As hope for the end of the COVID-19 pandemic grows with encouraging news about vaccines, the Liberal government will increasingly turn its attention to recovery, and its promise to make climate change a central focus of the economy’s rebuilding.
Last month, Environment Minister Jonathan Wilkinson tabled legislation that will enshrine the government’s goal of making Canada a net-zero emitter of greenhouse gases (GHGs) by 2050. However, while setting an ambitious target is one thing, meeting it is quite another.
Prime Minister Justin Trudeau’s government is now at a critical juncture, even as he’s hemmed in by Conservative premiers who resist his climate-change agenda.
The Liberals can either continue the slow march with targeted and modest actions, or implement a far-reaching climate plan that will transform the Canadian economy and position it to prosper in a zero-carbon world.
To reach that more ambitious goal, the government will have to kickstart the effort with a stimulus plan that plows tens of billions of dollars into clean-energy programs. But the Trudeau government will also have to go far beyond the frequently heard calls for public spending on high-profile energy projects.
It will need the entire government to adopt a climate lens, as opposed to its current practice of creating boutique programs in departments such as Agriculture; Natural Resources; or Innovation, Science and Economic Development, while the rest of the bureaucracy carries on with business as usual.
The prime minister is unlikely to get much help from key provinces, as he did in 2016, when federal, provincial and territorial governments hammered out the Pan-Canadian Framework on Clean Growth and Climate Change. However, Ottawa can forge partnerships with municipalities — and with the private sector, which is far more committed to action than it was four years ago.
The enormous impact of capital markets could dwarf the public-sector effort to effect a zero-carbon transformation. To harness it, the government must step up and lead the effort to enshrine the principles of sustainable finance that properly value the risks and opportunities arising from the growing climate crisis and the global response to it.
In responding to the pandemic this year, the federal government delayed much of its climate-change agenda. It focused instead on providing financial support to individuals and businesses, including the oil industry, which was struggling before the pandemic and has been clobbered by the resulting global drop in demand for crude.
In a November report, the Winnipeg-based International Institute for Sustainable Development said Canada, along with other Group of 20 industrialized countries, “doubled down” on its fossil-fuel subsidies this year, despite long-standing promises to end them. It rated Canada’s record of fossil-fuel subsidies between 2016 and 2019 “very poor.”
EnergyPolicyTracker.org, which is produced by two European non-government organizations, calculated that, as of Nov. 18, Canada had provided some $18.6 billion in conditional and unconditional support to the fossil-fuel sector, and only $14.6 billion to support clean energy. It characterized as “conditional support” the $2.4 billion that Ottawa spent on cleaning up abandoned oil wells and helping industry reduce methane emissions.
Meanwhile, the Liberal government’s lobbying of president-elect Joe Biden to approve the Keystone XL pipeline sends a clear message that, despite its public promise of net-zero emissions by 2050, Ottawa remains committed to building fossil-fuel infrastructure whose normal lifespan is around 30 years.
So what would an ambitious, climate-focused recovery plan look like?
For starters, it would be securely anchored in the government’s commitment to exceed its existing target under the Paris Agreement to reduce GHGs by 30 per cent below 2005 levels by 2030, and to reach net-zero emissions by 2050. It must also be rooted in a “just transition,” with education, training, and other support to ensure individual Canadians — oil-industry workers, Indigenous people, and others who are already disadvantaged in the current economy — don’t fall further behind.
It would allocate billions of dollars annually over several years on a range of clean-energy programs. The Task Force for a Resilient Recovery — a group largely drawn from think tanks, with some business members — says $55.4 billion should be spent over five years on clean-energy infrastructure, building retrofits, electric-vehicle infrastructure, nature-based programs, and the production and adoption of clean technology across the economy.
A bold plan would involve the federal government spending its vast procurement budget on incentives for companies to adopt clean-tech solutions to lower their own GHG emissions, and, just as important, to commercialize and drive down the cost of innovative technologies.
As mentioned, it would embrace principles of sustainable finance, and make it clear to corporate directors, and managers of public-sector pension plans, that they have a fiduciary duty — that is, a legal obligation — to ensure their organizations are part of the solution, rather than part of the problem in the climate emergency.
The response to the COVID pandemic around the world demonstrates the power of collective action when governments and the private sector collaborate. Witness the unprecedented speed of vaccine development. It also shows the tragic results that occur when leaders ignore the science and refuse to take tough action in the face of a crisis.
The Liberal government’s actions over the next several months will tell whether it has the guts to lead, or will content itself with lofty promises unmatched by bold action.
The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.
This article originally appeared in the iPolitics Holiday Magazine published earlier this month.
South Korea Sees One of Strongest Recoveries Among Major Economies – BNN
(Bloomberg) — President Moon Jae-in expects South Korea’s economy to rebound to pre-pandemic levels in the first half of the year, saying it will have one of the strongest recoveries among major economies.
“South Korea managed to minimize the economic damage of Covid last year,” Moon told the World Economic Forum’s Davos Agenda on Wednesday. “The combined growth rate last year and this year is expected to be the highest among the OECD nations,” Moon added, referring to the Organisation for Economic Co-operation and Development.
Moon said South Korea will begin its Covid-19 vaccination program next month. Although it’s later than many advanced economies, South Korea has posted relatively low infection and death rates after it slowed the virus’s initial spread without a lockdown, relying instead on rapid testing and contact-tracing to mitigate flareups.
South Korea ended the pandemic year of 2020 with a 1% contraction in gross domestic product, likely to be the smallest among OECD members. Government spending that included four extra budgets helped limit the damage from a slump in consumer spending, with exports powering the recovery from the second half of the year.
Korea Economy Shrinks Just 1% in 2020 on Exports, Virus Control
The Bank of Korea expects the economy to expand 3% this year. The government’s plan to increase housing supply is helping the construction industry, while policies to provide more pandemic relief are being mulled.
The small annual contraction leaves South Korea in better shape than most developed economies. Finance Minister Hong Nam-ki said in a Facebook post Tuesday that the country’s performance stood out when considering that the world’s 10 biggest economies probably shrank between 3-10%.
©2021 Bloomberg L.P.
Indian economy to get shot in the arm from federal budget: Reuters poll – The Guardian
By Tushar Goenka and Shaloo Shrivastava
BENGALURU (Reuters) – India’s path to economic recovery will be stronger than previously thought as fiscal expansion and vaccine hopes help the country heal from COVID-19, a Reuters poll of economists showed.
The world’s second-most populous country has begun a huge vaccination drive and a steep fall in new coronavirus cases over the past few months is supporting a recovery in Asia’s third-largest economy.
Alongside that, nearly 60% of respondents, 18 of 31, who responded to an additional question in the Jan. 13-25 poll said India’s federal budget, due on Feb. 1, would help a significant economic recovery in financial year 2021/22 and has already sent stocks to record highs.
“We expect global economic activity to return to normality in fiscal Q2 and India to grow in fiscal 2021/22, with government stimulus packages expecting to contribute,” said Hugo Erken, head of international economics at Rabobank.
“There is a strong sentiment the budget will aim to continue expenditure as growth is the only way India can come out of recent setbacks.”
The poll of over 50 economists showed the economy would grow 9.5% next fiscal year – the highest since polling began for the year in March 2020 – after contracting 8.0% in the current fiscal year.
It was expected to grow 6.0% in fiscal year 2022/23. The poll predicted the economy would grow 21.1%, 9.1%, 5.9% and 5.5% in each quarter of the 2021/22 fiscal year, largely upgraded from a poll taken two months ago.
But when asked how long it would take for the economy to recover to its pre-COVID-19 level, 26 of 32 respondents said it would take up to two years, including six analysts said longer than that. Twelve analysts said within a year.
“There is a lack of fiscal space to boost growth sufficiently and India is unlikely to reach its pre-COVID-19 levels any time soon despite policy support,” said Sher Mehta, director at Virtuoso Economics.
“Economic momentum will struggle to gain traction as there are fears of stagflation and the possible end of monetary policy easing.”
The Reserve Bank of India, which has slashed its main repo rate by 115 basis points since March 2020 to cushion the shock from the coronavirus crisis, was expected to keep its benchmark lending rate at 4.0% through at least 2023.
That was a shift in expectations from a survey taken two months back when a 25 basis point cut to 3.75% was predicted in the April-June period.
WILL BORROW MORE
India’s government will focus on fiscal expansion in next week’s budget and revise its borrowing target higher for the 2021/22 fiscal year, prompted by the expected economic slowdown and weak jobs growth, according to the latest poll.
Government borrowing has ballooned due to pandemic spending while revenues have severely dampened.
The median forecast showed the government would revise its fiscal deficit target for next fiscal year up to 5.5% from 3.3% of gross domestic product.
Around 55% of economists, 18 of 33, who answered an additional question about the focus of the budget said it would be more on fiscal expansion than prudence.
“Tight fiscal policy can do lasting damage by hurting potential growth that would have been negatively affected on account of the pandemic,” said Abhishek Upadhyay, senior economist at ICICI Securities PD.
(For other stories from the Reuters global long-term economic outlook polls package:)
(Reporting by Tushar Goenka and Shaloo Shrivastava; Polling by Vivek Mishra and Md. Manzer Hussain; Editing by Jonathan Cable and Steve Orlofsky)
Canadian dollar rallies as records fall on Wall Street
TORONTO (Reuters) – The Canadian dollar strengthened against its U.S. counterpart on Tuesday, recovering from an earlier eight-day low, as corporate earnings bolstered Wall Street and the greenback broadly declined.
The loonie was trading 0.3% higher at 1.2695 to the greenback, or 78.77 U.S. cents, having touched its weakest level since Jan. 18 at 1.2782. The U.S. dollar lost ground against a basket of major currencies as demand for safe havens faded.
“It seems to be a fairly broad-based USD move,” said Erik Nelson, a currency strategist at Wells Fargo in New York.
“Buoyant equity and commodity prices, particularly oil prices, may be helping support some relative CAD outperformance here as markets await tomorrow’s FOMC announcement,” Nelson said.
The S&P 500 notched a record high after a batch of upbeat earnings updates, including Johnson & Johnson’s strong profit forecast and 3M’s quarterly profit beat. The Federal Reserve kicked off its two-day policy meeting.
Canada will seek exemptions to a U.S. effort to ensure federal agencies buy American-produced goods, Prime Minister Justin Trudeau said, as business groups expressed concern about the potential impact.
Canada sends about 75% of its exports to the United States, including oil. U.S. crude oil futures settled 0.3% lower at $52.61 a barrel as global coronavirus cases continued to rise, but were not far off 11-month highs.
Canada will soon make foreign travel harder in a bid to clamp down on the coronavirus, Trudeau said without giving details, prompting major provinces to demand action.
Canadian government bond yields were higher across much of a steeper curve. The 10-year rose 1.1 basis points to 0.824%.
Canada‘s GDP data for November is due on Friday which could offer some clues on the interest rate outlook.
(Reporting by Fergal Smith; Editing by Alistair Bell and Richard Chang)
The latest numbers on COVID-19 in Canada – Brandon Sun
South Korea Sees One of Strongest Recoveries Among Major Economies – BNN
Calgary's real estate rebound expected to continue in 2021: CREB – CTV Toronto
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Galaxy M31 July 2020 security update brings Glance, a content-driven lockscreen wallpaper service
Tech17 hours ago
Apex Legends could release on February 2 for the Switch
Tech2 hours ago
The 2022 M5 CS Sedan is BMW’s quickest production car ever – Driving
Sports2 hours ago
Schilling requests to be removed from HOF ballot going forward
News2 hours ago
Cheap Auto Insurance in Canada
Sports17 hours ago
Smith weighs lineup changes after 7-1 loss – TSN
Politics15 hours ago
Politics Briefing: Trudeau says new travel restrictions are coming – The Globe and Mail
Economy19 hours ago
New coronavirus variants pose major risk to the global economy, IMF warns – CTV News
News2 hours ago
Canada seeking exemptions from Biden’s ‘Buy American’ provisions