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The Future for Canada’s economy amid pandemic



VANCOUVER (NEWS 1130) — The word recession doesn’t really capture how bad the economic impact of this crisis will really be, according to the former chief economic analyst for Statistics Canada.

Philip Cross, with the Macdonald-Laurier Institute, argues governments and policymakers haven’t fully grasped the consequences of restricting and closing down parts of the economy.

“It stands to reason if you close down all non-essential parts of the economy it’s going to be devastating,” he says.

Cross expects April’s job numbers, which come out Friday, will be even worse than the records set last month.

Statistics Canada recorded 1,010,700 jobs lost in March across the country, with full-time work falling by 474,000. That drop also brought the unemployment rate to 7.8 per cent from 5.6 per cent in February.

At the time, however, almost all of the job losses reported in March were due to temporary layoffs, according to Stats Canada, and workers expect to get back to work within six months.

Cross notes when these numbers were done, provinces were only just starting to shut down to slow the spread of COVID-19. He says a decline will hopefully start to even out through May and June.

Although, Cross says a quick bounceback isn’t coming on the other side of the pandemic either.

“Quite possible that we’d have some starting recovery. Then appears an outbreak of the virus. They’ll close things down again. They could be two steps forward, one step back even for a while,” he says.

Cross warns the effects of this won’t simply be a short-term blow but could last much longer.

“For some sectors, years is going to be the good time required for recovery,” he says, pointing to Air Canada, which recently announced it will take about three years to recover after the pandemic losses. “Other industries may never completely recover,” he says.

“But the idea that we’re going to have a ‘V-shaped’ recovery where we go straight down and then we go straight back up, that’s not going to happen. It’s much more likely to be much more like a ‘hockey stick’ kind of decline with a slight uptick at the end,” he says.

Cross says it’s going to be a difficult recovery ahead and there could even be more a second cycle decline and recovery, similar to a W-shape.

“I think there’s an increasing appreciation for the fact this recovery is going to be different than anything we’ve seen because the recession itself is completely different from anything we’ve seen,” he explains.

B.C. Premier John Horgan is set to release details on the province lifting restrictions Wednesday.

-With files from Hana Mae Nassar and Richard Dettman

Edited by Harry Miller

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Trump’s Economy Will Look Better Than You Think On Election Day – Forbes



Here’s some bad news for Democrats intent on unseating the Trump administration. While the current economic situation looks dire, a huge bounce back is forecast for this summer and will likely continue into the fall.

At least 12 economists see the economy growing at an annualized rate of at least 20% in the third quarter. Some even see it growing as fast 30% over the same period, according to a recent survey of multiple economists by The Wall Street Journal.

And it is just that sort of economic snap-back that could put President Trump back in the White House for another four years.

Things Look Bad Now

Currently, it might seem hard to see anything good in line for the Trump administration. Millions of people have been fired in a matter of a few weeks. The economy is expected to shrink by 17% in the three months through June, according to Trading Economics. And the death toll from the Covid-19 pandemic is rising. In short, it’s bad, and everyone knows that fact.

But it is the health of the economy that generally dictates how people vote. If there are plenty of jobs, inflation is low, and people feel better off than they did a four years ago, they’ll likely vote for more of the same. That’s what happened with Presidents Reagan and Clinton. Some readers will remember Clinton’s early 1990s campaign quip, “It’s the economy stupid.” That was true then and still is now.

The economic data from the last few weeks are so bad that Democratic Party operatives may be banking on the dire economy to ensure a landslide victory in the fall election. But that hope may soon evaporate as we enter the summer.

Economic Bounce Back This Summer

What probably matters more for many voters is what will happen in the few months before the November election, not the current situation. And that could surprise the world.

Ameriprise Financial AMP  and Nomura Securities International both see an annualized growth rate of 30% in the three months through September, according to the WSJ survey. Another 10 similar institutions, such as CSFB, Scotiabank BNS  and Natwest Markets, forecast the economy will expand by between 20% and 30%.

Other institutions see lower rates of growth and perhaps even continued contraction. The average growth estimate for the third quarter is around 9%, according to the WSJ survey.

However, as long as the lockdowns continue to get loosened, then growth estimates should continue to rise.

Normally an annualized growth rate of 3% would be considered a good reading and would likely come side-by-side with the sustained creation of millions of new jobs each year.

But growth rates of 20-30% are spectacular. Even 9%, the average second-quarter forecast, would be shockingly high in normal times. What’s more, if these forecasts are even vaguely accurate, the growth should create a load more jobs. Exactly how many is hard to judge because there hasn’t really been a precedent for an economic lockdown.

Growth Boom to Continue Through Year End

There is some more good news. According to the same WSJ report, the growth boom is set to continue in the fourth quarter. The highest estimate is for a bounce of 21.5%, with the average at a respectable 6.9%. Again, that continued growth should create another slew of new jobs, many of which will appear before the election.

So what? The likely rebound in economic growth could also help tilt the election toward incumbent President Trump.

A second Trump term could also be a further bullish factor for the stock market because of the administration’s decidedly pro-business approach to the economy and his effort to reduce regulations. In other words, investors should be watching this closely.

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Doug Ford rejects regional approach to reopening Ontario's economy – Toronto Star



One size fits all.

That will be Ontario’s mantra for reopening the economy in the wake of the COVID-19 pandemic, insists Premier Doug Ford.

Even though the Greater Toronto Area accounts for 65.6 per cent of Ontario’s cases, leaving huge swaths of the province relatively unscathed, Ford is rejecting the regional approach of opening up as is being done in neighbouring Quebec, Manitoba and New York state.

“I have to follow science and the medical advice. I always have, I always will,” the premier said Thursday, emphasizing that provincial chief medical officer of health Dr. David Williams and other public health officials will make the call.

“I’ll take their advice and if Dr. Williams doesn’t think it’s the right thing to do, then I’m following his advice. I have from the beginning. I’ll continue to follow it,” he said.

Ford admitted he is under a lot of pressure to expedite the opening of the economy in regions beyond the GTA.

There are far fewer coronavirus cases in Kenora, Algoma, North Bay, Parry Sound, Sudbury, Kingston, Renfrew, Huron-Perth, Prince Edward County, and most of southwestern Ontario outside the Windsor city limits.

“I hear it at cabinet, I hear it at caucus. I hear it all the time from our own members,” the premier said.

Indeed, Progressive Conservative MPPs from outside the Golden Horseshoe privately confide that they are feeling heat from their constituents.

“How am I supposed to keep telling businesses in my area to remain closed for what’s essentially a Toronto problem?” said one rural Tory MPP, speaking on condition of anonymity in order to freely discuss internal caucus discussions.

“At a certain point, we’ve got to reopen,” added the MPP, who personally lobbied Ford against the universal reopening approach.

But the premier, who began the first phase of reopening the economy last week when stores with street-front entrances were allowed to welcome customers, said “we just have to be cautious” to curb the spread of a virus that has killed 2,248 people in Ontario.

“On a long weekend in the summer, there’ll be half a million cottagers going up to the Muskokas, the Haliburtons, up to the cottage area — and they’re coming, primarily, they’re coming from the 905 and 416 area,” he said.

In Quebec, where 4,228 people have died from COVID-19, Premier François Legault has pushed a phased regional approach to opening.

Outside of Montreal, the epicentre of the pandemic in that province, much of the economy will be up and running next week, including indoor shopping malls.

“We have to continue to be careful because we cannot afford to have large increases in the next few days or weeks in the number of people in our hospitals in Montreal,” Legault said earlier this week.

In Manitoba, where only seven people have died of COVID-19, Premier Brian Pallister announced Tuesday that most businesses — including restaurants, bars, and gyms — will be open next week.

Pallister stressed “slow and careful movement in the direction of easing our restrictions is the right approach.”

New York state has suffered 23,282 deaths — more than 10 times as many as Ontario despite a population of 19.5 million compared to the province’s 14.5 million — but is pushing forward with phased regional reopening.

In New York, a region must meet seven different metrics before being allowed to move a broader stage of reopening, including a sustained decline in total hospitalizations over a three-day rolling average and a decline in deaths.

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Each region must have at least 30 per cent of its intensive care unit beds and 30 per cent of all hospital beds open and must meet diagnostic testing and contact tracing capacity.

Western New York, across the Niagara River from Ontario, currently meets all seven requirements for reopening selected businesses and services.

Earlier this month, Gov. Andrew Cuomo defended his plan.

“Close down everything, close down the economy, lock yourself in the home — you can do it for a short period of time, but you can’t do it forever.”

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie



What do you think of the “one size fits all” strategy for reopening Ontario’s economy?

Conversations are opinions of our readers and are subject to the Code of Conduct. The Star does not endorse these opinions.

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Province's decision to reopen economy still lacks some clarity: CFIB –



The Atlantic Vice President of the Canadian Federation of Independent Business says he’s pleased with the province’s decision to reopen the economy, but adds it still lacks some clarity.

On Wednesday, Premier Stephen McNeil announced the province’s next steps to reopening the economy, saying businesses that were required to shut down due to the COVID-19 pandemic will be able to restart operations on June 5.

Jordi Morgan told NEWS 95.7 he’s happy to hear this, but adds there are still some questions that need to be answered.

“It remains to be seen how well this happens because we’re still not entirely clear on what all the requirements are for these individual businesses,” said Morgan.

Morgan is also pleased with the province’s new small business reopening and support grant, a $25 million fund that will help businesses welcome back customers safely.

“Very happy to see that because there are a number of businesses that are going to require some bridging to reopen, invest in personal protective equipment and other things that are necessary in order to operate the business,” said Morgan.

He says once they get all the guidelines in place, they’ll have a better idea of how to operate and keep both the public and employees safe.

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