Canada's Economic Outlook More Optimistic Than Before, However Industry and Trade Still in Shock, Suggests RSM Canada's Report - Canada NewsWire | Canada News Media
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Canada's Economic Outlook More Optimistic Than Before, However Industry and Trade Still in Shock, Suggests RSM Canada's Report – Canada NewsWire

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  • Short-term data suggests economic activity across Canada is on the rise.
  • Report also shows that the shift to remote work has been harder for provinces with a focus on natural resources, as well as for older demographics.
  • Expedited government investment will be required to accelerate recovery and pay down national debt following the COVID-19 pandemic.

TORONTO, July 14, 2020 /CNW/ – RSM Canada (“RSM”), the leading global provider of audit, tax and consulting services focused on middle market businesses, today launched its second 2020 issue of “The Real Economy: Canada” – a quarterly report that provides Canadian businesses with economic analysis and insights into factors driving growth, or economic headwinds, in Canada’s middle market.

As Canada moves past the initial shutdown phase of the COVID-19 pandemic and provinces start to reopen, the Real Economy: Canada report shines a light on the economic impact of the pandemic so far, what the outlook is for the near future, and explores some of the measures government and other authorities can take as the country looks towards its recovery.

Key findings in this quarter’s report include:

  1. After a big drop in April, Canada’s economy is slowly on the up, according to high-frequency data from re-opening provinces.
  • Data such as transport use, and even restaurant bookings, show that the economy is performing better than predicted after a drop of 11.6 per cent in April.
  • Despite promising economic indications, Canada’s industrial sector is at the same level of distress as in the Great Depression.
    • Signs of economic recovery don’t offset the huge shock to trade and supply chain.
    • Industry’s contribution to GDP industry fell by nearly 6 per cent in March, and new orders dropped by nearly 40 per cent in April.
    • The sector was already in decline due to the worldwide manufacturing recession brought on by the U.S. trade war.
  • To continue economic recovery, and to pay down national debt following the pandemic, the government and authorities need to boost investment today.
    • Canada’s national debt will increase following the pandemic, and the country will need to ‘grow’ its way out of it.
    • Three key investment areas to boost productivity include:
    1. Digital infrastructure – for example, continue investment in broadband projects for more rural areas of Canada
    2. Investment in goods movement
    3. Investment to reduce congestion in urban centres
  • Certain provinces, industries and age groups are at risk of being left behind in Canada’s shift to remote work.
    • While 40% of the labour force in provinces like Ontario and British Columbia are capable of working from home, only 30 per cent are able in provinces with a greater focus on natural resources.
    • Those who are younger and have obtained college educations or higher are more likely to be able to work from different locations. Meanwhile, those older than 44 have a reduced capacity to work through digital means.
    • While 85 per cent of those employed in finance, education or professional vocations can work remotely, only 10 to 25 per cent are able in the retail, manufacturing and agricultural industries.

    “The pandemic has certainly dealt a tough blow to Canada’s industrial sector – an area already struggling back in 2019 as a result of the ongoing trade war between the U.S. and China,” said Joe Brusuelas, chief economist with RSM US LLP. “Despite some promising short-term economic indicators, and the Bank of Canada’s steps to accommodate stimulus measures, it’s imperative that the authorities make prudent investments to keep industrial recovery moving in the right direction and look to boost trade efforts as much as possible.”

    “Following the slow re-opening of provinces, short-term data shows that the Canadian economy is performing at a better rate than previously predicted,” adds Alex Kotsopoulos, partner, projects and economics with RSM Canada. “However, it’s likely that provinces with a greater proportion of their economy dedicated to areas such as natural resources will lag behind others, and additional investment or focus may be needed to support these areas.”

    “As we look to the future, the financial measures taken to address this pandemic will increase Canada’s national debt, and the country will essentially need to grow its way out of that debt” continues Kotsopoulos. “By making important investments today in areas such as infrastructure and goods movement, the federal government can get ahead early and begin to set the groundwork for that growth.”

    For more information on ‘The Real Economy: Canada‘ or to download the report, visit RSM Canada’s website: https://rsmcanada.com/our-insights/the-real-economy/the-real-economy-canada-volume-6.html.

    About RSM

    RSM’s purpose is to deliver the power of being understood to our clients, colleagues and communities through world-class audit, tax and consulting services focused on middle market businesses. The clients we serve are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today’s ever-changing business environment.

    RSM Canada LLP provides public accounting services and is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in 120 countries. RSM Alberta LLP is a limited liability partnership and independent legal entity that provides public accounting services. RSM Canada Consulting LP provides consulting services and is an affiliate of RSM US LLP, a member firm of RSM International.  For more information visit rsmcanada.com, like us on Facebook, follow us on Twitter and/or connect with us on LinkedIn.

    SOURCE RSM Canada

    For further information: Media contact: Ben Rose or Stephen Colle, FleishmanHillard HighRoad, 416-214-0701, [email protected]

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    A timeline of events in the bread price-fixing scandal

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    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)

    The Canadian Press. All rights reserved.

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

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    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)

    The Canadian Press. All rights reserved.

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

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    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.

    The Canadian Press. All rights reserved.

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