NORTHERN ECONOMIST 2.0

Monday, 23 March 2020

Covid-19 In Canada: Regional Impact

By now, we are quite used to seeing the daily numbers by province splashed across computer and television screens as the number of Covid-19 cases grows. As of 6pm on March 22nd, there were a total of 1430 confirmed cases in Canada. If we plot those ranked by province as in Figure 1 below, we see that the total number of cases is largest in Ontario at 425, followed by British Columbia at 424. However, what is interesting is that this does not convey the full impact of severity across provinces because this is not adjusted for population. Ontario, for example has approximately two and a half times the population of British Columbia which means on a per capita basis, British Columbia has more cases.

Figure 2 provides these same numbers in terms of cases per 100,000 population. It becomes quite apparent when the provinces are ranked in terms of cases per 100,00 population, that western Canada - particularly British Columbia and Alberta are the hardest hit in terms of cases at 8.3 and 5.9 cases per 100,000 of population. They are then followed by Ontario and Nova Scotia at 2.9 cases per 100,000 each. Saskatchewan clocks in next at 2.8, Quebec at 2.6, the Northwest Territories at 2.2, PEI at 1.9 and New Brunswick at 1.2. The remaining provinces and territories currently have less than 1 per 100,000 of population.

That is all for now.

Saturday, 21 March 2020

It Is Time to Declare a National Emergency

In his address to the nation earlier today, Prime Minister Justin Trudeau stated that he was not ready to declare a national emergency in regards to Covid-19 but that the federal government was studying the data and all options were still on the table. The number of cases in Canada today has reached over 1300 and there are now 20 deaths. If we are going to get this crisis under control, we need to completely shut the country down for two weeks - that is, there must be a lock-down in which everyone except essential workers in health, public security, and food and medical supply is restricted to their home and can only emerge either to shop for groceries, fill prescriptions at pharmacies, or obtain emergency medical care. Moreover, this needs to be enforced by public authorities with the power to stop individuals and ask why they are out and about or why they are in a group and not maintaining social distance.

This must be done sooner rather than later. This may seem to be an overreaction but in this type of situation it is better to overreact rather than under react if we want to have any hope of getting this under control and avoid what is happening in Spain or Italy. We have had more lead time than those countries did and yet the federal government appears timid in its response. The decision lag continues. It is individual businesses and respective provincial governments that are taking action by declaring emergencies and implementing changes in how things are done.

The emergency economic action taken by the federal government is important but will not be effective if people are afraid. The best way to protect the economy is to protect the health of Canadians and give then the confidence that comes with knowing the health effects of COVID-19 are being contained. Perhaps, the federal government may feel that health is a provincial responsibility but under our constitution, the federal government has the overarching responsibility for peace, order and good government, the spending power and even the power of quarantine. Is the government waiting to repatriate everyone from abroad trying to get back? But how can they all come back if other countries are shutting their borders and airlines are stopping flights?

Who really knows what is driving the current federal response. One imagines if the elder Trudeau was currently Prime Minister, one would have seen the imposition of the War Measures Act to deal with this crisis. As draconian as that sounds, what other options are there to get people to stay home, comply with social distancing and stop the spread of the virus?

Monday, 16 March 2020

Special Announcement from the Diocese of Thunder Bay Re COVID-19

Diocese of Thunder Bay

SPECIAL NOTICE TO ALL PARISHES

RE: CORONA VIRUS – COVID 19

Diocese of Thunder Bay

SPECIAL NOTICE TO ALL PARISHES

RE: CORONA VIRUS – COVID 19

In consultation with health officials here in Thunder Bay and in an attempt to curb the spread of this virus in northwestern Ontario and to safeguard the health of everyone, especially of the elderly and most vulnerable, I am regretfully making the decision to CANCEL ALL SUNDAY MASSES IN ALL PARISHES OF THE DIOCESE (Saturday night and Sunday) for the next TWO WEEKENDS: March 21-22, and March 28-29.

We will assess the situation for coming together for Masses again on Palm Sunday, April 4-5, 2020 and for Holy Week.

Weekday Masses can continue in the parishes since crowds are usually much smaller for these Masses. People using their discretion attending should practice “social-distancing”, that is keeping one meter away from each other at the Mass.

No shaking of hands and Communion is to be received only in the hand.

Funerals are to be celebrated when necessary and again “social-distancing” should be encouraged for those attending.

Parishes should provide tissues and hand sanitizers where possible, in appropriate places in the church or foyers. Washrooms should be kept clean and sanitized if possible. People should be encouraged to wash their hands regularly.

People who are feeling even slightly ill, with colds are asked to NOT come to church until they are better, for the safety of all.

Please encourage your people to view Mass on Television on Vision TV or on the internet and to pray at home, the rosary or study scriptures on the Sundays there is no Mass.

Priests may celebrate a ‘private Mass’ on Sunday but without a congregation, for their own spiritual life. All Catholics are dispensed from the requirement to attend Mass, on weekends when the Masses are cancelled.

Parishes should put a sign on their doors on the weekends indicating the situation.

Future information will be coming for the Mass of Chrism and Holy Week Celebrations, please stay tuned.

Sincerely in Christ,

+ Fred J. Colli

Most Rev. Fred J. Colli

Bishop of Thunder Bay

Saturday, 14 March 2020

Canada's Response to COVID-19

In response to the COVID-19 situation, Canada is about to undergo a pretty major economic shock comprised of both an aggregate supply shock - given the disruption to supply and production chains - and an aggregate demand shock - as consumer and business spending dries up. This is unprecedented and the ultimate effects on price and output will depend on the proportionate size of the leftward shifts. And of course, when things in the global world economic order get tough, you can always count on "team players" like Russia or Saudi Arabia to make things worse as they have with their oil production squabble. This will provide the final push to conditions that were already driving a potential Canadian slowdown given the length of the business cycle, and the impact of trade restrictions and disruption with both the US and China. Ironically, those elements in Canada who were trying to shut down the Canadian economy with transportation and production blockades only a few short weeks ago, will get their wish in ways they could not possibly imagine.

This shock is mainly to expectations and confidence on the part of consumers, investors and business. Anything that requires non-essential consumer spending - restaurant meals, tourism, travel, and leisure activities - will be hit the hardest. Essentials in sectors such as food and supplies will do better. Many personal services will also be hit hard in the immediate term. Online services and shopping especially with delivery service will get a boost. At the same time, this is an "animal spirits" driven crisis and once it appears the COVID-19 situation is under control, there will be a fairly rapid resumption of activity and pretty quick bounce-back from any recession in Canada. The longer-term is more interesting. Just as 9-11 changed global trade, travel and interactions in many ways, this too may result in changes in travel mobility especially. The openness of borders that marked the second age of globalization from the 1990s to the present may fade.

From a health economics perspective, Canada is a highly developed economy with an excellent health care system. Moreover, in the aftermath of SARS in the early 21st century, there was substantial investment in public health infrastructure so in general it is very well prepared. However, like other countries, the danger from COVID-19 is that despite the fact that most people have mild symptoms, that small proportion that has more severe illness is large enough to overwhelm the health-care system - particularly the supply of acute care beds and respirators. Here Canada is less prepared than most. Despite being one of the largest health care spenders in the OECD, it has one of the lowest per capita amounts of hospital beds and physicians in the OECD. A case in point, Italy has much higher bed and physician numbers per capita than Canada and it is still being overwhelmed. Canada's hospital system in particular has been at capacity for years and there really is no slack. A major question that must be answered once COVID-19 is under control is where did all the health spending money go? How can one be one of the biggest spenders on health in the developed world and yet be at the bottom for indicators such as hospital beds and physician numbers and often only mid-ranked on many health indicators? There should be a reckoning here.

In response to COVID-19, there has been a pretty unprecedented response on both the fiscal and monetary policy side from our federal government and the Bank of Canada. Ottawa is about to open the spending taps with stimulus and supports, which will undoubtedly include money for the provinces to spend on health. There will be large deficits and this is a time where deficits are called for though it should also lead to the question as to why deficits have been so large to date in the absence of a downturn or crisis. Interest rates have dropped dramatically and by mid-April will probably drop even more. In many respects, this is the right thing to do given the immediate crisis but there are limits to what all of this can accomplish.

In the end, this downturn is an "animal spirits" driven crisis that is being driven by expectations and uncertainty. All the king's spending and all the king's horses will not have an effect if people are afraid to venture out and spend. Put another way, you can lead a horse to water but you cannot make it drink if it is afraid to leave the barn. The biggest stimulus to the economy is confidence that governments and health authorities know what they are doing and are getting the situation under control - a drop in infection rates would be the clearest indicator of this.

Announcing measures like enhanced screening at airports and points of entry followed by news stories of people getting off planes on international flights in Vancouver or Toronto with nary a query is not a recipe for boosting confidence. Where are the screening staff at Canadian border entry points making sure everyone is asked questions about where they have been and taking temperatures? What is being done to boost the supply of beds and respirators? Getting the situation under control ultimately requires more than spending announcements and moral suasion. It also requires evidence of effective action. These are not regular times. Words are not enough.

Wednesday, 11 March 2020

The Future of Policing in Thunder Bay

It appears that high crime rates in Thunder Bay have provided a new impetus for both police infrastructure and operating expenditure growth. Along with this year’s large budgetary increase, there is now a consultant’s report on a new police station that according to one local media report has “raised eyebrows” at City Council. A French-language report for those with french language facility also provides a very nice overview of the matter.

The issue is two-fold. First, the report maintains that the current Balmoral Street police station is at the end of its useful life and needs to be replaced by a new and larger – double the size actually - central police station at a new location. The current facility is old and lacks key facilities like a shooting range, suitable public spaces, a forensics lab and training rooms. The price tag is for replacing a building that is approximately 30 years old is $52 million and that will be on top of all the other things City Council wants to do on the infrastructure side including a new turf facility.

Second, the report says more space is needed because the current force is likely to grow significantly over the next 20 years in terms of new staffing to meet modern policing styles and needs and the growth is expected to see employment rise from the current 309 to 400 – a 29 percent increase in staffing despite population projections that do not see Thunder Bay population growing much if at all in the immediate future.

This ask is a big deal. To start, the capital spending alone for a new station when the existing building is only about 30 years old begs the question as to why the current station cannot be renovated. True, the consultants say a new build is cheaper in the long run as renovating the existing station to meet needs will cost $64 million. However, we all know the history of cost estimates when it comes to public sector builds in Thunder Bay. Both of those numbers are estimates and that $52 million especially will grow considerably once construction begins. More importantly, if we are embarking on a major spending program for police services, why not take this as an opportunity to revisit the nature of policing entirely in terms of service location?

A new and bigger centralized station is really a very 1970s concept and characteristic of the post-amalgamation approach to public services in Thunder Bay – a shiny new building in a “central spot” when the population is in two clusters at opposite ends. If the public likes this, just ask them how much they really like having all the medical services in one spot that always requires a major drive to get to and is not conveniently accessible by public transit? The public might also like to ask if when it comes to health services, why Thunder Bay does not have something like an urgent care centre that could take pressure off the one emergency at TBRHSC - but I digress.

One wonders if putting all the policing assets in one locational basket is really that wise in the 21^st century. While we are a relatively small community, we are also remote and our population is quite spread out. Is having only one location for police, one central hospital, etc…really the way to go forward in a world increasingly marked by shocks and catastrophes that can cripple infrastructure? Even the shiny new “centralized” EMS HQ and station in Thunder Bay was ultimately supplemented with satellite facilities. Like I said, we are remote and it would take a long time for any type of help to get here in the event a major catastrophe happens.

If the decision is to go with new and larger police facilities, why not renovate the Balmoral complex and then put in another satellite facility – at some distance from the current location which is effectively already a north side location - that can serve as a training facility/forensics lab/community policing and supplementary policing facility. Officers travelling back and forth between the locations is simply another community patrol which would enhance service. Is there an exceptionally compelling reason why a forensics lab, training rooms and a shooting range all need to be together with the frontline policing services?

As for the new staffing, this is a potential slippery slope. The new policing methods noted in the report that will lead to increased staffing tend to rely not on front line officers but supplementary staff to handle many of the non-direct-crime fighting duties that officers need to do. This is supposed to free up front-line officers by not having them do routine administrative tasks and paperwork as well as “save money” by having these tasks done by cheaper civilian staff. However, in the end this is Thunder Bay and these workers will be municipal workers. How much economy in operations will really occur if the current number of front line officers grow only slightly but an additional 50-60 municipal employees are added over the next 20 years to the police service? This one needs a lot of thought given the impact on the operating budget.

So, this report is food for thought. Councillors are correct in asking tough questions.