Economy

Australia’s Massive Fires Hurt Tourism And Threaten To Slow Its Economy

Published

5 years ago

January 12, 2020

Tourists, wearing face masks due to heavy smoke, take a selfie at Sydney Harbour on Dec. 19, 2019. As news of Australia’s wildfires spreads around the world, fewer tourists are arriving in the country.

Australia calls itself the Lucky Country, a nation so fortunate in geography and natural resources that it hasn’t had a recession in nearly three decades.

But the deadly wildfires raging through large parts of the country are slowing tourism and other key sectors that contribute to its impressive economic growth.

“Just the area of Australia that’s now impacted is unheard of. So we are in uncertain territory,” says Martin North, principal at the research firm Digital Finance Analytics.

The wildfires have killed more than two dozen people more than a billion animals. They’ve destroyed more than 1,800 houses, an untold number of commercial buildings and thousands of acres of prime farmland, according to the Insurance Council of Australia.

Insurance losses so far have totaled nearly a half billion dollars, but the numbers are likely to rise sharply, says Campbell Fuller, the council’s head of communications.

“For [the fires] to burn across such a wide area, over such an extensive period, is uncommon. In fact, it’s unprecedented to have that number of bushfires burning concurrently,” he says.

The fires have damaged two pillars of the Australian economy: the agricultural sector, which was already weakened by a severe drought, and the all-important tourism industry.

Winter in the Northern Hemisphere is peak tourist season in Australia, when visitors from Asia and Europe flock to the country, eager to soak up the sun and enjoy the country’s outdoor lifestyle.

As news of the wildfires spreads around the world, fewer tourists are arriving and those who do come have had to endure less-than-ideal conditions.

Even in Sydney, far from the fires, skies are so smoky that fire alarms have gone off in office buildings. Ferry service in the city’s world-famous harbor has sometimes been canceled because of poor visibility.

The campground run by Fiona Austin in Shoalhaven, south of Sydney, is usually full this time of year, but tourists were ordered to evacuate, and only a few people remain.

“It’s affected a lot of businesses, and I can’t see people coming back at the moment when the fires are still burning,” Austin told NPR’s Jason Beaubien.

The fires mark something of a change of fortune for the Australian economy, sometimes called the Wonder Down Under.

The country has benefited enormously from its proximity to Asia, says Justin Wolfers, an Australian native who is a professor of economics and public policy at the University of Michigan.

“Not only did we start the last few decades a relatively rich country in the club of the first-world industrialized countries, we’re also parked right next to Asia, which is where much of the world’s growth has come from over the past few years,” Wolfers says.

China, in particular, has been hungry for the kinds of commodities Australia has a lot of, such as coal, natural gas, wheat and wool, and it sends more tourists to Australia than any other country.

Wolfers says the Australian government has also demonstrated more skill than other countries at navigating the challenges of the global economy, like the Asian financial crisis of the late 1990s.

While the U.S. Congress was squabbling over how to address the Great Recession, the Canberra government was acting swiftly to stimulate spending and cut interest rates, he says.

Unlike other industrialized countries, Australia has experienced a steady rise in population, largely because of immigration, so even in slow times the economy has kept growing, Wolfers adds.

Some of that growth has eased in recent years, as China’s economy has slowed. Australian consumers are spending less, and housing prices, which have skyrocketed in recent years, have fallen.

“The growth levels in Australia are lower than they’ve been in a very long time,” North says. “We were already looking … pretty shaky and that was before all of the bushfires.”

One potential problem is that many Australians haven’t updated their insurance policies over the years or have let them lapse altogether, he notes.

Australia has suffered through catastrophic fires before, such as the 2009 conflagration in Victoria, which did billions of dollars in damage. But the current fires are affecting a much bigger area, and they’ve also begun earlier, making it hard to assess how much they’ll cost.

“What’s really concerning to us is that this is still relatively early in our typical bushfire season” and there are worries about how much longer it will last, says economist Katrina Ell of Moody’s Analytics.

Ell doesn’t think a recession is likely, but North isn’t as sure.

The fires started in relatively unpopulated areas, but they’re moving closer to the cities, where they can do a lot more damage, he says.

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Business

A timeline of events in the bread price-fixing scandal

Published

5 hours ago

September 19, 2024

Anne Joseph

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)

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Economy

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

Published

5 hours ago

September 19, 2024

Anne Joseph

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)

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Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

20 hours ago

September 18, 2024

Anne Joseph

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.

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