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Economic recovery threatened if some workers, households left behind, Macklem says – CBC.ca

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An economic rebound that leaves behind parts of the Canadian labour force in the short term could end up jeopardizing the recovery from COVID-19 in the long run, Canada’s top central banker says.

Bank of Canada governor Tiff Macklem said the pandemic has widened divides in the country that could worsen further without the right response.

The longer people hit by the pandemic are out of work, he said, the harder it will be for them to find new jobs and the more likely they are to give up looking for work.

The combined effects on workers and businesses could weigh down the economy, harming even those who are doing comparatively well.

It’s why Macklem has been talking recently about inequality — and why he thinks the central bank should be making the argument.

“Our mandate is to support the economic and financial well-being of Canadians. It doesn’t say some Canadians, it’s all Canadians,” he said over a recent video conference from his office.

“What we see right now, as a result of this pandemic, are growing divides.”

People line up at a Service Canada office in Montreal in March. The Bank of Canada said this week that it’s expecting to take until 2022 for the economy to reach pre-pandemic levels, but the impact of closed businesses and unemployed workers could take longer to heal. (Paul Chiasson/The Canadian Press)

Some workers, sectors still lagging

Low-wage workers are still about 20 per cent below their pre-pandemic levels of employment, Macklem noted, whereas other workers with higher incomes have recouped job losses from the spring.

“High-touch” sectors like restaurants and accommodations are lagging behind as restrictions limit customers and consumers stay home.

The way back isn’t a sprint but a long slog, Macklem told The Canadian Press hours after the bank said it’s expecting to take until 2022 for the economy to get back to pre-pandemic levels, with some scarring from closed businesses and unemployed workers taking even longer to heal.

“It’s not going to be possible to fully recover the economy until we have a vaccine, but we want to try to reduce the negative effects,” he said.

“Once there is a vaccine, we want to make sure we get back to our full potential.”

WATCH | Economy unlikely to rebound until 2023, impact of U.S. election:

Our weekend business panel discusses a warning this week from Canada’s chief central banker that the economic recovery from the pandemic is likely to be long and slow, as successive rounds of COVID-19 lead to a ‘scarring’ of the domestic and world economy. Plus, what’s at stake for Canada in this week’s historic U.S. election? And a Canadian entrepreneur is launching a new chain of tea shops across North America. 11:21

Second-in-command during last economic crisis

Macklem took over the central bank’s top job in June. He had been the bank’s second-in-command during the last economic crisis a decade ago.

One of the bank’s key functions is to keep inflation at a moderate level, which it does by controlling a key interest rate. The lower the interest rate, the more appealing it is to borrow, invest and spend.

Macklem inherited a key policy rate slashed to 0.25 per cent, which he has said is as low as it will go and where it will stay, likely until 2023, to keep interest rates low so households feel comfortable spending.

He has overseen the bank’s foray into “quantitative easing,” which is a way for central banks to pump money into the economy, and mass buying of federal debt to effectively lower borrowing costs for the government.

I don’t want to pretend that there aren’t some difficult decisions to take.– Bank of Canada governor Tiff Macklem

It has put him in a political hot seat, with Conservatives on Parliament Hill warning the bank about appearing too cosy with the governing Liberals and wanting Canadians to take on debt to finance a recovery.

Macklem said the bank’s actions are independent of whatever the government might want and have to do with its mandate of keeping inflation at two per cent a year. Inflation is close to zero because of the pandemic.

“We have a lot of unemployed Canadians. That’s putting downward pressure on inflation. So we need to put a lot of monetary stimulus into the system to achieve our objective,” he said.

“I don’t want to pretend that there aren’t some difficult decisions to take, but our objective is clear.”

Much uncertainty facing Canadian households

Near, the end of the interview, Macklem took a breath to think over a question that he repeats out loud: “How am I coping?”

He spoke slowly about getting fresh air, eating right and getting enough sleep. He said he misses talking to colleagues in person, and there’s worry the bank could lose some creativity in its thinking without people in the same room, sharing thoughts and ideas.

“We’ve got to guard against that,” Macklem said.

He pivoted to the uncertainty facing Canadian households: parents whose children might be at school one day, home another, or others with elderly parents who need help getting essentials from the store.

Every Canadian is dealing with extraordinary demands, he said, and no one knows how this pandemic is going to play out. That leads to anxiety.

“I gained a lot of experience particularly in the ’08-’09 financial crisis. This crisis is very different. But you know, that feeling you get in the pit of your stomach is not that different,” Macklem said.

“Some of the lessons from that crisis and also some of the things that we did that were not as effective, I think, are very valuable in dealing with this pandemic.”

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Niagara's new economic development director looks forward to regrowing economy in 2021 – WellandTribune.ca

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Niagara’s new economic development director George Spezza is optimistic about the year to come, despite the devastation many businesses have suffered under COVID-19 pandemic restrictions.

“If we can weather the storm and look forward to an economic recovery based on some of the successes of the vaccines that are coming forward, I think 2021 could be an opportunity to really gain that momentum and start growing the economy again,” said Spezza, who started his new job on Monday.

“I’m always really impressed with people’s ability to fight against some of these crises and survive. We want to do everything we can from an economic and regional perspective to support that growth and recovery efforts. I believe it will take some time, but the future is bright moving forward.”

Spezza suspects the economic recovery will begin slowly in the first few months of 2021, and quickly increase as restrictions are lifted.

When that happens, he said the industries that have been impacted the most such as tourism, and hospitality “should see an influx of people coming back to that sector, and they’ll start seeing some of that growth.”

“Companies will have to be ready and prepared for that influx of tourism and hospitality.”

In the meantime, he said, Niagara’s economic development office will continue to assist businesses, keeping them up to date on information about programs and assistance accessing upper-tier government funding.

“The provincial and federal governments are coming forward with significant dollars and our role really is to ensure that our business community has access to that, and we can provide some assistance in accessing those programs,” Spezza said.

Navigating through the ever-changing information about programs that are available can be difficult for business owners, who are already working long hours running the day-to-day operations of their companies.

Spezza had been paying attention to Niagara while working as director of business growth services for Toronto’s economic development and culture office, prior to joining the Region’s economic development office. The Mississauga resident said he could see Niagara’s potential.

“It’s really a region with a lot of upside and a bright future,” he said, adding he often visited Niagara to explore the area.

“It was growing and doing well, and I think there’s a great opportunity for success there.”

Spezza’s interest in helping the region realize its potential led him to apply for the job running the economic development office and brought some new ideas to the job on ways to accomplish that goal.

“Niagara has a global brand already, and there are some great opportunities on how we can continue to build on that brand.”

Through collaboration and teamwork, Spezza said he hopes to leverage Niagara’s well-known brand to drive expansion into other markets and drive increased investment.

“Certainly we have a hospitality industry that is very well recognized around the world, but how can we best capture the visitors and tourism in the area to talk about all the other amazing opportunities to invest in the region?” he said.

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Spezza described Valerie Kuhns — the Niagara Region Economic Development department’s strategic economic initiatives manager who had been filling the vacancy for most of the past two years — as a “consummate professional,” adding he is looking forward to working with her and other office staff.

“I think we’re going to make a very good team working together, Val and I and the rest of the office,” he said.

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Canadians to get say on how to grow Blue ocean economy – SaltWire Network

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Canadians will be asked their opinions as the federal government begins crafting its strategy to develop a blue economy.

Fisheries and Oceans Minister Bernadette Jordan says the online consultation process will begin in the new year to open up the discussion to provinces, territories, Indigenous peoples and others. More details on the process will come soon, she said.

That was just one of the details revealed Thursday, Dec. 3,  in a virtual panel discussion hosted by the Ocean Frontier Institute (OFI), following up on the announcement of the previous day of Canada’s commitment with 13 other nations to sustainably manage 100 per cent of its oceans.

The OFI-hosted virtual panel discussion — Charting a Course for a Sustainable Blue Economy — focused on Canada’s opportunities for sustainable growth of the “blue” economy.

Panelists included OFI’s CEO and science director Dr. Anya Waite, OFI’s strategic engagement officer Catherine Blewett and Karin Kemper, global director for environment, natural resources and blue economy global practice with the World Bank, as well as Jordan.

244,000 miles worth of management


WHAT’S A BLUE ECONOMY?

The blue economy is described as an economy driven by sustainable, ocean resources and accounts for about $31.65 billion annually in GDP. It is the source of almost 300,000 Canadian jobs with direct, indirect and induced benefits in sectors as diverse as fisheries and aquaculture, marine transportation, ocean energy and technology, recreation and tourism.

WHAT IS PROBLUE?

This is a multi-donor trust fund that “supports the sustainable and integrated development of marine and coastal resources in healthy oceans.” PROBLUE has four pillars: fisheries and aquaculture, marine pollution, oceanic sectors, and seascape management. To date, PROBLUE has received pledges of approximately US$110 million from Canada, Norway, Sweden, Denmark, Iceland, France and Germany.


There are many challenges ahead for those who aim to grow the blue economy. One is just the sheer expanse of the seas on planet earth.

Waite noted if the world’s ocean were measured as a country, it would be the seventh largest in the world.

And among the world’s nations, Canada governs a massive marine environment — three oceans and a coastline of about 244,000 kilometres.

Those marine areas are crucial, not just to national economies, but to the global environment.

The Labrador Sea, for instance, on Canada’s East Coast, is referred to as “the Earth’s lungs.”

The seawater in that space absorbs carbon and heat; it’s a natural filter that helps regulate global climate.

“The Labrador Sea is a bigger carbon sink than the Amazon rain forest,” said Waite. “The ocean is our climate.”

Protecting the ocean environment will be a significant task.

The ocean economy

Fishing boats at Petit Etang, Cape Breton. According to the World Bank, one in 10 people in the world depend on the fishing industry for their livelihood. - SaltWire File Photo
Fishing boats at Petit Etang, Cape Breton. According to the World Bank, one in 10 people in the world depend on the fishing industry for their livelihood. – SaltWire File Photo

Finding balance between environmental protection and economic needs will be another.

Globally, said World Bank director Kemper, one in 10 livelihoods are dependent on fisheries, with women making up about half of the fish harvesting/processing workforce.

She said as Canada and the other nations move towards sustainable management, there may be some short-term tradeoffs, but “in the long term we have to focus on sustainability.”

And as countries begin the process of recovering from COVID, she said, some short-term solutions could aid the long-term goal of the sustainable oceans commitment.

“Governments might want to do large infrastructure projects to create employment – putting money into people’s pockets in the short term,” she said, “and that could lead to things like cement seawalls to prevent coastal erosion, planting mangroves to rebuild swamps or doing recovery work on reefs.”

There’s no dispute that there’s still much to learn about the ocean.

According to Jordan, the current Canadian government has done much work since 2015 to improve research and rebuild fish stocks.

For example, she said, funding was recently increased to expand knowledge of caplin, the fish that feeds other fish, in the Newfoundland and Labrador region.

“We are using the new funding to examine this data to determine how it can be used to establish reference points to advise resource managers,” she told SaltWire.

Since 2018 she noted, the federal government has completed rebuilding plans for six of 19 selected fish stocks.

More than fishing

Fisheries and Oceans Minister Bernadette Jordan - SaltWire File Photo
Fisheries and Oceans Minister Bernadette Jordan – SaltWire File Photo

The blue economy is not only the fishing industry.

“Our ocean industries account for nearly $32 billion annually in GDP and 300,000 jobs across fishing, aquaculture, energy, ocean technology, shipping, tourism and other industries.”

And the goal of ocean sustainability is a global one, with a challenge for progressive nations to help underdeveloped countries in sustainable ocean management.

That’s why Canada is also committing to help other nations craft their own sustainable oceans plans through the World Bank’s PROBLUE fund.

Thursday Jordan announced Canada will invest another $4 million to that fund, for a total commitment of $69 million, making this country the top donor to the fund so far.

You can watch the full panel discussion here:

[embedded content]


 Transforming the ocean economy; the principles

The following principles are outlined in the report “Transformation for a Sustainable Ocean Economy”, a vision document created by Canada and the 13 other nations that have committed to enacting sustainable management of 100 percent their oceans by 2025.

Alignment: Ocean protection and production must align with the UN Framework Convention on Climate Change and the Paris Agreement, the Convention on Biological Diversity, and the Polluter Pays Principle as set out in the Rio Declaration. Actions must be aligned across ocean-based and land-based activities and ecosystems.

Inclusiveness: Human rights, gender equality, community and Indigenous Peoples’ participation, through their free, prior and informed consent, must be respected and protected.

Knowledge: Ocean management must be informed by the best available science and knowledge, including indigenous and local knowledge, and aided by innovation and technology.

Legality: The UN Convention on the Law of the Sea is the legal basis for all ocean activities, and existing international ocean commitments must be implemented as a foundation for achieving a sustainable ocean economy.

Precaution: Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

Protection: A healthy ocean underpins a sustainable ocean economy. A net gain approach must be applied to ocean uses in order to help sustain or restore the health of the ocean.

Resilience: The resilience of the ocean and ocean economy must be enhanced.

Solidarity: The need for access to finance, technology and capacity building for developing countries, especially Small Island Developing States and Least Developed Countries, must be recognised, taking into account their particular circumstances and vulnerabilities.

Sustainability: The production and harvesting of ocean resources must be sustainable and support resilient ecosystems and future productivity.

Click here for more about the Ocean Frontier Institute visit.

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Brazil's economy grew 7.7% in Q3, but slower than expected – 570 News

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RIO DE JANEIRO — Brazil’s economy grew 7.7% in the third quarter of the year from the previous three months, the national statistics institute reported on Thursday — the strongest quarterly result in a quarter century but less than expected following heavy stimulus spending.

It is the fastest quarterly growth since the series began in 1996 and confirmed the Brazilian economy’s exit from technical recession, characterized by two consecutive quarters of contraction. But activity hasn’t yet returned to the level seen prior to the coronavirus pandemic.

Brazil’s Economy Ministry had projected growth of 8.3% for the period, according to a bulletin relased on Nov. 17.

The expansion during July through September coincided with the payment of emergency assistance funds to more than 60 million people to mitigate the impact of the pandemic, and also with the reopening of activities in most states, where quarantine measures were relaxed.

“The data is disappointing due to the enormous fiscal stimulus that the government used for the economy to recover,” Emerson Marçal, head of the Center for Applied Macroeconomics of the Getulio Vargas Foundation in São Paulo, told The Associated Press by phone.

The emergency payment, about $10 monthly in the third quarter, helped boost retail sales and contributed to the recovery of industrial production, Marçal said. The end of the aid, tentatively scheduled for December, and the possibility of new restrictions on activity due to the surge of coronavirus cases may further compromise the speed of recovery, he added.

Brazil has confirmed more than 6.4 million coronavirus infections, with 174,000 deaths. In recent weeks, infections have risen in big cities like Sao Paulo and Rio de Janeiro. President Jair Bolsonaro has consistently argued that the economic impact of lockdowns and other measures during the pandemic would be more damaging to Brazil than COVID-19 itself.

Brazilian banks estimate a 4.5% drop in Brazilian GDP for 2020, a smaller decline than is expected in the region’s other major economies. The International Monetary Fund projects a contraction of 8.1% for the Latin American and Caribbean region, with Brazil least affected by the crisis.

Marcelo Silva De Sousa, The Associated Press

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