Canada’s economy has made up almost half of its historic contraction since the height of the pandemic, Statistics Canada reported Friday.
Gross domestic product expanded 4.5 per cent in May, the agency said in its first full release for the month. June was even stronger, with the statistics agency reporting a flash estimate of another five per cent increase. Cumulatively, GDP has increased about 10 per cent in the two months, after falling more than 18 per cent in March and April.
The report confirms Canada’s economy has experienced a sharp recovery since emerging from nationwide lockdowns. At issue is whether the rebound will be sustained. Bank of Canada policy makers have already warned the initial resurgence will probably taper off in the second half.
Based on the flash estimate, economic activity in June was about 90 per cent of output levels recorded in February. At the nadir of the recession in April, output levels were about 82% of pre-pandemic levels.
That’s “still a big gap by any historical comparison, but this also marks a quick rebound,” Brett House, deputy chief economist at Bank of Nova Scotia, said by email.
Even with the May-June increase, the second quarter will go into the books as probably the worst since the Great Depression for Canada’s economy. Based on June flash estimate, economic activity in the quarter was down 12 per cent from the first three months of the year.
That’s about 40 per cent at an annualized pace, according to Bloomberg calculations, which is roughly in line with economists’ projections. South of the border, the U.S. posted a 33 per cent contraction in GDP for the second quarter annualized, the most on record.
“While such a decline was expected, it was worse than what was seen earlier in the week in the U.S. for the same quarter, as Canada enacted restrictions earlier and eased them less aggressively,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said in a note to investors. “The good news is that the cautiousness has kept virus cases under control north of the border, suggesting Canada’s economy is in a position to outperform that of the US in Q3.”
Output was up in almost all sub-sectors in May, with double-digit monthly gains by retailers that coincided with the reopening of many stores across the country. Construction, too, recorded a strong rebound, with activity up 18 per cent in the sector.
Oil and gas, and entertainment-related industries continued to shrink.
Source: – BNN
Support for Digital Economy in the North – northchannelcurrent.ca
The Ontario government is providing more than $1 million to support the technology sector, create jobs and help boost the digital economy in the North. Funding is being delivered to eight companies through the Northern Ontario Heritage Fund Corporation (NOHFC).
Media Release: “As we focus on economic recovery, our government is proud to make targeted investments in growing sectors and businesses here in Northern Ontario,” said Greg Rickford, Minister of Energy, Northern Development and Mines. “Today’s investments in the North’s digital economy will help businesses grow and thrive, stimulate economic development and diversification across the region and create highly-skilled employment opportunities for the people of Northern Ontario.”
NOHFC investments include:
- $289,340 for KBM Resources Group in Thunder Bay to grow its operations by purchasing state-of the-art aerial survey and mapping equipment and software.
- $186,778 for Mijem Inc. in Sault Ste. Marie to enhance its mobile commerce phone app, which targets postsecondary students by making it easier to buy and sell items such as textbooks, furniture, clothing and sublets.
- $165,851 for The Kore Project Inc. in Sudbury to develop cloud-based software that combines vendor compliance and safety and certificate management for employees and contractors into one simple and easy-to-use system.
- $139,500 for Border Giant Inc. to establish a customs broker and parcel service company in Thunder Bay that makes it fast, easy and inexpensive for consumers and retailers to import and export goods.
- $100,000 for Waabnoong Bemjiwang Association of First Nations to finish building an asset management tool for its six member First Nations.
- $91,000 for FSET Inc. in Kenora, an IT software development and services company, to expand its operations by purchasing a building.
- $60,000 for Clark Marketing Communications Productions in North Bay to develop software that tracks and matches job seekers with relevant training and employment opportunities in the Ontario government’s social assistance branches, such as Ontario Works.
- $15,619 for Tier1CRM Inc., a software developer for the financial services industry, to set up an office in Sudbury.
“FSET needs to remain a progressive company to work within the technology sectors. The incredible support from the NOHFC allows FSET to expand across the North, and throughout Ontario,” said Nicole Brown, Chief Operations Officer, FSET Inc. “We are receiving the funding at the perfect time, allowing us to continue our expansion and take our company to the next level. The team appreciates the support and funding from NOHFC and the impact it is having on FSET.”
The NOHFC promotes economic development across Northern Ontario by providing financial assistance to projects – big and small, rural and urban – that stimulate growth, job creation and skilled workforce development. Since June 2018, the NOHFC has invested more than $193 million in 1,386 projects in Northern Ontario, leveraging more than $748 million in investment and creating or sustaining 3,912 jobs.
The government is moving forward with a regional approach to Stage 3 of reopening, as the province implements its made-in-Ontario plan for renewal, growth and economic recovery. For a full list of regions that have entered Stage 3, as well as a list of restrictions that remain in place, please visit ontario.ca/reopen.
BLAKE DOYLE: Anticipation of economic direction – TheChronicleHerald.ca
Approaching the middle of August, Prince Edward Island’s economy is entering a stage where we can assess the seasonal cycle. We can evaluate the success of our tourism season, and the effectiveness of our reopening. Having spent 25 years as a tourism operator outside Charlottetown, the seasonal peak always occurred prior to Old Home Week when traffic starts to migrate toward the capital centre. So this is a good time to calibrate register receipts.
But reliable data is in short supply. By observation, I would concede that Island business experienced a burst of enthusiasm through each successive stage of economic reopening. The pent-up energy of buying ice cream, browsing retail, dinning out or getting a haircut was intense; but now satisfied.
As increased competition for share of wallet spreads the local purchasing power across many seasonal businesses, the influx of tourists has been appreciated, but muted, as measured in traffic flows.
The long-lasting consequences of the pandemic shutdown is an adjustment to consumerism. Shelter in place, eat at home, shop online and suspend travel. These are economy-breaking behaviours, which will take time to readjust.
After a false-start in March, P.E.I. Premier Dennis King recast his economic guidance taskforce in the middle of May. This is one of the most diverse and impressive group of industry leaders recently assembled, under the banner of the Business Continuity Group (BCG). There is strong thought-leadership embedded, but the group is unwieldy.
A quarter into the BCG mandate and with little communication outside a twitterbot that rebroadcast a few community tweets, the business community is ravenous for the promise offered in the group’s inception.
Reliable, decision-worthy data lags too long in a responsive environment. Even Jerome Powell, U.S. Federal Reserve chairman, is looking at non-standard, high-frequency data to make assessments — data like credit card purchases. What he has seen in the U.S. is an economic uptick in May and June where consumer spending recovered half off the March lows and employment recovered one-third of their losses. But in July, partially from viral resurgence, credit card purchases have slowed, and small business job growth is stalling.
This data is not perfect, but it is the best available. The diversity of the BCG and the breadth of industries touched can provide real-time, generalized analytics on accommodation bookings, retail sales, tourism investment, manufacturing and business purchases. This information is essential for all Island small businesses when forecasting investment, hiring or compression into the fall. We need to release this data.
I would appeal to the premier to release preliminary findings, not the euphoric economic restart optimism, but practical trending data and provide this information in real-time on a weekly basis. Business needs current information on which to make informed decisions.
If elements of the economy are performing well — and some sectors absolutely are — this is great news. If sectors are suffering — and unquestionably some are — then use this data for policy directives to induce and support industry.
Our seasonal economy is within a quarter of annual suspension. The economy needs a plan for the “off season” with federal CERB and rental rebates winding down, the economic underpinnings will feel the challenges deferred from spring.
The premier has mused about encouraging Islanders to apply tourism dollars locally. Perhaps economic inducements can be offered to Islanders this fall/winter.
In 1891, the Merchant Bank of Prince Edward Island issued bank notes. Can the government issue a 10-per-cent Buy-P.E.I. credit for local money spent in our Island bubble?
This encourages a local spend and multiplication benefit at a time when our domestic Island economy will be entirely self-reliant … but still competing with Amazon, Walmart and Costco.
Keep the spend-and-tax revenue local. Easy decision!
Island business should be extended provincial benefits to maintain post-seasonal employment, or even add new hires. This should be paired with the return to school plan and a goal of recovering our labour participation rate to an aspirational 75 per cent.
Our government could offer business interruption insurance, available to companies that can demonstrate a year-over-year decline of a measurable percentage, lagging by a quarter to support stabilization.
Construction carries our economy; as goes construction, so goes our economy. But population is required to continue this run. According to the province’s population projections in September 2019, our natural population rates turns negative in seven years. Now is the time to work on an Employ P.E.I. strategy to attract professionals who are eager to live in our pristine (COVID free) environment and contribute to our economy. (We see these people regularly through my recruitment firm).
More difficult, the government needs to articulate a strategy to taper investment or redirect its budget to economic stabilization. Spending cannot continue in all directions – but investing in the economy will increase revenues.
The Business Edge is always happy to dispense free advice, the value of which is equivalent to the cost. Perhaps other Islanders can contribute to this conversation on our collective economic future.
Blake Doyle is The Guardian’s small business columnist.
GUEST COLUMN: Diversify the economy through clean growth – TheChronicleHerald.ca
By Kieran Hanley / Special to The Telegram
As the world battles through the pandemic, its nations are deliberating on what shape global economic recovery will take. There is a growing sense that investments should meet two tests: that they contribute to economic activity and jobs right away; and that they will provide longer-term benefits for the economy, the environment, and society. In short, economic recovery and “clean growth” should go hand in hand.
This is the case in Canada. Long before the pandemic, our federal government was aggressively investing in initiatives related to climate change, sustainability and clean technology. So, it is a safe bet to assume that its approach to economic recovery will follow suit. Influential groups like the Task Force for a Resilient Recovery say that building back better means “supporting the jobs, infrastructure and growth that will keep Canada competitive in the clean economy of the 21st century.”
For its part, Newfoundland and Labrador has been hit hard by not just the pandemic, but also the collapse of oil prices. The reality is that we need to take advantage of any lifeline available to us. And so, part of our economic recovery has to be making the most of any and all federal programs — many of which will have a clean growth twist. We need to be prepared for this.
Yet the opportunity for our province extends far beyond simply being reactive.
There are also opportunities for brand new industries that can put our province at the forefront of the energy transition and diversify our economy.
The pursuit of sustainability within our offshore oil and gas industry will lead to the development and application of new low-carbon products, services and processes that will not only be demanded worldwide and across multiple oceans sectors — but will also contribute to the long-term success of this industry here at home.
The accelerated electrification of our economy will contribute to mitigating the costs of Muskrat Falls. This means increasing the number of electric cars on our roads, converting our Metrobus fleets to run on electricity and switching buildings from fossil fuel-based heating sources to electric. This also means designing a future that involves electrified ferries, seaport and airport operations and industrial processes.
These are just two areas where clean growth perfectly aligns with existing provincial priorities and will create jobs. But there are also opportunities for brand new industries that can put our province at the forefront of the energy transition and diversify our economy.
The production of hydrogen is an important example. Hydrogen is a fuel that emits zero emissions and can be produced through low or zero-emissions means. The past year has seen rapid progress for this industry, with interest intensifying during the pandemic. Several countries are forcefully pursuing its production, with Canada set to announce a national strategy in the near future. Given our existing marine infrastructure and access to enormous renewable energy resources, Newfoundland and Labrador may be in an excellent position to become a global producer of hydrogen — as we are of oil today.
But to make the most of any of these opportunities, we need a plan. That is why in June, the Newfoundland and Labrador Environmental Industry Association (NEIA) submitted a series of recommendations for Newfoundland and Labrador’s economic recovery — with a key action being the creation of a “Clean Growth Directorate” within government. Between navigating resources, regulations, incentives and innovation supports, many government departments have a role to play in the pursuit of clean growth, but none are entirely responsible. A whole-of-government approach to clean growth — and meeting our net zero commitments — is required in order to attain the level of proactivity that is needed. With new provincial leadership comes an opportunity to take deliberate and targeted action.
The clean growth opportunity is immense. It not only provides environmental benefits, but also contributes to economic resilience in a world that is increasingly concerned with greenhouse gas emissions and environmental impacts. Newfoundland and Labrador is blessed with a wealth of resources and is home to a budding technology sector that can enable our province to become one of the cleanest jurisdictions on the planet and an inspiration to other regions around the world.
Let’s put people to work today, building the economy of tomorrow. NEIA stands ready as a partner in the pursuit of any and all options.
Kieran Hanley is executive director of NEIA, the Newfoundland and Labrador Environmental Industry Association.
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