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.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
