The conversation about reopening the economy is farther along in the United States than in Canada, for a variety of political and non-political reasons.
Never mind eye-popping tweets from President Donald Trump. The actual White House plan is more detailed, and more cautious, than his tweets let on.
Just look at the auto industry. It operates across borders, with people carrying pieces back-and-forth in the process of assembling cars.
Numerous auto companies already have a target date in mind for resuming production: They’re aiming for May 4, according to Flavio Volpe, head of Canada’s Automotive Parts Manufacturers’ Association.
Here’s where things stand.
What Americans want: a go-slow approach
It’s hard to miss the spectacular sight of protesters honking car horns, waving Confederate flags and pressing angry faces against windows as they demand the lifting of lockdown orders.
They’re a small group of mainly Trump supporters, and they’re being egged on by Fox News and the president.
Protesters at the Ohio legislature on Monday demanded the lifting of lockdown orders. But this is not the prevailing sentiment in the U.S. In fact, it’s not even Trump’s own policy. (Joshua A. Bickel/The Columbus Dispatch via AP)
But this is not the prevailing sentiment in the U.S. In fact, it’s not even Trump’s own policy.
What various polls show, including one from Pew Research and one from Gallup, is that the vast majority of Americans want to do this slowly and carefully.
According to Gallup, over 70 per cent of Americans want to wait and see what happens with the spread of the virus; another 10 per cent want to wait indefinitely; and just 20 per cent would return to normal activities immediately.
Polls do show a partisan gap — to some extent.
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Republicans and rural residents are supportive of relaunching earlier than Democrats, more of whom live in crowded cities and rely on mass transit. That said, neither poll shows a Republican majority favouring instant reopening.
Neither does Trump’s plan.
The plan he released this week offers broad guidelines to states as they formulate their plans for reopening.
The comeback plan: Phase 1, 2, 3
Trump on Friday posted all-caps tweets reading “LIBERATE MICHIGAN!” and “LIBERATE MINNESOTA!”and “LIBERATE MICHIGAN!” — a not-so-subtle message suggesting dissent against Democratic governors’ isolation orders, which one ex-federal prosecutor described as criminally negligent.
But Trump’s actual blueprint is more nuanced, and lays out a three-stage approach. It’s up to state governors to decide when each phase should start.
Take sporting events as an example.
Games would start without live fans. Trump describes it as, “Made for television.” Eventually, stadiums would allow some fans. “Maybe they’ll be separated by two seats,” Trump said.
The new normal at the White House: physical distancing at a news conference in the Rose Garden last week. (Leah Millis/Reuters)
Then, finally, you’d have larger crowds again.
It’s the same for restaurants. In an initial phase, tables are spaced apart and waiters may wear face shields. In a hair salon, barbers and stylists are wearing protective gear.
That’s the kind of incremental comeback envisioned by leaders of Canada’s business community.
“A phased approach,” said Brian Kingston, of the Business Council of Canada. “This is going to be a very long process.”
There are already blueprints for the auto sector.
Auto-parts maker Lear has publicly released its plan, which calls for one infrared thermometer for every 100 employees; and guaranteed supplies of soap, disinfectant, shields and gloves.
The company would stagger shifts and lunch breaks, after some of its workers died in Mexico.
Volpe, of the parts manufacturers’ association, said a night shift and a day shift might start a half-hour apart so that there’s less crowding and more time for cleanups.
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Production would ramp up slowly.
He said companies couldn’t instantly start at 100 per cent capacity even if they wanted to because their suppliers’ schedules have also been disrupted.
“You might aim for 50 per cent of volume in Week 1,” Volpe said.
“Then another 10 per cent the next week.”
The nightmare scenario
Here’s what terrifies the business community: reopening too quickly then having to close again. The fear is not just over the implications for human health and the broader economy. It’s also a fear of cash-flow problems.
Volpe said what scares companies is burning through cash to build products, then the economy stalls, the goods gather dust in the factory, and there’s no revenue coming in.
“Companies risk bankruptcy, failure, if we go through a restart and have to shut down again,” Volpe said.
Phase 1 of reopening will see sporting events in empty stadiums, Trump says. It’s happening elsewhere, including at this April 2 baseball game in South Korea. (Kim Hong-Ji/Reuters)
The Business Council is urging the Canadian government to go slowly. It released a letter this week asking for consultations.
“A terrible outcome would be a W-shaped recovery,” Kingston said. “That would be absolutely disastrous.”
The big hurdle: testing
Every serious examination of the next steps identifies mass testing as a necessary requirement. And North America isn’t there yet.
One of the more conservative U.S. estimates, from the right-leaning American Enterprise Institute (AEI), says the U.S. would need at a minimum 750,000, and at a maximum 3.8 million, tests per week.
A proposal at Harvard University is far more aggressive: at a minimum, it calls for one to 10 million tests in the U.S. per day if the country tracks people’s movements closely; and possibly hundreds of millions of tests per day without close tracing.
That capacity could exist by early summer, says the paper.
Canada is still testing fewer than 20,000 per day, which, accounting for population size, would put it near the low end of the AEI range, and far lower than what other papers suggest. This week, Health Canada approved a portable DNA analyzer to add capacity.
Early reopening will include unusual scenes, as people take special protective measures. Restaurants and hair salons may look different. With the lockdown lifted in Wuhan, China, barber Yang Guangyu wears a handmade mask while working on a customer. (Aly Song/Reuters)
The U.S. is testing just over 150,000 a day, according to one often-cited resource.
All testing helps — even poor-quality tests with a high failure rate will reduce the spread, says Paul Romer, the Nobel Prize-winning economist.
As for contact tracing, the left-leaning Center for American Progress proposes using a phone app that people would have to download if they want to get a test or board a plane. It suggests the app’s data should be handled by a non-profit.
Co-ordination, or chaos
Another thing that worries business is a case-by-case scenario where different jurisdictions have different rules.
This is true within countries and between them.
Within Canada, the Business Council letter acknowledged that different provinces might move at different paces.
But it pushed for national protocols that every province can apply.
Here’s what the protocols look like in the U.S.: The White House says states should consider Phase 1 of reopening only after documented cases trend downward for 14 days; and hospitals can treat all patients without crisis measures; and with robust testing in place, including antibody testing, for health-care workers.
For the record, those are essentially the same things Prime Minister Justin Trudeau cited when asked this week what it will take to reopen the economy: He mentioned a downward trend in cases, “massive” testing and contact tracing.
But Trudeau added: “We’re still many weeks away from talking about actually doing anything to reopen our economy.”
Then there are international norms.
Volpe said the private sector is working to introduce shared standards at different facilities. There’s some concern in his sector that governments aren’t co-ordinating as closely.
“Companies are all talking to each other,” Volpe said. “And one of the questions companies are asking is, ‘Are the governments talking to each other?'”
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.
