(Bloomberg) — Even as rains drench the fields and orchards in California’s Central Valley where Bill Diedrich grows pistachios, almonds, tomatoes, cotton and other crops, he is still calculating losses from the region’s other defining extreme: severe drought.
Only months ago, it was a shortage of water that forced Diedrich to divert water meant for tomatoes so he could partially hydrate 350 acres (142 hectares) of almond trees. “It’s kind of like not feeding your child all they need,” he said. “Our food security depends on the water supply.”
The atmospheric rivers that have swept over the state — claiming at least 17 lives and dumping 24 trillion gallons of rain since December — would seemingly help that supply. Yet they’ve also shown one of California’s key infrastructure shortcomings as climate change intensifies weather extremes. The state’s outdated water system, designed and built between the 1930s and 1970s, makes it difficult in the current era to capture, store and convey water California needs to remain the dominant US agricultural and economic power.
The record-setting rain has rushed over saturated fields, burst out of river and stream banks, flooded cities and overwhelmed drainage systems, before ultimately washing out to sea.
“Time and time again we see wet years come and go and then wring our hands when it’s dry because we haven’t been able to save enough when it was wet,” said Mike Wade, executive director of the California Farm Water Coalition, a Sacramento nonprofit group.
Since the early 20th century, California’s growth has depended on capturing, storing and transporting immense amounts of water from the northern part of the state and the Sierra Nevada Mountains, where snow provides a water bank for warmer months, to farms in the Central Valley and cities in relatively arid southern California.
From the 1930s through the 1960s, the state and federal governments funded monumental engineering projects, such as the California State Water Project and the Central Valley Project, fueling population and economic growth, and through irrigation, transforming the Central Valley into the world’s most productive agricultural region. Today, the state’s growers produce one-third of US vegetables and 75% of US fruit and nut crops, according to the California Department of Food and Agriculture, generating more than $50 billion in annual revenue.
But the state’s infrastructure was built for a different climate, said Peter Gleick, a climatologist and co-founder at the Pacific Institute, a nonprofit research group in Oakland.
“It’s time to rethink how we operate the existing infrastructure and what kind of new infrastructure we need, given the increasing extreme events that climate change is bringing,” he said.
The systems of dams and aqueducts heralded as engineering marvels in the last century are contributing to current problems, because natural habitats and drainage systems were paved over or diverted, said Ellen Hanak, director of the PPIC Water Policy Center. Excess rain that otherwise could have been absorbed by the ground like a sponge instead gushes into torrential runoff.
Hanak says California’s challenge for the future is to adjust the system to balance ecological and economic interests such as agriculture. Capturing more surface water is one method, but involves building reservoirs and other above-ground structures that are expensive and often difficult to site.
A far more economical and ecologically sound method is to recharge groundwater, typically by channeling water so it can flow into natural underground aquifers that have been over pumped and drained during years of drought. “There is tremendous potential to get more water back in the ground in ways that benefit agricultural and urban users” said Hanak.
In 2014, California voters approved $7.5 billion in bonds to restore watersheds, improve water quality and water infrastructure, including $2.7 billion in funding for water storage projects. But unlike the grand engineering feats of the last century, today’s California water projects require decades to bring online, with years spent on environmental, regulatory and planning reviews.
Construction has yet to begin on any of the seven projects approved by the California Water Commission, and the new storage structures are scheduled to come online between 2025 and sometime after 2030.
See also: California Drought Conditions Improve After Weeks of Downpour
Governor Gavin Newsom acknowledged concerns about the prolonged time line of the water storage projects authorized in 2014. “The process is leading to paralysis,” Newsom said at a press conference in Sacramento on Tuesday. He said he has appointed “strike teams” to resolve the permitting bottlenecks among local, state and regulatory agencies.
Such frustrations, shared by farmers and residents alarmed by worsening extremes, are a recurring theme in California’s water woes.
“During the dry years, the people forgot about the rich years, and when the wet years returned, they lost all memory of the dry years,” John Steinbeck wrote in East of Eden. “It was always that way.” The year was 1952.
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.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
