Economists and market analysts say that when President-elect Joe Biden takes the oath of office in January, he will inherit a battered economy. While most metrics of economic activity have risen from the record-shattering lows they hit in March and April, the pace of improvement has slowed, and analysts worry that burgeoning Covid-19 case numbers will throttle the hard-won economic momentum the country has eked out so far.
It won’t be easy. Control of the Senate is still up in the air, but many believe it’s likely that Congress’s upper chamber might still have have a Republican majority with Sen. Mitch McConnell, R-Ky, as Majority Leader. Although Biden has referenced his work with McConnell in the past to bolster his credentials as a politician who can successfully work across the aisle, McConnell’s public backing of President Donald Trump’s refusal to concede on Monday was, if nothing else, a clear indication that bipartisanship will be elusive for Biden.
“With a divided Congress, a handful of the major legislative priorities of a Biden administration seem unlikely,” said Ross Mayfield, an investment strategy analyst at Baird. “Any kind of major corporate tax hike or wealth tax seems incredibly unlikely with a Republican Senate.”
“Pfizer’s progress towards a vaccine is promising, but does not negate the need for lawmakers to act in the near term.”
Despite Biden positioning himself as a centrist, economists aren’t expecting much across-the-aisle cooperation. After a stimulus deal is passed, “I think it’s going to be difficult to do much beyond that, legislatively,” said Mark Zandi, chief economist at Moody’s Analytics.
Although Biden will be unable to put most of his — and his party’s — boldest initiatives into action, Zandi said the new president would likely implement a flurry of executive orders, many targeted at undoing policies Trump had unilaterally imposed the same way. “Biden’s going to reverse Trump on trade, on immigration, on climate change, on banking regulations,” he said. “It’s not big, fundamental shifts… it’s more incremental.”
Economists say these are the week-one, day-one challenges Biden will face as soon as he is sworn in — and how he might be able to meet them.
Corral the coronavirus
Although a public health crisis first and foremost, experts agree that containing and lowering the burgeoning number of Covid-19 cases is the only way to alleviate the economic crisis that has gripped the country since March. Getting the virus under control will ensure that stores, restaurants, hotels and entertainment venues can stay open, and that Americans will have the confidence — and the disposable income — to take flights, attend ball games, eat out at restaurants and shop in stores.
“He’s going to encourage the governors to recommend that face masks be mandatory in order to try and improve the chance of the economy opening as quickly as possible,” said Sam Stovall, chief investment strategist at CFRA Research. “I think everybody realizes that more action is needed.”
Nov. 10, 202002:15
His administration will need to invest in people, equipment and technology to improve the availability and accuracy of testing, production and dissemination of PPE and development of virus-mitigation and contract tracing protocols — all goals endorsed by public health officials. However, observers caution that Biden could run into resistance from Republican Congress members and governors over issues such as mask mandates and increased funds for testing and contact tracing.
Get America more stimulus
Congress was unable to come to an agreement on the terms of a stimulus package before the election. Economists are divided on whether or not — and when — another tranche of aid might be forthcoming. “Any kind of coronavirus fiscal stimulus legislation still seems likely, [but] some of the good recent economic data shows economic momentum that has pared the appetite for a big bill,” Mayfield said.
Most analysts, along with top officials like Federal Reserve Chairman Jerome Powell, do agree that additional stimulus is needed. The progress announced by Pfizer on Monday towards a Covid-19 vaccine was promising, some said, but did not negate the need for lawmakers to act in the near term.
“Regardless of the path of the virus, I think there’s pretty high awareness across the partisan spectrum that there needs to be some sort of bill to carry this recovery across the finish line,” Mayfield said.
A worsening public health picture could incentivize lawmakers to work quickly, some said. “Majority Leader McConnell’s reluctance to move ahead with a relief bill the last few months suggests it will be uphill sledding — though one might note that many experts expect the pandemic to be considerably worse by the time Biden is sworn in, which may make the politics of a broad relief and recovery effort somewhat more feasible,” said Mason B. Williams, a political science professor at Williams College.
Bring back jobs
A growing number of job losses are shifting from temporary to permanent, an ominous change labor economists say will get worse between now and the inauguration, particularly if the current alarming trajectory of case growth continues unchecked.
Economists agree that, even if a Biden White House is able to get a sufficient handle on Covid-19 to avoid reimposition of shutdowns, Americans will need the means as well as the willingness to spend. Securing more stimulus is an important first step, Stovall said. “He would want to focus on stimulus right away to save as many jobs as he can,” he said. With consumer spending the biggest contributor to GDP, putting money in the pockets of ordinary Americans is a quick way to insulate the jobs of countless cashiers, cooks, hairstylists, hotel staffers and others in high-contact service-sector positions.
Mayfield said another way Biden could contribute to job gains would be to coordinate more PPE production at American factories. “I think you’ll probably see some effort on some things like utilizing the Defense Production Act to mobilize some U.S. manufacturing,” he said. This would have a multifaceted impact touching on a few different Biden administration priorities: Adding jobs, securing enough PPE to combat Covid-19 and revitalizing American manufacturing with an eye towards rebuilding.
“In proposing a Public Health Jobs Corps, Biden is wisely copying from the New Deal’s playbook of providing short-term ‘emergency’ employment.”
Biden’s transition website calls for establishing a 100,000-person job corps to combat the coronavirus. “In proposing a Public Health Jobs Corps, Biden is wisely copying from the New Deal’s playbook of providing short-term ‘emergency’ employment in ways that will stimulate long-term economic growth,” Williams said.
Although hailed by some as a proactive way to tackle the nation’s considerable public health as well as economic challenges, this proposal would likely face resistance from Congressional Republicans. Likewise, Biden’s proposals to develop jobs in sectors as diverse as infrastructure, green energy and child- and elder-caregiving all would require the kind of spending outlays he would be unlikely to wrest from a GOP-led Senate.
“Republican Senators are even less likely to support Biden’s spending priorities than they would be likely to support some of Trump’s spending priorities,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance.
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)
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.
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.
