Economy
Premier Ford says Ontario preparing for 'gradual' economic reopening as modelling shows pandemic peak likely reached – The Globe and Mail
Premier Doug Ford says Ontario is preparing for the “gradual” reopening of the economy as new modelling shows the province has likely reached its peak in the COVID-19 pandemic, even as the situation in long-term care homes continues to worsen.
Mr. Ford said Monday that his jobs and recovery committee, made up of key cabinet ministers, has begun to develop a framework for a “gradual, measured and safe” reopening of the province, while cautioning that physical distancing and self-isolation measures must remain in place for weeks if not longer.
“Absolutely in no way is this fight over,” the Premier said at Queen’s Park. “We aren’t there yet. … But we want to make sure we give people hope.”
New projections, released by provincial health officials on Monday, say Ontario is now expected to have fewer than 20,000 cases of the novel coronavirus, substantially lower than the 80,000 projected by previous models.
Matthew Anderson, president and CEO of Ontario Health, said the new projections show that physical-distancing measures implemented weeks ago are working at reducing the spread of COVID-19 in communities.
“We’ve been very successful – you’ve been very successful – in helping us to control the spread and maintain capacity within our acute-care system.”
The numbers in long-term care homes, however, continue to grow.
According to the latest model, at least 367 of the province’s 591 deaths have been in long-term care – more than 60 per cent. The numbers do not include group homes or retirement homes.
There are now 127 outbreaks at the province’s 626 long-term care homes, according to official numbers, but the number is much higher if suspected outbreaks and those not yet reported to the province are included.
New research has found that nursing-home residents over the age of 69 were 13 times more likely to die of COVID-19 than people in the same age group living elsewhere.
David Fisman, an epidemiologist at the University of Toronto’s Dalla Lana School of Public Health, and four of his colleagues analyzed confirmed and suspected coronavirus outbreaks at 272 of the province’s 626 long-term care homes as of April 7.
They then compared COVID-19 death rates in long-term care facilities with rates outside of long-term care.
Along with the thirteenfold difference in COVID-19 death rates among people 70 and older, the researchers discovered that people 80 and older were eight times more likely to die of COVID-19 if they lived in long-term care.
The research also found the COVID-19 deaths in nursing-home residents most often followed confirmed infections in staff. The more workers tested positive, the likelier the home was to record a death soon after.
Ontario recently passed an order limiting long-term-care staff to working in one home, but it does not apply to temporary or contract workers. The province also says it is sending in hospital “SWAT” teams of medical professionals to help homes, including 70 volunteers from Toronto’s University Health Network, and says guidelines for personal protective equipment are also being followed. On the weekend, 21 homes received “much needed supports,” the Ministry of Long-Term Care said.
On Monday, NDP Leader Andrea Horwath called on the government to immediately take over direct management of long-term care facilities where residents are not being protected, to restrict all workers in congregate-care settings – including temp agency workers – to one facility only, and to raise wages to $22 an hour for care-home staff.
But Merrilee Fullerton, Minister of Long-Term Care, has rejected calls to take over such facilities, including two of the hardest-hit homes in the province. At Eatonville Care Centre in Toronto and Anson Place Care Centre in Hagersville, at least 58 residents have died and 185 have been made ill by COVID-19.
“Since Day 1, we’ve been on this. And it is not a lack of preparation from my perspective,” Dr. Fullerton said Monday.
Health officials across Canada introduced physical-distancing measures, including closing schools and non-essential businesses, last month to slow the spread of COVID-19 infections. The goal was to prevent the health care system from becoming overwhelmed with a surge of patients, and while Ontario continues to see hundreds of new cases each day, officials and experts say that, over all, the outbreak appears to be largely under control in communities.
But officials and experts say it is still too early to relax physical distancing, as doing so would lead to a spike in new cases.
“Everyone needs to continue to stay home as much as possible, maintain physical distancing, to ensure that the province continues to stop the spread of COVID-19 and flatten the curve,” said Barbara Yaffe, Ontario’s associate chief medical officer of health.
In order for provinces to begin opening back up, Dr. Fisman said they will need to figure out ways to maintain suppression of new COVID-19 cases. This will hinge on widespread testing and better surveillance, such as entry screening at hospitals and monitoring infection risk in children if schools open again, he said.
With reports from Carly Weeks and Kelly Grant.
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Economy
Biden's Hot Economy Stokes Currency Fears for the Rest of World – Bloomberg
As Joe Biden this week hailed America’s booming economy as the strongest in the world during a reelection campaign tour of battleground-state Pennsylvania, global finance chiefs convening in Washington had a different message: cool it.
The push-back from central bank governors and finance ministers gathering for the International Monetary Fund-World Bank spring meetings highlight how the sting from a surging US economy — manifested through high interest rates and a strong dollar — is ricocheting around the world by forcing other currencies lower and complicating plans to bring down borrowing costs.
Economy
Opinion: Higher capital gains taxes won't work as claimed, but will harm the economy – The Globe and Mail
Alex Whalen and Jake Fuss are analysts at the Fraser Institute.
Amid a federal budget riddled with red ink and tax hikes, the Trudeau government has increased capital gains taxes. The move will be disastrous for Canada’s growth prospects and its already-lagging investment climate, and to make matters worse, research suggests it won’t work as planned.
Currently, individuals and businesses who sell a capital asset in Canada incur capital gains taxes at a 50-per-cent inclusion rate, which means that 50 per cent of the gain in the asset’s value is subject to taxation at the individual or business’s marginal tax rate. The Trudeau government is raising this inclusion rate to 66.6 per cent for all businesses, trusts and individuals with capital gains over $250,000.
The problems with hiking capital gains taxes are numerous.
First, capital gains are taxed on a “realization” basis, which means the investor does not incur capital gains taxes until the asset is sold. According to empirical evidence, this creates a “lock-in” effect where investors have an incentive to keep their capital invested in a particular asset when they might otherwise sell.
For example, investors may delay selling capital assets because they anticipate a change in government and a reversal back to the previous inclusion rate. This means the Trudeau government is likely overestimating the potential revenue gains from its capital gains tax hike, given that individual investors will adjust the timing of their asset sales in response to the tax hike.
Second, the lock-in effect creates a drag on economic growth as it incentivizes investors to hold off selling their assets when they otherwise might, preventing capital from being deployed to its most productive use and therefore reducing growth.
Budget’s capital gains tax changes divide the small business community
And Canada’s growth prospects and investment climate have both been in decline. Canada currently faces the lowest growth prospects among all OECD countries in terms of GDP per person. Further, between 2014 and 2021, business investment (adjusted for inflation) in Canada declined by $43.7-billion. Hiking taxes on capital will make both pressing issues worse.
Contrary to the government’s framing – that this move only affects the wealthy – lagging business investment and slow growth affect all Canadians through lower incomes and living standards. Capital taxes are among the most economically damaging forms of taxation precisely because they reduce the incentive to innovate and invest. And while taxes on capital gains do raise revenue, the economic costs exceed the amount of tax collected.
Previous governments in Canada understood these facts. In the 2000 federal budget, then-finance minister Paul Martin said a “key factor contributing to the difficulty of raising capital by new startups is the fact that individuals who sell existing investments and reinvest in others must pay tax on any realized capital gains,” an explicit acknowledgment of the lock-in effect and costs of capital gains taxes. Further, that Liberal government reduced the capital gains inclusion rate, acknowledging the importance of a strong investment climate.
At a time when Canada badly needs to improve the incentives to invest, the Trudeau government’s 2024 budget has introduced a damaging tax hike. In delivering the budget, Finance Minister Chrystia Freeland said “Canada, a growing country, needs to make investments in our country and in Canadians right now.” Individuals and businesses across the country likely agree on the importance of investment. Hiking capital gains taxes will achieve the exact opposite effect.
Economy
Nigeria's Economy, Once Africa's Biggest, Slips to Fourth Place – Bloomberg
Nigeria’s economy, which ranked as Africa’s largest in 2022, is set to slip to fourth place this year and Egypt, which held the top position in 2023, is projected to fall to second behind South Africa after a series of currency devaluations, International Monetary Fund forecasts show.
The IMF’s World Economic Outlook estimates Nigeria’s gross domestic product at $253 billion based on current prices this year, lagging energy-rich Algeria at $267 billion, Egypt at $348 billion and South Africa at $373 billion.
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