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Relaxing isolation rules won’t help the economy, say economists – The Verge

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As the COVID-19 pandemic stretches into its second month and shows no signs of slowing, President Donald Trump has pushed to relax the restrictions on travel and movement that are, right now, the best hope for controlling the disease. “We have to get our country back to work,” Trump said in a town hall at noon on Tuesday. “This cure is worse than the problem. Many people — in my opinion, more people — are going to die if we allow this to continue. Our people have to go back to work.” He named Easter Sunday, April 12th, as a potential end date for the restrictions since “you’ll have packed churches all over our country.”

But there’s a problem with trying to restart the economy by relaxing containment restrictions: economists say it won’t work.

The economy can’t recover until the pandemic is under control, says Maurice Obstfeld, a professor at the University of California, Berkeley and former chief economist at the International Monetary Fund. “Before we restart economic activity, we have to stabilize the level of infections,” Obstfeld tells The Verge. If we move too soon, he worries we would see a new surge in infections, “causing even more damage to the economy than if we confronted the health crisis decisively now.”

In recent days, conservative media has increasingly promoted the idea that the containment restrictions are doing more harm than good. In a Fox News interview on Monday, Texas Lt. Gov. Dan Patrick seemed to call for a broad repeal of restrictions, regardless of the human cost. “My message is, let’s get back to work,” Patrick told Tucker Carlson. “Let’s get back to living. Let’s be smart about it. And those of us who are 70-plus [years old], we’ll take care of ourselves. But don’t sacrifice the country.”

Former Fox host Glenn Beck put it in even starker terms. “I would rather have my children stay home and all of us who are over 50 go in,” Beck told his audience on Tuesday night. “Even if we all get sick, I would rather die than kill the country.”

As those pundits frame it, the recent economic collapse is caused by public health restrictions rather than the coronavirus itself, and loosening those restrictions could potentially lessen the damage. But the economists studying the recession see a return to normal activity as likely to cause yet more economic damage.

Given the exponential growth of the disease, University of Michigan economist Justin Wolfers says it is cheaper to stop the spread today than it will be tomorrow. “The relevant choice is whether to take dramatic actions today when the number of cases is measured in the tens of thousands,” he says, “or whether to take even more dramatic actions in the future when the number of cases is measured in the hundreds of thousands, or in the millions.”

The number of confirmed US cases is rising by roughly 38 percent each day, on pace to reach into the hundreds of thousands by the end of the week, according to data collected by Johns Hopkins University. Deaths have been rising at a slower rate, around 23 percent per day, suggesting some of the rise in case count may be the result of accelerated testing. Still, any relaxation of social distancing would likely cause those numbers to spike, with devastating consequences for both public health and economic activity.

As a result, even skeptical economists are recommending a measured response rather than a return to the status quo. Harvard economist James Stock, who is a member of the National Bureau of Economic Research, said he believed that the public health response had underplayed the ongoing economic crisis.

“I think the right framing is, how can we most efficiently reduce the spread of the virus while allowing some economic activity,” Stock told The Verge. Still, more testing is required before meaningful recovery measures could be put in place. “Random testing of the population is badly needed to understand prevalence and the asymptomatic rate.”

Countries like South Korea have been able to get the outbreak under control by testing the population broadly — whether or not people had symptoms — and then isolating those who tested positive. But the US still faces a massive shortage of test kits, which means that doctors can’t even test every patient with symptoms. Without more tests, it will be hard to get a handle on who is at risk of transmitting the disease — and hard to relax restrictions without driving up infections.

It’s unclear how the White House plans to proceed. In a press conference on Tuesday at 5:30PM ET, the president continued to reference the Easter goal but seemed to lower expectations for an end to social distancing. “I’m hopeful to have Americans working again by that beautiful Easter day,” Trump said, “but rest assured that every decision we make will be grounded in the health, safety, and well-being of Americans.”

In the meantime, experts say the economic crisis will be hard to separate from the public health problem. “My worry is that right now, we have the worst of both worlds: a stalled economy and an ineffective public health response to the pandemic,” Obstfeld says. “The answer is not simply to pretend we can go back to business as usual.”

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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)

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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.

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