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Canada records C$282.56 billion budget deficit over first 11 months of 2020/21

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OTTAWA, April 30 (Reuters) – Canada‘s budget deficit in the first 11 months of fiscal 2020/21 swelled to C$282.56 billion ($230.04 billion) from a deficit of C$6.98 billion in the year-ago period, as Ottawa spent heavily to fight the COVID-19 pandemic, the finance ministry said on Friday.

“The unprecedented shift in the government’s financial results reflects the severe deterioration in the economic situation and temporary measures implemented,” it said in a statement.

Year-to-date revenues dropped 14.1% reflecting a broad-based decline in tax and other revenues, which include items like Crown corporation profits. Year-to-date program expenses, meanwhile, jumped 81.6% largely due to emergency transfers to individuals, businesses and the provinces.

On a monthly basis, Canada posted a deficit of C$14.37 billion in February 2021, compared to the C$3.58 billion surplus recorded in February 2020.

Monthly revenues were down 9.3% on a decline in tax and other revenues. Program expenses climbed 58.1%, again on COVID-19 response measures.

 

 

(Reporting by Julie Gordon, 613-235-6745, Julie.gordon@tr.com; Editing by David Ljunggren)

Economy

Quebec mulling additional support measures for economy: Pierre Fitzgibbon – Montreal Gazette

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The economy minister was in Montreal to introduce projects to brighten up downtown and lure office workers back.

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Quebec will consider unlocking fresh sums to support economic expansion and ensure businesses in downtown cores can survive the pandemic, Economy Minister Pierre Fitzgibbon said.

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Finance minister Eric Girard “is going to do an economic update in November, and we’re working now to see what other programs across all ministries we could tap to continue the relaunch of the economy,” Fitzgibbon said Friday in an interview in Montreal on the sidelines of a business event.

“Perhaps there are other sums out there that we can obtain. The government is quite open to this because all in all, public finances are in a good situation.”

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Quebec on Friday reported a $359-million deficit for the three-month period ended June 30. That’s a 92-per-cent improvement over the $4.74-billion shortfall reported in the same quarter a year ago — right at the start of the pandemic.

Real gross domestic product in Quebec expanded at an annualized rate of 3.4 per cent in the second quarter, topping its pre-pandemic level with the help of strong domestic demand, the provincial statistics institute said Thursday. Investment in machinery and equipment, household consumption and residential construction all posted gains.

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By contrast, GDP for Canada as a whole contracted 1.1 per cent on an annualized basis.

Despite the broad economic rebound, some sectors — such as commercial real estate — are struggling.

Office vacancies in downtown Montreal rose to 13.2 per cent in the third quarter, real-estate firm CBRE said Thursday. That’s the highest level since the fourth quarter of 2004.

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Fitzgibbon was in town Friday at a Chamber of Commerce of Metropolitan Montreal event to introduce eight creative projects selected to brighten up downtown Montreal and lure office workers back.

Provincial financing for the initiative totals $3.1 million, part of a $23.5-million aid package for Montreal’s central business district that was announced in March. All told, Quebec set aside $75 million to help rekindle economic activity in downtown cores across Quebec.

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“The Montreal economy accounts for 57 per cent of Quebec’s GDP, and we cannot let it down,” Fitzgibbon said. “If more money is required, we will do it. At this time, I don’t think we’ll have an issue with money. There are other programs for innovation or creativity that we can put to work. We can take money elsewhere to achieve the same thing.”

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COVID-19 has deprived downtown Montreal of much of its office worker population in the past 18 months. Plans to bring back employees this autumn have recently been put on hold as a fourth wave sweeps across Quebec.

In fact, teleworking’s enduring popularity probably means downtown cores will never be as busy as they were before the pandemic, according to Fitzgibbon.

“We have to admit that many companies are going to favour teleworking, even after health restrictions have been lifted, for reasons such as family-work balance,” the minister said. “That will be a reality.”

And with several downtown-based employers having opened satellite offices in suburbs such as Brossard or Laval during the pandemic, “perhaps we will never have the same density that we had before,” he said.

ftomesco@postmedia.com

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Economy

Bahrain to Double VAT as Economy Recovers from Pandemic – BNN

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(Bloomberg) — Bahrain will double value-added tax to 10% in an effort to boost revenues and curb one of the Gulf’s widest budget deficits as the economy begins to recover from the pandemic, according to an official close to the government. 

The Gulf country decided to raise VAT following a comprehensive spending and revenue review, the official told Bloomberg, as the government looks for ways to rebalance its finances without undermining an economy in recovery mode.

Bahrain is under fiscal strain despite a $10 billion bailout package pledged by its wealthier neighbors in 2018. Last year, it said it was putting some of its reform efforts on hold to focus on helping the economy cope with the double shock of Covid-19 and a fall in oil prices. 

Bahrain Puts Economic Recovery Ahead of Boosting Budget Revenue

©2021 Bloomberg L.P.

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Economy

When machines suck humanity out of the economy – Open Democracy

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Travaux par aspiration was the slogan on the lorry. Doing building work with a vacuum cleaner. The noise was colossal and the trench long as this vast machine sucked up rocks, slabs of concrete the size of a diner plate, along with all the sand and gravel under the pavement. It left a clean trench, a metre deep for some 30 metres under our kitchen window, done and dusted in the morning of the last working day in July and with only three people on site.

My first paid employment meant digging in the stone and clay of a Chiltern valley. The flints refused to give way under my pickaxe. The knack of swinging it so the point fell with the fullest force possible just where I intended, took several days of training by the lads from Connemara.

You could tell them a mile off by the cut of their hair, their tweed jackets and steady pace of bodies whose assigned function in the economy of the time was to dig into the earth, whether it was the peat of their homeland or the hoggin of the Thames Basin. Between themselves the talk was in a soft, lilting language that switched to English when instructing me in how to make, or rather craft their tea.

This was as strong as their arms. Two half-pound packets of loose Indian from the Co-op round the corner, two pounds of sugar and a pint of milk tossed into a tin bucket of water simmering on a gas ring their ganger had brought by the bus and boat from Galway. As they dipped their cups in, I kept the bucket full with water, extra sugar, milk and tea leaves so the taste never lost its bite.

We knew each other’s names before we had lifted our first shovelful. The camaraderie and generosity to each other and to me was as warm as the language directed against their employer. Their lives, though, were hard and short, their final years solitary ones with a pint of Guinness at the bar and no pension to talk of in the pocket. Britain moved on the roads they built and lived in the homes they erected, but gave back little by way of thanks.

In 1960, on the outskirts of London, as now outside builders’ merchants in Paris, they and their kind waited and wait at the roadside for someone needing a ready hand to do a good job for as little money as the market can enforce. Travaux par aspiration is as much a threat to their restricted livelihoods as the automation of engineering factories or of bureaucratic work is to those who thought their jobs would be careers for life.[i]

Aristocratic sauternes

Where we stayed for part of this summer was a book in praise of Yquem,[ii] about the most expensive wine money can buy. Naturally, it was a song of praise to Alexandre de Lur Saluces as the vineyard in the Sauternes region of Bordeaux had been in the hands of his aristocratic family for centuries. Now, it is majority-owned by the luxury goods empire of France’s richest business figure Bernard Arnault and his LVMH, the company that clothes Brigitte Macron for free.

By a unique happenstance of the soil around the chateau and how it is drained, Yquem apparently gains its unparalleled quality because the vineyard is especially welcoming to an infection that turns the grapes into a shrivelling, fungus-ridden mass. Generations of skilled workers, mostly living in tied accommodation, made of these grapes what the author declares to be “a symbol of perfection”. We learn about what they have done, the skills they developed, the equipment they used, the price the fruit of their labours could command, even the luxurious meals that it should accompany.

The right to a name is granted to only one of them, if spiced with sexist condescension:

“Though uninhabited, the chateau is kept up and the Count often receives. The meals are usually prepared by one of the chefs of Bordeaux. For the more simple occasions, a member of the staff, a woman who knows how to roast a joint of mutton to perfection, is in the kitchen (and) it is Thérèse, one of the ‘vigneronnes du domaine’ who also cleans the house, who serves the wine, always at a perfect temperature, discreetly, with style and a calm pride.”

On page 82, two horses are pictured and named: Popaul and Pompon. The human being leading them out of their stables is left unpersonned amid this glorification of a tipple for the privileged.

In the 1990s, the work of caring for the vines still used ancient technology: perhaps it does today. Bernard Arnault, however, has plenty of experience in outsourcing, delocalising or just automating away jobs. Travaux par aspiration is the name of his game. It helps one understand why, amid all the names that never got scratched on a tombstone as capitalism and its industrial revolution moved centre stage, that of Ned Ludd, the machine breaker, is the only one we ever seem to remember.

To recall why we do, go and taste the crackling anger and sardonic irony of Lord Byron’s prose and poetry from 1812 when the then parliament voted to hang machine breakers: “Stockings fetch better prices than lives— / Gibbets on Sherwood will heighten the scenery, / Shewing how Commerce, how Liberty thrives.”

[i] You can catch up with the machines on the website of their manufacturer, the French company Rivard at https://www.rivard-international.com/en/products/aspiratrice-excavatrice/. Rivard has been part of the US Alamo Group for over a decade.

[ii] Richard Olney, Yquem, Flammarion, second edition, 1997

This piece was originally published in the September edition of Splinters.

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