As the Bank of Canada’s new governor, Tiff Macklem, reminded us last week, the lockdown to stop the coronavirus epidemic has been costly. And the battle is not over yet.
Those who once thought shuttering the economy to corral COVID-19 was too expensive now merely have to look south, where a strategy of whistling past the graveyard has led to an economically devastating second round of the disease.
Even while some COVID-deniers continue a bizarre refusal to follow simple steps to defeat the pandemic, Canadian businesses may be able to profit from lessons learned abroad.
Using the innovation for which capitalism is famed and the power of good science, it may be possible to have the best of both worlds. Instead of waiting for a vaccine — which some scientists doubt will be as effective as hoped — businesses and policy-makers are seeking strategies to reopen the economy without launching an even more costly renewed outbreak.
From the slightly wacky to the eminently practical, here are some ways Canada might be able to have its cake and eat it too.
Despite increasing scientific evidence that masks are effective, Georgia Gov. Brian Kemp, seen greeting U.S. President Donald Trump last week, is trying to prevent cities from making mask-wearing compulsory. (Jonathan Ernst/Reuters)
1. Drinking helmets
From Japanese whisky-producer Suntory comes one of the most interesting COVID-19 business proposals: a specialized drinking helmet that allows the up-close socializing typical in pubs without sharing the virus. The company has not yet revealed prototypes.
Along with Plexiglas barriers, vastly improved ventilation and increased table spacing, the drinking helmet would just be a slightly more eccentric innovation to keep patrons feel safe while showing authorities that bars and restaurants need not be sources of contagion.
2. Automation
As agricultural economist and farmer Philip Shaw told me recently, automation was already sweeping the industry — even in such difficult tasks as tomato picking — before COVID-19 precautions began adding to the costs of temporary foreign workers. Shaw, who worries farmers have not had enough government support during the crisis, says profits depend on imported labour.
But every time costs rise, new technology becomes more feasible. Now, after repeated outbreaks of the disease in meat-packing plants, companies including Tyson Foods are struggling to get machines to do processing jobs that have traditionally been thought to require the finesse of human manual dexterity.
3. Raise wages
Improbable as it may seem, while some traditional business voices are calling for the end of the Canada emergency response benefit — so that employers can persuade workers to come back to lower wage jobs — others insist now is the time to increase employee incomes.
A crisis is an ideal time to raise pay <a href=”https://t.co/xczCEPb6ID”>https://t.co/xczCEPb6ID</a>
Management research shows investing in people pays off in the long run. Usually businesses can’t afford to wait. But since businesses aren’t expecting immediate returns in this period, this may be a perfect time to hire only essential workers and pay them well.
While his suggestions have often been ignored by his boss, on Friday Dr. Anthony Fauci, a leading member of the U.S. president’s coronavirus task force, had some sound advice on how businesses can “carefully and prudently” open the economy, as he told the U.S. Chamber of Commerce, without suffering a new outbreak.
One of his pieces of advice is to use a “dial up, dial down” strategy — instead of opening businesses everywhere all at once, do it in incremental steps, ready to take a step back if cases begin to increase and avoid the risk of a costly return to lockdown.
5. Some businesses reopen first
It is inevitable that some self-interested businesses including the entertainment and airline industries have been lobbying hard to get back to normal.
“Let’s go fly for God’s sake,” American Airlines boss Doug Parker told the Wall Street Journal just as the U.S. was hitting new COVID-19 case records.
But it is clear that different businesses have different risk levels.
In the absence of drinking helmets, for example, bars have been contagion hot spots. Businesses in regions, such as the Atlantic provinces, that have been relatively virus free get to go first while health authorities prepare to pounce on local outbreaks.
6. Listen to science
Last week Air Canada’s chief medical officer Jim Chung called on governments to adopt a “science-based approach” to reopening the travel industry.
While the appeal was clearly aimed at getting more paying bums in seats, the idea of businesses listening to science seems like one that could have prevented the U.S. second wave and could stop one from happening in Canada. The newness of the disease has meant that medical experts seem to have repeatedly got it wrong.
But as scientists learn more about the disease — and masks, and whether airports and travel, or something else, actually contribute more to the spread of the disease — business leaders may be learning that by accepting scientific advice and adopting innovative techniques, they can maximize profits and bring the economy back without unleashing a disastrous new U.S.-style spike in cases.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
