The flood of federal spending in response to the coronavirus pandemic and the ensuing economic crisis will see the deficit soar to $343 billion this year, as officials warn the economy might never go back to normal.
At the same time, Finance Minister Bill Morneau provided no indication of a roadmap for when or how the government plans to rein in spending. But he insisted in the 168-page fiscal snapshot that the country remains well-positioned to handle the weight of that deficit because of historically low interest rates .
That lack of clarity means there are few clues as to what Canadian taxpayers can expect down the road, either in terms of potentially higher taxes or service cuts.
What the snapshot does make clear is that there is a very real likelihood that the Canadian economy and consumer habits may not soon — if ever — return to what they were pre-COVID-19, and that the level of further spending required to spur recovery will depend on how seriously Canadians continue working to flatten the curve.
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“Uncertainty is inherent in any forecast. However, in the current context, uncertainty is magnified to unprecedented levels. In addition to recovery being driven by public health outcomes, it may not follow historical patterns – crises can have a profound impact on economies that lead to permanent change,” the fiscal snapshot stated.
“The economy may not be able to produce the same level of goods and services, even if demand returns to pre-crisis levels.”
The fiscal snapshot cited as an example that will likely mean fewer seats at restaurants, leading to fewer jobs and less money for businesses.
Continued restrictions on travel, it also noted, could impact immigration, which would lead to slower growth in the workforce and employer’s ability to fill key jobs and services.
The fiscal snapshot comes after months of economic pain that has seen Canadian unemployment levels hit their highest-ever levels.
While national unemployment was at a record low of 5.5 per cent in January, the coronavirus crisis and the nationwide shutdown led to an unemployment rate of 13.7 per cent in May and a total of 30 per cent of the workforce either losing hours or unemployed.
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“The recession likely reached its lowest point in late April, although a large share of the economy still remains idled,” the snapshot suggested.
3:41 The economic impact of the coronavirus, explained
The economic impact of the coronavirus, explained
But even if the worst may have passed, that doesn’t mean the outlook is positive for businesses that will have to continue to find ways to adapt in difficult circumstances, the document warned.
“Even without resurgence of uncontrolled transmission, global uncertainty is likely to remain for some time. In the face of this, businesses have to decide when to start hiring and investing again,” the snapshot stated.
“There is a risk that this process could be prolonged until there is more certainty that the virus is no longer a threat and that the global economic recovery is solidly underway. In the interim, many businesses will have to follow strict physical distancing protocols and will be operating at greatly reduced capacity. “
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In short: any businesses or consumers hoping for a return to the life they once knew appear to be out of luck for quite a while yet.
3:05 Fiscal Snapshot: Morneau says keeping COVID-19 transmission rate down key part of economic plan
Fiscal Snapshot: Morneau says keeping COVID-19 transmission rate down key part of economic plan
Perrin Beatty, CEO of the Canadian Chamber of Commerce, also cautioned the government in response to the fiscal snapshot that Canadian businesses need clear guidance now.
“We need a longer-term fiscal plan and forward guidance from the government. Today should have been an opportunity to offer Canadians a clear picture of the challenges and a coherent strategy to address them,” he said in a statement.
“What businesses, investors, analysts and Canadians alike wanted to hear was how we will move away from the short-term measures that are quickly draining the federal treasury to helping families and businesses once again become self-sufficient.”
Conservative Leader Andrew Scheer also criticized the snapshot for failing to provide clearer details on how the government plans to shape the country’s economic recovery.
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He described the financial outlook in the snapshot as “dire.”
“Every single country on the planet will be desperately competing for the same opportunities and the same investments so where is the prime minister sending us?” he said.
“The prime minister has absolutely no plan … spending billions of dollars does not create economic growth.”
The unprecedented economic shutdown sparked by the need to limit spread of the highly contagious virus saw the government roll out $212 billion in spending on income replacement and scientific research, business loans and grants to vulnerable Canadians.
Among those measures was the wage subsidy and the Canada Emergency Response Benefit, a $2,000 per month benefit for Canadians earning less than $1,000 per month because of the economic shutdown.
More than eight million Canadians have received the CERB. As well, 1.2 million who had previously claimed the benefit stopped doing so in May as lockdown measures began to ease.
The government also said in the snapshot that it will extend the wage subsidy for an unspecified amount of time beyond the most recent extension to Aug. 29.
“We will have more to say on that in the very near term as we finalize those details as how it can be used to help us get back to work,” Finance Minister Bill Morneau said in a press conference on Wednesday when asked about the extension.
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The snapshot does not provide an estimate for the precise cost of whatever further extension is planned but noted when the program was first announced, it was earmarked to cost $45 billion and the three-month extension of the program to Aug. 29 upped that cost to $82.3 billion.
Parliamentary Budget Officer Yves Giroux had said in June that the cost of those programs would create a deficit of roughly $256 billion this fiscal year alone.
Officials speaking to reporters on background acknowledged the $343 billion deficit now projected could get worse if the uneven recovery forecast in several possible future scenario models included in the document come to pass, though said they did not see that as likely.
Low interest rates billed as way to limit coronavirus debt pain
For consumers, all of this effectively means uncertainty will continue to be the key watchword for the foreseeable future.
A further fiscal projection will come in the fall but there’s no commitment from the government right now to any kind of fiscal anchor or attempt to adjust its forecasts for possible future risks.
What the government is doing, however, is trying to lock in the historically low interest rates that officials have repeatedly cited in defence of their massive spending.
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The government will lock in long-term bonds at current low levels, meaning it will pay current levels of interest on future payments it makes towards getting rid of the deficit.
Because of the low interest rates, the government expects to pay $4 billion less on debt charges than it had planned to just last year.
“As challenging as this situation is, we’re in a position that the cost of our debt is lower than it’s ever been before,” said Morneau in a press conference.
When the pandemic first hit in January, the Bank of Canada has set its prime interest rate — which effectively acts as a guide for the rates given to consumers at their regular banks — at 1.75 per cent. But it has slashed that three times since, with the rate now at 0.25 per cent.
The debt-to-GDP ratio will rise from 31 per cent to 49 per cent because of the coronavirus emergency spending, the fiscal snapshot noted.
But overall, there fiscal snapshot puts an emphasis on the unpredictability of the coronavirus pandemic and the uncertainty that causes for trying to create any kind of economic forecast.
Whether the economy begins to slowly recover or whether it contracts again due to another shutdown, officials said, comes down to public health and whether Canadians stop the spread.
CAPE CANAVERAL, Fla. (AP) — Three NASA astronauts whose prolonged space station mission ended with a trip to the hospital last month declined to say Friday which one of them was sick.
Astronauts Matthew Dominick, Michael Barratt and Jeanette Epps publicly discussed their spaceflight for the first time since returning from the International Space Station on Oct. 25. They spent nearly eight months in orbit, longer than expected because of all the trouble with Boeing’s Starliner crew capsule and rough weather, including Hurricane Milton.
Soon after their SpaceX capsule splashed down in the Gulf of Mexico off the Florida coast, the three were taken to a hospital in nearby Pensacola along with Russian cosmonaut Alexander Grebenkin, who launched with them back in March.
One of the Americans ended up spending the night there for an undisclosed “medical issue.” NASA declined to say who was hospitalized or why, citing medical privacy.
When asked at Friday’s news conference which one had been sick, the astronauts refused to comment. Barratt, a doctor who specializes in space medicine, declined to even describe the symptoms that the unidentified astronaut had.
“Spaceflight is still something we don’t fully understand. We’re finding things that we don’t expect sometimes. This was one of those times and we’re still piecing things together on this,” said Barratt, the only member of the crew who had flown in space before.
Epps said everyone is different in how they respond to space — and gravity.
“That’s the part that you can’t predict,” she said, adding, “Every day is better than the day before.”
Dominick said little things like sitting comfortably in a hard chair took several days to get used to once he returned. He said he didn’t use the treadmill at all during his time in space, as part of an experiment to see what equipment might be pared on a long trip to Mars. The first time he walked was when he got out of the capsule.
The two astronauts who served as test pilots for Boeing’s Starliner — Butch Wilmore and Suni Williams — will remain at the space station until February, flying back with SpaceX. Starliner returned empty in September.
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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.
COLUMBIA, S.C. (AP) — Forty-three monkeys bred for medical research that escaped a compound in South Carolina have been spotted in the woods near the site and workers are using food to try to recapture them, authorities said Friday.
The Rhesus macaques made a break for it Wednesday after an employee at the Alpha Genesis facility in Yemassee didn’t fully lock a door as she fed and checked on them, officials said.
“They are very social monkeys and they travel in groups, so when the first couple go out the door the others tend to just follow right along,” Alpha Genesis CEO Greg Westergaard told CBS News.
Westergaard said his main goal is to have the monkeys returned safely with no other problems. “I think they are having an adventure,” he said.
The monkeys on Friday were exploring the outer fence of the Alpha Genesis compound and are cooing at the monkeys inside, police said in a statement.
“The primates are exhibiting calm and playful behavior, which is a positive indication,” the police statement said, adding company workers are closely watching the monkeys while keeping their distance as they work to safely recapture them.
The monkeys are about the size of a cat. They are all females weighing about 7 pounds (3 kilograms).
Alpha Genesis, federal health officials and police all said the monkeys pose no risk to public health. The facility breeds the monkeys to sell to medical and other researchers.
“They are not infected with any disease whatsoever. They are harmless and a little skittish,” Yemassee Police Chief Gregory Alexander said Thursday.
Authorities still recommend that people who live near the compound about 1 mile (1.6 kilometers) from downtown Yemassee shut their windows and doors and call 911 if they see the monkeys. Approaching them could make them more skittish and harder to capture, officials said.
Eve Cooper, a biology professor at the University of Colorado Boulder who has studied rhesus macaques, said the animals have the potential to be dangerous and urged people to keep their distance.
Rhesus macaques monkeys can be aggressive. And some carry the herpes B virus, which can be fatal to humans, Cooper said.
However, Alpha Genesis states on its website that it specializes in pathogen-free primates. Cooper noted that there are pathogen-free populations of rhesus macaques that have been quarantined and tested.
“I would give them a wide berth,” Cooper said. “They’re unpredictable animals. And they can behave quite aggressively when they’re afraid.”
Alpha Genesis provides primates for research worldwide at its compound about 50 miles (80 kilometers) northeast of Savannah, Georgia, according to its website.
Locally, it is known as “the monkey farm.” And there is more amusement than panic around Yemassee and its population of about 1,100 just off Interstate 95 about 2 miles from Auldbrass Plantation, a Frank Lloyd Wright house designed in the 1930s.
There have been escapes before, but the monkeys haven’t caused problems, said William McCoy, who owns Lowcountry Horology, a clock and watch repair shop.
“They normally come home because that’s where the food is,” he said.
McCoy has lived in Yemassee for about two years and while he plans to stay away from the monkeys, he has his own light-hearted plan to get them back.
“I’m stocking up bananas, maybe they’ll show up,” McCoy said.
The Alpha Genesis compound is regularly inspected by federal officials.
In 2018, the U.S. Department of Agriculture fined Alpha Genesis $12,600 in part after officials said 26 primates escaped from the Yemassee facility in 2014 and an additional 19 got out in 2016.
The company’s fine was also issued because of individual monkey escapes as well as the killing of one monkey by others when it was placed in the wrong social group, according to a report from the USDA.
The group Stop Animal Exploitation Now sent a letter Thursday to the USDA asking the agency to immediately send an inspector to the Alpha Genesis facility, conduct a thorough investigation and treat them as a repeated violator. The group was involved in the 2018 fine against the company.
“The clear carelessness which allowed these 40 monkeys to escape endangered not only the safety of the animals, but also put the residents of South Carolina at risk,” wrote Michael Budkie, executive director of the group.
The USDA, which has inspected the compound 10 times since 2020, didn’t immediately respond to the letter.
The facility’s most recent federal inspection in May showed there were about 6,700 primates on site and no issues.
In a 2022 review, federal veterinarians reported two animals died when their fingers were trapped in structures and they were exposed to harsh weather. They also found cages weren’t adequately secure. Inspectors said criminal charges, civil penalties or other sanctions could follow if the problems weren’t fixed.
Since then, Alpha Genesis has undergone six inspections with minor problems reported only once.
In January 2023, the USDA said temperatures were out of the 45 to 85 degree Fahrenheit (7.2 to 29.5 degree Celsius) required range at some of the compound’s monkey cages. The inspection found moldy food in one bin, sharp edges on a gate that could cut an animal and sludge, food waste, used medical supplies, mechanical equipment, and general construction debris on the grounds.
Supporters of medical research involving nonhuman primates said they are critical to lifesaving medical advances like creating vaccines against COVID-19 because of their similarities to people. Keeping a domestic supply of the animals is critical to prevent shortages for U.S. researchers.
Humans have been using the rhesus macaque for scientific research since the late 1800s. Scientists believe that rhesus macaques and humans split from a common ancestor about 25 million years ago and share about 93% of the same DNA.
These monkeys have been launched into space on V2 rockets, used for AIDS research, had their genome mapped and made stars of their own reality television show. They were in such high demand in the early 2000s that a shortage led to scientists paying up to $10,000 per animal.
Outside of rats and mice, rhesus macaques are one of the most studied animals on the planet, said Dario Maestripieri, a behavioral scientist at the University of Chicago who wrote the 2007 book “Macachiavellian Intelligence: How Rhesus Macaques and Humans Have Conquered the World.”
The animals are very family oriented, siding with relatives when fights break out. And they’re adept at building political alliances in the face of threats from other monkeys. But they can be painful to watch. Monkeys with lower status in the hierarchy live in a constant state of fear and intimidation, Maestripieri said.
“In some ways, they kind of represent some of the worst aspects of human nature,” Maestripieri said.
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Lovan reported from Louisville, Kentucky, and Finley reported from Norfolk, Virginia.
Finance Minister Chrystia Freeland speaks with reporters after chairing a special cabinet committee working on Canada’s plan to deal with the incoming Donald Trump administration. Freeland says she’s stood up for Canadian interests in the past and is ready to go another round. (Nov. 8, 2024)
