Although the Conference Board had previously forecast real GDP growth of 0.3 per cent this year, they now say it could contract by 1.1 per cent in 2020.
Over 330,000 jobs will be lost over the second and third quarters, leading to the unemployment rate rising to 7.7 per cent. Stats Canada has been reporting unemployment nationally to be anywhere from 5.5 per cent to six per cent in recent months.
The U.S. economy would contract by around one per cent.
“With diminished demand from our most important trading partner, Canada’s exports of goods and services are forecast to decline in real terms by 2.2 per cent in 2020.”
Oil prices will remain low and investment into Canada’s fossil fuel sector will continue to fall.
“In the coming years, Canada and many other countries will need to deal with the economic fallout of COVID-19, which will likely leave households, governments, and businesses deeper in debt than they were prior to the crisis”
Financial aid packages from the federal government and the Government of Alberta are likely to help many individuals and businesses avoid bankruptcy, thus reducing long-term financial hardships.
The full report from the Conference Board of Canada can be accessed here.
How To Stop The Global Economy From Plunging Into A Depression? – Forbes
There is little doubt that the global economy is in recession, which is defined by the IMF as growing less than 2% a year. Looming on the horizon is the even darker threat: global depression, which is characterized by a decline in real GDP exceeding 10% in more than one major economy and lasting for two or more years. This is the specter that governments are trying to stave off. In the U.S. and Europe, they are moving faster and throwing more resources at it than they did in response to the global financial crisis. The question is whether they will succeed. The answer hinges on knowing what stands between the current recession and a more catastrophic depression.
The economic ravages caused by Covid-19 began with a disruption of supply that quickly weakened demand. It turns out that much of the economic impact of Covid-19 is due to the very measures needed to control the pandemic. When cities are locked down and people stay home to avoid contact with others, all economic activities in industries involving people in close proximity come to a halt. Consumer spending crashes because people are either too fearful or unable to go out and spend. As a consequence, businesses are in jeopardy; their revenues are drying up faster than they can cut costs, and many will have no choice but to lay off workers or even shut down.
The current recession will turn into a depression if business closures and layoffs spread unchecked, changing a temporary dip into a total collapse of demand that derails the economy. A self-reinforcing feedback loop will then lock revenue-starved companies and salary-starved households into a destructive, downward spiral—a global depression.
What stands between the current recession and a global depression is the survival of the business sector. Government efforts must therefore focus on supporting the business sector with policies that are direct, timely and effective. Tax holidays, rollover of loans, and suspension of payments of interest, rent and fees are a start.
What is really needed is for governments to help pay a portion of salaries so companies don’t have to lay off their workers as revenues dwindle. This will break the link between the initial decline in demand and a much more devastating economy-wide crash. Large companies and small businesses need help equally. Bernie Sanders and his comrades may rail against such a policy as a case of government of bailing out big businesses, but what they don’t understand is that large companies are key customers for many small businesses. And if big companies go down, small businesses will go down with them. And while giving every adult American $1,200 may be an expedient and certainly a popular measure for President Trump, it doesn’t do much to help households whose breadwinners are rendered jobless.
Time is running out. Job losses are rising rapidly. The U.S. Department of Labor reported March 26 that jobless claims that week rose to a record 3.3 million, up from 282,000 the week before. Ireland went from nearly full employment in February to losing an equivalent of 48% of all new jobs created in the last five years in March, according to Dublin’s Economic and Social Research Institute.
Governments may be throwing the kitchen sink at the problem, but the outcome depends on how, when and where the money is spent. The survival of the business sector is our best hope in warding off a global depression. We must ensure that it does.
Yuwa Hedrick-Wong is Chief Economics Commentator for Forbes Asia. He is also a visiting scholar at the Lee Kuan Yew School of Public Policy, National University of Singapore. Having worked as an economist across the Asia-Pacific, Europe, Middle East and Africa in the past 25 years, he regularly writes columns about the global economy for Forbes Asia. Views expressed are his own. He can be reached at: email@example.com.
Varcoe: With a global oil deal, Alberta's economy could finally catch a break – Calgary Herald
Article content continued
“It buys us time. It’s not the solution,” said Schmidt.
A meeting of the G20 energy ministers, including federal Natural Resources Minister Seamus O’Regan, is scheduled for Friday. O’Regan spoke with Brouillette on Thursday and, in a Twitter post, said the two countries “will work together at the G20 to get oil prices stabilized.”
For Alberta, the prospect of an OPEC+ agreement arrives as the economic body blows keep on landing.
A new Statistics Canada report Thursday shows the country lost more than one million jobs last month as businesses shut down due to the virus.
In Alberta, more than 117,000 jobs disappeared. The unemployment rate jumped up to 8.7 per cent from 7.2 per cent in February, although the figure will likely be far higher for April.
There are many colossal problems facing Alberta’s economy today. More job losses are likely to come and many businesses may not re-open once the pandemic passes.
For realists looking across the landscape, it’s a forbidding environment.
But an end to the oil-price war is a necessary first step to rebuild a hard-hit economy.
Chris Varcoe is a Calgary Herald columnist.
Quebec preparing plan to reopen economy, as COVID-19 infection rate stabilizes – CTV News Montreal
Quebec Premier Francois Legault said Thursday health risks for younger people returning to work are limited considering almost all Quebecers who have died of COVID-19 are over the age of 60.
And if those younger workers – particularly in the province’s important construction sector – can keep away from their parents and grandparents, “then we can start to reopen,” Legault told reporters during his daily news conference.
But the premier was guarded about when that will be and which businesses outside the construction sector will be allowed to operate when the province-wide shutdown ordered in March is eased.
What is becoming increasingly clear, Legault said, is that the COVID-19 infection rate in the province is expected to peak “in the next few days.” Government projections released Tuesday estimated the peak would arrive around April 18.
“We need to ensure that is true,” Legault said, “but the numbers are holding up. It’s been a few days now.”
Legault and the province’s director of public health, Horacio Arruda, say their number one priority is to control the spread of COVID-19 in order to reduce the number of deaths.
But in recent days, they both have begun talking about a need to balance economic growth with an acceptable rate of infection.
Figures released Thursday show Quebec had the largest unemployment rate increase in Canada in March, rising by 3.6 percentage points to 8.1 per cent. Legault said hundreds of thousands of Quebecers are in financial difficulty, and Arruda added that Quebecers cannot expect to eliminate all new infections.
“We will finish by accepting a certain level of transmission in society so that (the virus) burns itself out in time,” Arruda said. “We will always evaluate the balance of risks of reopening versus the potential pandemic context.”
He said his medical team will evaluate each sector of the economy, region by region, and make recommendations to the premier. Legault said he will focus on opening businesses “where people can keep a distance of two metres.”
Legault had shut down all businesses deemed “non-essential” in March and after initially considering a reopening in mid-April, extended the order until May 4.
The premier has recently suggested that key sectors, including construction, could open sooner. Construction alone employs hundreds of thousands of people and generates annual investments in the province of around $40 billion, according to the provincial agency that oversees the industry.
Yves-Thomas Dorval, president of Quebec’s main federation of employers, said Thursday he is happy with the optimistic tone shown by the premier. Dorval said his organization, the Conseil du patronat du Quebec, will have a concrete list of proposals for the government by the end of next week on how to reopen the provincial economy.
Dorval said the business community is concerned authorities want to restart the economy sector by sector, as opposed to taking a broader approach.
All businesses that are able to protect their workers and limit the spread of COVID-19 among their customers, he said, should be able to begin operating at the same time, to avoid the most disruption.
“The government wants to go by sector, by task, by job – we won’t get out that way,” he said in an interview. “I think we can move into a context of relaunch or reopening of the economy, with general principles on public health.”
Dorval says businesses that cannot always ensure workers and clients maintain a distance of two metres should still be able to open – under certain conditions. Those include equipping employees with protective gear, limiting contact with clients and ensuring all customers maintain adequate distance between themselves, he said.
Quebec reported 41 new deaths linked to COVID-19 Thursday, bringing the total to 216 in the province. Provincial health authorities said there are 10,912 confirmed cases of the virus, with 679 hospitalizations and 196 patients in intensive care.
Nearly half the deaths have come from long-term care facilities, but Legault stressed that not all such facilities have been seriously impacted by COVID-19. Most of the deaths are tied to six long-term care centres.
Ninety per cent of those who died were 70 years old or older and another nine per cent were aged between 60 and 69 years old, Legault said.
This report by The Canadian Press was first published April 9, 2020.
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