(Reuters) – The coronavirus pandemic threw tens of millions of Americans out of work, ended the longest U.S. economic recovery on record and undermined a key argument for President Donald Trump’s re-election.
Now, the Republican president and his Democratic opponent in the Nov. 3 election, Joe Biden, have to convince Americans who can get the economy back on track.
As part of his broader economic plan, Biden is expected to propose new policies as soon as this week to increase jobs in childcare, elder care and education.
Here is how the candidates want to revive the economy:
BACK ON TRACK
Since the COVID-19 outbreak, Trump has signed legislation to flush the economy with trillions of dollars in onetime aid to businesses, individuals and local governments.
The president also pushed states to reopen as quickly as possible, even as infections spiked.
Biden has cautioned against reopening the economy without first ramping up coronavirus testing. The former vice president, who oversaw U.S. stimulus spending after the 2008 financial crisis, says households – as well as local governments – need more support to get through the shutdown.
While Trump has said further stimulus measures must include a payroll tax cut, Biden wants Washington to offer states more support in paying for unemployment benefits.
TAXES AND WAGES
The president, a former real estate developer, has touted the 2017 tax cuts he signed into law as stimulating economic growth. Cutting payroll taxes would boost paychecks of most working Americans.
Biden criticized the 2017 tax cuts as giving too many benefits to the wealthy and corporations. He has pledged to reverse some of those cuts, raising the marginal tax rate on the highest income earners back to 39.6%, from 37%, while also lifting investment profit taxes. He also supports raising the national minimum wage to $15 an hour from $7.25 and expanding some tax credits for lower-income workers.
“We have to build a much more inclusive, much more equitable middle class and an economy that everybody – everybody – gets a fair shot at,” Biden said in April.
The Trump campaign is attacking the policy of raising taxes while the economy struggles to recover.
TRADE
In a return to a core issue of his 2016 presidential campaign, Trump is telling voters he wants to boost domestic manufacturing. He stepped up verbal attacks on Beijing as his administration accelerates an initiative to remove industrial supply chains from China.
He has also argued that America’s difficulties in procuring medical supplies internationally during the pandemic are another reason to encourage U.S. companies to avoid offshoring.
“If one thing comes out of this, more than anything else, is that we should make product in the United States,” Trump said in April.
Biden offered his own made-in-American manufacturing plan in July. He pledged to spend $700 billion on American-made products and industrial research, which he said would give at least 5 million more people a paycheck during a job-killing pandemic.
As a senator, Biden voted for the North American Free Trade Agreement (NAFTA), a trade pact that helped Mexican factories gain access to the U.S. market.
Biden has criticized Trump’s tariff war with China as bad for U.S. consumers and farmers. In 2018, he called for “retaliation” on countries like China which he has said subsidize industries and allow intellectual property theft.
GREEN INVESTMENTS
Biden said he would spend $2 trillion over four years to improve infrastructure, create zero-emissions public transportation, build sustainable homes and create clean-energy jobs.
Trump advocates more spending on U.S. roads, bridges and airports, too, but has signaled little appetite for making “green” investments.
(Reporting by Trevor Hunnicutt in New York and Jason Lange in Washington; Editing by Colleen Jenkins and Jonathan Oatis)
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.
