Lockdown or a drip feed of Covid restrictions? One path is better for the economy - CNN | Canada News Media
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Lockdown or a drip feed of Covid restrictions? One path is better for the economy – CNN

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The crisis, which hit Europe for the first time in early spring, is back — but this time around, many people feel that locking down society is too high a price to pay. Yet most medical and economic experts CNN spoke to agree that, in the long run, a short lockdown is better than a constant battle to contain the pandemic.
British Prime Minister Boris Johnson is one of those trying to avoid a second nationwide lockdown in England.
Senior scientific experts advised the United Kingdom leader to impose an immediate two-week national lockdown to curb the spread of Covid-19 in September. Instead, on Monday, Johnson unveiled a limited system of coronavirus restrictions to be imposed locally, if needed, and once again encouraged those who can work from home to do so.
Robert Jenrick, the UK housing minister, told the BBC on Tuesday that Johnson’s government had “to balance protecting people’s lives,” with keeping people in education and employment.
As a result of its spring lockdown, the UK economy shrank by 20% in the second quarter, pushing it into the deepest recession of any major developed economy. Johnson is now under pressure from some members of his Cabinet to keep the economy open, even as winter looms and coronavirus cases rise.
But some experts believe that limited restrictions have little impact on the virus and hurt the economy more over time.
“The number one priority is getting control of the virus,” Andrew Goodwin, chief UK economist at advisory firm Oxford Economics, told CNN. “And the quickest, [most] aggressive, way you can do that is the best thing for the economy.
“The worst thing is to have this bubbling for a long time, that’s the most dangerous thing,” he said. “Ultimately the longer this goes on, the worse it is for the economy and for public finances.”
Goodwin said a short “circuit-breaker” lockdown, as recommended by the scientists advising the UK government, could cause GDP to contract by 2.5% in the fourth quarter of 2020.
“That would be a relatively small hit now, compared to what we had before, and it would be worth it — if it worked,” he said, adding: “Piecemeal solutions, delivered late, lead to real economic damage. And if you let the virus rip, people take their matters into their own hands. People stop getting into social contact situations.”
China shows what’s possible when lockdowns are combined with population tracking policies intended to contain the virus. The world’s second-largest economy locked down hard earlier this year, and the government has spent hundreds of billions of dollars on stimulus efforts. It was the only major world power to avoid a recession this year.
But that success has proved difficult for other countries to replicate, especially in places where leaders do not wield the same level of control over their populations as Beijing.
Johnson’s approach in England is by no means unique. The Irish government last week rejected a call by health chiefs to reimpose a nationwide lockdown, despite a sharp surge in cases.
The country’s Prime Minister, Micheal Martin, instead tightened coronavirus restrictions across the country for three weeks, citing the need to protect companies from more damage.
“It is important to understand we are in a very different situation to last March,” Martin said on October 5. “Businesses are beginning to recover and vital public health services are still backlogged. Severe restrictions now would have a very damaging impact which those services and those businesses may not be able to recover from.”
But just across the border, Northern Ireland’s executive has taken a far more aggressive strategy. First Minister Arlene Foster announced on Wednesday that schools, pubs and restaurants would close for four weeks, in an effort to tackle spiking cases. The First Minister of Wales Mark Drakeford told UK’s Sky news that the country was also considering a short national lockdown.
In France, many of those working in the hospitality industry fear a second lockdown may be on the way.
Such is the pressure from the sector that officials have allowed restaurants to stay open in Paris and reopen in the city of Marseille, despite both areas being zones of “maximum alert,” meaning Covid-19 case rates there are high. Bars and cafes remain closed in both cities.
“We need to stop thinking that there is an opposition between economy and public health,” Catherine Hill, a prominent French epidemiologist, told CNN.
“If we solve the coronavirus crisis, then we solve the economic crisis. In China, they controlled the epidemic and the economy returned. The aim is simple: To get rid of the virus, so that life gets back on track.”
French Prime Minister Jean Castex indicated this week that more restrictions were on the way. “We are taking measures based on the epidemic situation,” he told news channel France Info on October 12.
“No options are to be excluded considering the situation we see in our hospitals.”
Jonathan Portes, a professor of economics at King’s College London, said “a successful strategy to suppress the virus is the best thing for the economy” even if it means the government needs to borrow more to fund support for businesses and households.
“We have no problem borrowing the amount of money [needed],” Portes said. “There’s no affordability constraint. Being able to afford a second lockdown is simply not one of the top five economic problems facing the UK right now.”
Robert West, professor of health psychology at University College London, said a future national lockdown in the UK is likely regardless of ongoing worries about the shock it will deliver to the economy because cases are rising so quickly.
But he says the key is for the government to use the time spent in lockdown to improve systems that can help control the virus once the restrictions are lifted.
“It would be a complete waste of time if we locked down without developing a test and trace system,” he told CNN.
The four nations of the UK do have test and trace systems but they have been criticized in recent months over perceived administrative errors, delays and backlogs. The government has defended the systems.
“Since it launched, NHS Test and Trace has contacted 700,000 people who may otherwise have unknowingly spread coronavirus and told them to isolate,” a Department of Health and Social Care spokesperson told CNN.
Lock down or not, the fate of the economy rests on the ability of governments to control the virus as winter approaches.

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Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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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 Press. All rights reserved.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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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.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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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.

The Canadian Press. All rights reserved.

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