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Economy

Posthaste: What the coronavirus fallout will do to the economy where you live – Financial Post

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Good Morning!

Provincial economies face a widespread hit from the coronavirus outbreak and the oil price crash, says TD Economics. It is slashing its growth forecasts for the provinces in 2020 by 1.2 percentage points on average, with most regions approaching zero.

The impacts will vary across the country. B.C. and the Atlantic provinces are most vulnerable to a decline in tourism, while Ontario faces supply-chain disruptions to manufacturing and the blow to the financial markets. Quebec and PEI are in a better position because they started the year with strong momentum.

TD sees a contraction in real GDP in 2020 for four provinces: Newfoundland (-1.6%), Alberta (-1.1%), Saskatchewan (-0.4%) and Nova Scotia (-0.4%).

Alberta has been struggling to climb out of recession since 2015-16; now it faces its second oil shock in five years, one that will very likely send its economy back into a downturn, said TD. Hit by a global price war and plunging demand from the coronavirus shutdown, oil prices have plunged close to US$20 and Canadian crude fell to just above $7, a historic low. Canadian oil companies are already slashing spending.

TD, however, does not think the impact will be as bad as it was in 2016, mainly because the industry is much less “frothy” than five years ago when investment was at its peak. Alberta has not seen a major new project since 2014.

Newfoundland & Labrador, where the Hebron oilfield was key to driving the economy’s growth this year, is in a similar situation. But unlike other oil-producing provinces, Newfoundland & Labrador has little capacity to ramp up deficit spending because of its already high net debt to GDP ratio, said TD.

Ontario’s growth is expected to slow to 0.5% for 2020 as the spread of the coronavirus shuts down or curtails key industries over the next few months. TD expects activity to pick up by the end of the second quarter, but doesn’t see a full recovery until well into the second half. Highly indebted households make this province especially vulnerable heading into the coronavirus crisis because confidence and spending will further plummet as incomes are disrupted by temporary layoffs and stock portfolios lose value.

The good news is that TD sees a solid rebound in growth across most provinces in 2021, (though right now that seems a long way away) as trade and travel restrictions are lifted. The big uncertainty remaining though is how long the oil price crash will last.

Here’s what you need to know this morning:

  • Vancouver City council holds a meeting by electronic means to consider whether to declare a local state of emergency because of COVID-19.
  • Notable Earnings: Accenture Plc
  • Today’s Data: Canadian new housing price index, U.S. current account, leading indicators

To say the oilpatch had a bad day Wednesday is a gross understatement. Western Canadian Select crude dropped as much as 37% to its lowest price in history, hit by the double whammy of plummeting demand brought on by coronavirus shutdowns and Saudi Arabia and Russia flooding the oil market in a fierce price war. When the dust settled Wednesday, WCS was trading at $7.47. Canadian oil producers plunged in tandem, most of them falling by the double digits. Canadian Natural Resources Ltd. was down 17.5% to $10.69, Suncor was down 17% to $14.93 and Cenovus Energy Inc. fell 20% to $2.21. Moreover, analysts say the worst is yet to come. “The last two price collapses both never hit prices we’re seeing today,” said Kevin Birn, an oil sector analyst at IHS Markit, adding, “I don’t think we’ve seen the full brunt of what may come — overall, global demand is still probably going to fall.”

— Please send your news, comments and stories to pheaven@postmedia.com. — Pamela Heaven @pamheaven

With files from The Canadian Press, Thomson Reuters and Bloomberg

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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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Economy

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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