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The seeds of a more 'resilient' local economy likely won't blossom until into 2022 – Windsor Star

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Hampered by the slower than hoped for vaccine rollout, a report released by Workforce WindsorEssex indicates the timeline for the region’s more ‘resilient’ economic recovery from COVID-19 is likely January to June of 2022.

The 50-page document was part of larger look at the post-pandemic recovery for all of Southwestern Ontario and was headed up by Workforce WindsorEssex.

The report provides four different scenarios for the economic recovery based on varying factors, but Workforce WindsorEssex research associate Samantha Dalo said the current conditions most resemble the two slower recoveries.

“We’re looking at the labour market slowly improving after 2022,” said Dalo, who was one of two authors of the report along with Trudy Button.

“It will depend on the vaccine rollout and who is willing to take it.

“Sectors that rely on consumers and services that require more fact-to-face will take longer to recover. There’ll be a great deal of variation in the recovery from sector to sector.”

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We’re still reacting to a lot of things

Along with the other eight Workforce organizations in southern Ontario, the report involved over 250 government, industry, education and business partners from Windsor to Niagara to Owen Sound.

Samantha Dalo, lead research associate for the local scenario project for Workforce WindsorEssex, is pictured outside her home on Monday, March 22, 2021.
Samantha Dalo, lead research associate for the local scenario project for Workforce WindsorEssex, is pictured outside her home on Monday, March 22, 2021. Photo by Dax Melmer /Windsor Star

Localized reports were produced for each Workforce organization participating along with an overall regional study.

Dalo said until there’s significant vaccine distribution, the public health concerns will continue to hold Southwestern Ontario’s recovery back.

The report labels the stages of the post-pandemic recovery timeline as react, restart, recover and resiliency.

Dalo added the key to rebuilding for long-term economic prosperity is sustaining what we have, recruitment and job retention and developing programs to engage job seekers in the region’s growth industries.

The local sectors forecast to grow are manufacturing and related technologies, construction, machinery, education, healthcare and agriculture.

“We’re still reacting to a lot of things,” said Windsor-Essex Regional Chamber of Commerce CEO/president Rakesh Naidu.

“We’d hope to be past dealing with surges and rising numbers

“So much is going to hinge on the vaccine rollout. It’s not up to what was planned and that’s creating headwinds.”

Among the report’s key local recommendations is successor planning for skilled trades/apprenticeships, re-skilling, micro credentialing, employers engaging more directly with students, more collaboration among companies, updating infrastructure with 5G networks and nurturing interest in the high-demand technology sectors of AI and cyber security.

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Naidu said the chamber of commerce is also lobbying the province to target hard hit sectors and communities, increase access to capital to help businesses survive through the recovery phase and support decarbonizing Ontario’s transportation sector.

After the medical concerns are no longer the main focus, Button said permanent structural changes in the workforce and society are also going to require adjusting to.

“We’re not going back to what it looked like in February, 2020,” said Button, a research and policy analyst for Workforce WindsorEssex.

“I think the structural change in the work force is likely going to be more dramatic than the changes in society.”

Button said many of the adaptations companies have undertaken, such as more remote work or hybrid models, will remain.

Retail, hospitality and service industries are going to retain their ecommerce and delivery models while all sectors will look to domesticate and duplicate their supply chains.

“We see that shift being reinforced by announcements every week by companies saying they’re not going back to the office,” Button said. “There’s going to be less demand for office space now that companies see they can operate without that overhead.”

  1. Justin Falconer, CEO of Workforce WindsorEssex, is shown at his office on Friday, March 12, 2021.

    Despite stubbornly high unemployment, early signs of economic recovery

  2. Home builders with Jake's Handy Hands Construction continue to work into the winter months in this December 2020 photo. Windsor's post-pandemic recovery will lag behind some Ontario cities.

    Employment survey forecasting a conservative job recovery for Windsor

  3. Massey Secondary School student Rishi Naidu conducted an online survey asking high school students about the impact of COVID-19.  Photo taken Thursday, March 4, 2021.

    Pandemic impacting high school students mental health and career choices

That change will also impact Southwestern Ontario’s mid-sized cities and towns.

Button said the flow of talent out of large urban regions afforded by remote work is already playing havoc with housing costs across southwestern Ontario.

“I think some of the other changes we’re likely to see is demand for more patios and the permanent closing of some city streets to traffic in favour of people walking around or cycling,” Button said.

“It’s interesting some of the structural changes we’re expected to see become permanent are positive.”

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Economy

Canada to go big on budget spending as pandemic lingers, election looms

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By Julie Gordon

OTTAWA (Reuters) – Canada‘s Liberal government will deliver on its promise to spend big when it presents its first budget in two years next week amid a fast-rising third wave of COVID-19 infections and ahead of an election expected in coming months.

Finance Minister Chrystia Freeland has pledged to do “whatever it takes” to support Canadians, and in November promised up to C$100 billion ($79.8 billion) in stimulus over three years to “jump-start” an economic recovery in what is likely to be a crucial year for her party.

Prime Minister Justin Trudeau’s Liberals depend on the support of at least one opposition group to pass laws, and senior party members have said an election is likely within months as it seeks a clear majority and a free hand to legislate.

Furthermore, by September, all Canadians who want to be vaccinated will be, Trudeau has said.

Freeland has said the pandemic created a “window” of opportunity for a national childcare plan, and that will be reflected in next Monday’s budget along with spending to accelerate Canada‘s shift toward a more sustainable economy.

“It will be a green and innovative recovery plan aimed at creating jobs,” said a government source who declined to comment on specific measures. The budget will aim to help those “who have suffered most” the effects of the pandemic, the source said.

Critics say the government would be better to hold off on blockbuster spending because the economy has shown it is poised to bounce back, and to prevent the country from racking up too much debt.

“Clearly a garden-variety stimulus package is the last thing we need. This is pile-on debt,” said Don Drummond, an economist at Ontario’s Queen’s University.

“The risk is that at some point interest rates are going to go up and we’re going to be in trouble,” he said, pointing to the mid-1990s when Canada‘s debt-to-GDP ratio skyrocketed, leading to rating agency downgrades and years of austerity.

The Bank of Canada cut its benchmark interest rate to 0.25% to counter the economic fallout of the COVID-19 crisis and has said rates will not rise until labor market slack is absorbed, currently forecast for into 2023. That may change when it releases new projections on April 21.

EXPANDING ECONOMY

More than 3 million Canadians lost their jobs to the pandemic. As of March, before a third wave forced new lockdowns, only 296,000 remained unemployed because of COVID.

Despite still-high unemployment levels in hard-hit service sectors, the economy has expanded for nine straight months even as provinces have adjusted health restrictions to counter waves of infections.

“Once we see sustained reopening, we do think that the recovery will have quite a bit of momentum on its own,” said Josh Nye, a senior economist at RBC Economics.

“We think Canada‘s economy will be operating pretty close to full capacity by this time next year,” he said.

Economists surveyed by Reuters expect Freeland to project a deficit in the range of C$133 billion to C$175 billion for fiscal 2021/22, up from the C$121.2 billion ($96.7 billion)

deficit forecast in November. https://tmsnrt.rs/3wSJPcm

The deficit for fiscal 2020/21 ended in March is forecast by the government to top a historic C$381.6 billion ($304.5 billion).

Canada announced on Monday a C$5.9 billion ($4.7 billion) aid package for the country’s largest airline carrier, Air Canada, and said talks were ongoing with No. 2 carrier WestJet Airlines Ltd and others.

 

(Reporting by Julie Gordon in Ottawa; Additional reporting by Fergal Smith in Toronto; Editing by Steve Scherer and Peter Cooney)

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Economy

CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Economy

Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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