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Long-term Alberta economy reboot plan coming Monday

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GRANDE PRAIRIE, Alta. — Premier Jason Kenney says his government’s blueprint to reboot Alberta’s distressed economy will be announced Monday in Calgary.

“It will be a bold and ambitious plan to make strategic investments to get people working right now when we need it most, but also to invest in the long-term productivity of our economy,” Kenney said Friday.

He said it will involve the largest ever spending on public infrastructure, including areas such as health care and transportation.

There will be also be a focus on diversifying the economy in critical growth sectors while buttressing the existing oil and gas industry.

It will be a plan for a province that was looking at a $7-billion budget deficit this year before the COVID-19 pandemic drained away jobs and business activity, and a global oil price war collapsed profits for its wellspring industry.

The budget deficit for this year is now pegged at $20 billion.

In March, Kenney announced a 12-member economic advisory panel, including former prime minister Stephen Harper, to provide guidance on the relaunch.

Kenney has been sharply criticized by the NDP Opposition for pursuing growth strategies in oil and gas while ignoring emerging industries such as high-tech and artificial intelligence.

Kenney’s government, when it took power, cancelled tax incentives designed to grow high-tech. He said those programs were ineffective as they reached a small percentage of the tech market.

On Thursday, Kenney said part of Monday’s plan will include the outline of a new program to incentivize job-creating investment in the information technology, digital and innovation sector.

“We will be outlining a number of sectoral strategies in areas of our economy that we need to grow in order to diversify while also articulating policies that ensure a strong future for the oil and gas sector.”

Kenney won last year’s election on a promise to galvanize Alberta’s economy, struggling even then with low oil and gas prices. He promised a pan-economic, less-is-more approach, championing broad incentives and then letting the free market take its course.

To that end, his government cut the corporate income tax rate, reduced the minimum wage for those under 18, and scrapped the provincial consumer carbon tax, though that levy was later replaced with a federal version.

Albertans have the lowest overall tax burden among Canadian provinces, and Albertans do not pay a provincial sales tax.

Since then, as the oil and gas economy has continued to struggle, Kenney has assumed a more direct interventionist approach.

In March, his government agreed to provide $1.5-billion to Calgary-based TC Energy Corporation, enabling the completion of the KXL pipeline to ultimately take Alberta crude across the United States to refiners and shippers on the Gulf Coast.

The $1.5 billion in equity investment will be followed by a $6-billion loan guarantee next year.

Kenney has said Alberta will be able to sell its shares for a profit after the pipeline is built and it will generate a net return of more than $30 billion through royalties and higher prices for its oil over the next two decades.

This report by The Canadian Press was first published June 26, 2020

— By Dean Bennett in Edmonton

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Indian economy's medium-term outlook remains uncertain – RBI Governor – The Guardian

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By Swati Bhat and Aftab Ahmed

NEW DELHI (Reuters) – The medium-term outlook for the Indian economy remains uncertain with supply chains and demand yet to be restored fully while the trajectory of the coronavirus spread and the length of its impact remain unknown, Reserve Bank of India Governor Shaktikanta Das said on Saturday.

According to most estimates, the Indian economy will register a record contraction of over 4.5% in the current fiscal year that started on April 1 due to the pandemic.

Starting late March, the country was placed under one of the strictest lockdowns in the world for over two months. Since early June, the government has started easing restrictions to help some revival in the economy even though the number of infections in the country continues to rise.

“The Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions,” Das said in an address to an online forum.

“It is, however, still uncertain when supply chains will be restored fully. How long will it take for demand conditions to normalise and what kind of durable effects will the pandemic leave behind on our potential growth?” he said.

Das said that the 2008 global crisis and the current crisis show that such economic shocks have “fatter tails” than generally believed, and that the country’s financial system should have larger capital buffers.

A recapitalisation plan for Indian banks is necessary as the economic impact of the pandemic may result in higher bad loans and erosion of capital for banks, the RBI governor added.

The central bank has cut policy rates by 115 basis points in response to the pandemic, resulting in a total policy rate reduction of 250 basis points since February 2019, along with providing liquidity of 9.57 trillion rupees ($127.28 billion).

It has also eased some bad loan provisioning norms and allowed loan moratoriums for retail customers.

Das said that the central bank has to carefully unwind the unusual monetary and regulatory measures taken to cushion the economic shocks in the post pandemic world, as the financial sector should return to normal functioning without relying on the regulatory relaxations as the new norm.

India recorded 27,114 coronavirus cases in the last 24 hours, taking the total to 820,915 including 22,123 dead.

The RBI governor also said that inflation will continue to moderate going forward and investment activity will revive.

(Reporting by Swati Bhat and Aftab Ahmed; Editing by Raju Gopalakrishnan)

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NWT says its economy is weathering Covid-19 better than others – Cabin Radio

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Published: July 10, 2020 at 4:27pmJuly 10, 2020


The NWT’s economy will come out of Covid-19’s initial months damaged but in better shape than other parts of Canada, the territory said on Friday.

The territorial government is forecasting a 3.3-percent contraction in its economy this year, which it says is “significantly less than the national average of 8.2 percent forecast by the Conference Board of Canada,” an economic think-tank.

Despite steep declines in the tourism and transportation industries, the territory said “steps taken to keep the diamond mines and the public sector active” had softened the pandemic’s blow.

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Mining and government are by far the territory’s largest employers. The Ekati mine has suspended activities but the Gahcho Kué and Diavik mines remain fully operational.

The private sector is in worse shape. A GNWT-commissioned survey of businesses showed that 81 percent of NWT companies had experienced a “significant decrease” in revenues.

Tourism and transportation industries were the hardest-hit, telling the government they saw revenues drop by an average of 71 percent.

On the other hand, more than 90 percent of businesses surveyed by the territory in April and May reported they expected to make it through the pandemic.

Consumer spending and small business spending has rebounded since May, the territory said, and 71 percent of NWT residents surveyed were planning to travel within the territory in the next six months.

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The Department of Industry, Tourism, and Investment said the results of third survey – carried out in June to examine the impact on consumer demand – is coming soon.

According to the territory, the various surveys are “part of … ongoing work to better understand the effects of Covid-19 on the NWT and how best to respond to them.”

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Saskatchewan economy adds 30,000 jobs in June as businesses open up again: Statistics Canada – CBC.ca

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Saskatchewan added more than 30,000 new jobs in June as businesses began to open back up from the COVID-19 pandemic.

Saskatchewan’s unemployment rate dipped to 11.6 per cent in June from a high in May of 12.5 per cent, according to a Statistics Canada report on Friday. 

At the national level Canada added almost one million jobs in June.

The national jobless rate fell to 12.3 per cent, down from the record-high of 13.7 in May. There are still 1.8 million fewer jobs in Canada today than there were in February.

Jason Childs, an associate professor of economics at the U of  R, said he was pleasantly surprised by the employment gains.

“To be gaining 30,000 jobs provincially and nearly a million jobs nationally is some unexpected good news, which is nice for a change,” he said.

Employment is rebounding as more businesses open up across Canada. (Statistics Canada, Labour Force Survey)

The growth in Saskatchewan was split between 22,000 full-time jobs and 10,000 part-time jobs.

Childs cautioned that the jobless rate in the province is still more than six per cent higher than it was at this time last year, when it was 5.2 per cent, and there still about 40,0000 fewer jobs than before the pandemic.

“[Some people] don’t appreciate how deep the hole we’re in is and this is not a hole we’re going to get out of quickly,” Childs said. “[Unemployment] has more than doubled from this time last year.”

All those job losses have not been evenly distributed throughout the population.

Young workers are taking the brunt of the job losses in the province.

One in five people 15 to 24 years old are without a job, compared to 8.6 per cent of workers over the age of 25.

University of Regina associate professor of Economics Jason Childs says we have a long way to go to get back to pre-pandemic economic levels. (CBC)

Unemployment among First Nations is 18.4 per cent and the Métis jobless rate is 17.3 per cent.

Childs said both those groups already have higher unemployment and they will have a harder time getting back in the workforce.

“People looking for that first job are going to have a really tough time right now because anything that opens up you’re probably going to be competing with somebody who’s got a lot more experience,” he said.

The one sector hit hardest by the pandemic is food and accommodation, where an estimated 400,000 workers across the country are still without a job.

Employment increased in all provinces in June, but it remains below February levels. (Statistics Canada, Labour Force Survey)

Childs said those jobs are dependent on consumer spending and tourism, and that people’s financial habits have changed during the pandemic.

“I still think we’re going to see a drag [on the economy] as we get what’s called the Paradox of Thrift,” Childs said.

“As people begin to save for their own protection we may see that drag on economic activity as consumption falls off.”

He said people are beginning to cut back on ‘luxuries’ like going out to eat or grabbing a cup of coffee.

“That’s a place where you can cut back fairly easy,” he said.

“People are dealing with a massive amount of uncertainty right now and uncertainty breeds caution and doesn’t breed spending.”

Childs said no amount of fiscal stimulus is going to solve this crisis without consumer confidence.

“You need to get people back to a place where they feel comfortable and safe spending in order to return to the previous level of economic activity,” he said. “Or we’re just gonna have to get used to this.”

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