Economy

Global economy faces fears of a 'lost decade' as COVID-19 cases surge – CBC.ca

Published

4 years ago

January 6, 2021

Optimism that the early arrival of a vaccine meant that the global economy would be out of the woods in 2021 is facing a rethink as COVID-19 resurges and mutates.

There remains every possibility that an efficient rollout of the vaccine in Canada and elsewhere really will lead to signs of a recovery well before the end of this year. But there are voices suggesting that the pandemic may hold more bad news in store.

Certainly the year’s first day of market trading was less than auspicious.

“Stocks hit records early in the session as investors focused on the rollout of COVID-19 vaccines,” Reuters reported. “But investors quickly turned cautious over the path of the virus, which continues to spread amid the discovery of a new variant.”

It is never a good idea to put too much stock in a single day’s trading or the instant analysis of sudden market moves, but Monday’s decline — which saw a fall in the technology-heavy Nasdaq market of nearly three per cent — added to a feeling of unease.

Triggering tighter restrictions

“As the new COVID-19 strain triggers tighter restrictions on economic activity and limits even more the movement of people, it has become increasingly clear that the road to vaccine-induced immunity will now have more potholes,” Mohamed El-Erian, a well-known U.S. adviser to financial corporations who is now president of Queen’s College, Cambridge, wrote in Tuesday’s Financial Times.

El-Erian worried that the struggle to recover from the pandemic’s economic impact would lead to misguided efforts by countries toward a “further weaponization of trade tariffs” and a destabilizing polarization in politics and income.

Ambulances line up in London on Tuesday, where a more virulent strain of COVID-19 has contributed to a renewed outbreak and new economic closures. Case and death rates in regions that remained largely open mean places such as Britain have faced growing pressure to take stronger action. (Hannah McKay/Reuters)

Virologists warn of not just a single new strain but a series of continuing mutations as the disease spreads around the world, constantly evolving through accidental changes in its genetic makeup. Then, as we have already seen, the most virulent versions out-compete their viral cousins to sweep back out and around the world.

With luck, the faster-spreading mutations will be no worse — and could theoretically be milder. But some scientists in the United Kingdom have warned that current vaccines may not be as effective on one new variant in South Africa.

The more virulent European version has already turned up in the United States and Canada. As of this writing, the one found in South Africa has not yet been spotted here, but experience with previous transmission waves implies its arrival is inevitable.

Meanwhile, the idea that countries and regions can fight the virus while keeping the economy intact is facing contradictory evidence.

Case and death rates in regions that remained largely open mean places such as Britain and the U.S. have faced increasing public pressure to take stronger action, even as the economy weakens. Places that imposed severe lockdowns earlier in the battle against the pandemic, such as Australia and China, have seen relative economic success.

Police patrol the streets of Johannesburg on Jan. 1 during a curfew imposed after a new variant of the coronavirus was found. Some scientists in the U.K. have warned that current vaccines may not be as effective on the variant in South Africa. (Siphiwe Sibeko/Reuters)

World Bank worries about debt, education breakdown

China’s economic data is commonly disputed, but the World Bank suggests growth in the country will rebound to about eight per cent this year.

In its newly released Global Economic Prospects report for 2021, the World Bank fears a lingering impact from the virus — what it warned could be a “lost decade,” especially for countries that failed to get on top of the pandemic early.

“Many countries are expected to lose a decade or more of per-capita income gains,” the World Bank report said. “Downside risks include the possibility of a further resurgence of the virus, more severe effects on potential output from the pandemic and financial stress.”

Besides the immediate damage to the economy caused by interruptions to trade, domestic commercial activity and job losses, the World Bank worries that such factors as a huge piling up of public and private debt and a breakdown in education will lead to a prolonged deterioration in economic prospects.

A nearly empty Pearson International Airport in Toronto on Dec. 30. In parts of Canada and in the U.K., calls for stricter measures — including more severe limits on travel intended to combat the spread of COVID-19 — make hopes for an economic rebound in 2021 seem less certain. (Carlos Osorio/Reuters)

In parts of Canada and in the U.K., calls for stricter measures — including more severe limits on travel intended to combat holiday-induced spread and growing pressure on hospitals — mean earlier hopes that the autumn rebound would continue into 2021 seem less certain.

Although they may be distorted by the holidays, jobs data for both the U.S. and Canada are due on Friday and will offer the freshest possible update on whether the slow but steady uptick in the Canadian economy has stalled.

Gross domestic product figures released two weeks ago showed that growth has continued to creep up ever since April’s big dip. If that continues, it won’t strictly be a V-shaped recovery, but maybe a V written by a four-year-old that stretches out a bit too far to the right.

That may have changed. The GDP data was from October when everyone was far more optimistic, whereas Statistics Canada collected the December jobs data that we’ll see on Friday just weeks ago.

Those employment figures may offer a first hint if the right-hand bar of the V has jogged down, making it into something closer to a W — the potential indicator of a double-dip recession.

WATCH | Making vital supplies became saviour for manufacturers during pandemic:

As the pandemic ramped up, Canada’s manufacturing sector nimbly shifted gears and started making products to keep people safe from COVID-19. Even among manufacturers, it reminded people what happens when a country makes its own necessary goods. 2:09

Follow Don Pittis on Twitter: @don_pittis

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Business

A timeline of events in the bread price-fixing scandal

Published

16 hours ago

September 19, 2024

Anne Joseph

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

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Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

16 hours ago

September 19, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

1 day ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

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