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It’s day 119 since Canada’s 100th coronavirus case. The number of cases is 106,106 as of publication time, up 171 since yesterday—a 32 per cent decrease from the seven-day prior average of 254 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
Brazilian President Jair Bolsonaro—who previously dismissed the pandemic as a “media trick”—has tested positive for COVID-19. The 65-year-old wrapped up his televised announcement about his test by taking off his mask in front of journalists: “Just look at my face. I’m well, fine, thank god.”
Basic billions: A six-month, means-tested basic income to help people through the post-pandemic period would cost the federal government between $45.8 billion and $96.4 billion, according to a new report from the Parliamentary Budget Officer (PBO). Some policy experts, former federal staffers, and parliamentarians have called for one in response to the economic effects of COVID-19, although its proponents differ on whether it should be a limited-time measure or the start of a permanent assistance program.
The PBO’s model of a basic or guaranteed income is a limited program—it’s designed to provide up to three-quarters of the federal low-income threshold. It’s not universal, a quality advocates of such programs have argued is necessary to get buy-in from people who wouldn’t receive a targeted benefit. A basic income would replace some existing provincial and federal tax credits, allowing Ottawa to offset $15 billion of the program’s cost.
The federal government is currently sending pandemic-affected workers $2,000 a month via the Canada Emergency Response Benefit (CERB). In June, Prime Minister Justin Trudeau announced the program’s eligibility period would be extended for eight more weeks. As of June 28, 8.16 million unique applicants had received a combined $53.5 billion through the CERB; Finance Canada recently upped its cost estimate for the program to $80 billion.
But as many as 1.4 million people without jobs may have been excluded because they don’t meet the prior work requirements, quit their jobs over infection fears or simply struggled with the application. A basic income might reach those individuals.
The PBO previously did the math on a year-round basic income, estimating it would cost $76 billion, offset by $33 billion in savings.
In the markets: Chinese stocks closed up, while Canadian, U.S. and European indices faltered Tuesday. Tech and mining companies helped keep the TSX’s loss to just 0.47 per cent, faring better than the major U.S. indices. China’s CSI 300 extended its weekly gain to 12 per cent, following urging from state-run media for consumers to buy stocks. European stocks faltered after the European Commission predicted the continent’s GDP would drop 8.3 per cent this year, a more pessimistic forecast than its May prediction of 7.4 per cent, due to longer-than-expected coronavirus lockdowns.
EU stocks were also dragged down by fresh data showing Germany factory output was down nearly 20 per cent in May year over year, while Spain’s was down 25 per cent. U.S. stocks fell as some investors took gains after yesterday’s rally and some pulled back due to concerns about surging coronavirus cases in the country. U.S. volatility indexes are showing persistent “fear” from investors. Gold, a traditional safe haven in times of economic crisis, climbed to its highest level since 2011.
Canadian investors, by contrast, are jumping back into riskier assets as exchange-traded funds hit net flows of $4 billion in June, the most since February. The Canadian dollar fell to 73.47 cents U.S. in late afternoon trading, falling from a near two-week high on Monday on investor concerns that renewed lockdowns will slow economic activity.
“I think it’s Yemen’s Wuhan. Everyone is walking around with IV lines in their arms. There’s water in the streets [from the floods] and sewage. The mosquitoes are the size of birds. It is a very infected city. It feels infected. It smells infected. It looks infected”: Dr. Ammar Derwish kept a diary documenting the reports he heard from members of his community in Aden as he tried to treat them alone, often looking at X-rays by moonlight and falling sick himself: “I feel stupid, as a doctor, not knowing if this is a symptom or not.”
Cross-country checkup: A mandatory mask policy for indoor public spaces went into effect in Toronto and Ottawa today. Montreal is looking to follow suit. P.E.I. Premier Dennis King said a recent outbreak in the Maritimes could’ve been prevented with stronger communication, or “a greater, in-sync protocol” between Canada Border Services and the provinces. Nova Scotia is asking visitors to provide their quarantine addresses and phone numbers upon arrival; public health will call every day for 14 days, and will notify police if three consecutive calls go unanswered. Quebec will release details tomorrow about fines and penalties for venues not complying with coronavirus regulations. The Weeknd has donated $500,000 to Scarborough Health Network.
Bay Street to Main Street: Canadian pension plans are on the rise, but still well below their pre-pandemic levels. Mercer Canada’s pension health index, which measures funding ratios in the industry, reached 101 per cent on June 30, up from 93 per cent in March, but below the rate of 112 per cent at the end of 2019. Stock-market gains since the end of March have helped pull pensions back up, but low interest rates are blunting the increases.
- Seventy-two per cent of Canadians said they weren’t comfortable flying, now that Air Canada and WestJet have stopped leaving the middle seats empty.
- The average selling price of a Toronto home rose 12 per cent in June, a rebound from a coronavirus induced slowdown.
In the lab: Nearly 70 per cent of Canadians surveyed by Statistics Canada said they would likely get vaccinated once a COVID-19 shot was available; 77.3 per cent of those surveyed said they had a high level of trust that the federal government would secure a vaccine.
GlaxoSmithKline has agreed to help Quebec City-based Medicago develop its vaccine. The U.S. has awarded Novavax US$1.6 billion to develop a vaccine—the most any company has received so far through Operation Warp Speed. Novavax has never brought a product to market; it’s set to release the results of its earliest-stage human trial later this month. (“We have baboon data that looks really, really good and maybe better than anyone else,” said CEO Stanley Erck.) Meanwhile, Moderna, another recipient of U.S. federal funds that has never produced an approved vaccine, is reportedly in tense disagreements with government scientists, which has delayed its trial by two weeks.
The race to find a vaccine is igniting nationalist sentiment akin to the Cold War’s “sputnik moment” or the creation of the light bulb, which public health officials say threatens to upend the process. Here is a dispatch from a clinical trial participant who describes the vaccine process like “walking over thin ice and looking for cracks.”
Drinking from the firehose:
- U.S. employers hired over 200,000 IT workers in June, the biggest increase since the COVID-19 outbreak, though the unemployment rate amongst such workers remained unchanged.
- Samsung posted a better-than-expected second-quarter profit of US$6.8 billion, as demand for chips and electronics surged.
- A report says the pandemic has permanently changed how people in China work and consume on the internet. (Hint: they are doing a lot more of both.)
- Big- and mid-cap firms will slash capital spending by an average of 12 per cent—a somewhat bigger cut than 2009, and the steepest drop in 14 years.
- Though big Bay Area employers like Facebook and Twitter are letting their employees work from home permanently, 45 per cent of companies have yet to decide on when to reopen their offices, while a survey of IT employers says 67 per cent of respondents believe work-from-home policies will be long term or permanent.
- Gap will sell “high quality and fashionable” face masks directly to employers.
Around the world: The White House has issued formal notice of its withdrawal from the World Health Organization by July 6, 2021. In an open letter, 153 economists urged U.S. policymakers to keep delivering direct-cash payments to boost the economy and keep struggling people afloat. Their advice comes as the U.S. Congress’s economic relief legislation comes to an end on July 31. With cases nearing three million, the U.S. Department of Health and Human Services will temporarily provide free COVID-19 tests in three hard-hit cities: Florida, Louisiana and Texas. Melbourne has reimposed a six-week lockdown after the state recorded its highest one-day increase in cases. In China, Beijing reported zero new coronavirus cases for the first time in almost a month. Today marks the world’s first cricket match where the use of saliva on the ball is banned, forcing bowlers to look to Vaseline or sweat.
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One last job: Peter Tsai, the inventor of the N95 mask, retired two years ago, but is now working 20 hours a day on a volunteer basis in a makeshift laboratory at home to help scale up production of the in-demand commodity.
* We’re emphasizing new cases, rather than running totals, because “flattening the curve” is when each day’s new cases are fewer than those of the previous day. The percentage increase is determined based on how today’s cases compare to a rolling seven-day prior average.
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