Anne Jackson could always count on springtime to bring guests to her bed and breakfast in Fort Good Hope, N.W.T.
That’s the time every year when the territorial government always seemed to send up officials to the fly-in community on the Mackenzie River, about 800 kilometres from Yellowknife. Lawyers, health officials, housing workers, accountants — they’d arrive in Fort Good Hope like clockwork.
Usually, they’d stay at Jackson’s Bed and Breakfast, where Anne’s dad, Wilfred, is quick with a story, a joke or piece of wisdom learned out in the bush, shared over tea or bacon and eggs. Those springtime guests helped sustain the business through the lean seasons.
But no one is coming this spring.
With all but the most essential travel and gatherings banned to prevent the spread of COVID-19, the Northwest Territories is very nearly locked down. It’s starving an already lean economy even further and it’s left many worried about how bad things can get.
“It’s been slow, and when I say slow, there’s nothing, no guests,” Jackson said. “We weren’t prepared for this.”
Like business owners across Canada, Jackson is poring over her accounts. She’s at the kitchen table, figuring, adding, subtracting, doing the mathematical gymnastics it requires to keep paying the bills without any money coming in. They’ve applied for relief, but nothing’s reached them yet.
On top of that, she’s watching as the first cases of COVID-19 appear in the North, hoping her community isn’t next.
“It’s like watching a movie,” Jackson said. “We’re isolated, but we have to talk about what happens if it does get here. The fear is that if it does, it will affect everybody. That’s what’s on everybody’s mind.”
COVID-19 and the N.W.T. economy
So far, COVID-19 has yet to gain a strong foothold in the Northwest Territories. There have been five confirmed cases and all have been isolated. There is no evidence of community spread at this time.
But officials have been aggressive, issuing strict orders that have forced most businesses to close and banned nearly all gatherings of people.
“It’s going to hurt a lot of people,” said Dave Ramsay, a business consultant in Yellowknife who was the Northwest Territories’ minister of industry from 2011 to 2015. He estimates up to 50 per cent of businesses won’t survive without adequate relief.
“These are small, medium-sized businesses that can’t weather the storm,” Ramsay said.
The economic fundamentals for the Northwest Territories weren’t particularly strong before the pandemic.
Its $5-billion GDP is driven by its three diamond mines and government. Its budding tourism industry, which relies heavily on tourists from Asia, has been shut down. Its tax base is small — about 75 per cent of the government’s revenue comes from Ottawa.
“We’re a ward of the state,” Ramsay said. “We have been for some time.”
Teetering mining industry
The mining industry, which already had problems, continues but not at full steam.
One mine, Ekati, has shut down and sent its workers home. The other two remain operational but at a limited capacity. They’ve sent some workers home with pay to protect their remote northern communitiesfrom the virus, and are taking on extra costs, such as chartered flights, to bring employees in from southern Canada. It remains unclear whether they are eligible for federal aid.
If we don’t have mining here in the N.W.T., we don’t have much of an economy.– Dave Ramsay, former N.W.T. industry minister
If those mines close, either because of health concerns or because of the global economic downturn following the pandemic, Ramsay and others say the results could be catastrophic.
“If we don’t have mining here in the N.W.T., we don’t have much of an economy,” Ramsay said.
Though it’s difficult to predict how the diamond industry will react to COVID-19, stocks have tumbled and analysts suggest the diamond supply will drop between 10 and 12 per cent next year.
Ramsay also serves on the board of directors for Fortune Minerals, a company developing a mine project near Whati, N.W.T., and is already seeing investors shy away.
“It’s almost impossible to raise money out there in the markets,” he said. “It was tough before, and you throw a global pandemic in the mix, it becomes really tough.”
Ramsay’s hopeful the territory will convene an economic task force made up of business leaders and former politicians to come up with creative solutions.
‘Orders of magnitude worse’ than 2008-09 crisis
Though the Conference Board of Canada does not yet have an outlook on how COVID-19 will affect the northern economy, it predicts Canada’s GDP will contract by 4.3 per cent in 2020. If that number is applied to the Northwest Territories’ $5-billion GDP, that translates to a loss of about $250 million.
It’s not just the diamond mines facing an uncertain future. Northern airlines, which are lifelines to remote communities such as Fort Good Hope, all face questions about their long-term viability.
The federal government has announced $8.7 million to help those airlines hire back employees, but it doesn’t replace the revenue that will be lost if flights are still grounded during the summer exploration and tourist season.
Michael Miltenberger, a former Northwest Territories finance minister, now runs a consulting business and works with airlines such as Air Tindi, which operates medevac, resupply and commercial passenger flights between Yellowknife and the territory’s smaller communities.
He says what he’s seeing now is much worse than the 2008-09 financial crisis.
“It was one thing in 2008 when money became an issue and credit became an issue,” he said. “This is many, many orders of magnitude worse. You’ve lost your customer base literally overnight.”
In Fort Smith, N.W.T., where Miltenberger lives, nearly all businesses are shuttered: restaurants, hair salons, anything in the service industry.
He’s concerned about how long-term economic hardships and anxiety will affect families, possibly making the territory’s well-documented social problems worse as time goes on.
Government triaging relief
So far, the Northwest Territories has offered businesses an aid package worth $21.5 million, mostly in waived fees, deferred payments and low-interest loans. That’s in addition to existing federal programs and a $130-million northern aid package Prime Minister Justin Trudeau announced last week.
For the most part, the $21.5 million represents money the territory is not taking in, and it’s unlikely to have much room to borrow more for future relief. That’s because of the federally imposed debt cap. The territory is only able to borrow $30 million before it hits its $1.3-billion limit.
N.W.T. Industry Minister Katrina Nokleby recognizes that if left too long, the territory’s economy may not recover from the coma it’s in now. She describes her work as triage, as she balances health and safety with the territory’s grim economic reality.
“Triage unfortunately is probably the best word for it,” Nokleby said. “Where are the priorities? What are the critical pieces? Where are we going?
“If we pack up shop right now and bunker everybody down under lock and key, we won’t have an economy to come back to.”
In the short term, Nokleby is looking at what businesses can be leveraged to help in the pandemic relief, delivering medical supplies, equipment or personnel. Long-term, she’s looking at approved government construction projects to see if they’re still safe to go ahead.
Amid these dire predictions, Nokleby does hope whatever the new normal is, will leave the territory more self-sufficient, with a stronger economy than before.
But to do that, the Northwest Territories’ economy needs to survive first.
Source: – CBC.ca
Edited By Harry Miller
Investing in conservation generates huge returns for economy, study finds – CBC.ca
With Earth’s wildlife now facing an extinction crisis, a group of economists and scientists is hoping to persuade governments that it pays to protect nature.
Specifically, expanding areas under conservation could yield a return of at least $5 for every $1 spent just by giving nature more room to thrive.
That in turn would boost agricultural and forestry yields, improve freshwater supplies, preserve wildlife and help fight climate change — all of which would boost global economic output on average by about $337 billion ($250 billion US) annually, the group of more than 100 researchers argues in a paper published online Wednesday by The Campaign for Nature, a coalition of conservation organizations from around the world.
The work represents one of the most comprehensive studies of the potential economic benefits from protecting nature — a research area fraught with best-guess estimates on the monetary value of animals, plants and ecosystems left intact.
Released as the United Nations lobbies governments to set aside 30 per cent of their land and sea by 2030, the report aims to challenge the notion that conservation is costly.
“You cannot put a price tag on nature, but the economic numbers point to its protection,” said Anthony Waldron, an ecologist at the University of Cambridge who lead the group examining the economic implications of designating a third of the Earth as a nature reserve.
Others question how precise accounting for nature’s economic contribution is even possible, said Bram Büscher, a political scientist at Wageningen University & Research in the Netherlands.
“What are two ducks worth? And would these ducks in the U.S. be the same as in Latin America? And how would you compare those things, and what would be their role?” Büscher told Reuters.
Economic arguments can backfire
Leaning too heavily on economic arguments could also backfire, if governments end up opening areas deemed valuable to the highest bidders, warned Julia Steinberger, an environmental economist at the University of Leeds.
“All it takes is one lobbyist to come along and say, ‘This program is no longer economically viable,'” Steinberger said. “That’s the risk we see when we tie environmental protection to economic performance.”
But even a rough estimate of nature’s economic value is better than nothing, given the scale of what is at stake, the report’s authors argue. Scientists estimate that at least a million species are facing extinction in the next few decades, largely due to human-driven activities including habitat loss, pollution and climate change.
Hoping to halt the global die-off, 30 countries are already backing a draft document pledging to conserve 30 per cent of the Earth’s surface by 2030, which will be discussed at the UN Biodiversity Convention postponed to next year in Kunming, China.
Currently, about 15 per cent of the Earth’s land and 7 per cent of the ocean has some degree of protection.
A 30 per cent conservation goal, aside from producing natural resources like fish stocks and timber, would also help to guarantee healthy ecosystems that provide an additional $472 billion ($350 billion US) a year in services that are essential to life, including filtering water, clearing air pollutants or preventing coastal erosion, the report said.
Such a goal would require an average annual investment of roughly $189 billion ($140 billion US) by 2030, the researchers estimated. Currently, about $32 billion ($24 billion US) is spent globally per year on protecting natural areas, they said.
“The well-being of humanity and global economic prosperity depends on us fixing our broken relationship with nature,” said report co-author Enric Sala, an ocean explorer in residence at National Geographic Society.
The report said that a major expansion in protected areas would have to be managed carefully to ensure that the economic benefits were spread evenly throughout populations.
But first, countries have to join the effort. And even then, compliance is not guaranteed. Despite having more than 190 countries pledge to fight climate change under the 2015 Paris Agreement, emissions of heat-trapping gases continue to rise.
Nevertheless, with some U.S. states pledging to reduce greenhouse gas emissions, there is growing interest in finding ways to account for the economic benefits provided by forests and other ecosystems, said economist John Talberth at the Center For Sustainable Economy in Portland, Oregon.
Understanding these economic benefits can also help policymakers decide, for example, whether a forest can be felled for timber or better left untouched to absorb carbon dioxide and support wildlife or water cycles. “The climate crisis has put a foot on the accelerator of getting this done,” Talberth said.
Where will Canada’s coronavirus economy go next? Here are 3 possible scenarios – Globalnews.ca
The fiscal “snapshot” of the state of Canada’s finances amid the coronavirus pandemic makes it clear that a high level of economic uncertainty remains.
But officials still outlined several possible scenarios for what could come next for Canada’s economy — and they depend on whether there is a serious second wave of COVID-19 transmission.
In a news conference with reporters, Finance Minister Bill Morneau said the snapshot included what the federal government knows now and “a sense” of what officials think will occur in the short term, noting that “the ability to forecast is extremely difficult” at this time.
Here are three possible scenarios outlined in the snapshot released on Wednesday:
The main economic outlook
The main economic outlook for Canada contained in the document is based on the results of a survey of private-sector economists conducted by the federal finance department in the third week of May.
Federal officials are using the average of those results as the basis for its fiscal projections for the year ahead.
The results of the survey are “most consistent with slow, steady and relatively low levels of ongoing community transmission of the virus,” according to the government’s snapshot.
The unemployment rate — which peaked in the second quarter of 2020 — may remain higher than pre-COVID-19 levels throughout the rest of 2020 and 2021, declining gradually to around seven per cent by the end of 2021, the projections showed.
The average results of the survey also showed private-sector economists expect the country’s real GDP to drop 6.8 per cent in 2020 — a contraction expected to be “much worse than experienced during the 2008-2009 financial crisis.”
Coronavirus: Trudeau says federal government went into debt so Canadians ‘wouldn’t have to’
But the average of the forecasts predicted “a faster rebound in real GDP than in the past three recessions,” positing that real GDP would rebound by 5.5 per cent in 2021.
“While private-sector views are relatively aligned on the magnitude of the second-quarter decline [in 2020], their third-quarter growth forecasts diverge widely, reflecting tremendous uncertainty around, for example, the pace of rehiring and investment, rebound in consumer activity, etc.,” the snapshot read.
Fiscal Snapshot: Morneau says keeping COVID-19 transmission rate down key part of economic plan
A “further resurgence” of the coronavirus in Canada and a second wave of measures to contain it “would severely hamper the economic recovery” — but that resurgence could still be “less economically damaging” than the first wave, the report cautioned.
Citing the “high degree” of uncertainty over how the pandemic will continue to unfold from both public health and economic perspectives and Canadians’ level of caution during that time, the federal government also included two “alternative scenarios” to economists’ projections in its snapshot, which painted more grim outlooks.
The ‘uneven and gradual recovery’ scenario
The first alternative scenario outlined a more “uneven and gradual recovery” from the pandemic, assuming a “slower pace of return to normal” of economic activity and “repetitive peaks of viral transmission.”
Under that first scenario, households would continue to avoid most public spaces and activities, while businesses wouldn’t fully rebound amid “stringent containment measures” and would continue to operate below capacity.
Those “prolonged shutdowns” would result in more permanent, rather than temporary, job losses, resulting in a “more uneven recovery” across the country and a drop in real GDP of 9.6 per cent in 2020.
“With the pace of business resumption still uncertain, it is unknown whether this scenario will come to pass or not, but it illustrates the potential downside risks that could still exist,” the snapshot noted.
The ‘virus resurgence scenario’
The second scenario considers a serious resurgence of COVID-19 with “uncontrolled transmission” and a sharp increase in new cases later in 2020, evolving into a series of smaller waves of transmission next year.
In that scenario, the resurgence would occur at the same time as the annual flu season and force another round of social and economic shutdowns as part of renewed containment measures.
Economic activity would tank again, and while it might be less severe than during the first wave, the economic damage would be “large,” the document said — resulting in re-closed businesses, fresh layoffs and less spending.
“Overall, this translates into a deeper and longer-lasting negative impact on the economy, with a decline of 11.2 per cent in real GDP in 2020 and the level of real GDP remaining below that of even the most pessimistic private-sector forecast by the end of 2021,” the document said of the second alternative scenario.
Longer-term economic update coming in the fall: Morneau
Which scenario Canada is headed toward may become clearer later this year.
Morneau told reporters the government intends to release a meatier, longer-term economic update or budget and its plans for the “path forward” in the fall, when officials “have more information.”
“We are in a situation where the ability to forecast is extremely difficult,” the finance minister said.
Fiscal Snapshot: Morneau details how COVID-19 benefits have helped Canadians, businesses
Canada is indeed “in unprecedented times,” Sahir Khan, executive vice-president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, told Global News.
“Whatever number you put out, it’s going to be wrong no matter what,” Khan said.
“For better or for worse, I think we are looking at the federal government as the resource that can restart this economy because I think we don’t have anywhere else to turn.”
Fiscal Snapshot: Scheer says Morneau gave no plan to support reopening
In a statement following the release of the fiscal snapshot on Wednesday, the president and CEO of the Canadian Chamber of Commerce criticized the government for not including a “longer-term fiscal plan” in its fiscal snapshot.
“Today should have been an opportunity to offer Canadians a clear picture of the challenges and a coherent strategy to address them,” Perrin Beatty wrote.
© 2020 Global News, a division of Corus Entertainment Inc.
Fiscal 'snapshot' to reveal economic impact of COVID-19 on Canadian economy – CTV News
Canadians will get a clearer picture of the current state of the economy and national deficit when Finance Minister Bill Morneau unveils what’s been billed as an economic and fiscal “snapshot” on Wednesday afternoon. Morneau will present the snapshot inside the House of Commons—which is gathered for a special committee of the whole session— at around 1:40 p.m. ET.
Speaking to reporters in advance of the snapshot being made public, Prime Minister Justin Trudeau said it’s clear that certain sectors will bounce back and some people will be able to find work, but others won’t, and so ongoing government support will be necessary through the economic rebound phase.
“When the pandemic first hit, a lot of people lost their jobs overnight. They didn’t know how they were going to feed their families, or pay their bills. Faced with this unprecedented challenge our government had two options: We could sit back and let Canadians fend for themselves… or we could swiftly and substantially choose to support Canadians. We chose to support Canadians,” Trudeau said.
The report—which is not a federal budget or a fiscal update—is set to show the current state of the federal deficit and the impact of the nearly more than $193 billion in spending on direct COVID-19 aid to Canadians as well as health and safety measures. Among the biggest ticket items to date: the $2,000 a month Canada Emergency Response Benefit; the 75 per cent wage subsidy; and the Canada Emergency Business Account, which offers businesses loans of up to $40,000.
The snapshot is also going to look at how Canada’s economic response compares to that of other countries and forecast what can be expected economically in the months ahead.
The overall economic numbers will be the first offered by the federal government since a December 2019 update—the only of the Liberal minority since the last election—which projected the deficit would rise to $28.1 billion in 2020-21.
The 2020 federal budget date was scheduled to be March 30 but that was cancelled due to the surging COVID-19 pandemic at the time.
In the December update, Canada’s debt-to-GDP ratio was at 30.9 per cent and projected to remain on track to reduce incrementally over the next few years.
Over the last few months federal job numbers have already showed millions are out of work, and a growing list of businesses are set to shutter their doors permanently.
In an effort to buoy businesses big and small, in addition to the direct spending offered, the federal government has offered billions in liquidity and government-guaranteed loans which Morneau has said he hopes will bridge key job creators in this country to better times.
Today’s snapshot comes after opposition parties and economists called for a more robust fiscal update. Already the Conservatives and New Democrats have spelled out what they expect to see from the economic report card. While the Conservatives are calling for a clear path out of the red—which is now likely to be a years-long endeavour—the NDP want to see a plan for continuing to support those disproportionately impacted by the economic downturn.
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