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Economy

Quebec's seemingly aggressive plan to reopen the economy next week seen as a risk worth taking – Financial Post

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When thousands of Bombardier employees return to work at private jet assembly plants over the next few weeks, they will be standing six feet apart, washing their hands frequently and getting their temperatures checked daily at facilities with increased cleaning, modified shifts and extra personal protective equipment.

The Quebec transportation giant furloughed 12,400 employees due to the coronavirus pandemic that left 1.2 million Quebecers and millions of Canadians out of work. But Bombardier will send back 11,000 employees to work, 9,000 in Quebec, as its home province prepares to reopen its economy.

Such health and safety measures will become common in Quebec as nearly 500,000 people return to jobs in retail, manufacturing and construction sectors over the next two weeks. Shops with exterior entrances will open outside Montreal on May 4 and in the city a week later, with construction and manufacturing resuming May 11.

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Quebec isn’t the only province preparing to jumpstart business — Saskatchewan, Manitoba and New Brunswick also plan to reopen soon — but the province’s plan is seen as aggressive given it has the highest number of COVID-19 cases and deaths in Canada.

Yet economists, business associations and unions alike view the gradual reopening as a risk worth taking given the trajectory of the disease, which is predominantly killing seniors, particularly those living in long-term care facilities.

Quebec’s reopening plan may seem aggressive, but it was also the first province to close in a more severe way than others, National Bank of Canada chief economist Stéfane Marion said in an interview. It completely shut down its construction industry on March 24, for instance, a sector Ontario didn’t limit until April 4.


Quebec shut down its construction industry on March 24.

Brent Lewin/Bloomberg files

“Every month you extend the shutdown, you lose a full year of potential growth,” Marion said. “The longer you shut down, the more permanent the destruction of capacity.”

The coronavirus has proven most deadly to seniors that aren’t part of the labour force, Marion said, noting that’s the opposite of the 1918 Spanish Flu that killed young people and children. Yet that pandemic had a lesser hit on the agricultural-heavy economy, unlike the current economy where 79 per cent of people work in the service sector.

Every month you extend the shutdown, you lose a full year of potential growth

Stéfane Marion, National Bank of Canada chief economist

“Social distancing is easier to do when 33 per cent of the population works in agriculture,” Marion said.

Industries heaviest hit by the current pandemic — transportation, arts and entertainment, retail, food and accommodation — make up 22 per cent of the labour force but only 7 per cent of the gross domestic product, Marion said. The longer the shutdown, the less likely these people will have jobs to return to, he said, adding it will have a big effect on both inequality and the labour market.

Unions are also onboard with the reopening plan, based on successful resumption of activity in the mining and residential construction industry. Fédération des travailleurs du Quebec (FTQ) president Daniel Boyer said his union, which represents 600,000 workers, has worked closely with the government and employers to create a plan to safely reopen. So far, a majority of the employers have been following safety protocols, he said.

“Some people said it’s too soon, but I think the majority agree with the plan,” Boyer said. “You know we will have to live with the virus for many months, probably a year, and we cannot stay home longer than that.”

We will have to live with the virus for many months, probably a year, and we cannot stay home longer than that

Daniel Boyer, Fédération des travailleurs du Quebec (FTQ) president

Desjardins economist Hélène Bégin said Quebec seems to have found a balance between health and safety concerns and resuming business, in part by starting to reopen in smaller communities less affected than the urban hotspot of Montreal.

“We all know it’s a big risk, but we have to take it one step at a time,” Bégin said. “The priority is health, but at the same time we have to restart gradually to contain the damage that is hurting the economy.”

Even with the gradual reopening, Desjardins doesn’t expect the economy to return to pre-crisis levels for gross domestic product and employment until 2022, Bégin said.

Retailers are anxious to get back to work although they expect traffic volumes to be 30 to 50 per cent less than usual based on other countries emerging from the pandemic, Quebec Retail Council director Stephane Drouin said. Although the start of a new season is good timing to attract consumers, retailers expect them to be tight on cash flow despite government efforts to help pay rent.


A pedestrian walks past a boarded store on Montreal’s Ste-Catherine street, on Tuesday, April 28, 2020.

Paul Chiasson/The Canadian Press

Another challenge will be convincing consumers that it’s safe to shop, Drouin said. Clothing stores will need to introduce protocols for trying on clothes, he said, which could include disinfecting items in steam and not returning product to the shelves for 24 to 48 hours.

Customer safety will be critical for retailers trying to avoid a second lockdown.

“We want to reopen for good,” Drouin said, adding many are accelerating plans to digitize shopping. “The responsibility of retailers right now is to make customers feel secure and welcome in their stores.”

The construction industry is another that will take safety protocols seriously to avoid another shutdown. The $52-billion industry employs about 265,000 people in the province, 190,000 directly on job sites, according to the Association de la construction du Quebec senior economist Jean-Philippe Cliche.

“When we look at the construction industry, Quebec is the only one that completely closed its activity to zero except for New York State,” Cliche said. “We are losing more or less a billion dollars of production a week when we have it closed.”

Quebec is at risk of an “infrastructure deficit” if it misses a construction season, particularly in Montreal where numerous road and tunnelling projects are waiting crews. That’s enough incentive to follow the rules to avoid a second closure, especially since health officials expect the disease to stick around for up to two years as scientists create a vaccine, Cliche said.

“We need to learn to slowly but surely live with this disease,” he said. “If it goes out of control again, we might have to close again. Nobody wants that so we’ll try to apply the rules as much as we can and make sure it doesn’t happen.”

Financial Post

• Email: ejackson@nationalpost.com | Twitter:

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Economy

The Crypto Bull Run Is Igniting The Web3 Creator Economy – Forbes

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Protection and monetization of digital IP has long been one of the most promising areas for Web3 disruption, offering to better protect IP while returning more value to creators. Development to date has focused on leveraging the capabilities of NFTs to introduce digital scarcity while using smart contracts to better enforce the distribution of royalties. Nevertheless, it’s fair to say that no solution has yet proven compelling enough to attract significant adoption from the established creator economy, which was reported by Goldman Sachs
GS
in 2023 to be worth around $250 billion.

The bear market of the last two years has undoubtedly played a part, with Crunchbase stating that funding for Web3 projects “cratered” by 74% year over year in 2023, making it more difficult for projects to advance their roadmaps.

However, over the same period, a new threat to the creator economy has emerged: The growing prevalence of AI-based tools. With a new bull market now underway, has the moment arrived for Web3 creator tools?

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A Sea Change For Creators

AI is a double-edged sword that has the potential to both make and break the burgeoning creator economy. Generative AI paves the way for a new wave of creators and modes of creation; however, the human ramifications could be significant. Traditional creators, including the New York Times
NYT
, are already mounting lawsuits over the unfair use of their work to train algorithms. Plus, there’s the impending risk that human creativity could get drowned out by a wave of AI-generated content.

There’s also the question of monetization. Each successive wave of digitalization tends to strip value from creators, leading to concerns that the rise of AI will further erode the ability of creatives to monetize their work.

While many are still debating the scale of the AI threat, creators are seeking any solution to better protect their work and future earning opportunities, while regulators and policy hawks are keen to see more transparency in AI-generated content. The fact that this is an election year in dozens of countries where AI-based content is already playing a headline role also adds a political and democratic imperative to the equation.

Reigniting The Web3 Creator Fire

The new bull market in crypto is now giving fresh impetus to projects and investors who understand the opportunity for Web3-based creator tools but have been waiting for the right time to move into the market. Korea’s largest VC firm, Hashed, recently put the creator economy and protection of intellectual property at the top of its 2024 call for startups, and the theme will be central to this year’s Korean Blockchain Week (KBW). The flagship KBW: Impact conference event is organized by FACTBLOCK and co-hosted by Hashed.

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I reached out to Simon Kim, CEO and Managing Partner at Hashed, who shared, “We foresee that integrating content into Web3-based creator applications will enhance user retention and drive sustainable growth, fundamentally transforming the overall user experience. The progression of AI technology will be a catalyst in accelerating this trend, further bridging the gap between innovative content creation and blockchain technology. Blockchain is a pivotal force in redefining the landscape of content creation, offering novel pathways for IP management and monetization.”

Even AI Creators Need A Hand

Along with names such as a16z and Paris Hilton’s VC fund, Hashed also participated in last year’s $54 million round for Story Protocol, one of the standout successes in an otherwise flat funding year. Story Protocol is a “programmable IP layer” that aims to simplify the enforcement of rights, allow creative remixing, and streamline the monetization process for both original and subsequent creations while minimizing the operational barriers that often hinder the creative industry.

Perhaps somewhat paradoxically, the project recently made headlines thanks to a partnership that will allow user-generated AI models created on Ritual to be recorded and accredited to their creators with each use.

However, competition to capture the Web3 opportunity for the creator economy is rapidly heating up across the space.

In December, Web3 gaming giant Animoca Brands confirmed the company’s commitment to supporting the creator economy and advancing Web3 over the coming year. Although primarily known for its game portfolio, Animoca also operates an ed-tech platform that enables co-publishing rights for educational content, allowing creators to distribute monetized content directly to students. The CEO highlighted the lack of control and monetization opportunities for creators in the Web2 space.

From Piracy To IP Protection

Many might remember Limewire, perhaps best known as the scourge of noughties musicians. In 2007, the Electronic Frontier Foundation estimated that it was on one in three computers to obtain pirated MP3 files. However, the project recently launched a Web3 creator studio on Polygon
MATIC
, initially focused on imagery but with plans to expand to music and audio files.

Users can access a range of AI tools to manipulate files or create new works. All creations are minted as an NFT
NFT
on the Polygon blockchain, while royalties are paid out automatically based on the use or sale of the content. Ultimately, Limewire could go from being a facilitator of pirated music to a monetization tool for musicians: Quite the redemption arc, particularly so in this new era when the Web2 streaming model has evolved to hurt musicians’ revenues.

However, some are taking the royalty payments a layer deeper to mitigate future protocol risk. Projects including Enjin and Rarible have embedded royalty payment functionality into the blockchain programming itself, meaning that its application-agnostic and royalty payments should continue uninterrupted for as long as the blockchain is in operation.

As these developments are still in their infancy, it will be intriguing to see how they are received by a creator economy that’s grappling with the full impact of AI tools. However, the combined factors of a new bull market, AI’s opportunities and challenges, and the chance to better monetize and protect IP amid declining revenues on Web2 platforms mean that the timing for Web3 creator tools to make a strategic market entry could not be better.

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Economy

Britain's economy went into recession last year, official figures confirm – The Globe and Mail

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People walk over London Bridge, in London, on Oct. 25, 2023.SUSANNAH IRELAND/Reuters

Britain’s economy entered a shallow recession last year, official figures confirmed on Thursday, leaving Prime Minister Rishi Sunak with a challenge to reassure voters that the economy is safe with him before an election expected later this year.

Gross domestic product shrank by 0.1 per cent in the third quarter and by 0.3 per cent in the fourth, unchanged from preliminary estimates, the Office for National Statistics (ONS) said on Thursday.

The figures will be disappointing for Mr. Sunak, who has been accused by the opposition Labour Party – far ahead in opinion polls – of overseeing “Rishi’s recession.”

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“The weak starting point for GDP this year means calendar-year growth in 2024 is likely to be limited to less than 1 per cent,” said Martin Beck, chief economic adviser at EY ITEM Club.

“However, an acceleration in momentum this year remains on the cards.”

Britain’s economy has shown signs of starting 2024 on a stronger footing, with monthly GDP growth of 0.2 per cent in January, and unofficial surveys suggesting growth continued in February and March.

Tax cuts announced by finance minister Jeremy Hunt and expectations of interest-rate cuts are likely to help the economy in 2024.

However, Britain remains one of the slowest countries to recover from the effects of the COVID-19 pandemic. At the end of last year, its economy was just 1 per cent bigger than in late 2019, with only Germany faring worse among Group of Seven nations.

The economy grew just 0.1 per cent in all of 2023, its weakest performance since 2009, excluding the peak-pandemic year of 2020.

GDP per person, which has not grown since early 2022, fell by 0.6 per cent in the fourth quarter and 0.7 per cent across 2023.

Sterling was little changed against the dollar and the euro after the data release.

The Bank of England (BOE) has said inflation is moving toward the point where it can start cutting rates. It expects the economy to grow by just 0.25 per cent this year, although official budget forecasters expect a 0.8-per-cent expansion.

BOE policy maker Jonathan Haskel said in an interview reported in Thursday’s Financial Times that rate cuts were “a long way off,” despite dropping his advocacy of a rise at last week’s meeting.

Thursday’s figures from the ONS also showed 0.7 per cent growth in households’ real disposable income, flat in the previous quarter.

Thomas Pugh, an economist at consulting firm RSM, said the increase could prompt consumers to increase their spending and support the economy.

“Consumer confidence has been improving gradually over the last year … as the impact of rising real wages filters through into people’s pockets, even though consumers remain cautious overall,” Mr. Pugh said.

Britain’s current account deficit totalled £21.18-billion ($36.21-billion) in the fourth quarter, slightly narrower than a forecast of £21.4-billion ($36.6-billion) shortfall in a Reuters poll of economists, and equivalent to 3.1 per cent of GDP, up from 2.7 per cent in the third quarter.

The underlying current account deficit, which strips out volatile trade in precious metals, expanded to 3.9 per cent of GDP.

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Economy

How will a shrinking population affect the global economy? – Al Jazeera English

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Falling fertility rates could bring about a transformational demographic shift over the next 25 years.

It has been described as a demographic catastrophe.

The Lancet medical journal warns that a majority of countries do not have a high enough fertility rate to sustain their population size by the end of the century.

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The rate of the decline is uneven, with some developing nations seeing a baby boom.

The shift could have far-reaching social and economic impacts.

Enormous population growth since the industrial revolution has put enormous pressure on the planet’s limited resources.

So, how does the drop in births affect the economy?

And regulators in the United States and the European Union crack down on tech monopolies.

The gender gap in tech narrows.

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