In 2016, U.S. economist Larry Summers — commenting on the release of a comprehensive National Academy of Sciences/Global Health Risk report titled The Neglected Dimension of Global Security: A Framework to Counter Infectious Disease Crises — said that “relative to its significance, there is no issue that gets less attention” than the risk of pandemics and epidemics.
Summers added: “I am struck by how little attention this issue receives relative to the issue of global climate change.” Summers returned to the virus risk in 2017: “At the moment, the spending and attention given to threats such as terrorism, cyber-warfare, or climate change is an order of magnitude greater than that given to pandemic prevention.”
And so now, scrambling to catch up, the political authorities at the UN’s World Health Organization (WHO) and in towers of power around the world who underplayed the pandemic risk are engaging in a giant social and economic experiment: the temporary shutdown of the $100-trillion world economy to fix a real looming crisis they long ignored.
And it is an experiment. Governments around the world are using the global economy as a test tube for science and behaviour theories that the COVID-19 pandemic can perhaps be managed and controlled by imposing draconian limits on most economic activity.
The economic shock of the policy mix is unprecedented, sweeping the stock markets and changing the lives and fortunes of all businesses and individuals. The catchphrase for the global effort is “flattening the curve,” which is based on a widely reproduced graphic illustration that appears to demonstrate the benefits of squeezing the spread of the COVID-19 virus out over a longer period of time by choking economic activity.
If the disease can be spread out over a longer period, according to the theory, that will relieve the burden on unprepared health-care systems, theoretically save many lives and allow time for the development of a vaccine.
Above is the official global health schematic outline of the intended impact of social distancing measures as nonpharmaceutical interventions for an influenza pandemic. Adapted from similar diagrams in the European Centre for Disease Prevention and Control Technical Report and the Centers for Disease Control and Prevention Guidance Report.
The graphic looks impressive. In recent weeks it has been promoted by health authorities in Europe, the United States and elsewhere, and has been reproduced by the media and online. The graphic dates back to at least 2009 and a report from the European Centre for Disease Prevention and Control. It is not a scientific or economic graph. Rather, it is a schematic diagram, a sophisticated doodle that aims to convey the theory of the hypothetical benefits of imposing economy-wide public health measures, including many of the programs now being imposed around the world: travel restrictions, border closings, quarantines, school closings, cancelled public and international events. A core principle is to enforce “social distancing.”
While economic costs of flattening the curve are acknowledged to be significant, they remained uncalculated and totally unknown. The benefits are even less certain.
“The evidence base supporting each individual measure is often weak,” said the 2009 European report. The objectives of economic controls also appear limited to reducing the peak burden on health-care systems and “somewhat” reducing the total number of cases. The idea is to “buy a little time.”
It is worth observing that the graphic does not imply a reduction in either total cases recorded or deaths. Indeed, the geometry of the graph suggests the total number of cases under the flattened curve would be the same as the surging short-term curve. The only real difference is that the contagion would be spread out over a longer period of unspecified time.
There are flurries of concern during an Ebola crisis or the 2009 N1H1 outbreak, but after the headlines die down “outbreaks are no longer in the headlines, epidemic readiness is frequently displaced … in favour of more immediate and visible priorities.” That tendency, says the WEF report, leaves the world open to panics and reactions that can lead to massive economic upheaval. Another new paper containing the same flatten-the-curve graphic published by the U.S. Centers for Disease Control and Prevention suggests many of the economic and social controls will have limited benefits at high costs.
The authors of the paper — titled Nonpharmaceutical Measures for Pandemic Influenza — found “limited evidence” that workplace measures and closures would be effective in controlling a virus despite their high costs. The benefits of closing schools are open to question due to issues of timing and duration; further research is required, said the paper. Social distancing measures are also uncertain. “The evidence for avoiding crowding is limited,” it said.
The overall verdict on social distancing was ambiguous and unconvincing. “Our systematic reviews suggested that social distancing measures could be effective interventions to reduce transmission and mitigate the impact of an influenza pandemic. However, the evidence base for these measures was derived largely from observational studies and simulation studies; thus, the overall quality of evidence is relatively low.” On home quarantine, the paper said “we found that the evidence base was weak.”
No wonder political leaders such as Prime Minister Justin Trudeau have a hard time explaining the objectives behind the flat curve movement or how long it might take. It could be weeks or it could be months, Trudeau said Wednesday as he waffled through key issues without giving any details.
What is the official objective of the global economic shutdown? Nobody knows, including the disagreeing infectious disease specialists swamping the media. Will fewer people contract COVID-19 as a result of closing down most economic activity?
Probably not.
The economic control experiment could take many months, even longer. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, has been saying for some time that tens of millions of Americans and many more around the world can be expected to contract COVID-19 over the coming year and into 2021. The disease will spread, no matter how draconian the economic curtailment, he said the other day, and could affect 25 to 60 per cent of the U.S. population before the end of the year. Canada would be caught in the same web. China’s apparent control over the virus is misleading, says Osterholm. As soon as Chinese citizens are released from their police-state quarantined lives, the COVID virus will begin to reappear.
Osterholm could be wrong about this, but there are few official sources ready to contradict his assessment that the global economic freeze cannot stop COVID-19. It will have to play itself out, reaching millions and even billions of people who will then become immune. How many will die is the major unknown, with Italy looming as the hard example of a health-care system failure.
Of all the countries in the world, one stands out for its honesty and good sense. In a television address this week, Prime Minister Mark Rutte of the Netherlands clearly spelled out the risks and options. Unlike leaders in Canada, he explicitly stated that “in the coming period a large proportion of the Dutch population will become infected with this virus.” As the disease spreads, he said, more people will become immune, which will benefit those at risk.
The government, said Rutte, will attempt to delay the spread of the disease, but he dismissed the idea of working endlessly to contain the virus. “That would mean shutting down the country completely. Such a rigorous approach may seem like an attractive option, but experts say that this would not be a matter of days or weeks. In this scenario, we would essentially have to shut the country down for a year or even longer, with all the consequences that would entail.”
In a 2017 book, Deadliest Enemy: Our War Against Killer Germs, the University of Minnesota’s Osterholm dissects the global political failure to prepare for an inevitable pandemic. Terrorism, nuclear war and climate change are all manageable, he said, but infectious disease risks remain out of reach due to lack of attention.
To help fix the global infections disease regime, Osterholm calls for a “major overhaul of the WHO, beginning with its governance and financial support by member nations for there to be any effective public health response to the 21st-century world of infectious diseases.” If that cannot be accomplished, he said, we need a new international organization.
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.
