Treasury Board and the union representing 122,000 striking workers resolved their differences relatively quickly, but perhaps not quickly enough to keep their work stoppage from tipping economic growth into negative territory, Bay Street economists said.
Economy
PSAC strike may have sent economic growth into negative territory, economists say
Eight-day work action will trim 0.1 to 0.3 percentage points off gross domestic product in April
Mona Fortier, the head of Treasury Board, and the Public Service Alliance of Canada (PSAC) agreed to a contract in the wee hours of May 1 that includes a wage increase of 12.6 per cent over a four-year period, retroactive to June 2021. Treasury Board employees work in areas from port inspections to passport offices. Some 35,000 Canada Revenue Agency workers remained on strike.
Economists figure the eight-day work action, which began on April 19, will trim 0.1 to 0.3 percentage points off of gross domestic product in April. The economy was already slowing, so that could be enough to cause overall output to drop this spring, Douglas Porter, chief economist at BMO Capital Markets, said in an email.
To be sure, whatever economic losses come from the strike could be recouped in May — when PSAC members return to work with bigger salaries. “That hit should be more or less fully reversed this month,” Stephen Brown, an economist at Capital Economics, said in an an email, adding that “the hit from the strikes in April still raises the chance of second-quarter GDP growth being negative.”
A little less growth might help the Bank of Canada get inflation under control. Year-over-year increases in the consumer price index peaked at 8.1 per cent in June 2022, the most in four decades. Inflation has been dropping steadily since, but policymakers have been clear that they’re worried that wage increases based on last year’s cost-of-living increases could keep inflation from dropping back to the two per cent target.
Average hourly wages rose 5.2 per cent in March, according to the most recent data released by Statistics Canada. That was higher than headline inflation, which increased 4.3 per cent in March.
But, it was only the second time in this inflationary run that wages outpaced the consumer price index. Nathan Janzen, an economist at Royal Bank of Canada, said wages have been playing catch up, one of the reasons the PSAC agreement doesn’t have him too worried.
We should expect to see more larger-than-usual wage increases coming
Nathan Janzen, economist, Royal Bank of Canada
Brown at Capital Economics said he didn’t think the deal would fuel inflation, as it covers a small number of workers as a share of total employment, roughly 0.5 per cent of the Canadian workforce. “From the (central) bank’s perspective, the key point is that the wage deals for this year, at 3.5 per cent, and for next year, at 2.25 per cent, are consistent with the bank’s two per cent inflation target,” he said.
“Also, by spreading the wage increases on four years rather than three years, you spread the inflation pressures,” St-Arnaud said. “This is much better than if all the adjustment was front-loaded.”
Still, BMO’s Porter said the concern persists that this deal could set the floor for future contract negotiations, thereby complicating the Bank of Canada’s efforts on inflation. “It seems that at the margin, this deal could make the Bank of Canada’s job of getting inflation back down to two per cent and keeping it there will be a bit tougher,” he said.
The extent to which the strike slowed growth could determine the central bank’s response. Statistics Canada issued an advance estimate for March GDP on April 28 that predicted a decline of 0.1 per cent. Statistics Canada said the economy eked out growth of 0.1 per cent in February.
Marc Ercolao, an economist at Toronto-Dominion Bank, noted that the April GST rebate could offset the negative impact from the strike. St-Arnaud at Alberta Central is also skeptical the strike will trigger a decline. While there could be a “drag” from the strike, “at this point, some quick estimates suggest flat growth in Q2,” he said in an email. “It would require much more weakness in the rest of the economy to see negative growth in Q2.”
Continue Reading
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.
FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.
Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?
Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.
Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.
Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.
Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?
Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.
Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.
Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.
Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?
Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.
Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.
Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.
This report by The Canadian Press was first published Sept. 18, 2024.
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
News2 hours ago
Flames re-sign defenceman Ilya Solovyov, centre Cole Schwindt
News2 hours ago
Oman holds on to edge Nepal with one ball to spare in cricket thriller
News2 hours ago
Vancouver Canucks will miss Demko, Joshua, others to start training camp
Media1 year ago
12 Bizarre Things People Did Just To Make Social Media Content
Sports5 years ago
AP source: Bears acquiring quarterback Nick Foles from Jaguars – Sportsnet.ca
Investment5 years ago
dynaCERT Inc. Invites You to Join Us at the Vancouver Resource Investment Conference | INN – Investing News Network
-
News2 hours agoSleep Country shareholders approve sale to Fairfax Financial
-
News2 hours agoNurse-patient ratios at B.C. hospitals set to expand in fall, says health minister
-
News2 hours agoAlberta Premier Smith aims to help fund private school construction
-
News2 hours agoHealth Minister Mark Holland appeals to Senate not to amend pharmacare bill
-
Economy2 hours agoN.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation
-
Economy2 hours agoConstruction wraps on indoor supervised site for people who inhale drugs in Vancouver
-
News2 hours agoSecond-half goals lift defending MLS champion Columbus past Toronto FC
-
News2 hours agoFirst-degree murder charge in death of five-year-old Quebec boy: Crown
