When economists consider the costs of the Tokyo Olympics playing out as we speak, they naturally focus on dollars spent. Though the official figure is in the $15 billion range, private estimates can approach double that amount.
Yet the real one is what economists call “opportunity cost.” Since the moment in 2013 when then-Prime Minister Shinzo Abe scored the 2020 Games, his government had every opportunity to implement his bold-sounding plan to end deflation and recreate a little 1964 magic.
Yes, yes, these are the Tokyo Games. But you’ll notice that Tokyo Governor Yuriko Koike barely has a role in them. It’s all about the ruling Liberal Democratic Party harnessing a few weeks in the global spotlight to increase Japan’s geopolitical clout 1964-style.
That year, Tokyo staged one of modern history’s truly spectacular Olympiads. Japan’s postwar coming-out extravaganza announced its emergence as a technological powerhouse about to upend the world order. Tokyo wowed the world with skyscraper-strewn, neon-lit skylines, avant-garde stadiums and futuristic bullet trains zooming by at 130 miles per hour.
Japan’s big return to the global community was courtesy of Abe’s grandfather, Nobusuke Kishi, the prime minister who scored the 1964 Games. For Abe, Tokyo 2020 was a means of both closing the family-legacy circle and recreating the post-1964 economic boom 56 years later.
Covid-19 flipped the script, of course. Not only did Japan have to pay billions more to delay the 2020 Games by a year. It also lost out on the 40 million tourists Abe’s party expected to attract surrounding the event.
A volunteer follows the action from an empty stand during a water polo match of the Tokyo 2020 … [+] Olympic Games on July 25, 2021.
Photo by David Ramos/Getty Images
But the sprawling gulf between the tech renaissance 1964 proved to be and now is what amazes most. 2020 finds Japan as Asia’s second-biggest economy, behind China, in a technological rut.
Japan Inc., which once changed everything with the Walkman, computers, Trinitron color TVs, new gaming systems now lags South Korea in smartphones and memory chips. One of the biggest complaints from visiting sportswriters: troubles with mobile apps and websites they’re required to use. Not a great look.
The Abe era’s obsession with putting on a great show to rival granddad’s tells you everything you need to know about why Japan’s economy is falling behind.
In December 2012, Abe returned to power five years after a one-year 2006-2007 stint as premier. Abe 2.0 was suddenly a bold reformer—a Japanese amalgam of Margaret Thatcher and Ronald Reagan. He laid out a multi-pronged program to cut red tape, shake up a change-averse bureaucracy, incentivize innovation, empower women and attract foreign talent.
Japan’s former Prime Minister Shinzo Abe (left) and Thomas Bach, President of the International … [+] Olympic Committee (right).
Photo by Kim Kyung-Hoon-Pool/Getty Images
Instead, Abe, between 2012 and 2020, really had a two-pronged plan: aggressive Bank of Japan easing and Tokyo 2020. Abe and his LDP blundered by thinking that rekindling the collective spirit that lifted the nation after 1964 would, somehow, magically, euphorically, restore the innovative energy of years past.
This might sound oversimplistic. But from the moment Japan secured the Olympics in 2013 until Covid-19 hit in early 2020, the vast majority of Abe’s top upgrades went quiet. Either because of distraction or sincere hope that the Olympics would be an economic game-changer, the Abe years were a reform dud.
Even the perceived successes have lost their sheen. Japan’s apparent progress in tightening corporate governance didn’t avoid the Carlos Ghosn fiasco at Nissan Motor. It didn’t head off a recent scandal at Toshiba Corp. concerning board seats. And a decade on, who’s going to jail for the safety failures that resulted in the nuclear crisis at Fukushima?
The deflation that the Abe years had supposedly defeated, meantime, is trying to make an untimely return. As the West frets runaway inflation, the most Japan’s core consumer prices could do was perk up 0.2% in June from a year earlier. The upward price pressures Japan actually is experiencing are the bad kind: importing pricy commodities.
People wearing face masks pose for photographs next to Olympic Rings on March 24, 2020 in Tokyo, … [+] Japan.
Photo by Carl Court/Getty Images
What is Japan doing about it? Nothing obvious. In mid-2020, Japan tossed an additional $2 trillion of stimulus at the economy, or 40% of gross domestic product. The BOJ larded up its balance sheet with additional asset purchases. Yet since Yoshihide Suga replaced Abe last September, he’s spent far more time avoiding cancellation of the Olympics than recalibrating the economy.
Besides, Prime Minister Suga’s team figured, Covid risks would recede soon enough, and Japan would pull in many millions of tourists by July 2021 to add vigor to the economy. That gamble has aged very poorly.
The best-case scenario now is that Tokyo 2020 isn’t a super-spreader event that upends the economy in 2022 and beyond. Or that history doesn’t remember these few weeks as a gold-medal caliber incubation opportunity for a new Tokyo variant.
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.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
