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Diane Francis: Canada must follow Germany's path to reopening the economy – Financial Post

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It’s no coincidence that the first large Western democracy to contain the spread of COVID-19, and the first to prepare to reopen its economy, is Germany, whose leader, Chancellor Angela Merkel, is a trained scientist.

Likewise, the most successful Asian democracy to contain the spread, and never have to lock down its economy, is Taiwan, whose vice-president, Chen Chien-jen, is an epidemiologist and esteemed scientific researcher.

How both coped well with this pandemic highlights the fact that scientific credentials, along with economic ones, should be key criteria in selecting leaders and cabinet ministers in the future. This is not because pandemics are going to come with increasing frequency. This is because those with science and economic backgrounds can evaluate complex data and make better decisions than those elected because of their looks, tweets, speeches or name recognition.

Germany, by the way, should have had a catastrophic crisis on its hands because it is densely populated and surrounded by countries with soaring death rates. But its science-based policies helped it navigate the crisis better than most. Its death rate of 54 deaths per million is dramatically lower than nearby countries such as Spain (437 per million), Italy (384), France (296) and the United Kingdom (237).

For starters, Germans have not been as unruly as residents of many other European countries, or the United States. This is because they are disciplined and efficient: German financial assistance to workers and business was almost immediate. Besides that, its public was mollified because, throughout this pandemic, Merkel has made a series of calm and reasoned public addresses to explain the scientific issues and lay out the next steps, along with the reasons why the government is taking those steps.

There were no televised outbursts involving magical thinking, no playing the blame game, no upstaging other levels of government or engaging in baseless forecasting. Germans were given the facts from the start as to how challenging this would be.

Merkel quickly imposed stringent two-person limits on gatherings, along with social distancing requirements and lockdowns. She explained that the government’s priorities were testing and the tracing of “every infection chain,” to contain the spread.

In the beginning, Germany was hit just as hard as other European countries, but its health-care system has fared much better. It was, and is, self-sufficient in terms of medical devices, test kits and equipment production, and had a surplus of ICU beds and other specialized health-care services at the ready.

Its institutions and politicians were temperate. There was no competition for supplies and — due to Merkel’s science-based policymaking — the country ramped-up testing faster than and to a greater scale than most. Now about 120,000 tests are administered daily among a population of 83 million, and the goal is to do even more.

Results have been rapid and flawless, thanks to a network of laboratories that, among other innovations, developed the first test in the world for this coronavirus.

Now Germany is so far advanced in controlling the virus that it is cautiously rolling out a system of issuing so-called “immunity cards” for those who have been shown to have developed antibodies to the disease, which will allow them to work, travel and socialize, thus allowing the country to gradually reopen its economy. Such a system will be the key to finding a safe and sustainable way to kickstart economic activity in Canada and elsewhere.

On this side of the pond, 16 U.S. states have formed three coalitions to examine a staged re-opening of their economies. This will be based, as California Gov. Gavin Newsom said, “on science and public health, not politics.”

Canada’s provinces should adopt the German model: prioritize antibody testing and immune certification as a means of safely reopening their economies. Canada is not a country with a sizeable scientific research base, as Germany is, but our health-care systems are gigantic, science-based, not-for-profit organizations that work closely with their provincial governments. They must sign off on how to lift restrictions, in order to protect their workers and avoid a second wave of contagion.

Financial Post

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Economy

Canadian dollar moves to extend weekly win streak as oil rebounds

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Canadian dollar

The Canadian dollar strengthened against its U.S. counterpart on Friday and was on track for its seventh straight weekly gain as oil prices rose and domestic data added to evidence of robust economic growth in the first quarter.

Canadian factory sales rose 3.5% in March from February, led by the motor vehicle, petroleum and coal, and food product industries, while wholesale trade was up 2.8%, Statistics Canada said.

The price of oil, one of Canada‘s major exports, reversed some of the previous day’s sharp losses as stock markets strengthened, though gains were capped by the coronavirus situation in major oil consumer India and the restart of a fuel pipeline in the United States.

U.S. crude prices rose 1.2% to $64.61 a barrel, while the Canadian dollar was trading 0.6% higher at 1.2093 to the greenback, or 82.69 U.S. cents, moving back in reach of Wednesday’s 6-year peak at 1.2042.

For the week, the loonie was on track to gain 0.3%. It has climbed more than 5% since the start of the year, the biggest gain among G10 currencies, supported by surging commodity prices and a shift last month to a more hawkish stance by the Bank of Canada.

Still, BoC Governor Tiff Macklem said on Thursday if the currency continues to rise, it could create headwinds for exports and business investment as well as affecting monetary policy.

The U.S. dollar fell against a basket of major currencies, pressured by a recovery in risk appetite across markets after Federal Reserve officials helped calm concerns about a quick policy tightening in response to accelerating U.S. inflation.

Canadian government bond yields were lower across much of a flatter curve, with the 10-year down 2 basis points at 1.549%. On Thursday, it touched its highest intraday in eight weeks at 1.624%.

 

(Reporting by Fergal Smith; Editing by Nick Zieminski)

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Toronto Stock Exchange rises 1.21% to 19,366.69

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Toronto Stock Exchange

* The Toronto Stock Exchange‘s TSX rises 1.21 percent to 19,366.69

* Leading the index were SNC-Lavalin Group Inc <SNC.TO​>, up 16.0%, Village Farms International Inc​, up 9.8%, and Denison Mines Corp​, higher by 9.4%.

* Lagging shares were Aurora Cannabis Inc​​, down 7.2%, Centerra Gold Inc​, down 3.8%, and Canadian National Railway Co​, lower by 3.7%.

* On the TSX 194 issues rose and 35 fell as a 5.5-to-1 ratio favored advancers. There were 25 new highs and no new lows, with total volume of 225.7 million shares.

* The most heavily traded shares by volume were Enbridge Inc, Manulife Financial Corp and Cenovus Energy Inc.

* The TSX’s energy group rose 3.32 points, or 2.7%, while the financials sector climbed 4.80 points, or 1.3%.

* West Texas Intermediate crude futures rose 2.65%, or $1.69, to $65.51 a barrel. Brent crude  rose 2.68%, or $1.8, to $68.85 [O/R]

* The TSX is up 11.1% for the year.

This summary was machine generated May 14 at 21:03 GMT.

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Economy

U.S., Mexico, Canada to hold ‘robust’ talks on trade deal

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The United States, Mexico and Canada will next week hold their first formal talks on their continental trade deal, with particular focus on labor and environmental obligations, the U.S. government said on Friday.

Trade ministers from the three nations are set to meet virtually on Monday and Tuesday to discuss the U.S.-Mexico-Canada (USMCA) deal, which took effect in July 2020.

“The ministers will receive updates about work already underway to advance cooperation … and will hold robust discussions about USMCA’s landmark labor and environmental obligations,” the office of U.S. Trade Representative Katherine Tai said in a statement.

The United States is also reviewing tariffs which may be leading to inflation in the country, economic adviser Cecilia Rouse told reporters at the White House on Friday, a move that could affect hundreds of billions of dollars in trade.

The United States, testing provisions in the new deal aimed at strengthening Mexican unions, this week asked Mexico to investigate alleged abuses at a General Motors Co factory.

(Reporting by David Ljunggren; Editing by Hugh Lawson and Jonathan Oatis)

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