By: Mary W. Rowe and Zita Cobb
Canada’s productivity — measured as economic output generated per hour of work — continues to decline, dramatically lagging other G7 developed countries. What began as a rant by pundits, has now shifted to a steady lament.
Article content
If we want to improve productivity in Canada, we should be investing in our own businesses and essential community infrastructures to support them.
Advertisement 2
Article content
The search for foreign direct investment has long been a Canadian preoccupation. Instead of doubling down on creating conditions to ensure any capital generated in Canada continues to be invested in Canada, we have pursued investments from other places. Too often, money that is made here is quickly whisked off to be invested elsewhere.
Nowhere is this more ironic than following the money of our pension funds, which defend their obligation to their members to pursue highest returns outside of Canada. This, even as the infrastructure and services upon which the communities in which they live depend — such as affordable housing, access to capital, transit and mental health services — are starved of investment.
We need to make investing in Canadian businesses — and investing in our communities — a top priority again.
In the last century, Canada invested heavily in major transportation, mass transit, housing, energy generation and distribution, health systems, post-secondary institutions and cultural infrastructure — the underpinnings of an economy able to grow and diversify, and a society able to integrate significant numbers of immigrants each year.
Advertisement 3
Article content
We built power plants and public libraries, transit systems, hospitals and concert halls. This enabled millions of Canadians to work productively in many places, many sectors; create businesses, provide services and make meaningful lives and vibrant communities.
It’s time our economic policies prioritized buttressing and building vibrant communities so that money stays in Canada and so that we are investing in Canadian ideas, services and industries.
One of our greatest strengths is our small and medium enterprise (SME) sector which employs close to 90 per cent of Canada’s labour force working in the private sector.
SMEs absorb newcomers, providing a path to economic inclusion, skills development and social integration. Yet getting investment into smaller enterprises — where most Canadians work to support their ‘productivity’ — can be quite challenging, where the transaction costs, and more modest returns, deter investors.
Canada is a country rich in natural assets and a myriad of environmental, civic and cultural assets. Investing in them with our own resources — private and public investment funds, corporate returns, philanthropy and good old-fashioned taxation — may render a slower growth rate and a smaller rate of return in the short term, but over the longer term, will generate returns for investors.
Advertisement 4
Article content
It would also support the necessary conditions for a resilient economy, better equipped to adapt to rapidly changing conditions.
Fogo Island Inn is an example of where the beneficial owner is the local community, upon which its continued success entirely depends. Fogo Island Inn was created by Shorefast (a registered charity) as a part of a process to invest in the development of the natural and cultural assets that exist in the place. The Shorefast model reinvests in the assets of the place along with Canadian investors from the private, public and philanthropic sectors.
Further, strategic, modest government investment can strengthen local economies from the ground up. My Main Street is an application-based program to invest in independent businesses and place-making activities along main streets in Canada. It is administered by the Canadian Urban Institute with support from the Federal Economic Development Agency for Southern Ontario and offers streamlined, direct-to-business and community placemaking support to help attract visitors and locals to main streets.
Advertisement 5
Article content
Canada’s economy is distributed across many communities — cities and towns of different sizes and across many regions in the country. Despite differences in scale between urban and rural communities, we must invest our resources in creating the enabling conditions to support businesses, and the people and places that support them.
Canada is made up of thousands of places, rich with assets that are ripe for investments to strengthen their capacity to self-fuel.
Mary W. Rowe is CEO of the Canadian Urban Institute and a Community Economies Fellow at Shorefast. Zita Cobb is founder and CEO of Shorefast and Innkeeper at Fogo Island Inn.
Article content
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
k.d. lang gets the band back together for Canadian country music awards show
NATO military committee chair, others back Ukraine’s use of long range weapons to hit Russia
Cavaliers and free agent forward Isaac Okoro agree to 3-year, $38 million deal, AP source says
Liverpool ‘not good enough’ says Arne Slot after shock loss against Nottingham Forest
With a parade of athletes on Champs Elysées, France throws one last party for the Paris Olympics
‘Challenges every single muscle’: Champion tree climber turns work into passion
MPs to face new political realities on their return to Ottawa
Air Canada, pilots still far apart as strike notice deadline approaches
Comments