Caroline Wawzonek just said goodbye to her dream job.
Having spent a career working in human rights and criminal defence, chairing committees and working groups dedicated to bettering the justice system and addressing the chronic issues it creates, she was elected into office one year ago and immediately selected to become the N.W.T.’s new justice minister.
“To be there, frankly, at a pivotal time where I think there is this social movement for change — I absolutely loved it,” she said.
“It really has been what I wanted it to be,” she said. “That, you know, you can put your hand on something and start to see movement in a different direction.”
Two weeks ago, Wawzonek left that job as the result of a cabinet shuffle in the wake of former industry and infrastructure minister Katrina Nokleby’s stunning departure from cabinet.
But in the process, Wawzonek took on one of Nokleby’s old departments — Industry, Tourism and Investment (ITI) — adding it to her ongoing role as finance minister.
Walking out that meeting, Wawzonek had somehow gained an even greater responsibility than she had at justice: guiding the territory’s economy through an unprecedented crisis.
A ‘broad, broad obligation’
To quote Wawzonek, ITI is an “interesting department.” It’s amorphous mandate spans from wooing billion-dollar mining conglomerates to placating gas station owners in communities of fewer than 100 people.
“It’s not actually large in terms of its … number of staff, and it’s not actually large in terms of its budget,” she said. “What it is huge with is its complexity.”
As minister of finance and, now, industry, Wawzonek will be tasked with not only announcing million-dollar relief funds and economic incentives, but ensuring they are implemented correctly.
That has not always been easy. ITI is sometimes the target of criticism from the territory’s private sector, accused of creating unnecessary delays and red tape.
Some of those problems originate in other departments, Wawzonek stressed. But she acknowledged ITI is frequently the “interface” between government and the private sector.
“If we’re not able to show that we’re hearing those concerns and translating it into action at [the] cabinet table … that is when that relationship breaks down,” she said.
Recently, that issue came to a head over how the government hands out contracts — in some cases, bypassing Indigenous companies that had been labouring to build capacity for decades in favour of southern-based corporations.
Wawzonek said her first priority will be to see a promised procurement review through to completion, during which controversial tools like the N.W.T.’s Business Incentive Policy will be up for discussion.
“We want to be providing value,” she said. “But we also want to ensure that to the best extent that we possibly can, the benefits of government procurement is staying in the North.”
“So I think there’s a very big picture discussion that needs to happen, and then there’s the one-on-one with businesses who say … this was a difficult process to navigate.”
But Wawzonek’s mandate letter — the longest of any minister — also asks her to address long-standing challenges that have stumped previous governments: increasing employment, diversifying the N.W.T.’s economy, and attracting new mining investment.
On the latter, Wawzonek is a realist about the problems facing the mining industry in the territory: unsettled land claims, a lack of infrastructure, and regulatory complexity often said to discourage investment.
“The reality is with all three of them, those are not easy problems to fix tomorrow,” she said.
While mining will remain the cornerstone of the economy through her tenure, Wawzonek said she’ll take her lead from regional diversification strategies when deciding which other sectors to target for growth.
“Keeping in mind always that our goal … isn’t just to, you know, diversify for the sake of it,” she said. “It’s to grow an economy from the Northwest Territories.”
Problems predating COVID-19
Her biggest challenge — and greatest limitation — is impossible to ignore: an unending pandemic that has kept the territory’s borders closed and businesses hobbled.
COVID-19 received little mention in Wawzonek’s mandate letter, but it is likely to dominate her immediate future in the role.
Wawzonek has previously spoken about how COVID-19 is making the territory’s problems worse. But faced with the challenge of delivering a fair economic recovery on a tight budget, Wawzonek said not much has changed.
“Our economic challenges and our budgetary challenges started before COVID-19, right?” she said. “What COVID-19 has done is forced everyone to really … reckon with the reality.”
That makes the issue of judging her success or failure in the role a difficult one. Wawzonek takes a moment when asked how she’d judge herself.
In the end, she opts for modest goals — better budgeting in finance that shows the “value for dollar” of government programs, and a procurement review that makes businesses feel heard.
“I think they have to say when things are better,” she said.
“That to me would be success.”
Diesel Gas Market May Signal a Weaker Economy – Barron's
The diesel market serves as a barometer for the state of the economy because the fuel is widely used in the transportation industry, and the signals it’s giving off in terms of supply, demand and prices don’t point to a very promising future.
“It’s the best fuel to see how the economy is recovery” as it’s a “fuel of industry,”
Patrick De Haan
, head of petroleum analysis at GasBuddy.
At the supply level, “diesel is far more bleak than gasoline to a refiner,” he says. U.S. gasoline inventories are under their year-ago level, “thanks to strong discipline by refiners,” but supplies of distillates, which include diesel and jet fuel, are running “some 30% above year-ago levels.” That’s “representative of a slowdown in the economy and certainly, air travel,” said De Haan.
For the four-week period ended Oct. 16, jet fuel product supplied, a measure of demand, was down nearly 46% compared with the same period a year ago, according to the U.S. Energy Information Administration. Given the weak demand, many refineries have favored production of diesel over jet fuel.
At the same time, diesel demand has taken a hit when economic activity is reduced, there’s fewer trucks on the road, and “thousands of school buses aren’t running,” says De Haan. “Right now, diesel demand is weaker and hasn’t seen the return gasoline has, and that bodes poorly for the situation going forward.”
Still, there have been signs of improving demand, with diesel consumption starting to move toward the four-week average, “potentially indicating that the worst is in the rearview mirror for the economy,” says Denton Cinquegrana, chief oil analyst at the Oil Price Information Service by IHS Markit.
Prices between the two fuels, meanwhile, point to a slow economic recovery. Diesel prices have been generally higher than gasoline prices for the “better part of the last two decades,” in part because a barrel of crude oil typically yields far less diesel than gasoline, says De Haan. However, in “quite a rare feat,” diesel prices have fallen under gasoline in some cases. That hasn’t happened since ultra clean diesel was mandated in 2007 and became more expensive to refine as a result, he says.
At the wholesale level, where refiners sell to retailers, gasoline prices have been higher than diesel’s. Wholesale prices in July for gasoline were at $1.38 a gallon, while diesel for on-highway use was at $1.254, according to the EIA’s latest figures. At the retail level, however, the average gasoline price was at $2.15 as of the week ended Oct. 19, below the $2.388 price for diesel.
Retail prices recently saw around a 20-cent difference, the lowest monthly average since September 2017, according to Cinquegrana. The narrow price difference has a lot to do with high U.S. diesel inventories, so he believes it’s “more about hefty supplies than a ‘yay or nay’ vote on the health of the economy.”
It’s also difficult to figure out whether price changes in diesel are due to economic growth or to “changes in jet fuel demand, or demand for heating oil, the latter of which can be influenced by winter weather, says
, head of oil pricing analytics at S&P Global Platts.
“Gasoline demand is slowly recovering, as is diesel, with the economy,” he says. Still, the current relative weakness in diesel is primarily due to the loss of demand for jet fuel, and demand for that is “likely to lag as both business travel and leisure travel will probably be slower to recover than other parts of the economy.”
Calgary's post-pandemic economy poised for 6.9% expansion in 2021, report says – CBC.ca
Calgary’s economy is going to start roaring back to life next year, but not before the city posts a dismal 10.1 per cent GDP contraction for 2020 as the pandemic and the energy sector slump continue to take their toll, according to a report released Tuesday.
The Conference Board of Canada’s forecast for Calgary’s economy says that after being put through the wringer in 2020, the city’s fortunes will start to turn around in the new year.
“As the pandemic eases and oil prices slowly begin to strengthen, our call is for the Calgary economy to expand by 6.9 per cent in 2021,” the report said.
Calgary’s labour market already shed 44,000 jobs from the second quarter of 2019 to the first quarter of 2020.
Another 90,900 jobs were lost in the second quarter of this year, and the board predicts employment will fall by a record 8.0 per cent overall in 2020.
The report predicts Calgary’s unemployment rate will remain high for many more months, averaging 11.3 per cent this year and 10.4 per cent next year.
“Calgary won’t recover its lost jobs until the end of 2022, partly because the oil and gas sector will recover only slowly,” the report said.
Some sectors of the economy are expected to recover faster than others.
The board says Calgary’s badly bruised retail sector — which saw sales drop by 5.1 per cent in 2020 — will bounce back and grow 9.7 per cent in 2021.
But the arts and entertainment industry, which declined 26.2 per cent, and the accommodation and food industry, which fell by 36.9 per cent, might not fully rebound until 2022, the report says.
Speaking Tuesday at the annual outlook conference hosted by Calgary Economic Development, ATB Financial chief economist Todd Hirsch said it’s expected that unemployment in Alberta will drop only slightly to 11 per cent next year and remain in the double digits for some time yet.
“It’s going to take a lot of growth, maybe a few years of growth, to absorb all of that excess labour and make sure everyone finds jobs. So it’s going to take us a while and we don’t think we’re going to be back into single digits probably until 2022 or even later,” he said.
“To get back to 2014 levels, we estimate that’s not going to happen until probably 2024. So it’s sort of a lost decade of growth for this province.”
Calgary Economic Development is banking on the technology sector to help turn around the city’s fortunes.
CEO Mary Moran says companies are already realizing what Calgary has to offer, pointing to how several tech firms have moved into empty office space downtown.
“You have seen the real estate industry adjust to … shorter-term leases, different floor plates, different amenities that they’re offering. And those ones that have made that adjustment are the ones where the tech companies are migrating to.”
Moran says her organization’s goal is to double the number of tech companies in Calgary by the end of this decade.
Result of 2020 U.S. election has implications for Canadian economy – insauga.com
Coverage of the U.S. election has split Canadians into three main camps: those who are relieved they live north of the border, those who don’t care, and those who are nervous either outcome with have consequences for us, the neighbour to the north.
A recent report from RSM Canada indicates the election outcome, combined with Canada’s reliance on the U.S. economy, might alter Canada’s recovery and longer-term outlook.
Based on the findings, Canada-China trade has been trending down since the beginning of the U.S.-China Trade War in 2018, while total trade between Canada and the United States increased during this period.
This indicates, based on the current administration’s inability to cap the domestic spread of the virus, a Donald Trump re-election could present economic risks to Canada, due to our dependence on them.
However, Trump’s protectionist tendencies suggest Canada may see further headwinds with its largest trading partner, should he be re-elected.
Additionally, Joe Biden’s proposed ‘Made in America’ tax incentive, which offers tax credits for companies in the U.S. that expand employment and salaries domestically, could potentially discourage future Canadian market expansion.
Further, Biden’s willingness to adopt Trump’s tough stance on China if elected suggests Canada will likely continue to be negatively affected by U.S.-China trade relations.
Moreover, Canadian oil pricing will be hit hard if Biden follows through on his campaign promise to cancel the Keystone XL pipeline–a critical venture for Western Canada oil producers that would provide direct access to the Gulf Coast refineries and world markets.
“Despite a rocky relationship between Canada and the current U.S. administration in recent years, it’s clear that a victory for either Trump or Biden would pose risks to Canada’s economy,” Alex Kotsopoulos, vice president of projects and economics with RSM Canada, said in a news release.
“The issue is that Canada has become increasingly dependent on its neighbour south of the border, and when you combine this with the strong ‘America First’ policies of both presidential candidates, Canada will feel the brunt of those decisions. Therefore, it’ll be important for the Canadian government to proactively engage with the new administration to shore up trade and supply chains, which will be vital in Canada’s own recovery,” he continued.
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