Economy
How COVID-19's latest wave will hit our economy – The Journal Pioneer
When Ontario Premier Doug Ford ordered the closure last Friday of restaurants, fitness centres, cinemas and performing arts until at least Nov. 6, he understood the consequences.
Since the beginning of the pandemic, employees in these sectors had already suffered disproportionately. In the national capital region, the first COVID-19 lockdown stripped employment in hotels & restaurants by more than half. With the gradual re-opening of the economy employers started rehiring. But as of September, employment in hospitality-heavy sectors was 25 per cent below where it was in February — compared with a net decline of just five per cent for the rest of the local economy.
Retailers, with the exception of big box stores such as Costco and Walmart, have also been forced to make substantial trims to staff levels. These remain nearly 10 per cent below where they were in February. And that doesn’t begin to cover the economic pain because so many of these employees are working fewer hours.
Restaurants and retailers comprise thousands of small businesses that are the bedrock of Ford’s political base. The premier had vowed earlier in the week not to shut down people’s livelihoods unless he was presented with solid evidence that such a move was necessary.
Such evidence apparently arrived in the form of “alarming public health trends that require immediate attention”, to use Ford’s words.
To some extent this was inevitable: COVID-19 has been spreading rapidly, especially here and in Peel and Toronto. Across the province, the number of confirmed cases over the past week or so has averaged 700 per day — roughly 25 per cent higher than during the peak of the pandemic last April. Over the same period, the tally of active cases in the province climbed seven per cent to 5,540.
Even so, Ontario’s health officials had been somewhat reassured by the fact the number of COVID-19 patients being treated in hospital had actually tumbled 76 per cent to about 200 in early October.
So where’s the alarming trend? Almost certainly, part of it has to do with an accelerating “positivity” rate. While some of the rise in new confirmed cases of COVID-19 is the result of sharply increased testing, the city’s health authorities have been disturbed by the steep climb in the percentage of positive tests.
The ratio during the week ended Oct. 4 was 2.6 per cent. That was well short of the situation last April, when more than 15 per cent of COVID-19 tests were positive — in large part because tests were being allocated for obviously sick people.
Nevertheless, it’s still a marked deterioration from last July, when typically fewer than 0.5 per cent tested positive.
The percentage of positive tests has been rising rapidly in Ottawa since Labour Day — and health officials were keen to avoid another holiday-inspired acceleration.
The other trend being watched carefully by Ottawa Public Health is the rate of infection in the community, otherwise known as R (t) — which measures how many times a single infected individual will forward the pathogen. The last bit of public data from OPH described a seven day average of 0.8 as of Oct. 5. At first glance this suggests a community that is getting control of things, especially compared with the situation immediately after Labour Day, when infected people were passing along the illness to an average of 1.5 people each.
What we don’t know is what happened between Oct. 6 and 11 — transmission data for this period has been suppressed thanks to a larger than normal backlog. This needs to be sorted out before statisticians can properly calculate the new ratio.
Bottom line: the province and OPH alike would like to use the next four weeks to reverse some key trend lines. Which of course leaves many of the region’s small businesses once more in limbo, with many owners hanging on by the thinnest of margins, despite promised financial help from Ontario, Quebec and the federal government. Ontario, for instance has earmarked $300 million to assist businesses affected by the latest shutdowns with fixed costs such as property taxes and energy bills.
The economy for the region as a whole has fared relatively well compared with the country’s other big cities. Indeed, the capital region’s jobless rate in September was 8.6 per cent — making it the only major metropolitan area in single digits. The unemployment rate in the other cities ranged from 10.7 per cent in Montreal to 12.8 per cent in Toronto.
Part of this distinction has to do with our region’s supremely unbalanced economy. Fully 24 per cent of the region’s employment base is in public administration. Of the other big urban centres, only Edmonton, with a 6.2 per cent ratio, relies on government for more than four per cent of its workforce.
Add in a couple of other strong sectors — health services (13.6 per cent of the capital’s employment last month) and education (7.3 per cent) — and it seems likely the capital region’s economy should have sufficient shock absorbers for some time to come.
That’s not much solace for workers in hotels & restaurants (4.6 per cent of employment) and culture & entertainment (3.6 per cent), who must contend with a hugely unequal result from COVID-19.
Nor will it protect Ottawa and Gatineau from the inevitable retracing that will occur down the road, when the federal government must finally address its massive debt.
Copyright Postmedia Network Inc., 2020
Economy
Canada's budget 2024 and what it means for the economy – Financial Post
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Economy
Opinion: Canada's economy has stagnated despite Trudeau government spin – Financial Post
Article content
Growth in gross domestic product (GDP), the total value of all goods and services produced in the economy annually, is one of the most frequently cited indicators of economic performance. To assess Canadian living standards and the current health of the economy, journalists, politicians and analysts often compare Canada’s GDP growth to growth in other countries or in Canada’s past. But GDP is misleading as a measure of living standards when population growth rates vary greatly across countries or over time.
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Federal Finance Minister Chrystia Freeland recently boasted that Canada had experienced the “strongest economic growth in the G7” in 2022. In this she echoes then-prime minister Stephen Harper, who said in 2015 that Canada’s GDP growth was “head and shoulders above all our G7 partners over the long term.”
Article content
Unfortunately, such statements do more to obscure public understanding of Canada’s economic performance than enlighten it. Lately, our aggregate GDP growth has been driven primarily by population and labour force growth, not productivity improvements. It is not mainly the result of Canadians becoming better at producing goods and services and thus generating more real income for their families. Instead, it is a result of there simply being more people working. That increases the total amount of goods and services produced but doesn’t translate into increased living standards.
Let’s look at the numbers. From 2000 to 2023 Canada’s annual average growth in real (i.e., inflation-adjusted) GDP growth was the second highest in the G7 at 1.8 per cent, just behind the United States at 1.9 per cent. That sounds good — until you adjust for population. Then a completely different story emerges.
Article content
Over the same period, the growth rate of Canada’s real per person GDP (0.7 per cent) was meaningfully worse than the G7 average (1.0 per cent). The gap with the U.S. (1.2 per cent) was even larger. Only Italy performed worse than Canada.
Why the inversion of results from good to bad? Because Canada has had by far the fastest population growth rate in the G7, an average of 1.1 per cent per year — more than twice the 0.5 per cent experienced in the G7 as a whole. In aggregate, Canada’s population increased by 29.8 per cent during this period, compared to just 11.5 per cent in the entire G7.
Starting in 2016, sharply higher rates of immigration have led to a pronounced increase in Canada’s population growth. This increase has obscured historically weak economic growth per person over the same period. From 2015 to 2023, under the Trudeau government, real per person economic growth averaged just 0.3 per cent. That compares with 0.8 per cent annually under Brian Mulroney, 2.4 per cent under Jean Chrétien and 2.0 per cent under Paul Martin.
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Canada is neither leading the G7 nor doing well in historical terms when it comes to economic growth measures that make simple adjustments for our rapidly growing population. In reality, we’ve become a growth laggard and our living standards have largely stagnated for the better part of a decade.
Ben Eisen, Milagros Palacios and Lawrence Schembri are analysts at the Fraser Institute.
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Economy
Federal budget is about ensuring fair economy for ‘everyone’: Trudeau – Global News
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