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It’s businesses that drive economic growth – for our future’s sake, we must spur them

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Canada’s near-term economic struggles will begin to resolve by the second half of next year when growth returns, a new forecast from Deloitte Canada says. Condo and office towers are seen in downtown Vancouver on April 25.DARRYL DYCK/The Canadian Press

The Honourable Anne McLellan and the Honourable Lisa Raitt are co-chairs of the Coalition for a Better Future, a group advocating for economic and social policies.

As Finance Minister Chrystia Freeland prepares to deliver the fall economic statement, our advocacy organization, the Coalition for a Better Future, urges the government to develop a robust plan to boost productivity and prosperity for all Canadians.

It has been seven months since we released the coalition’s annual scorecard of key metrics for Canada’s economy and expressed deep concern about the persistent weakness threatening to undermine our future prosperity.

Since then, our worries have only become heightened.

On a Per-capita basis, our economy has not only stalled but is contracting. Real GDP per capita has fallen over the past year faster than at any time in at least six decades outside of a recession, and we are producing less per person today than we were in 2018. Labour productivity, the amount of output generated per hour worked, looks even worse.

The outlook, meanwhile, is hazy. We will no longer be able to rely on low-interest loans to drive growth, like we have for much of the past two decades. In fact, the excesses of the past that have led to high household debt levels (among the highest anywhere) and out-of-reach housing prices will now act as headwinds. Governments, too, will face higher debt burdens that will limit their ability to continue stoking growth.

Look long enough at the numbers and it becomes pretty clear that in a world where consumers and governments will be pulling back, business will need to step in. We will need to develop an investment-first mindset.

Canada needs to have a long-term plan for economic growth that is inclusive and sustainable. We avoid advocating for specific proposals or taking sides in debates since we understand there are competing potential paths toward achieving our objective. But there are certain guardrails we think make a lot of sense.

The first principle of good economic management is to do no harm, so let’s not be too cavalier about how we think about and deal with our resource sector. Without energy exports, our dollar would be weaker and inflation and interest rates would be higher.

At the same time, the imperative of climate change means it can’t be business as usual. We will need to find a way to reconcile a healthy resource sector with our environmental goals, and the only way we’ll be able to do that is by accelerating the pace of private-sector investment in green technologies.

Businesses will need to step up and government will need to use its balance sheet to reduce risk, co-finance projects and provide other forms of cost certainty to help make the calculus work. The federal government has taken some key steps toward that direction, but we’re still waiting on it to execute its plan.

A second guardrail for policy is to foster a stable environment for this investment to take place. If we want corporations to ramp up capital spending in the coming years – in the order of hundreds of billions of dollars – we need to make businesses confident that they can get a return on their investment.

This will require unity of purpose across parties on, at the very least, core objectives such as the need to drive the energy transition, even if we don’t agree on specific policies. It means making sure Indigenous communities are part of the equation both for the private sector and governments.

It also means seeing corporate Canada as a partner. We hear from businesses that they are concerned about policy being drawn up for short-term files. Quick fixes don’t work when trying to solve our longer-term economic challenges. We should also stop demonizing profits, which is becoming uncomfortably mainstream. We will need healthy, profitable companies to drive the expansion of investment needed to drive up living standards.

A third important guardrail should be to get macroeconomic policy right. The best type of environments for business investment are the ones where policy achieves low and stable inflation.

Getting inflation down will require two things. One, fiscal policy needs to work in concert with monetary policy. They can’t work at cross purposes. Two, we need to maintain an independent central bank.

There are no easy answers. The problems we face are multi-faceted and long-standing. But Canada still has a lot of good going for it. We are a rich, prosperous country that does a lot right.

We believe we can overcome our problems. We refuse to accept that slow growth is inevitable.

 

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Business

A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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