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How the Pandemic Is Changing the Economy – Brookings Institution



The COVID-19 public health crisis, the economic shock triggered by the pandemic, and public policy, business, and individual responses to the pandemic together have provoked the sharpest and fastest economic downturn in U.S. history. Both the pandemic and the fiscal policy response have ebbed and flowed, and the economy remains fragile. Wendy Edelberg and Jay Shambaugh discuss how the current crisis fits into historic context and what will be the long-lasting economic consequences. In particular, policymakers will need to address increasing concentration among businesses, accelerating automation, and stark reductions in labor force participation among certain groups. An effective response will require renewed emphasis on antitrust enforcement, changes to the labor market to ensure that those with less education are not left behind, and support for parents, caregivers, and those with compromised health to help keep them attached to the labor market in the face of enormous challenges.

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Freeland to deliver Liberal plan to revive Canada's post-pandemic economy today –



The federal government will release its long-awaited fiscal update today — a spending plan to help Canadians cope with COVID-19 while recharging the national economy and key sectors battered by the global crisis.

Deputy Prime Minister and Finance Minister Chrystia Freeland will rise in the House of Commons at 4 p.m. ET today to outline details of her plan to both boost job creation and cut greenhouse gas emissions.

Government sources have told CBC News the plan will include new but time-limited spending measures to support hard-hit industries and vulnerable Canadians, while laying the groundwork for the policy priorities presented in September’s speech from the throne.

The update comes in the wake of optimistic reports suggesting promising vaccine candidates could roll out early in the new year — and as COVID-19 caseloads continue to grow alarmingly in some parts of the country. Numbers have reached record highs in some regions, prompting new or extended restrictions and business closures.

The measures in today’s economic statement are expected to include:

  • Support for airlines and the tourism and hospitality sector, hit hard by heavy losses due to border closures and lockdowns. The sources suggest the update will include assistance for airlines, hotels and restaurants, and for the companies that supply them.
  • Money to help long-term care homes stop the spread of infections.
  • Support to help women return to work.
  • Stimulus spending for infrastructure projects tied to the government’s promise to reduce greenhouse gas emissions as part of the economic recovery.

Record deficit projected

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that projected the deficit would hit a record $343.2 billion.

The Trudeau Liberals last delivered an actual budget in March 2019, when they were still in their first mandate.

The Trudeau government has pushed back at calls to deliver an economic forecast since the current health crisis began, maintaining that the pandemic made it impossible to accurately predict economic growth or the scope of necessary emergency spending.

Conservative Leader Erin O’Toole said the government’s delays in procuring rapid testing and vaccines have put workers and the economy in a “risky” situation.

“There is no plan for the economy if we don’t have rapid testing and vaccines as swiftly as possible,” he said during a news conference in Ottawa Sunday.

“We’re already seeing small businesses teetering on the edge. That is leading to the uncertainty and the concern out there about the wellbeing of tens of thousands of Canadian families that have invested everything in their restaurant or their autoshop or a range of businesses that are close to bankruptcy.”

WATCH | What to expect in the long-awaited fiscal update:

CBC News’s David Cochrane breaks down what Finance Minister Chrystia Freeland is expected to announce in Monday’s federal fiscal update, including details on the deficit and new pandemic spending. 1:16

NDP Leader Jagmeet Singh said today’s update is the perfect opportunity to announce “bold measures” to address the needs of the Canadians most severely affected by the pandemic.

“The COVID-19 pandemic has shown how fragile the services that were supposed to help people are, and the importance of strengthening our social safety net so that no one is left behind,” he told CBC News.

NDP pushes for child care support

The NDP is calling on the federal government to fund child care services that would allow more parents to return to work safely. It’s also pressing the government to launch a universal pharmacare program.

Green Party Leader Annamie Paul said it’s not enough for the government to present a “laundry list” of spending today. With a vaccine expected next year, she said, it must present a green recovery plan with economic and social investments.

“With a glimmer of hope on the horizon, it is vital that we seize this moment to prepare a green recovery plan that will engage every possible innovation, technology and resource at Canada’s disposal to enhance our ability to face challenges,” she said. 

The Green Party is calling for a guarantee that any supports the Liberals offer carbon-intensive sectors are “responsible and conditional.” It also wants to see larger investments in projects and sectors that speed up progress toward a net-zero emissions economy.

Business hopes to see long-term growth plan

Business groups say they hope to see a plan today that charts a course through the ongoing crisis to long-term economic recovery and growth.

Canadian Chamber of Commerce president and CEO Perrin Beatty said he wants to see a shift from broad supports to smaller, more targeted federal programs to help the most vulnerable Canadians and sectors, including the restaurant, accommodation, arts and entertainment and retail sectors.

He said he hopes to see a plan that will boost Canada’s business investment and competitiveness — and not a suite of “unaffordable” new permanent programs.

“Even as we navigate our way through this second wave of the pandemic, Canada needs its government to set the conditions for a strong, business-led recovery. Canadian families and businesses continue to pay a high price because of COVID-19, and the hard work of getting Canada’s economy ready for recovery must start now with a clear and coherent plan,” he said in a media statement.

Business organizations say they want to see a fiscal update focused on boosting growth. (Evan Mitsui/CBC)

Cash-strapped municipalities are also looking for good news in today’s statement.

Federation of Canadian Municipalities president Garth Frizzell said he hopes to see “clear successor arrangements” to the safe restart agreement, which saw the federal government set aside $19 billion for the provinces to help them weather the second wave and drive job growth post-pandemic.

“The fall economic statement is an opportunity to build on the federal-municipal partnership that has kept Canadians safe, and essential front line services running strong, since the beginning of the pandemic,” he said.

“They rely on us to keep doing that through 2021, and that’s why municipalities need to see a clear commitment that the federal government will continue to work with us to ensure support for municipal operating and transit costs.”

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Turkish Economy Fared Much Better Than Peers in Third Quarter – BNN



(Bloomberg) — Turkey’s coronavirus-battered economy fared far better than all peers in the third quarter, driven by a stimulus campaign that sacrificed the lira and price stability.

Gross domestic product last quarter rose 6.7% from a year earlier, after shrinking 9.9% in the previous three months, according to data released on Monday. The median of 14 forecasts in a Bloomberg survey was for 4.8% growth. The seasonally and working day-adjusted figures showed an expansion of 15.6% in the third quarter from the previous three months.

The $736 billion economy outperformed all Group of 20 nations including China, thanks in part to a combination of interest-rate cuts, fiscal spending and a government-led credit push.

Below are some of the highlights of the GDP report released by the state statistics institute in Ankara:

  • Last quarter’s growth was driven by a rise in household consumption, which jumped 9% from a year earlier.
  • Exports dropped 22% on an annual basis, after falling 36% in the preceding three months. Imports rose 16% following a 8% drop.
  • Gross fixed capital formation, a measure of investment by businesses, rose an annual 23%.

To help businesses and consumers ride out the the pandemic, the Turkish government pushed banks to ramp up lending. Loan growth remained robust throughout the summer, slowing toward the end of the third quarter.

At the same time, the central bank injected liquidity by scooping up government bonds, and delivered 1,575 basis points of easing until rate cuts stopped in June, leaving Turkey’s inflation-adjusted borrowing costs among the lowest in the world. The weighted average cost of funding dropped as low as 7.34% in July, then started growing for the rest of the quarter to end at 11.1%.

With the lifting of most virus-related restrictions imposed in the previous quarter, domestic tourism gained pace, and airports were opened to most foreign tourists.

The picture for the fourth quarter is less rosy as Turkey began reimposing limitations following a virus surge and replaced its central bank and economy chiefs. President Recep Tayyip Erdogan pledged to support his new economic managers with “bitter-pill” policies that conflict with his views — but only after the currency hit record lows, keeping headline inflation in double digits. The lira has lost 24% against the dollar this year.

The central bank’s new governor, Naci Agbal, started his tenure by raising interest rates by the most in over two years, a move that could damp demand.

“The fourth quarter will point to a slower growth picture.” said Enver Erkan, an Istanbul-based economist at the Tera Yatirim investment house.

(Updates with highlights of the report in the fourth paragraph)

©2020 Bloomberg L.P.

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‘No plan’ for economy will work without more access to COVID-19 tests, vaccines: O’Toole – Global News



Canada will not see economic stability until there is wide access to rapid tests and vaccines for the novel coronavirus, Conservative Party Leader Erin O’Toole says.

O’Toole made the remarks during a press conference Sunday morning.

“There is no plan for the economy if we don’t have rapid testing and vaccines as swiftly as possible,” he told reporters.

Read more:
Canada ‘in the top 5’ on list to receive coronavirus vaccines 1st: minister

O’Toole’s comments come as the federal Liberal government prepares to release a fall economic update on Monday.

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that estimated the deficit was heading for a record of $343.2 billion.

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Click to play video 'Ottawa to deliver long-awaited economic update amid pandemic'

Ottawa to deliver long-awaited economic update amid pandemic

Ottawa to deliver long-awaited economic update amid pandemic

O’Toole said there can’t be a “full economy, a growing economy, people working, people being productive without the tools to keep that happening in a pandemic.

“Those two tools are rapid tests and a vaccine,” he said.

O’Toole said Canada is “months behind our allies” when it comes to the large-scale rollout and use of rapid COVID-19 tests.

Health Canada has approved more than three dozen different tests for COVID-19, but only six of them are “point-of-care” versions more commonly referred to as rapid tests.

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Millions of rapid tests have been delivered to the provinces, however, health officials have been slow to utilize them as questions about best use and reliability remain unanswered.

Click to play video 'Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine'

Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine

Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine

O’Toole also said it appears as though Canada will be “months behind our allies on vaccines.”

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“These are critical tools,” he said. “The vaccine is the hope we’re all looking for.”

Canada has signed contracts to secure 400 million doses of COVID-19 vaccine, however, the federal government says only six million of those doses — enough to vaccinate three million people — will be in the country by early January for distribution once approved by Health Canada.

However, both the United States and Britain have said they expect to have millions of vaccine doses by next month and expect to have larger portions of their populations inoculated more quickly.

Read more:
Coronavirus cases are soaring but Trudeau’s approval ratings hold steady: Ipsos

O’Toole said Canadians are going to be “rightly frustrated” when other countries are “rolling out millions of doses” of COVID-19 vaccines before Canada.

“I hate to see us trailing,” O’Toole said. “I don’t compare ourselves to the worst response, I want Canada’s response to be the best, that’s why I want to see a plan and I want to see a plan for the economy — we need to get people working.”

Click to play video 'Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine'

Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine

Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine

O’Toole is not the only one who appears to be frustrated. In an interview with The West Block’s Mercedes Stephenson, Saskatchewan Premier Scott Moe said it is “troubling” that only a small segment of the Canadian population could be vaccinated immediately.

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Moe said the federal government communicated to the country’s premiers how many doses they would receive, adding that the first round of doses will likely treat about 100,000 people in Saskatchewan.

“We need to receive more and we need to receive it in a much more timely fashion,” he said.

Moe said Canada needs a “more ambitious procurement program for sure.”

Prime Minister Justin Trudeau has said Canada’s lack of domestic manufacturing capabilities for the highly sought-after coronavirus vaccines — several of which use brand new mRNA technology — means it will be slightly further back in the queue than countries that produce the vaccines domestically.

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Still, Intergovernmental Affairs Minister Dominic LeBlanc said on The West Block on Sunday that Canada is still positioned to be in the “top five” in the global queue for vaccines.

— With a file from the Canadian Press

© 2020 Global News, a division of Corus Entertainment Inc.

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