An underground economy that’s expanded during Ontario’s stay-at-home order hurts public finances and could be contributing to the spread of COVID-19, public health officials and experts said.
Bylaw officers in one of the province’s COVID-19 hot spots have issued dozens of fines for businesses operating against public health orders in York Region.
“We’re seeing an increase in underground activity,” said Dr. Karim Kurji, the region’s medical officer of health. “We do get anecdotal reports of people using their basements to carry out their particular trades, and we would much rather that this be done openly, with all the appropriate precautions put in place.”
The health region knows of at least one instance where a virus variant was spread after a nail technician visited customers’ homes to perform services, Kurji said, though the health unit lacks precise data on how widespread the issue is, given the businesses’ underground nature.
A browse through Facebook Marketplace, the tech giant’s online classifieds service, shows numerous listings for haircuts, manicures and eyelash extensions — all services that are verboten in regions under a stay-at-home order or in the grey-lockdown phase of the province’s reopening plan.
“In your home or mine!” one listing proclaims.
The Canadian Press reached out to a number of those offering such services but none agreed to be interviewed.
The top doctor in Niagara Region, which is currently in the grey-lockdown phase of reopening, said he is also aware of some businesses operating under the table in an effort to skirt public health rules.
“Such operations are very much a risk of transmission given their rejection of provincial and local measures to protect our populations and economy from COVID-19,” Dr. Mustafa Hirji said in an emailed statement.
Catherine Connelly, a professor of organizational behaviour at McMaster University’s DeGroote School of Business, said the underground economy has long been an issue.
Statistics Canada valued the nation’s underground economy at $61.2 billion in 2018, or roughly 2.7 per cent of the GDP.
Connelly said that’s likely grown due to the pandemic, which has also made the consequences of bending the rules far more serious.
“People don’t think of the broader consequences of something simple like a haircut or home renovations,” she said.
It poses challenges for contact tracers, who may have trouble getting the truth out of someone who tested positive for COVID-19 after frequenting illicit barbershops, Connelly said.
There are economic implications too, she noted.
“We desperately need the tax revenue. As a society, this is how we function that we get to have nice things like hospitals, and schools and stuff like that, but it’s never top of mind,” she said.
Connelly said she’s hopeful that the province’s reopening will drive some people back to the up-and-up.
“With the relaxing of some of the rules, I think some of the underground economy has evaporated,” she said. “But I think some people also got used to it during the lockdown periods and this might just carry on indefinitely.”
The head of a small-business industry group said he doesn’t believe the issue is widespread, but he understands why some business owners may have felt compelled to go on operating contrary to public health rules.
“Some of the rules are so nonsensical that I can understand why some business owners may be choosing to take the law into their own hands,” said Dan Kelly, CEO of the Canadian Federation of Independent Businesses.
“But that would be a pretty big risk to the future of their business to do that.”
This report by The Canadian Press was first published Feb. 19, 2021.
Nicole Thompson, The Canadian Press
Spinning waste into gold: Victoria, Nanaimo councillors call for 'circular economy' strategy – Times Colonist
When people talk about a circular economy in which materials get reused and less waste ends up in landfills, they’re really talking about entrepreneurs such as Meaghan McDonald.
The 31-year-old Victoria woman has launched a new venture that aims to make money and protect the environment at the same time.
Her brand, Salt Legacy, plans to give new life to discarded or “dead” sails from sailboats by using the durable, water- and sun-resistant materials to make backpacks, surfboard bags and other outdoor gear rather than burying all that nylon and polyester underground.
“I’ve always been really eco-conscious and always wanted to create something that would kind of help within the circular economy,” McDonald said.
She has a background in biology rather than business, so she got help from an eight-month incubator program run by Victoria’s Project Zero — a partnership between the non-profit Synergy Foundation and Vancity that assists start-up businesses looking to operate in a circular economy.
Project Zero envisions a Vancouver Island where, by 2040, “our waste will be our greatest resource” and hundreds of people will be working for small independent businesses that, like McDonald, will be “upcycling” materials into new products.
Municipal politicians are getting on board.
Victoria Coun. Jeremy Loveday describes the circular economy as an immense opportunity “to create good green jobs and live on this planet in a way that will actually be sustainable.”
That’s why he got Victoria council to endorse a resolution to the Union of B.C. Municipalities, calling on the provincial government to develop a circular-economy strategy.
Loveday said such a strategy would allow the province to encourage and mandate that governments, businesses and residents adopt circular-economy practices.
“And, I think, local governments are at the heart of it because cities are where the population, carbon emissions, waste and innovation are all occurring.”
His motion, which emerged from the Climate Caucus, a non-partisan network of more than 300 elected officials across Canada, received final approval from Victoria council on Thursday.
In a related move, council also backed Loveday’s resolution to the UBCM asking the province to adopt right-to-repair legislation, which would ensure citizens have access to the parts and information they need to fix items, rather than being discouraged by companies that claim ownership over the intellectual property of their products.
“The idea, essentially, is that it’s time for the era of planned obsolescence to be over, and that consumers should have the right to receive information about their products, have access to spare parts, and that we should be able to repair the things that we purchase, rather than having a product that is designed to have an end of life,” Loveday said.
Nanaimo Coun. Ben Geselbracht won approval from his council for similar motions last week, as well as a third resolution calling for a provincial strategy to deal with demolition and construction waste.
Geselbracht said that the more municipal councils sign on to the resolutions, the stronger the case for them receiving serious consideration at the next UBCM convention.
“Then, hopefully, when it gets passed to the minister, there’s a pretty clear mandate that this is an important issue and we really demand action on it.”
As for McDonald, she’s forging ahead with her business plans and collecting old sails from marinas and sailing clubs that are only too happy to donate materials destined for the landfill.
She has the prototype for her backpack complete, work is underway on a fanny pack and a surfboard bag is in the design stage.
McDonald is also gathering the history of each discarded sail, so that she can attach stories of adventure and world travel to her new products.
“Then the new consumer can kind of have a bit of that history and that connection piece to the backpack they just bought,” she said.
In that way, her products will keep stories circulating as well as the economy.
The Economy, Oil Demand And Prices – Forbes
Given data lags and uncertainty, it is often said that the Fed guidance of the economy is like someone driving through a tunnel with the windshield painted black, relying on the rearview mirrors and bouncing off the walls. Given current divergent views amongst the political tribes, I would add as a corollary that there’s a child in the backseat hitting the driver with a pillow, screaming slow down they’re scared, while another child does the same, except screaming they need a bathroom and the car should speed up.
Current debt levels now prevailing in most of the world’s governments are outside of historical experience, so far as I know, and could have a significant impact on future growth and interest rates. Continued stimuli to promote economic recovery could mean low interest rates and rapid growth, which would certainly fuel stronger oil demand. Or it could result in inflation and thus high interest rates, leading to a new recession. Similarly, attempting to pay down the debt could slow economic growth and depress oil prices.
Aside from growth levels, interest rates have an impact on energy investment and could influence future fuel mixes. For example, low interest rates theoretically favor capital-intensive types of energy, including nuclear and renewables, along with long-term projects like deepwater oil and gas fields. (High interest rates favor shale oil and gas, because of their shorter payoff period.) It is possible that the recent surge in solar and wind power investment reflects recent low interest rates, although mandates and subsidies are probably more influential.
The heavy debt levels could, on the other hand, reduce subsidies for renewables including electric vehicles. Although it has become a cliché to claim that solar and wind are cheaper even than coal power, this is very misleading: at the least, new investment would be required to replace fossil fuels with renewables. The International Energy Agency, in its latest World Energy Outlook, projects investment needed in its scenarios, and the difference between the Stated Policies Scenario and the Sustainable Development Scenario would be $340 billion a year in the 2020s and reaches $1 trillion per year in the 2030s. (I’ve railed against the injustice of giving well-to-do citizens large grants to buy electric vehicles, which are one of the most expensive ways of reducing GHG that is given serios consideration.)
And where some talk about a new commodity supercycle, I worry that there is a good chance that instead there will be a collapse in asset values, with markets possibly entering bubble territory. One famous, possibly apocryphal story, is that Joe Kennedy (patriarch of the political dynasty) sold off his stock holdings just before the crash of 1929 after hearing a shoeshine boy give a stock tip: that convinced him the market was overbought. Similarly, it would seem that the roaring bull market for certain stocks such as Gamestop
might not be the result of fundamentals but rather the current expansionist monetary policy, which cannot last forever.
And the growing use of SPACs and the surging value of Bitcoin also reminds me of the late Charles Kindleberger’s book, Manias, Panics and Crashes which describes how the invention of new forms of credit led to an expansion of the monetary supply, which caused asset bubbles followed by crashes. This could lead to a reversion to value stocks, such as oil and gas producers as well as utilities, ESG notwithstanding.
To be honest, though, I feel kind of like I’m in the passenger seat of the Fed’s car shouting, “Go left! No, Right! No, Stop!” Perhaps the next killer app will be a GPS for monetary policy.
UK's Sunak says vaccine passport idea might help the economy – TheChronicleHerald.ca
LONDON (Reuters) – British finance minister Rishi Sunak said the idea of giving people vaccine passports or certificates to allow them to enter venues or events might be a way to help the country and its economy recover from the coronavirus pandemic.
“Obviously it is a complicated but potentially very relevant question for helping us reopen those parts of our country like mass events,” Sunak told BBC television on Sunday.
Prime Minister Boris Johnson said last week that the government would hold a review to consider the scientific, moral, philosophical and ethical questions about using vaccine certificates for people who have received a coronavirus shot, which could help entertainment and hospitality venues reopen.
(Reporting by William Schomberg and David Milliken; Editing by David Clarke)
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