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 new coronavirus is spreading through the US, and several states have made emergency declarations. The World Health Organization has declared it a pandemic. Here are the basics:
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 massiveshortage 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.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
