“The Bill clarifies that the Act applies on the Internet. Clause 1 would add online undertakings as a distinct class of broadcasting undertaking subject to the Act. Online undertaking would be defined in the Act as an undertaking for the transmission or retransmission of programs over the Internet to the public by means of broadcasting receiving apparatus.” (link)
There is nothing about the internet which, remotely qualifies it as a “broadcast undertaking”.
This sort of loose language would meant that my little blog, and possibly my tweets, makes me CTV.
Now the summary suggests that I might not be CTV for purposes of the Act; but the mere idea that one may become a “broadcast undertaking” simply by being on the internet and that this would subject one to CRTC oversight is, frankly, insane.
It is idiot legislation but the important question is “why”? Why would the Trudeau government think it necessary to bring pretty much the whole internet under CRTC regulation?
(And, by the way, what is this nonsense about “programs”. No one really publishes “programs”.)
Canada’s Finance Minister, Chrystia Freeland wants to stimulate the Canadian economy by encouraging/forcing Canadians with savings to spend some of those savings. Right wing twitter is convinced that she’s prepping us for a “bail-in” where the government just comes in and takes a chunk of the money you have saved. Which may very well be true but that is not actually what she is presently saying.
She asked for ideas so here are a few:
Registered Recreation account. Modelled on the other registered vehicles, the RRA would allow individuals and families to deduct the costs of recreational activities from their taxable income to a certain limit each year. Essentially, keep the receipts from restaurant meals and take out, (when restaurants are open), hotel stays for non-business purposes, whale watching, ski passes, rec center memberships, sporting equipment. End of the year, tote up the receipts and enter it as a non-refundable credit. The RRA would target many of the businesses hardest hit by the lockdowns.
Small Business Bond: At the moment, the savings of Canadians are locked up in accounts which pay, at most, 1.5% interest. We’d all like to do better. Why not create a backed by the Government of Canada “bond scheme” which pays and interest rate of 5% and which lends working capital to small business at, say, 7% on easy terms. Flexible denominations starting at, say, $100 with an individual limit of, say $100,000. This would be the middle class helping out the middle class.
The First Nations Water Bond: Many Canadians are ashamed that the Government of Canada can’t “fix” the crisis of bad water on hundreds of reserves in Canada. Promises are made and broken. OK, let’s try a different approach. Let’s offer 5%, tax-free, bonds to fund a serious private/public/FN approach to real solutions here. Do 20 year bonds but spend the money in the first two years.
A Travel Tax Credit: Go see Canada! Reconnect with Family and Friends. Basically allow individuals and families to take a non-refundable credit for any plane or rail trip to another province where you stay for at least three nights. (And yes, you can “double dip” with the RRA…we’d like you to.)
The Original Art/Performance Credit: Buy a Canadian Painting, go to a Canadian play or musical performance. Keep the receipt and you get a non-refundable tax credit.
Shop Canada! Get a $100 non-refundable tax credit for every $500 spent when you buy from Canadian owned retailers. Must be cash or debit – no credit cards. Cumulative monthly.
Mobilizing Canadian savings is not rocket science: offer a decent rate of return, a tax nudge and the guarantee of the Government that the funds will be returned and money will flow. Give people non-refundable tax credits and they will hit the stores.
None of this needs to cost much. The non-refundable tax credits are tax expenditures but they should have a ripple effect which will offset those expenditures. The Small Business Bonds and the FN Water Bonds would be a charge on the Treasury but the Business bonds would be paid back and the Water Bonds would fund something the Government should be doing in any event.
What Freeland is actually talking about is accelerating the velocity of money in the Canadian economy. You can print as much money as you want but, if no one is spending it or spending it on inert assets like houses, it does very little economic good. There is an old saying that money is like manure, it does the most good when it is spread around. Get spreading Chrystia!
From the very outset of the COVID debacle for a variety of reasons politicians, public servants and public health have been making mistakes. Which is perfectly natural given what was initially thought about the virus.
The imagery out of Wuhan and later Italy were horrific. People falling (apparently dead) in the streets, ICU’s overwhelmed. This was not the flu even if it was not quite Ebola or even SARS. Those images, in the absence of very accurate death rate reporting, meant that the lethality of COVID was vastly over rated. Worse the demographics and condition of the dying were initially hard to discern.
The second misperception was the means of transmission of COVID and just how contagious it was. In the early stages the view seemed to be that COVID was only transmitted by physical contact. The dark joke about licking doorknobs circulated. This was in pre-mask mandate days. Social distance and handwashing were the orders of the day. Then it occurred to researchers that, perhaps, person to person transmission was possible without direct contact. The case rates were climbing and now it became time to “stay home” to flatten the curve to avoid overwhelming the hospitals. (Remember Italy!) We duely stayed at home and the curve flattened out significantly in many jurisdictions. (Cynics suggested that this might have had a lot to do with the coming of Spring in the Northern Hemisphere.)
The good news was that, astonishingly, for Americans and some Europeans, there was a vaccine just around the corner. As I write we are within a few days of the first Americans receiving this treatment. (We Canadians, being led by an imbecile, first backed a Chinese vaccine which did not deliver and then failed to place orders for the vaccines which did. UPDATE: Canada may get some vaccine early in the New Year.)
My friend John from comments will point out that Australia got lockdowns right so they can work. However, Australia seems to the only jurisdiction which has been willing to go hard with lockdowns. (And, well, they were locking down into the warm Spring weather Oz enjoys this time of year.) In England, France, Germany, Italy, Canada and many US states lockdowns have not really flattened the curve much. Nor has the adoption of “mask mandates” done much for the case rate.
The fact seems to be that COVID is very contagious. However, we now know a lot more about its lethality and it turns out to be relatively benign if you are under 80 and don’t have significant co-morbidities, are not significantly overweight and do not live in an extended care facility. Not a nice thing to catch but very unlikely to kill you.
None of this is a secret. But the general reporting on COVID tends to focus on case rates which are then used to power policy. Two things which are not mentioned much are the significant progress which has been made in treating COVID and some of the steps people can take to improve their own immune systems.
Mask mandates and lockdowns notwithstanding, case rates are or have hit alarming levels all over the Northern hemisphere. However, case fatality rates have not been quite so alarming. (Probably because treatment protocols have improved and the dumber Premiers and State Governors have been persuaded not to send COVID patients into extended care facilities.)
Paying exaggerated attention to case rates leads to politicians feeling pressured to up the ante with masking and lockdowns. Their constituents are only aware of the rising case rate and so want “action”, ideally backed by force of law. The costs and marginal efficacy of such actions does not reduce the public clamour.
As COVID has dragged on there have been very real economic, social and psychological costs. A two week “flatten the curve” exercise is very different from a four month “no non-essentials, mandatory stay at home” program. And those costs continue to rise.
There are plenty of optimists who see the whole thing wrapping up over the next few months (slightly longer in Canada) as the vaccines begin to be widely distributed. 90% efficacy and all. Which would be wonderful to see. However, at this stage that is several months off.
The current plan in most Western jurisdictions seems to be to hunker down, lock down, shut down and wait for the silver bullet of the vaccine. The costs of hunkering down for another three or four, or until September according to the imbecile, will be tremendous. Economic, social and psychological costs are cumulative rather than discrete. Once a business closes it has a lower chance of re-opening, once a family is evicted it has a higher chance of being homeless, a closed church or social club or pub is forgotten after a few months. In fact, the patterns of every day life may become irrecoverable after COVID’s long disruption.
The imbecile – along with a lot of other dimwits – want to take this “opportunity” to “build back better”. Another few months of masks and lockdowns and the will to build back at all may very well leave the building.
Societies, economic systems, science and technology are all built on the acceptance of a degree of risk. At the outset of COVID we had a very limited capacity to calibrate the risks the disease posed. We did not know that it was rarely lethal to people under 60 or to people under 80 with no co-morbidities. Now we do. We also had a very limited idea of what the costs of various social measures to marginally reduce risk would be. Now we are beginning to understand those costs.
All over the West we are seeing people taking to the streets to protest the “lockdowns” but, more realistically, the destruction of their lives for relatively marginal benefits. At the moment, the protestors are no more than a small minority. However, as the destruction of those lives continues that minority will grow. And it will be joined by millions of people who are currently described as suffering from “COVID fatigue”.
While governments can certainly back up masks and lockdowns with draconian fines and penalties, ultimately they rely on the co-operation of their citizens. As COVID drags on, that co-operation will almost certainly collapse.
Though it will probably lead to higher case counts it may well be time for governments to look at opening up their economies and their societies. The plexiglass shields are in place, people have learned how to wear masks somewhat effectively, there is some data suggesting that far more people have had COVID than the case numbers suggest. Yes, extended care facilities need to be kept in their bubbles – which will make for a sad Christmas for many families – and, yes, thirty for Christmas dinner remains a bad idea. But opening up retail and restaurants and pubs is almost certainly an acceptable risk. Opening churches to limited congregations is likely fairly safe.
Most fundamentally, governments need to provide the information people need to assess their own, personal risk. If the vast majority of deaths from COVID occur in people 80 and over, explaining that to the public is important. So, frankly, is telling the public to get their vitamin D levels up and to get exercise. People over 70 with underlying conditions should be encouraged to shelter in place and government and social groups should work to ensure that our seniors have what they need without having to spend a lot of time outside their homes.
The next few months, especially in Canada, are not going to be much fun. Unlike our American friends, we will not have a vaccine. And, absent that vaccine, governments with an excess of caution, are going to be pressured to keep the lockdowns and mask mandates in place and enforced. Despite the fact that we now know that COVID is not lethal for the vast majority of people who get it.
(UPDATE: The possibility that Canada may get some vaccine early in the New Year is obviously good news. Now, if it is distributed to i) frontline workers, ii)extended care facility workers, iii) over 85’s, iv) over 75’s and people with co-morbidities the death rate should fall off a cliff. All the more reason to take easing restrictions now seriously.)
Selectively easing restrictions may increase the case count a bit, but it will reduce the economic, social and psychological toll COVID takes. Letting individuals assess their own personal risk and make decisions accordingly is a first step in building back smarter.
Well over 100 Toronto police officers and at least ten horses shut down Adamson’s BBQ today. They arrested the proprietor for “trespass” on his own property.
His sin was, of course, opening when Toronto is under “lockdown”. And then opening again and then, today, getting around the changed locks on his premises and opening again.
Now there will be plenty of people who will say, “Well, it’s the law and necessary if we are going to “stop the spread”. But I suspect there will be a strong minority who will say, “Lockdowns don’t work and Costco is in full operation a block away.” Have at it, my interest is in the show of force.
For the City of Toronto and the Province of Ontario, Adamson’s was a point of rebellion which had to be crushed. At any cost. If Adamson’s was able to open the entire pandemic lockdown regime would collapse. So out came 100+ cops and the horses. (I was surprised there was not a tactical vehicle or two.)
Given that there were all of about a hundred people at the BBQ spot today this was more than sufficient force to ensure Adamson’s would not be able to open. No doubt Mayor Tory and Premier Ford are pretty sure the job is done. Adam Skelly, the owner, is cooling his heels in custody pending a bail hearing. (If that hearing goes as I expect, there will be compliance conditions attached to his bail, namely no re-opening.)
Big government relies upon the general complacency of its citizens. A couple of hundred people showing up to a BBQ joint can be handled with a large police presence. A couple of thousand? Much more difficult. 20,000, not a chance.
I keep saying to my very worried wife, “Worse before better.” Which means that before there is any chance that reason, moderation and good government is restored, things have to get a lot worse. On the left, groups like BLM and Antifa work very hard to create martyrs for their narrative. So far with limited success. Adam Skelly may have set in motion the process which will make him a living martyr for common sense and a degree of justice.
Tomorrow, when he is asked to agree to conditional bail all he needs to do is say “no”. Which will mean a few more nights as Her Majesty’s guest. But it will create a rallying point for people fed up with the two tier lock down system in Ontario.
It is not at all obvious that the Emergency Powers given to the Provincial Government of Ontario are, in fact, constitutional. (Though the Charter is riven with loopholes for extreme governmental conduct.) But the real question is whether Adam’s supporters can put people in the streets. They had a good hunch going to Doug Ford’s house after Adam was taken away today. Lots of tin pans and whistles later in the evening would be useful.
In a number of Canadian provinces and American states, COVID-19 has been used as an excuse to exercise powers which no one has consented to and which may well be unconstitutional. Pushing politicians into dialing all this back is not a public health issue (virtually none of the masking/lockdown measures has much to do with science) it is a civil society question. Where do governmental powers stop?
I popped across the Strait a couple of days ago to see my older son and do a bit of business. I had not been in Vancouver since January.
It was a beautiful day, a tiny bit of fog but it burnt off.
It is difficult to grasp, living on largely COVID free Vancouver Island, just how devastating COVID has been in other locations. Where I live we have lost some businesses but there are lots which continue. About half the people mask if they are in a store. The streets are busy.
I spent a lot of my younger life in a stretch of Vancouver known as South Granville. And that is where my son lives now. The key thing about this area is that it has dozens of low rise and some mid-rise apartment buildings. They range from a bit sad through very elegant, pre-WWII, multi bedrooms. The key thing about South Granville apartments is that they never, ever, come vacant. People know people, lists were kept by building owners and managers. Walking towards the bus on West 12th every single building had a “Vacancy” sign out.
I walked down Granville Street for a couple of blocks. This is a high end shopping area. 85% of the people on the street were wearing masks. There was about half the normal foot traffic. And, most significantly, at least a quarter of the storefronts were “For lease”. There were still plenty of stores open and the majority of them had a mask requirement for entry.
The Granville bus was empty enough that “social distancing” was not a problem. I was heading downtown and looking at the empty storefronts and the “liquidation” sales. But the shock was downtown Vancouver itself. The “Granville” entertainment (read many bars and clubs) has simply ceased to exist. There are few bars hanging on, but where there were 30 or so venues it looked to me as if there are now maybe 5. Vancouver has always had a homeless population and, sadly, a population of street addicts. When I was a kid there would always be a few of these people at the south end of Granville street. They largely disappeared after about 2000 as the area gentrified. Now they are back.
Going all the way downtown three things hit me. First, the absence of people. Noon, on a sunny, warm, October day normally would see hundreds of people on the streets, grabbing lunch, doing a bit of shopping: yesterday there were, at best, dozens. Second, the number of storefronts for lease and businesses which are no longer there. At a guess, a third of the businesses which lined Granville and Pender and Howe are gone. The third thing which struck me was the absence of “international students”. There are, or were, dozens of English language schools downtown – actually a little east of where I was – and part of the fun of downtown was seeing gaggles of students. They stood out against the ranks of the office workers. While there were only a few office workers, there were no foreign students at all.
At noon I turned up at a restaurant at the corner of Howe and Hastings. I waited outside for my lunch partner. I could see the restaurant owner hovering at his door. This is a restaurant where, normally, you pretty much have to line up for a lunch table. It was empty and stayed empty through our lunch.
After lunch I headed off to the old station. I always have a cigarette on the plaza just before the entrance to the station. It has a grand view of the mountains but also of the bright reddy orange cranes of the Port of Vancouver. On a sunny day the plaza will usually have a couple of hundred people having lunch or just sitting in the sun. It is a favourite spot for tourists to take pictures. Yesterday there were less than fifty (likely less than thirty, I didn’t count) people all well distanced. There were no tourists.
I walked down to the trains. Again, usually, there is a steady stream of people coming and going even at 1:00. I passed exactly one person coming up from the trains and the great hall of the station was, effectively, empty. As were the train, the bus and the return ferry.
Overall, while it was great to see my son and one of my favourite CEOs, it was the most depressing trip I have ever taken. I could not have imagined Vancouver on a sunny, warm, October day being dingy, but it was. Storefronts are the multi faceted eyes of a city. When they are dark, the city is dark at noon. People, in their thousands, are the life blood of a city. Without people a city, even a beautiful city like Vancouver becomes pale and anemic.
British Columbia has done well through COVID. We’ve done it without lockdowns or mandatory masking but not without huge costs. Most of those empty storefronts were occupied by businesses which are not coming back. The absent foreign students and tourists will only return slowly, if at all. The empty offices may very well stay empty either because the jobs they contained will vanish or because staying at home during a pandemic makes a lot of sense and COVID seems far from over.
In one way, Vancouver is better off than most cities because “downtown” is mixed use. Lots of people live in the condos which surround the business district. That will keep some of the businesses alive. But that is the only encouraging thought I had. No office workers, no foreign students, no cruise ship passengers, no tourists: it is difficult to see how Vancouver will ever recapture the vibrancy, the sheer vigor, it had when I was spending time there last fall.
Wonderful, complex things like cities and downtowns are also fragile. You cannot shut a city down without there being short and long term damage. Nor, I suspect, is there any good way to “restart” a city. You can rebuild a city after an earthquake or hurricane, but restarting is a very different challenge. Especially if the “shut down” was largely voluntary, as it was in Vancouver.
Whether COVID simply dies out or a vaccine is produced or therapeutics are invented which allow the thing to be controlled is a necessary, but not sufficient, condition for the healing of the city. What has been lost along with the businesses and the tourists, is a sense of trust and optimism. Those will take much more than an end to the pandemic to restore.
In the UK, France, Ontario and various other jurisdictions COVID case counts have risen at an alarming rate in the past few weeks. Unfortunately, mandatory masking and strict lockdowns seem to be the only tools governments feel they have in the face of case count surges.
It can be argued that the increasing case counts may be an artifact of more testing. Or a product of the sensitivity of the tests themselves; but the actual case numbers keep going up.
If you look at the top graph the sky is falling and masks, social distance, lockdowns, school closures and “stay at home” all make a lot of sense. If you look at the bottom graph, COVID is over.
In Montreal over this last weekend up to 100,000 people marched against mandatory masks. The mainstream media downplayed the turnout and suggested that there were all sorts of conspiracy theorists, Qanon believers, far right and Trump supporters marching. There probably were. But I suspect the vast majority of the marchers were responding to the disproportionate response of the Quebec government to graphs which look very much like Ontario’s.
People are more than willing to go along with governmental measures they can see the point of. “14 days to flatten the curve and prevent hospitals from being overwhelmed” made sense back in April. And the measures taken then may well have worked. But it is mid-September and the hospitals and their ICUs are not even slightly overtaxed.
So what is going on? Let’s simply dismiss the loonier conspiracy theories about Gates wanting to inject everyone with micro chips and Soros wanting to impose unlimited lefty control and the UN pushing Agenda-21 under the guise of the virus and a host of other wingnut positions. The more reasonable position is that the media reports “newsworthy” stories and low or no deaths does not make the grade and, politicians and public health people were completely overwhelmed at the start of COVID. With the best will in the world they relied on models which, it turns out, wildly over-estimated the spread and the severity of the virus. Now they are like cats up a tree. Easy to get up, not so easy to get down.
Here’s the problem: politically, opening up too soon and seeing a rise in actual deaths, is seen as fatal. All the more so when case numbers are rising. The precautionary principle has taken hold and politicians see a huge downside to anything but the most draconian measures. After all, what happens if the death count goes up?
Add to that political calculation the fact about half the population is heavily invested in the idea that COVID is very dangerous for everyone and that there is no precaution too stringent to protect us. That part of the population wears their masks, stays home and hopes there will be a vaccine before Christmas. In terms of the graphs above, these people remain in the last week of April. These are the people who look at case rates and demand everyone mask up.
The rest of us have moved on, taking sensible precautions for the locations in which we find ourselves, but trying to resume a normal life. We tend to look at “case fatality rates” and try to get statistics broken out by locality and demographics. Vigilant but optimistic.
For the moment, case counts and masks seem to be winning the day. Lockdowns are being re-imposed. Halloween looks to be cancelled and Thanksgiving may be limited to immediate family. Christmas, whatever happens, will be muted. “Out of an abundance of caution,” seems to be the prevalent sentiment. The fact that the hospitalization rate and death count curves have flattened and, in fact, fallen is not cutting through yet.
I suspect it will be the New Year before the tide turns. People have been scared witless and it will take a while for them to calm down. Even as the general population begins to gain perspective, the economic damage will only be starting. Everything from supply chains to commercial real estate to personal debt will have to re-calibrate to a world which has, effectively, lost a year economically.
Back in March I wrote a couple of posts about how it made sense for governments to shovel some money into the wallets of people displaced by the COVID pandemic. What I did not anticipate was that the free money train would run into October. Nor did I anticipate that the virus itself would continue along for this long.
Now, the good news is that while case numbers are still high – and getting higher in some locations – the hospitalization, ICU and death rates have dropped significantly. COVID is still a nasty disease that you do not want to catch, but it is not anything like a death sentence for the vast majority of people who catch it.
“Third, did Canadians blow this? Handing over $94 billion in direct deposits made real estate less affordable, goosed motorcycle sales and drove the price of two-by-fours through the roof at the same time 25% of all homeowners with mortgages decided to stop making payments and unknown numbers of tenants welched on rent. There’s a growing sense we might come out of this in way worse shape thanks to the unregulated flow of CERB cash. More spending did not reduce debt. In fact, household borrowing just hit a new high of $2.33 trillion.
Covid really messed things up. The political response was extreme. Maybe that was the right response. Perhaps not. Obviously a lot of people needed income support when their livelihoods were erased. Others found CERB cash replaced the need to look for a job. Others quit work to collect it. Small businesses complained of a lack of willing employees. And the gush of cash, along with crashed interest rates, has inflated prices and increased personal obligation. Now we have an unfathomable shortfall in public finances, and a government unbothered by it.”
Add to “free money” significant changes in how people actually live – working from home being the biggest – and the idea that the old normal is coming back is fading.
For lots of people, the old normal was not all that great. Minimum wage is pretty unattractive when you have had six months of no deductions $2000 a month. An hour’s commute each way to a cubicle in the sky is not enticing when your current commute time is 10 seconds. Going back to university classes seems a little pointless when it can be taught remotely – and yes, university is about more than just the classes. Same with high school. It is not obvious who misses shopping in malls or shopping in general. Some of this might return when the virus is finally contained; but it will not return unaltered.
Justin Trudeau is planning on rolling out a comprehensive strategy for the re-opening/re-structuring of Canada in the post COVID world. I expect a hodge-podge of dim green ideas and some sort of Universal Basic Income. Unfortunately, I do not expect any serious proposals as to who is to pay for it and how. Unless I miss my bet completely, Trudeau and his people will take the position that additional spending can simply become part of the Canadian National Debt financed at the current incredibly low interest rates. Which can work for a while provided that the money is cycled into economically productive activity (like building pipelines or very small nuclear reactors). Somehow, I doubt that is what the Liberals have in mind.
Instead, I suspect we will get a bunch of witless green energy schemes along the lines of the green disaster which hollowed out the Ontario economy.
Which will be a missed opportunity as an intelligently designed UBI combined with a serious infrastructure commitment might well serve Canada. By well designed, I mean a program which consolidated all of the payments government – federal and provincial – make to individuals into a single monthly payment. The would include welfare, disability, Child Tax Benefit, GST Credits, EI, CPP, OAP and a raft of other payments. In 2019, on just CPP, OAP, EI and the Child Tax Benefit, the federal government spent 100 billion dollars. In 2017 (the last year I could find numbers for) the provinces and territories spent 69 billion on “social protection” programs which include welfare and disability.
There are roughly 30 million Canadians over the age of 15. A $24,000 a year UBI would cost 720 billion, a little less than twice the federal goverment’s total program spending for 2019. However, a UBI program properly designed would likely make full monthly payments to no more than 10% of the adult population. The rest of the population would have the right to claim the benefit only if their income fell beneath a certain threshold. By basing the UBI on income some of the perverse incentives inherent in the scheme (such as work shyness and the penalization of effort) could be reduced.
The great advantage of a UBI lies in its elimination of the need for everything from EI to OAP to welfare. It is not administratively complex – just like the GST Credit or Child Tax benefit, you file a tax return and receive your payments if eligible.
Now, if you do the math on a 10% eligibility at $24,000 per year, the program would cost 72 billion a year, far less than the $169 billion the federal and provincial governments are now spending. In fact, if 20% of Canadians were eligible, this UBI would still be cheaper.
A critical feature of a well designed UBI is making sure that additional income from employment is encouraged rather than punished. Realistically, $24,000 is not much money (though still better than BC current welfare or disability rates). Being able to earn without forfeiting the UBI is very important. Were it up to me I would set maximum earnings at at least $12,000 a year and, ideally, $24,000 before the UBI was tapered off. And I would treat couples as individuals as is the case under the current tax system.
This sort of well designed UBI with the corresponding elimination of other forms of income support would take a while to implement effectively. Which is where having a bit of “free money” would be a very good thing. But the best part of this sort of UBI is that, net, it would actually reduce income support spending at both the federal and provincial levels. Reductions which will be vital because “free money” is not going to last forever.
It has been a glorious summer on Vancouver Island. Sunny, not too hot, with just enough rain to keep things green. COVID has largely passed the Island, especially the south Island, by. We never were in “lock down” but people stayed home in April and May, over the summer they have been venturing out. Social distancing has become second nature and about half the people you see are wearing masks indoors. (I am not. But, then again, I am almost never in stores or other indoor spaces.)
From a business perspective, this summer has been as quiet as most other summers are. Working with the junior mining industry you get used to the rhythm of the seasons. Right now, the majority of our clients are out drilling, mapping and soil sampling. They will have news in September and then we will get busy. As I have worked from home for a couple of decades COVID has made next to no difference to what I actually do with my days.
Having said that I cannot help but notice that COVID and its economic consequences seem to have befuddled the politicians and the markets. In Canada we have seen a 30% plus crash in the GDP but, with the exception of the March crash, our stock markets just motor ahead. Our Federal politicians have thrown fiscal caution to the wind and are heaping money on a grateful populace. Where is this money coming from? Well, the simple answer seems to be “The Future”.
The logic is that in an emergency it makes sense to keep things going by borrowing and then counting on future earnings to repay the debt. Interest rates are at an effective zero so this is, in principle, costless. More importantly, no one seems to be looking too carefully at the various programs designed to keep people and businesses going when there is no work and no trade.
Does this make sense? Can it make sense? I am reading a wonderful book on Keynes, The Price of Peace, and my sense is that the later Keynes would be fine with this unfettered spending. After all, the alternatives are too bleak to be contemplated.
Which is worrying because it means that there does not seem to be a plan to deal with the economic consequences of this exercise in emergency spending. What happens when interest rates go up even a little? What happens when mortgage deferrals end? What happens when the CERB runs out? If no one goes to the office but instead works from home, what happens to downtown infrastructure, businesses and buildings? What happens when the stock markets notice a 30% drop in the GDP?
There is a whole literature devoted to both the last summer before WWI and the last summer before WWII. I don’t think we are on track for war but I do think we are going to have the answers to the questions above in the next few months and we are not going to like them at all.
To some extent these questions will be asked in all the Western, developed, economies and the answers will differ significantly. Unfortunately, Canada, while having avoided a really awful COVID outcome, does not seem to have thought through how we rebuild our economy. Worse, at the federal level, we have a minority Liberal government which seems to think the coming economic distress will be ideal for resetting our economy along greener (and possibly, more gender/race inclusive lines). The idea that it might be useful to put as many people back to work as quickly as possible does not seem to have occurred to the Liberal government.
Regardless of government action, the “Market” is, eventually going to have something to say about how Canada has responded to and will respond to the economics of COVID. A 30% drop in GDP will not mean nothing; but it is hard to anticipate what will actually happen. Especially as our trading partners have, in many cases, experienced a similar collapse.
As they say in the stock market, things are looking “toppy”. Thrilling as Tesla and Apple’s share price rises have been, it is not unreasonable to think that parabolic is not sustainable. Solid as the Canadian bank share prices have been, as mortgage payment deferrals roll over into defaults, you have to think there will be some contraction. Real estate is hitting new highs with the abundance of cheap money available for mortgages, but if people do not have jobs, how can they pay those mortgages?
Modern economies are built on certain key assumptions. The most basic of those assumptions is that, more or less, production and consumption are in rough balance. While states and central banks have tinkered at the fiscal and monetary margins, until relatively recently, massive interventions were pretty much reserved for wartime emergencies. That restraint has now vanished.
Which is interesting as a matter of policy but what will its actual effects be on the day to day reality of economies. In a wartime emergency, spending big is not done to stimulate the economy, it is done to fight the war. Money is spent on war fighting tools which are very quickly consumed without leaving any trace in the overall economy. (Yes, wages for war work will rise but that usually reflects the scarcity of “manpower” which building armies and navies creates.)
The present circumstance is very different. Money is being spent and created at a wartime pace, but there is no wartime economy to finance. In fact, there is only a 70% peace time economy.
The consequences of the GDP collapse may be able to be postponed for a few months or a year, but, eventually they will begin to show up. Personal income will fall, tax revenue will drop: but there will still be the debt taken on during the COVID emergency.
I am taking my young dog down to Moses Point for a bit of a frolic. In 1914 and 1939 anyone with any awareness at all realized that war was imminent. Mary Wesley’s The Camomile Lawn, Anthony Powell’s, The Kindly Ones capture the sense of a last, good, summer. The water sparkles in the sun, the boats cruise by, but best to take a jacket because the cool breeze of fall is blowing and Moses Point is quite exposed.
I have not been writing much about COVID and its consequences simply because, day to day, very little changes.
I am very lucky. I live in British Columbia which has had among the lowest per capita case rate and death rate in the developed world. There are a variety of reasons for this first among them the provincial government’s decision to treat its citizens like grown ups. The government has shared its statistics, its models and its recommendations. It has issued very few “orders” nor has it locked down the economy. Social distancing, the ubiquitous plexi glass barriers at the cash tills, maximum occupancy to prevent over crowding are pretty much it in terms of required measures. No sit down dining in restaurants and bars closed. We are encouraged, but not required, to “stay at home”.
Yesterday there were only 15 new cases in the province. The curve has been decisively flattened. On Vancouver Island, where I actually live, there have been only 126 cases overall. There were no new cases yesterday.
The rest of Canada ranges from New York City levels of illness in Montreal to very little illness on the prairies and in most of the Maritimes. Ontario, particularly Toronto, has been hit pretty hard and has reacted with broad lock downs and fines for illicit dog walking or hoops shooting.
Right now, BC is coming back online in a phased way and I suspect most businesses will be operating with capacity restrictions by mid June.
Now the question is how much economic damage has the virus done.
While it is convenient for politicians and economists to think of the economy at the macro level with unemployment rates and money supply and such like, the actual economy is a vast set of tiny transactions and the habits which power those transactions. Before we can really talk about the effect of the virus on such lofty things as aggregate demand, we have to think about the very small scale exchanges of daily life.
To give one example: if a person who, before the virus, went to an office everyday is now working from home their web of tiny transactions will have changed shape – gas bought once a month rather than once a week, no dry cleaning, no Starbucks, no lunch in the food court. The question is whether, even if they keep their job, they will be going back to the office. Increasingly, the answer seems to be no as everyone from the Bank of Montreal to Facebook have announced that they are looking at leaving their workforce at home.
These sorts of choices – whether made by the individual, companies or governments radically and unpredictably change the economic balance in ways we will not fully understand for years. There is no way to model this sort of change because there is no way to predict what a shift to working at home will actually mean economically. Nor do we really have much ability to work through the ramifications of extremely limited air travel or fanless sporting events.
Now, add to these and countless other shifts in behaviour, there is also the uncertainty as to the rate of change in that behaviour. Air travel is, at the moment, very, very limited. Flights are cancelled, air crew furloughed, smaller planes deployed where possible. That happened at the beginning of April and is ongoing. It is not, directly, the result of government saying “reduce air travel” but rather a consequence of lockdowns and “stay at home” edicts. It is also a very rational response to the virus itself – who wants to sit in close quarters with someone who is asymptomatically infected? Will that change and if so how fast?
A lot of the day to day transactions of life require a background of general trust, a sense of confidence. You can flatten the curve, lift the lock downs and generally stimulate the economy with helicopter money but until trust and confidence are restored you are essentially pushing on a rope.
I suspect we are coming to the end of the first wave of the virus. A good, hot summer, may see the end of it. However, the possibility of a second wave, potentially worse than the first, cannot be dismissed. Which is just one more worry to pile on top of the profoundly out of kilter economy.
In many ways the biggest obstacle to economic progress is the very idea that we will somehow “get back to normal”. The fact is that there is no longer a “normal” to return to which means we will be going forward into a economy which we will be inventing as we go. Which might sound scary but, realistically, market economies have always invented their own futures.
The lads in Edmonton, politely taking down a railway blockade are a logical outcome of the abject failure of government to actually deal with the ongoing Wetsuweten fandango.
I was delighted to see these gentlemen take direct action but it brings into sharp relief the effects of ongoing, tolerated, illegality.
Much is made of “the rule of law” which is a malleable concept and can be used to justify the Liberal goverment’s forbearance from cracking down on the protestors, the protestor’s own claims as to a SCC endorsed higher rule of law which gives FN hereditary chiefs precedence in the matter of title to unceded lands, and the rights of a bunch of Alberta boys to clear the garbage off the tracks. These competing claims to the benefits of the rule of law are going to be tested in the next several days.
My own analysis is that if you want to claim a benefit from the law you must first obey it in all its particulars. Claiming the right to protest – essentially a free speech claim – makes great sense within Canada’s Charter framework. And your protest might, in fact, involve blocking traffic or access to land. What it cannot involve, if you want to continue to enjoy the protection of the law, is defying or ignoring an Order of a Court having jurisdiction. When you do that you a) break the law, b) put yourself outside the protection of the law.
The reason we expect the police to enforce Court Orders is that they are trained, accountable and are given the monopoly on force in a civil society. They sometimes screw up but they have to answer for their errors.
The Edmonton lads behaved perfectly. Hats off and all that. But it could have gone another way and almost certainly will if the politicians sideline the cops. Much as I admire the self-help ethos of those Albertans, we cannot always count on private citizens to be so polite. Especially if the protesters get a bit stroppy about having their “sacred items” removed from the rail lines and highways of the nation. To date, the allies of the FN protesters have been nice, white, middle class young women and old radicals. Antifa and Black Bloc people have been largely absent. That will not be the case if this drags on.
The Edmonton lads have, I believe, given the federal and provincial governments the cover they need to shut down the “support” protests forthwith. There is a legitimate concern that the protesters are going to have the shit kicked out of them, and vice versa, if the situation is allowed to continue. Time to actually enforce the rule of law and the injunctions which flow from it. No exception, no negotiation: if you ignore or defy a Court Order you will be told to stop and, if you do not, you’ll be arrested and charged.
We cannot afford to have bits and pieces of Canada where the law does not run. Even our dim witted Prime Minister must realize that. Time to stop virtue signalling and start ensuring that society remains civil and governed by the rule of law.