The B.C. economy is starting to recover from the effects of the pandemic, a new fiscal update shows, but for students, municipalities and some businesses, the shift means that the province is now seeking to collect on temporary relief offered in the early months of the economic shutdown.
Finance Minister Selina Robinson said Thursday that the province is unlikely to fully recover from the pandemic-induced global recession before the end of 2022, and only after widespread immunization for COVID-19 has been achieved, and global travel restrictions ease. But already in B.C., housing and consumer spending have surpassed pre-pandemic levels, while employment has almost returned to February numbers.
“Our economy is en route to recovery,” she said. After an estimated 400,000 job losses in the spring, when the pandemic sparked widespread restrictions on activities and travel, B.C. has counted seven consecutive months of job growth. “This is the highest job-recovery rate of any of Canada’s four largest provinces,” Ms. Robinson noted.
However, B.C.’s recovery is uneven, with deep inequities revealed as many entry-level and low-wage jobs have evaporated due to pandemic restrictions on travel and gatherings.
Those job losses have hit young workers hard. The unemployment rate for people aged between 15 and 24 years was 14.1 per cent in November, but the six-month moratorium on student-loan collection has ended and now the province is seeking to collect $70-million from students.
Tanysha Klassen, chairperson of the B.C. Federation of Students, said the repayment requirement didn’t come as a surprise, but it is tough because the economic recovery isn’t being felt by many students.
“It’s super unfortunate the moratorium is ending, when it feels like we are in the middle of this pandemic,” Ms. Klassen said. “Students and young people are often working in service and hospitality sectors, which are still hit hard. So it’s pretty tough out there for people who want to keep going to school.”
Students are not the only ones seeing their pandemic relief dry up. BC Hydro had deferred $103-million in payments for industrial customers, and those payments are now due to be collected. And the grace period for municipalities to remit more than $1-billion in school taxes expires at the end of the year.
The province is not expecting it will be able to collect on all it is owed. “There may be payment defaults on some of these revenues owed to government, depending on the breadth and duration of the pandemic, as well as consumer and business confidence and behaviour,” the province’s fiscal update report warns.
Ms. Robinson, speaking to reporters, would not commit to extending the deferrals. “We’re back to 98.5 per cent of the jobs that were lost … which is a good sign,” she said. “We’re monitoring very closely. We’re going to continue to be responsive to businesses and to individuals.”
Job losses have been highest in sectors including construction, retail, accommodation and food services. Those losses have been offset, in part, by the growth in professional and manufacturing jobs since February.
The Finance Minister said the government is focused on retraining opportunities because it is unclear when some sectors, such as tourism, will recover.
The province has committed to $10-billion in pandemic emergency measures this year, and the deficit is now forecast to reach $13.6-billion. That figure includes $2-billion in new pandemic spending measures approved this week in the legislature.
Still, the province currently retains its long-term triple-A credit rating, although two of the four major bond-rating agencies have given B.C. a negative outlook in the short term.
Since the past fiscal update three months ago, provincial revenues have fared better than projected, with gains in income taxes and property transfer taxes because of a strong housing market. Private-sector economists forecast that the economy will shrink by 5.2 per cent this year – just below the national average of 5.7 per cent. In 2021, the economy is expected to grow by 4.5 per cent – in line with the national average.
However, the uncertainty of the forecasts remains significant. “The major risks to the updated economic and fiscal forecasts continue to be the extent of the spread or containment of the virus in B.C. and its major trading partners; the timing, efficacy, availability and distribution of COVID‑19 vaccines; and the behaviour and confidence of individuals, consumers and businesses,” the fiscal update states.
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Four Years of Crisis: Charting Iran's Economy Under Trump – BNN
Iran had barely started to reap the economic benefits of its 2015 nuclear deal with world powers when Donald Trump withdrew and imposed sanctions so tight they plunged the country into its worst economic crisis since the 1980s.
Sworn in on Wednesday, the new U.S. president, Joe Biden, has already reversed some of his predecessor’s most controversial policies on immigration, climate and health. He’s also promised to re-engage with the Islamic Republic and picked some of the architects of the original pact for top policy posts.
Even if sanctions are eventually eased again, Iran’s road to recovery could be even more fraught this time around. Below are five charts that show how the Iranian economy changed during the Trump years:
Iran’s economy contracted sharply during the Trump years. Unable to export most of its oil due to the new sanctions, its government turned to other exports instead, making a big push to develop domestic manufacturing and expand trade with immediate neighbors. That helped offset some of the impact. It also meant that by the time Covid-19 hit global oil demand last year, Iran was better primed to absorb the shock than fellow crude exporters.
The biggest casualty of Trump’s “maximum pressure” policy was the Iranian rial, which lost about 80% of its value against the dollar, fueling inflation, devastating purchasing power and pushing millions of families into poverty. Efforts to stabilize the currency by controlling the rate and prosecuting money changers backfired, weakening the rial further as the black market thrived.
As the rial lost value, stocks saw unprecedented gains. The main index on the Tehran Stock Exchange has risen more than 600% since January 2019 as record numbers of new investors sought to shield their savings from inflation. The market has already begun to lose value since Biden’s election on expectations that sanctions will ease and the rial will strengthen again.
The European Union was Iran’s biggest trade partner before the bloc imposed oil sanctions in 2012 over the country’s nuclear program. Since then, China has become Iran’s top destination for energy exports and biggest source of imports. It has been the lone customer for Iranian crude since Trump’s sanctions came into force in 2018. While Europe’s tried to keep the nuclear deal alive, it struggled to maintain economic ties in the face of U.S. penalties.
In May 2019, the Trump administration suspended sanctions waivers that had enabled Iran to keep selling oil to a select number of countries. That sent crude exports plunging to 290,000 barrels a day, according to data compiled by Bloomberg, from about 2.6 million in January 2017, when Trump entered office. Iran has demanded the U.S. lift sanctions on its oil and banking industries as soon as possible and is preparing to increase production.
©2021 Bloomberg L.P.
Coronavirus: How the pandemic has changed the world economy – Yahoo Finance
The coronavirus pandemic has reached almost every country in the world.
Its spread has left national economies and businesses counting the costs, as governments struggle with new lockdown measures to tackle the spread of the virus.
Despite the development of new vaccines, many are still wondering what recovery could look like.
Here is a selection of charts and maps to help you understand the economic impact of the virus so far.
Global shares in flux
Big shifts in stock markets, where shares in companies are bought and sold, can affect the value of pensions or individual savings accounts (Isas).
The FTSE, Dow Jones Industrial Average and the Nikkei all saw huge falls as the number of Covid-19 cases grew in the first months of the crisis.
The major Asian and US stock markets have recovered following the announcement of the first vaccine in November, but the FTSE is still in negative territory.
The FTSE dropped 14.3% in 2020, its worst performance since 2008.
In response, central banks in many countries, including the UK, have slashed interest rates. That should, in theory, make borrowing cheaper and encourage spending to boost the economy.
Some markets recovered ground in January this year, but this is a normal tendency known as the “January effect”.
Analysts are worried that the possibility of further lockdowns and delays in vaccination programmes might trigger more market volatility this year.
A difficult year for job seekers
Many people have lost their jobs or seen their incomes cut.
Unemployment rates have increased across major economies.
In the United States, the proportion of people out of work hit a yearly total of 8.9%, according to the International Monetary Fund (IMF), signalling an end to a decade of jobs expansion.
Millions of workers have also been put on government-supported job retention schemes as parts of the economy, such as tourism and hospitality, have come to a near standstill.
The numbers of new job opportunities is still very low in many countries.
Job vacancies in Australia have returned to the same level of 2019, but they are lagging in France, Spain, the UK and several other countries.
Some experts have warned it could be years before levels of employment return to those seen before the pandemic.
Most of countries now in recession
If the economy is growing, that generally means more wealth and more new jobs.
It’s measured by looking at the percentage change in gross domestic product, or the value of goods and services produced, typically over three months or a year.
The IMF estimates that the global economy shrunk by 4.4% in 2020. The organisation described the decline as the worst since the Great Depression of the 1930s.
The only major economy to grow in 2020 was China. It registered a growth of 2.3%.
The IMF is, however, predicting global growth of 5.2% in 2021.
That will be driven primarily by countries such as India and China, forecast to grow by 8.8% and 8.2% respectively.
Recovery in big, services-reliant, economies that have been hit hard by the outbreak, such as the UK or Italy, is expected to be slow.
Travel still far from taking off
The travel industry has been badly damaged, with airlines cutting flights and customers cancelling business trips and holidays.
New variants of the virus – discovered only in recent months – have forced many countries to introduce tighter travel restrictions.
Data from the flight tracking service Flight Radar 24 shows that the number of flights globally took a huge hit in 2020 and it is still a long way from recovery.
Hospitality sector has shut its doors worldwide
The hospitality sector has been hit hard, with millions of jobs and many companies bankrupt.
Data from Transparent – an industry-leading intelligence company that covers over 35 million hotel and rental listings worldwide – has registered a fall in reservations in all the top travel destinations.
Billions of dollars have been lost in 2020 and although the forecast for 2021 is better, many analysts believe that international travel and tourism won’t return to the normal pre-pandemic levels until around 2025.
Shopping… at home
Retail footfall has seen unprecedented falls as shoppers stayed at home.
New variants and surges in cases have made problems worse.
Pedestrian numbers have fallen further from the first lockdown, according to research firm ShopperTrak,
Separate research suggests that consumers are still feeling anxious about their return to stores. Accountancy giant EY says 67% customers are now not willing to travel more than 5 kilometres for shopping.
This change in shopping behaviour has significantly boosted online retail, with a global revenue of $3.9 trillion in 2020.
Pharmaceutical companies among the winners
Governments around the world have pledged billions of dollars for a Covid-19 vaccine and treatment options.
Shares in some pharmaceutical companies involved in vaccine development have shot up.
Moderna, Novavax and AstraZeneca have seen significant rises. But Pfizer has seen its share price fall. The partnership with BioNTech, the high cost of production and management of the vaccine, and the growing number of same-size competitors have reduced the investors’ trust in the company to have bigger revenue in 2021.
A number of pharmaceutical firms have started already distributing doses and many countries have started their vaccination programmes. Many more – such as Johnson & Johnson and Sanofi/GSK – will join the vaccine distribution during 2021.
Canadian retail sales jump in November, but December looks gloomier
By David Ljunggren
OTTAWA (Reuters) – Canadian retail sales jumped by much more than expected in November, but preliminary figures for December suggest a sharp drop as novel coronavirus restrictions were re-imposed, Statistics Canada said on Friday.
Food and drink sales rose by 5.9% and helped push overall retail trade up by 1.3%, its seventh consecutive monthly gain and significantly greater than the 0.1% increase predicted by analysts in a Reuters poll.
Most retail businesses were open in November but as the second wave of the coronavirus spread, many provinces imposed clamp downs. Statscan said December retail sales looked set to drop by 2.6% but stressed this was a preliminary estimate.
“The expected tumble in December retail sales following the pop in November conforms to the Bank of Canada‘s outlook, which sees weakness at the turn of the year,” said Ryan Brecht, a senior economist at Action Economics.
The Bank of Canada forecast on Wednesday that the economy would shrink in the first quarter of 2021 due to the impact of temporary business closures.
Shortly after the data were released the Canadian dollar was trading 0.5% lower at 1.27 to the greenback, or 78.74 U.S. cents, with the currency giving back some of this week’s gains as oil and global shares fell.
Statscan is due to issue November GDP data on Jan. 29 and Royce Mendes, a senior economist at CIBC Capital Markets, said the agency’s flash estimate of 0.4% growth still seemed reasonable. The estimate was released on Dec. 23.
Overall November sales were up in 7 of 11 sub-sectors, representing 53.4% of retail trade, while in volume terms, retail sales rose 1.2%.
(Reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; Editing by Ken Ferris)
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