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How this ocean-to-table operation is helping the N.L. economy by keeping it local – CBC.ca

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Through late summer and early fall, Tim Ball spent as much time as possible underwater in his dive gear, scouring the seabed off the Burin Peninsula for scallops. 

It’s an ocean-to-table operation that sees his hand-harvested scallops quickly making their way to dinner plates in the downtown of St. John’s. 

“I try to keep it all local,” said Ball about his business philosophy. 

With a provincial economy that’s in dire straits and in need of reversing its course, Ball thinks every little bit can help— especially if the focus is keeping as many of those little bits as possible in the province. 

Tim Ball says dive harvesting is a scalable industry that would benefit rural Newfoundland and Labrador. (Adam Walsh/CBC )

For Ball, that means, among other things, using locally made bags and boxes for packing his scallops and using a Burin Peninsula cab company for sending his catch into St. John’s. 

“Because this is a primary industry … we are in, and we are getting the actual resources from the bottom, this is creating new money for the economy,” Ball said. “If the money is staying in Newfoundland, then great.”

Terre Restaurant in St. John’s is one of the destinations for Ball’s scallops. Before the season ended last month they could be found listed on the menu as “Seared Diver Scallops.”

Matthew Swift is the chef at Terre Restaurant in St. John’s. (Adam Walsh/CBC )

“They’re amazing,” said head chef Matthew Swift. 

“Anywhere else in the world … the idea of marketing day boat scallops is sort of a pipe dream. If I were to tell friends in other places that Tim gets out of the water, and I get the scallops in as long as it takes to drive in from Burin? It’s insane,” he said. 

On top of the quality, it’s Ball’s business recipe that also interests Swift. 

“Just in terms of having a diverse and smaller economy, where we can support people on a more individual level,” he said. 

This is the end of the line for Tim Ball’s hand-harvested scallops — seared and served on a plate at Terre Restaurant in downtown St. John’s. (Adam Walsh/CBC)

This way of thinking is something that also strikes a chord with John Schouten — Memorial University’s Canada Research Chair in Social Enterprise.

Schouten says Ball’s operation means more than just local spending on his supply chain. There’s also a spillover effect which would also see Ball spend money at local businesses in and around Garnish, where he fishes from. 

“So every hundred dollars that passes from me, to you, to somebody else here locally, that $100 is working the whole time in our favour here in the province,” said Schouten in an interview last month.

Patch the bucket

It may be a small example, but there’s a bigger lesson in it for the provincial government, said Schouten. He thinks the government should treat the economy like a leaky bucket, where money comes in and goes out. 

“If the government could, using that metaphor, start patching the bucket to keep the money in the province longer, working harder for local businesses, local people, people who are making a living wage — that would do wonders for the stability of the economy here,” he said. 

John Schouten is the Canada Research Chair in Social Enterprise at Memorial University. (Adam Walsh/CBC)

Speaking of helping the economy, Ball thinks what he’s doing is scalable. In addition to scallops, Ball also hand harvests sea urchin, but he thinks there’s more that can be harvested as well —  including kelp, sea cucumbers and periwinkles. 

For that to happen, there would have to be consistent licensing periods from the federal government and more divers with commercial dive training. 

Eventually Ball would like to see a special school that trains up to a dozen divers a year for this type of work.

If a community had a handful of divers, Ball said, the economic spin-off is easy to see — you need people shucking scallops and spotting the divers, gear needs repairing, supplies need to be bought. 

“I think it’s just a win-win situation for small communities,” he said. “It could be a good economic boon.”

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Fed stresses its commitment to low rates as economy stumbles – The Tri-City News

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WASHINGTON — Chair Jerome Powell said Wednesday that the Federal Reserve will keep pursuing its low-interest rate policies until an economic recovery is well underway, acknowledging that the economy has faltered in recent months.

The Fed said in a statement after its latest policy meeting that hiring and economic growth had slowed, particularly in industries affected by the raging pandemic, notably restaurants, bars, hotels and others involving face-to-face public contact. The officials kept their benchmark short-term rate pegged near zero and said they would keep buying Treasury and mortgage bonds to restrain longer-term borrowing rates and support the economy.

Speaking at a news conference, Powell made clear his belief that the economy will struggle in the coming weeks and months, until widespread vaccinations and government rescue aid eventually fuel a sustained rebound.

“We’re a long way from full recovery,” he said. “Something like 9 million people remain unemployed as a consequence of the pandemic. That’s as many people as lost their jobs at the peak of the global financial crisis and the Great Recession.”

The Fed statement warned that the virus is posing risks to the economy. But the officials removed phrases from their previous statement in December that had said the pandemic was pressuring the economy in the “near term” and posed risks “over the medium term.”

Powell said that language was removed because the Fed policymakers see the pandemic increasingly as a short-term risk that will likely fade as vaccines are distributed more widely. But he also cautioned that the threat remains a serious one, particularly because of the potential harm from new strains of the virus.

“We have not won this yet,” Powell said. “There’s nothing more important to the economy now than people getting vaccinated.”

For now, the job market, in particular, is faltering, with 9.8 million jobs still lost to the pandemic, which erupted 10 months ago. Hiring has slowed for six straight months, and employers shed jobs in December for the first time since April. The job market has sputtered as the pandemic and colder weather have discouraged Americans from travelling, shopping, dining out or visiting entertainment venues. Retail sales have declined for three straight months.

Yet the Fed still envisions a sharp rebound in the second half of the year as the virus is brought under control by vaccines and government-enacted rescue money spreads through the economy. Americans fortunate enough to have kept their jobs have stockpiled massive savings that suggest pent-up demand that could be unleashed, with a big lift to the economy, once consumers increasingly feel safe about resuming their old spending patterns.

Powell was pressed during the news conference on whether the Fed should respond to the recent speculative surge in the prices of some individual stocks, notably shares of GameStop, and whether that buying frenzy suggested a dangerous bubble in overall stock prices. Powell deflected the questions by saying the Fed’s interest rate policies aren’t well-suited to address speculation in the stock market.

In addition, he said, “if you look at what’s really been driving asset prices in the last couple of months, it isn’t monetary policy. It’s expectations about vaccines and also fiscal policy. Those are the news items that have been driving asset values in recent months.”

Powell also noted that the Fed is keeping rates low and buying bonds to support economic growth. Reversing those policies to offset potential bubbles in the stock market, he said, could harm the economy.

“We don’t actually understand the trade-off,” he said. “Will it actually cause more damage, or will it help? I think that’s unresolved.”

The Fed has signalled that it expects to keep its key short-term rate at a record low between zero and 0.25% through at least 2023. Earlier this month, Vice Chair Richard Clarida said he expects the Fed’s bond purchases to extend through the end of this year, which would mean continued downward pressure on long-term loan rates.

The central bank said it will continue its bond purchases until it makes “substantial further progress” toward its goals of maximum employment and stable 2% inflation. Powell said “it is likely to take some time” for that progress to be achieved.

The Fed’s drive to keep long-term rates low have helped hold down mortgage rates and fueled home sales and price increases. Home prices, for example, surged 9% in November compared with a year earlier, its fastest increase in more than six years.

The prospect of significant more government rescue aid and ongoing vaccinations has raised some concern that as Americans eventually release pent-up demand for airline tickets, hotel rooms, new clothes and other goods and services, the economy might accelerate and annual inflation could surge above the Fed’s 2% target.

If many companies don’t initially have the capacity to meet that demand, prices would pick up. Powell, however, dismissed those concerns, pointing to several long-run factors that have restrained inflation for more than a decade, such as an aging population that tends to spend less and save more, technological developments that improve efficiency, and overseas competition.

“Frankly, we welcome somewhat higher inflation,” Powell said. The Fed believes that inflation sustainably at 2% guards against deflation, a drop in prices and wages. And since interest rates include expected levels of inflation, that gives the Fed more room to cut interest rates. “The kind of troubling inflation that people like me grew up with seems far away and unlikely.”

The Fed adopted a framework last year that calls for inflation to average 2% over time. Given that inflation has mostly languished below that level since the Fed adopted it as a target in 2012, policymakers would have to let inflation run above 2% for some time to make up for the years of below-target price increases.

Christopher Rugaber And Martin Crutsinger, The Associated Press

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Down But Not Out: Pandemic Likely Dealt Blow To Economy But There's Room For Hope – NPR

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A sign noting a retail space is available for lease appears in San Francisco in December. A resurgence in the pandemic likely dealt a major blow to the U.S. economy in the fourth quarter.

Jeff Chiu/AP

Jeff Chiu/AP

The resurgence in the pandemic likely dealt a major blow to the U.S. economy in the last three months of the year, though it is not expected to have delivered a knockout punch.

Most economists expect fourth-quarter gross domestic product data on Thursday will show a significant slowdown from July to September, when the economy staged a sharp recovery from the early days of the pandemic.

Key sectors such as leisure and hospitality have been hit hard by the pandemic’s resurgence, and had it not been for the $900 billion rescue package that Congress passed in the final weeks of December, the economy might have started 2021 with a double-dip recession.

But other companies, including in manufacturing and online retail, are doing better and seeing business return to pre-pandemic levels.

Ben Herzon, a senior economist with IHS Markit, expects Thursday’s report from the Commerce Department will show GDP grew less than 1% in October, November and December.

That’s a significant slowdown from the previous three months when the economy grew by 7.4% as businesses reopened from pandemic lockdowns in March and April.

(The Commerce Department typically reports quarterly GDP changes at annualized rates, but that exaggerates swings both up and down. Measured by that rate, third-quarter GDP grew 33.4% after a drastic 31.4% contraction in the second quarter.)

“We got a really strong third quarter, and then things started to fizzle out a little bit,” Herzon said.

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Hurt most in the last three months of the year were restaurants and in-person entertainment businesses such as movie theaters as a winter wave of coronavirus infections and deaths made consumers nervous about going out. The leisure and hospitality segment of the economy lost nearly 500,000 jobs in December.

Other segments of the economy have fared better. Manufacturing and homebuilding continue to bounce back from their pandemic slump, and consumption of goods is higher now than it was before the coronavirus struck.

“There are some strengths,” Herzon said. “It’s just that services, which is a very large part of the economy, is really struggling to get back to where it was.”

While the U.S. has made up much of the ground it lost early last year, the economy likely ended 2020 about 3% smaller than when it began.

With COVID-19 still killing around 4,000 Americans every day, economic activity is likely to remain subdued for the next several months. But if new vaccines are successful in stopping the pandemic, the economy is poised for a strong recovery in the second half of this year.

The International Monetary Fund expects the U.S. economy to grow 5.1% in 2021 and match its pre-pandemic level sometime in the second half of the year.

Any forecast, however, comes with a number of question marks: How smoothly will the vaccine rollout go? What is the impact of new coronavirus variants? And how much more money will consumers spend once the pandemic is under control?

Americans who have kept working during the pandemic have socked away about $1.3 trillion in extra savings during the last year, according to Pantheon Macroeconomics. That could provide a significant boost to the economy, if and when they decide to spend it.

“You probably won’t get more haircuts than you otherwise would have,” Herzon said. “But maybe people are really tired of staying home, and they will go out to eat more than they would have otherwise.”

Additional fuel could come from the federal government if Congress approves another round of $1,400 relief checks, or other parts of President Biden’s proposed $1.9 trillion package to rescue the economy.

A surge in demand for airline tickets and restaurant reservations that suddenly outstrips supply could trigger a jump in prices.

But Federal Reserve Chairman Jerome Powell said any such increase is likely to be temporary and would not spark concerns at the central bank of runaway inflation.

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Carney, OTPP CEO set timelines for climate friendly economy at Davos – BNN

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Two Canadian investment leaders endorsed a transition to clean energy at a virtual Davos World Economic Forum on Wednesday, as more investors worldwide push for concrete sustainability commitments.

Former Bank of Canada governor Mark Carney said that politicians can help markets finance the transition to zero-emission economies by setting credible forward commitments.

Canada’s carbon pricing plan is an example of a forward commitment, Carney said, since it would hike the federal tax to $170 a tonne by 2030 from $30 currently.

“I think we’re reaching the tipping point. The question is execution. How is that political will channelled?” said Carney, who was speaking in his capacity as United Nations Special Envoy for Climate Action and Finance.

He pointed to recent COVID-19 vaccine purchase agreements as an example of the power of putting political will behind contracts.

Carney, who is also vice-chairman at Brookfield Asset Management, said that financial and economic markets will adjust to future goals, such as upcoming bans of internal combustion engines in Europe. Carney pointed to his research with U.S. Treasury Secretary and former Federal Reserve chairwoman Janet Yellen, which suggested that markets will “smooth” out the carbon price hikes.

“That’s what markets do best. And by the time you get to the point where the price is high, the economy has adjusted,” said Carney.

In a separate session, Ontario Teachers’ Pension Plan chief executive Jo Taylor said the pension plan tries to push its portfolio companies toward sustainability, rather than immediately divesting in carbon-intensive companies. The pension plan said last week it would commit to reaching net-zero greenhouse gas emissions by 2050.

“Through that engagement, rather than divestment, I think we can particularly push these companies to do a better job and actually provide some additional help and services in and around the world where they may not be immediately available,” said Taylor.

Carney and Taylor’s comments at Davos came as 61 global business leaders said at the forum they would begin using a standardized set of environmental, social and governance metrics and disclosures.

Global investment firm BlackRock Inc. also said this week it would start giving “heightened scrutiny” to investments that posed a climate-change risk, calling for more company disclosures not only on climate change but also social goals such as equity, diversity and inclusion. In his letter to CEOs, BlackRock chief executive Laurence Fink said that between January and November 2020 there was a 96 per cent year-over-year increase in sustainable asset investments in mutual funds and exchange traded funds.

Carney said that as more governments sign on to net-zero pledges, it is “cascading down” to large pension funds, insurance companies and sovereign wealth funds.

“We don’t often invest on our own, so what we need to do is also persuade other investors,” said Taylor. “Some of the investors we work with have a much more short-term view of what they’re trying to achieve.”

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