Beirut, Lebanon – Yara Adada, 28, sits at the window of her bakery and coffee shop in Gemmayze, a lively central Beirut neighbourhood known for its bars and restaurants.
Adada is the only one there. “We’re swatting flies,” she says.
Behind her, the counter is filled with pastries, the coffee machine is silent and the chairs and stools, usually full, are empty. Since the beginning of the conflict between Hamas and Israel, this has been the scene at Adada’s coffee shop and many other businesses as fears grow that the country could be pulled into a war with Israel.
“We’ve seen a very significant drop in customers, more than 50 percent,” Adada said. The usually buzzing coffee shop would get between 30 and 35 customers a day. “Now, on a good day, I have 10 to 15. Today it’s already midday and I only had one.”
“Yesterday I only made $4. It’s scary,” she said.
A plane takes off from Beirut airport. Since October 7, many airlines have scaled back or cancelled flights to and from Beirut, hurting Lebanon’s tourism-dependent economy [File: Emilie Madi/Reuters]
Economic ‘agony’
Since October 7 and the beginning of the ongoing exchange of fire between Hezbollah and Israel in southern Lebanon, the restaurant sector has seen a drop of up to 80 percent in business, according to Lebanon’s syndicate for restaurants, nightclubs and cafes.
Tourism, responsible for 20 percent of Lebanon’s gross domestic product (GDP), has been hit badly. Due to the volatile situation at the border, Australia, France, Germany, the United Kingdom, the United States and many other nations have not only urged their citizens not to visit Lebanon but have advised those in the country to leave while there are still commercial flights available.
The warnings came as airlines such as Lufthansa, SWISS and Saudia cancelled their flights. On October 20, Lebanese flag carrier Middle East Airlines announced it was reducing its flights “due to the ongoing circumstances in the region and the reduced insurance coverage for aviation risks in times of war”.
The decision, criticised by the government, has led to a drop of 80 percent in the Lebanese airline’s flights. At the Beirut airport – the only one in the country – there are now few planes on the tarmac, no queues, and hardly any passengers.
“The restaurant [sector] is completely devastated,” Nagi Morkos, from Hodema, a Lebanon-based consultancy firm, told Al Jazeera. Morkos, who works with restaurants, hotels, resorts and malls, said the operators are “anxious”.
“The biggest concern is not the war, it’s the status quo that will keep the situation like that for months. So it’s an agony more than a death,” Morkos said. “A war, yes, it’s terrible, but war has a time. Here we don’t know, it’s a wait-and-see situation.”
“We feel trapped and it’s very bad for business, very bad for tourism, very bad for the hospitality sector and very bad for investment.”
Empty shelves at a bakery in Tripoli, Lebanon [File: Emilie Madi/Reuters]
It’s not 2006 any more
On October 22, the Lebanese government announced that it was developing an emergency plan in case a war broke out. The measures included securing key infrastructures, like the Beirut airport, ports and main roads, all of which were bombed by Israel during its conflict with Hezbollah in 2006.
But Lebanon and the region are in a different, more challenging, situation than in 2006: Lebanon’s banking system was relatively normal back then, which allowed the central bank to provide banks with liquidity if necessary during the war; likewise, there was still confidence in financial systems and millions of Lebanese expats were still sending foreign currency into the country.
In 2006, although the Beirut airport was bombed, Middle East Airlines continued to operate from Damascus throughout the monthlong conflict and goods and people were still able to cross the border from and to Syria. But war in Syria and frequent Israeli air raids on Damascus airport mean that option is gone.
Lebanon is also almost completely dependent on imports for food, fuel and medicine, 70 to 80 percent of which arrive by sea.
In 2006, the country’s ports were unusable because of the threat of Israeli warships but Lebanon could fall back on healthy reserves, such as grains, that were kept in the Beirut port silos, which have since been destroyed by the 2020 port blast.
The still half-destroyed port can be seen from the office of the Lebanese minister of economy, Amin Salam.
He tells Al Jazeera Lebanon is in a worse position than ever and that food security is one of the main concerns for the government as it develops its emergency plan for possible war.
Lebanon at risk of food security ‘disaster’
Lebanon’s current reserves of food, fuel and medicine are only enough for a worrying two to three months, the minister said, adding that reserves should normally be enough to last for “about a year”.
“[B]ecause of the lack of vision of the past governments, nobody thought of building several locations for national reserves. Everything was put in the Beirut port and when the explosion happened, we lost the only national reserve we had,” Salam said. “So if it doesn’t get delivered on the seaport, we don’t have wheat, we don’t have grains, we don’t have bread.”
Salam said the government is working with private partners to increase the shipment of basic commodities in the coming weeks. However, vendors are asking for payments in advance “because they know [Lebanon’s] banking system is paralysed … so that’s kind of creating another layer of obstacles”, he explained.
Hani Bohsali, president of the Syndicate of Food Importers in Lebanon (IFBC), was one of the representatives who met Salam.
He told Al Jazeera that, just like in aviation, insurance companies for the maritime shipping industry have started charging premiums or lifting their war coverage completely, which is resulting in an inflation of consumer good prices by up to 3 percent.
“If I bring my shipments without war insurance and then the port gets hit and I lose my cargo, who will compensate me? Nobody… people [may reduce] their inputs to reduce their risk,” he said.
Bohsali is confident that current shipments already on their way to Lebanon won’t be affected. But while future orders have not been cancelled so far, the situation has to be assessed “on a daily basis”.
“Let us put it in a very cynical way: realistically, we don’t know. Nobody knows,” Bohsali said. “If the war breaks, what scenarios can you do if the Syrian border is closed and there is an embargo on the seas? Even if you do 100 contingency plans, it’s a waste of time if you don’t know what will happen.
“So what we, the private sector, are calling for is asking the government to just do its best to stop the war, because that’s the only option.”
Lebanon’s Economy Minister Amin Salam [File: Mohamed Azakir/Reuters]
‘Forget about tomorrow, deal about today’
Salam recognises that Lebanon is at risk of a “disaster” if war breaks out. But, he concedes, the country’s financial woes did not start on October 7.
When he took office in 2021, Lebanon was already facing one of the worst financial crises in modern times, with losses standing in excess of $72bn, a 98 percent devaluation of the national currency, 80 percent of the population living below the poverty line, and the central bank in ruins after its governor was charged with defrauding the public finances to the tune of $330m.
An agreed loan of $3bn from the International Monetary Fund has been seen as the light at the end of the tunnel, but implementation of the reforms it is conditional on has been slow.
“Everything that’s happening now is adding … another layer of chaos and lack of attention to the reforms needed to rebuild the Lebanese economy because … when something like this escalates, it takes us 10 steps backwards,” Salam told Al Jazeera. “When you are dealing in crisis mode, you forget about the tomorrow, you have to deal about the today.
“[O]ur infrastructure is very, very, very bad. And our economy is in a very challenging place,” the minister said. “We cannot afford even … a little escalation.”
A street vendor arranges kaak, a bread, in the southern Lebanese city of Sidon [File: Aziz Taher/Reuters]
A high price to pay
Adada, the cafe owner, knows well the burden of the “cycle of crisis” in Lebanon: the 28-year-old became unemployed after the 2019 financial collapse and remained jobless during the pandemic and the Beirut port blast. Hers was one of the first shops to open in the Gemmayze neighbourhood opposite the port after the explosion.
Almost everybody she knows warned her against opening a business in Lebanon, she said. But it was her dream to stay and help the economy. “It’s home,” she said.
She is not giving up yet. Despite the high cost of utilities and the growing prices of ingredients, Adada has enough savings to keep the shop afloat for at least six months.
“If a war breaks out I can close the shop for a while but I worry about my employees and other stores that aren’t as lucky,” she said.
Adada sympathises with the Palestinian people and their struggle, but she knows well the price Lebanon might have to pay.
It is a complex sentiment shared by many in Lebanon. “We cannot be selfish but we have to,” Adada says, looking out the window.
Outside, a few cars pass. Even fewer pedestrians walk around the usually vibrant neighbourhood.
“Lebanon doesn’t deserve this, we’ve been through enough,” she says. “Just let us breathe.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
