adplus-dvertising
Connect with us

Economy

COVID-19 impacting Cape Breton economy – TheChronicleHerald.ca

Published

 on



SYDNEY, N.S. —

There is a devastating health impact with the coronavirus but an economic one is creeping in.

The federal government announced Friday the cruise ship season at the Port of Sydney has been pushed back to July.

Nicole MacAulay, Port of Sydney Development Corporation’s manager of cruise and administration, said the port hasn’t had time yet to crunch the numbers and determine what it could mean financially for the port. The delay to July 1 includes 22 calls totalling 32,288 passengers.

300x250x1

“In terms of public safety, obviously that’s the top priority of the federal government and certainly the local community,” MacAulay said. “We have confidence that the government made the right decision to delay the season.”

It was to be an important season for the port with a record number of ships due to call and the inaugural year for the newly constructed second berth.

MacAulay said the local port has had regular discussions with representatives of other ports in eastern North America, Transport Canada and public health officials. She acknowledged it is a disappointment, especially for businesses that look forward to the additional visitors.

In an emailed statement, port CEO Marlene Usher noted that Sydney’s cruise season was set to begin on April 28 and the government’s decision increases community safety but has a negative economic impact for individuals and businesses who rely on tourism income.

The federal government has temporarily barred all cruise ships and ferries that carry more than 500 people, including crew, from docking in Canada until July to protect against the growing COVID-19 pandemic. Ottawa will re-examine the ban after June 30.

Chef Ardon Mofford, owner and chef of Governors Pub and Eatery, said the spring months of the cruise season are an important shoulder season for their business, having the season pushed back would make a big impact on their business. Located at 233 Esplanade, Governors is close to the Port of Sydney

“The spring is considered the shoulder season for us and the cruise ships give us a big boost that time of the year,” he said.

Mofford said first and foremost is the human tragedy of the COVID-19 — people being impacted by it and the safety of their customers and staff. However, the economic impact on the community that relies so much on tourism is real. Mofford said when the money is coming from cruise ships it’s money that gets invested into the economy that otherwise wouldn’t exist. 

“It brings a lot of money in that can’t be replaced in our community locally,” he said. “When you lose them it’s a complete loss of revenue.”

Chef Ardon Mofford, owner of Governors Pug and Eatery in Sydney, cooks some fish Friday. Mofford said the cruise ship season being pushed back means losing the shoulder season which impact business. Sharon Montgomery-Dupe/Cape Breton Post

As well, it will impact employment for students. At Governors, he said they usually hire in late April and the beginning of May. His staff increases 30-40 per cent.

“If that season is pushed off you probably wouldn’t do your hires until June which would affect students and culinary students coming out into their work placement.”

However, Mofford said impacts to any business affects an entire community. When he has 100 employees and they are all working and making gratuities, they are going to the mall, buying clothes, buying cars and other items. 

“When you take that much money out of the economy, how does that impact everybody? It has that ripple effect from the gas stations to the restaurants.”

If the COVID-19 impact continues, it would be devastating to the entire island to lose the tourist season. A lot of businesses are not in the position financially to endure the dip.

“Everybody gets impacted by it,” Mofford said. “We have to keep our minds open and understand that’s what happens to your entire community when something like this impact across the globe. People think it’s other people’s problems but it’s the whole world and Cape Breton’s not exempt from that.”

Nova Scotia has no confirmed cases of COVID-19 as of March 13 with 226 negative tests completed. 

Friday, a news conference with Premier Stephen McNeil and the province’s chief medical officer Dr. Robert Strang included announcements that public sector employees who travel outside of Canada, including the United States, will be required to self-isolate upon their return. 

The private sector is encouraged to take the same approach and support employees to self-isolate for 14 days after travelling outside Canada. To limit the spread, Strang is also encouraging individuals, employers and community organizations to limit social gatherings to no more than 150 people to limit spread. 

Wade Langham, co-owner of Cape Breton Fudge Co. on Charlotte Street in Sydney, said they get visitors from the cruise ships but where the passengers get everything catered to them and their business are a sweet treat with some food items, the cruise passengers don’t spend a lot on them. However, Cape Breton Fudge Co. does do an excursion at the shop.

“The cruise passengers get to learn about fudge and then make their own fudge,” he said.

“It would affect that for sure.”

Langham said COVID-19 is a ‘health first’ devastating situation which has taken the world by storm but the economic impact is real.

“I think it’s a worldwide economic impact that we don’t even fully grasp yet,” he said. “It’s not going to be good. I’m not going to be shocked if there’s an airline announcement soon. It’s really going to snowball.”

Langham said it’s hard to comment as this is all something massive we’ve never seen before.

“I’m sure there will be an economic impact that will affect us,” he said. “It’s going to affect everybody. We’ve just got to try and weather it the best we can.”

Holley Grant, gallery manager at the Cape Breton Centre for Craft & Design, said they do get visitors from cruise ships and it helps but it’s not their major source of revenue.

“For cruise ship passengers this is one stop of many and they only have one suitcase,” she said. However, the visitors are important, she added.

“It’s always the hope and opportunity that they might come back.”

Grant said it’s the tourists who chose Cape Breton as a destination and come on their own who are their best customers.

“It‘s hard right now to know how that’s going to go,” she said. “Everything right now is in a state of unknown, that’s the difficulty, we just don’t know what’s ahead. We haven’t got a clear sense of how this is going to unfold.”

Grant said they receive a lot of support from local residents which is appreciated.

In terms of precautions, they’ll do everything they can from that point of view. 

“As far as the economic impact, we’ll have to wait and see.”

(with files from Cape Breton Post staff)

RELATED:

Let’s block ads! (Why?)

728x90x4

Source link

Continue Reading

Economy

Biden's Hot Economy Stokes Currency Fears for the Rest of World – Bloomberg

Published

 on


As Joe Biden this week hailed America’s booming economy as the strongest in the world during a reelection campaign tour of battleground-state Pennsylvania, global finance chiefs convening in Washington had a different message: cool it.

The push-back from central bank governors and finance ministers gathering for the International Monetary Fund-World Bank spring meetings highlight how the sting from a surging US economy — manifested through high interest rates and a strong dollar — is ricocheting around the world by forcing other currencies lower and complicating plans to bring down borrowing costs.

Adblock test (Why?)

300x250x1

728x90x4

Source link

Continue Reading

Economy

Opinion: Higher capital gains taxes won't work as claimed, but will harm the economy – The Globe and Mail

Published

 on


Open this photo in gallery:

Canada’s Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland hold the 2024-25 budget, on Parliament Hill in Ottawa, on April 16.Patrick Doyle/Reuters

Alex Whalen and Jake Fuss are analysts at the Fraser Institute.

Amid a federal budget riddled with red ink and tax hikes, the Trudeau government has increased capital gains taxes. The move will be disastrous for Canada’s growth prospects and its already-lagging investment climate, and to make matters worse, research suggests it won’t work as planned.

Currently, individuals and businesses who sell a capital asset in Canada incur capital gains taxes at a 50-per-cent inclusion rate, which means that 50 per cent of the gain in the asset’s value is subject to taxation at the individual or business’s marginal tax rate. The Trudeau government is raising this inclusion rate to 66.6 per cent for all businesses, trusts and individuals with capital gains over $250,000.

300x250x1

The problems with hiking capital gains taxes are numerous.

First, capital gains are taxed on a “realization” basis, which means the investor does not incur capital gains taxes until the asset is sold. According to empirical evidence, this creates a “lock-in” effect where investors have an incentive to keep their capital invested in a particular asset when they might otherwise sell.

For example, investors may delay selling capital assets because they anticipate a change in government and a reversal back to the previous inclusion rate. This means the Trudeau government is likely overestimating the potential revenue gains from its capital gains tax hike, given that individual investors will adjust the timing of their asset sales in response to the tax hike.

Second, the lock-in effect creates a drag on economic growth as it incentivizes investors to hold off selling their assets when they otherwise might, preventing capital from being deployed to its most productive use and therefore reducing growth.

Budget’s capital gains tax changes divide the small business community

And Canada’s growth prospects and investment climate have both been in decline. Canada currently faces the lowest growth prospects among all OECD countries in terms of GDP per person. Further, between 2014 and 2021, business investment (adjusted for inflation) in Canada declined by $43.7-billion. Hiking taxes on capital will make both pressing issues worse.

Contrary to the government’s framing – that this move only affects the wealthy – lagging business investment and slow growth affect all Canadians through lower incomes and living standards. Capital taxes are among the most economically damaging forms of taxation precisely because they reduce the incentive to innovate and invest. And while taxes on capital gains do raise revenue, the economic costs exceed the amount of tax collected.

Previous governments in Canada understood these facts. In the 2000 federal budget, then-finance minister Paul Martin said a “key factor contributing to the difficulty of raising capital by new startups is the fact that individuals who sell existing investments and reinvest in others must pay tax on any realized capital gains,” an explicit acknowledgment of the lock-in effect and costs of capital gains taxes. Further, that Liberal government reduced the capital gains inclusion rate, acknowledging the importance of a strong investment climate.

At a time when Canada badly needs to improve the incentives to invest, the Trudeau government’s 2024 budget has introduced a damaging tax hike. In delivering the budget, Finance Minister Chrystia Freeland said “Canada, a growing country, needs to make investments in our country and in Canadians right now.” Individuals and businesses across the country likely agree on the importance of investment. Hiking capital gains taxes will achieve the exact opposite effect.

Adblock test (Why?)

728x90x4

Source link

Continue Reading

Economy

Nigeria's Economy, Once Africa's Biggest, Slips to Fourth Place – Bloomberg

Published

 on


Nigeria’s economy, which ranked as Africa’s largest in 2022, is set to slip to fourth place this year and Egypt, which held the top position in 2023, is projected to fall to second behind South Africa after a series of currency devaluations, International Monetary Fund forecasts show.

The IMF’s World Economic Outlook estimates Nigeria’s gross domestic product at $253 billion based on current prices this year, lagging energy-rich Algeria at $267 billion, Egypt at $348 billion and South Africa at $373 billion.

Adblock test (Why?)

300x250x1

728x90x4

Source link

Continue Reading

Trending