Fri. Sep 25th, 2020

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Posthaste: Coronavirus cases are rising again in Canada — should we brace ourselves for another lockdown?

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Good morning!

Coronavirus cases are on the rise again in Canada, with the country reporting 1,351 new cases Monday — figures not seen since late May.

While there has not been a proportionate increase in deaths due to the virus, there’s no reason to take things lightly. A resurgence could be costly for an economy that’s already reeling from the first wave and could still deliver immeasurable pain and suffering to many vulnerable Canadians and their loved ones.

Vigilance has always been the key to mitigating the impact of the virus, but sadly complacency appears to have set in somewhat after our early success in reining in the virus.

With schools and many businesses reopening and the wheels of economy in motion once more, there are real concerns that the virus could be lying in wait for us in our neighbourhoods, office towers, buses and restaurants.

Earlier this week, Ontario Premier Doug Ford warned that the province’s rising virus rates could force the province to move some regions back into lockdown.

“We will take every step necessary including further shutdowns,” Ford said. “The second wave of COVID-19, it’s a scenario that we’ve been preparing for all summer long.”

Prime Minister Justin Trudeau also warned this week about a second lockdown. “The last thing anyone wants is to go into this fall in a lockdown similar to this spring. The way we can prevent that is by remaining vigilant.”

But Avery Shenfeld, an economist at the Canadian Imperial Bank of Commerce, says that we know a lot more about the virus than we did earlier in the year, and that knowledge should mean that, if we play our cards right, containing this wave should entail a dramatically smaller economic cost than its predecessor.

“That realization means that there’s no good reason to shutter many of the things we closed back in March and April during the first wave. Getting a take-out coffee, with a masked customer facing a masked server, won’t be a concern,” Shenfeld wrote in a note last week. “Goods retailers needn’t close. Construction doesn’t need to totally shutdown if workers wear masks indoors. We needn’t change rules province wide, but only in hotspots that we can now identify with ramped up testing. And we only need to constrain selected activities where close quarters, unventilated spaces, and long periods without masks, are a feature.”

That’s a much narrower list, both geographically and economically, than was hit in the early spring, Shenfeld wrote. “Moreover, some of the hardest hit sectors — airlines, large convention centres, crowded arenas, restaurants serving office workers — haven’t yet rebounded, and simply don’t have as far to fall at this point.”

That’s just as well, as Canada can’t afford another lockdown.

The country’s economy will contract by 5.8 per cent this year, according to The Organisation of Economic Co-operation and Development, significantly higher than the 4.1 per cent decline seen on average in its G20 peers. And next year, Canada’s economic growth will rise 4 per cent, again lagging the G20’s more-impressive 5.7 per cent economic expansion.

“The economic outlook remains exceptionally uncertain, with the COVID-19 pandemic continuing to exert a substantial toll on economies and societies. Global output in the second quarter of 2020 was over 10 per cent lower than at the end of 2019, an unprecedented sudden shock in modern times,” the OECD said in an interim report published this morning.

“The extent and timing of the pandemic shock differed across the major economies, but all experienced a sharp contraction in activity as necessary containment measures were implemented.”

Unemployment in Canada has risen more sharply than most other G20 nations, while household spending has contracted more than most, OECD preliminary data shows.

“Activity rebounded as confinement measures started to ease, but momentum appears to be plateauing and confidence remains weak Policy still matters: to boost confidence policy makers should continue to improve healthcare, maintain fiscal and monetary support and assist people and firms with ongoing changes,” the OECD noted.

Yadullah Hussain


2020-09-16 08:21:21


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