel Rose; Editing by Emelia Sithole-Matarise)
Dollar finds a footing as traders brace for hawkish Fed
The dollar clung to a late week bounce on Monday as investors braced for January’s U.S. Federal Reserve meeting and raised bets it will chart a year ahead holding several rate hikes, while China surprised analysts with a benchmark cut.
Chinese economic growth data, due later on Monday (0200 GMT), a Bank of Japan policy meeting which concludes on Tuesday, British inflation data on Wednesday and Australian jobs figures on Thursday are also in view as traders gauge the global policy outlook.
The dollar was 0.2% higher at 114.45 yen early in the Asia session, about 0.8% above a Friday low. It also edged about 0.1% firmer on the euro to $1.1403.
The moves follow the dollar’s jump on Friday along with U.S. yields and underscore support for the greenback from the hawkish rates outlook, even if momentum for gains has started to wane.
The U.S. dollar index, which declined sharply last week until Friday’s leap, sat at 95.225 in Asia on Monday.
“Friday’s move suggest to me that the interest rate driver for dollar strength is not dead and buried,” said National Australia Bank’s head of foreign exchange strategy Ray Attrill.
He said it may not necessarily return to drive new dollar highs, but added: “We’ve had a hawkish twist out of every Fed meeting since June last year.”
The Fed meets Jan. 25-26 and is not expected to move rates, but there is a growing drumbeat of hawkish comments coming from within and outside the central bank.
Last week, J.P. Morgan CEO Jamie Dimon remarked that there could be “six or seven” hikes this year and billionaire hedge fund manager Bill Ackman floated on Twitter over the weekend the possibility of an initial 50 basis point hike to tame inflation.
The cash Treasury market was closed for a holiday on Monday but 10-year futures were sold to a two-year low and Fed funds futures also fell, reflecting a strengthening conviction in the market of at least four hikes in 2022.
The Australian and New Zealand dollars, which dropped sharply on Friday, remained under pressure on Monday. The Aussie was last down 0.2% at $0.7200, ending for now a brief foray above resistance around $0.7276. [AUD/]
The kiwi edged 0.2% lower to $0.6791.
In China, bonds rallied and the yuan slipped after the central bank cut borrowing costs for medium-term loans for the first time since April 2020, defying market expectations.
Ten-year government bond futures rose to their highest since June 2020 after the move and the yuan began onshore trade marginally softer at 6.3555 per dollar.
Chinese gross domestic product figures due at 0200 GMT are expected to show annual growth at its slowest in 18 months as a property downturn drags on demand.
Elsewhere a month-long rally for sterling has petered out around its 200-day moving average. It held at $1.3669 on Monday, but analysts say it could resume gains if inflation data makes the case for higher interest rates.
“Interest rate markets are currently pricing an 80% + chance of a 25 bp rate hike by the Bank of England on 3 February,” said Commonwealth Bank of Australia strategist Joe Capurso.
“A quicker pace of inflation could see pricing move closer to 100%.”
Currency bid prices at 0139 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
$1.1402 $1.1417 -0.13% +0.29% +1.1425 +1.1401
114.4500 114.2250 +0.20% -0.50% +114.5050 +114.2800
130.51 130.36 +0.12% +0.15% +130.5500 +130.3200
0.9156 0.9140 +0.17% +0.37% +0.9158 +0.9143
1.3665 1.3685 -0.14% +1.05% +1.3675 +1.3665
1.2549 1.2557 -0.06% -0.74% +1.2555 +1.2539
0.7200 0.7218 -0.24% -0.95% +0.7224 +0.7199
Dollar/Dollar 0.6790 0.6810 -0.28% -0.78% +0.6820 +0.6791
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook; Editing by Jacqueline Wong)
China’s Economy Slowed Late Last Year on Real Estate Troubles – The New York Times
Economic output climbed 4 percent in the last quarter of 2021, slowing from the previous period that ran July through September. Growth has faltered lately as home buyers and consumers become cautious.
BEIJING — Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants.
China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs.
China’s National Bureau of Statistics said Monday that economic output from October through December was only 4 percent higher than during the same period a year earlier. That represented a further deceleration from the 4.9 percent growth in the third quarter, July through September.
The world’s demand for consumer electronics, furniture and other home comforts during the pandemic has kept exports strong, preventing China’s growth from stalling. Over all of last year, China’s economic output was 8.1 percent higher than in 2020, the government said. But much of the growth was in the first half of last year.
The snapshot of China’s economy, the main locomotive of global growth in the last few years, adds to expectations that the broader world economic outlook is beginning to dim. Making matters worse, the Omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains.
The slowing economy poses a dilemma for China’s leaders. The measures they have imposed to address income inequality and rein in companies are part of a long-term plan to protect the economy and national security. But officials are wary of causing short-term economic instability, particularly in a year of unusual political importance.
Next month, China hosts the Winter Olympics in Beijing, which will focus an international spotlight on the country’s performance. In the fall, Xi Jinping, China’s leader, is expected to claim a third five-year term at a Communist Party congress.
With growth in his country slowing, demand slackening and debt still at near-record levels, Mr. Xi could face some of the biggest economic challenges since Deng Xiaoping began lifting the country out of its Maoist straitjacket four decades ago.
“I’m afraid that the operation and development of China’s economy in the next several years may be relatively difficult,” Li Daokui, a prominent economist and Chinese government adviser, said in a speech late last month. “Looking at the five years as a whole, it may be the most difficult period since our reform and opening up 40 years ago.”
China also faces the problem of rapid aging that could create an even greater burden on China’s economy and its labor force. The National Bureau of Statistics also said that China’s birthrate fell sharply last year and is now barely higher than the death rate.
Private Sector Struggles
As costs for many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have crumbled, most of them small and family owned.
That is a big concern because private companies are the backbone of the Chinese economy, accounting for three-fifths of output and four-fifths of urban employment.
Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping, a river town in southeastern China’s Fujian Province. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered.
As in many countries, there has been a broad shift in China toward online shopping, which can undercut stores by using less labor and operating from inexpensive warehouses. Mr. Kang was stuck paying high rent for his store despite the pandemic. He finally closed it in June.
“We can hardly survive,” he said.
Another persistent difficulty for small businesses in China is the high cost of borrowing, often at double-digit interest rates from private lenders.
Chinese leaders are aware of the challenges private companies face. The central bank is taking steps to encourage the country’s state-controlled commercial banks to lend more money to small businesses. Premier Li Keqiang has promised further cuts in taxes and fees to help the country’s many struggling small businesses.
On Monday, China’s central bank made a small move to reduce interest rates, which could help reduce slightly the interest costs of the country’s heavily indebted real estate developers. The central bank pushed down by a tenth of a percentage point its interest rate benchmark for some one-year loans, to 2.85 percent.
The building and fitting out of new homes has represented a quarter of China’s economy. Heavy lending and widespread speculation have helped China erect the equivalent of 140 square feet of new housing for every urban resident in the past two decades.
This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families.
China Evergrande Group is only the largest and most visible of a lengthening list of real estate developers in China that have run into severe financial difficulty lately. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers that have struggled to make payments as bond investors become more wary of lending money to China’s real estate sector.
As real estate companies try to conserve cash, they are starting fewer construction projects. And that has been a big problem for the economy. The price of steel reinforcing bars for the concrete in apartment towers, for example, dropped by a quarter in October and November before stabilizing at a much lower level in December.
The decline in home prices in smaller cities has hurt the value of people’s assets, which in turn made them less willing to spend. Even in Shanghai and Beijing, apartment prices are no longer surging.
Understand the Evergrande Crisis
What is Evergrande? The Evergrande Group, a sprawling Chinese real estate giant, has the distinction of being the world’s most debt-saddled developer. It was founded in 1996 and rode China’s real estate boom that urbanized large swathes of the country, and has millions of apartments in hundreds of cities.
There have been faint hints of renewed government support for the real estate sector in recent weeks, but no sign of a return to lavish lending by state-controlled banks.
The financial distress of Evergrande “is a signal that money will be pushed from real estate to the stock market,” said Hu Jinghui, an economist who is the former chairman of the China Alliance of Real Estate Agencies, a national trade group. “The policies can be loosened, but there can be no return to the past.”
Local Governments Feel the Pinch
The slowdown in the housing market has also hurt local governments, which rely on land sales as a key source of revenue.
The International Monetary Fund estimates that government land sales each year have been raising money equal to 7 percent of the country’s annual economic output. But in recent months, developers have curtailed land purchases.
Starved of revenue, some local governments have halted hiring and cut bonuses and benefits for civil servants, prompting widespread complaints on social media.
In Hangzhou, the capital of Zhejiang Province, a civil servant’s complaint of a 25 percent cut in her pay spread quickly on the internet. The municipal government did not respond to a fax requesting comment. In northern Heilongjiang Province, the city of Hegang announced that it would not hire any more “low-level” workers. City officials deleted the announcement from the government’s website after it drew public attention.
Some governments have also raised fees on businesses to try to make up for the shortfall.
Bazhou, a city in Hebei Province, collected 11 times as much money in fines on small businesses from October through December as it did in the first nine months of last year. Beijing criticized the city for undermining a national effort to reduce the cost of doing business.
Pockets of Strength in Exports
Exports are setting records. Families around the world have responded to being stuck at home during the pandemic by spending less on services and more on consumer goods now made mainly in Chinese factories.
Some areas of consumer spending have been fairly robust, notably the luxury sector, with sports cars and jewelry selling well.
Few anticipate that the government will allow a severe economic downturn this year, ahead of the Communist Party congress. Economists expect the government to soften its restrictions on lending and step up government spending.
“The first half of the year will be challenging,” said Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance. “But then the second half will see a rebound.”
Li You contributed research.
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