One hundred and forty!

Apologies to anyone who has clicked on this post assuming from the title that it's about darts. It's actually about the rollout of fourth doses of COVID vaccines in Ontario. If it's darts you want, here's a link.

Anyway, a couple of weeks ago the Province of Ontario announced that fourth doses of vaccines would be available to a fairly broad range of individuals, including indigenous peoples, those over the age of sixty and those with pre-existing medical conditions. Take-up of third doses has been a bit patchy -- only about 55% of eligible Ontarians have received that shot, compared to 85 percent who have had two doses.  So  perhaps it's no surprise to find that the take-up of fourth shots has so far been very slow.

Maybe the conditions for getting that fourth jab have something to do with this. The key requirement is that you have to wait "five months" after your third shot. Since most of those eligible for the fourth dose only started getting their third shots on December 3, this suggests nobody can book a fresh appointment until May 3, so perhaps it's no surprise the phones have not been ringing off the hook.

But wait a second! It turns out the actual wait time after the third shot is 140 days. That's not the same as any five months in the actual calendar, however carefully you select them -- February plus April plus June plus September plus November gives you 148 days. But in any case that would not make a whole lot of difference -- for anyone who got their third shot right on December 3, fourth dose eligibility at the time of writing is still eight days away.

But wait another second! A closer look at the Provincial vaccine portal shows that you can get your fourth shot three months after the third, provided you sign a form for "informed consent", which is a euphemism for "if anything goes wrong, don't blame us".  Not exactly an offer you can't refuse. I believe I'll wait a bit longer for that next shot, especially as there are signs that the latest COVID wave in Ontario may be ebbing. 

Enough!

Over the past two years I have commented a few times on the work of the Ontario Science Table, a group of experts set up by the Province to provide advice on dealing with COVID. The Table has regularly provided modelling-based forecasts for the pandemic, with results that we can reasonably describe as mixed. More often than not they have significantly over-estimated the severity of each successive wave, though it has to be said that they did rather better in predicting the fifth (aka omicron) surge in cases.  

The head of the Table is one Dr Peter Juni, and from where I am sitting he has done his colleagues, and thereby the government, few favours.  In speaking with the media, Juni always seems to jump straight to the worst case scenario identified by the modelling; not infrequently, he has seemed to go beyond that to scare people with numbers that he almost seems to have pulled out of the air.  

So, Ontario now seems to be in a sixth wave of COVID, not unexpected given that most restrictions on masking, indoor dining and such were removed a few weeks ago. Politicians and most doctors seem reasonably relaxed, or at least willing to see how things play out. After all, Ontario has close to 90 percent of its population double vaxxed, so the risk of severe outcomes is greatly reduced.

Someone who's not even a bit relaxed, however, is Dr Juni. PCR testing data shows a gradually rising case count in Ontario, with about 4200 cases reported in the latest daily data. This is known to be an underestimate, given reduced testing activity, but how much of an underestimate? Well, Dr Juni has been looking at waste-water data, and has reached the conclusion that the actual daily new case count is in a range of 100,000 - 120,000 per day! He asserts that one in twenty people in the Province currently has COVID, which implies that close to 750,000 people are currently stricken. Given that the official case count for the entire two years of the pandemic is about 1.2 million, that's a startling statistic indeed. 

I am not qualified to judge whether Dr Juni is right about this, but I can read numbers too. Scroll through to the bottom of the linked article and you'll see that the latest count of hospitalizations for COVID in Ontario is 1,126, with 159 patients in intensive care. The hospitalization number is rising, but the ICU count has actually fallen slightly in the last couple of days. I'd say that recording such small numbers of really sick people in the face of such a massive overall number of cases should count as good news, but what do I know?

Dr Juni is going to be leaving Canada very soon to take up a position at Oxford University, so this latest scare story may be his swansong. He is evidently a very smart man indeed, but his predilection for headline-grabbing has not always served Ontario well.

COVID modelling update

Time to revisit our old friends at the Ontario Science Table, who have just published the results of their latest attempt at modelling the course of the pandemic. Throughout this ordeal, Ontario Premier Doug Ford has insisted that he is "following the science", but the Science Table has not always made that easy. Regardless of how much work has gone into the models behind the scenes, politicians and the media have tended to jump on the worst case scenarios, which are generally just extrapolations. When those scenarios don't materialize -- which is, of course, the probable outcome -- public faith in both politicians and scientists gets eroded just a bit further. 

With that in mind, let's look at the slide deck the Science Table published on Tuesday. Clearly,  things are going much better than the scientists expected earlier in the fourth wave of COVID.  After Ontario relaxed many of its restrictions in mid-July, there were fears that the case count would soar, with the return to in-class schooling in September set to add to the toll. The worst case scenario was that cases, which had fallen to around 200 per day before the reopening, would soar to as many as 4000 per day by October.

There was certainly an uptick through August, with the daily case count seemingly heading north of 1000 at one point, but then the numbers stabilized and started to decline. For the past two days the number has been below 500. The Science Table acknowledges this, but in the most unenthusiastic way imaginable. Its first "key finding' begins thus: "New cases, hospitalizations and ICU admissions are not increasing".  You would think that was good news, but the scientists seem to want to play it down, calling the situation "fragile".  They attribute the fall in cases to rising vaccination rates and Ontario's decision to keep some of its public health measures in place.  Given that both of these factors were evident a couple of months ago, this rather begs the question of why the earlier projections were so much gloomier. 

In any case, the "fragility" of the situation leads the scientists to warn that the range of possible outcomes as the colder weather arrives is very wide, albeit starting from a much lower base than seemed likely earlier in the fourth wave. It's interesting to look at the graphics for cases and ICU admissions. Some smart person has chosen to print the worst case lines much thinner than those for the base case and more optimistic scenarios. Given the tendency of the media and politicians to glom onto the worst case at every opportunity, it seems unlikely that this is accidental.

These projections emerge as something interesting seems to be happening with the pandemic across the globe.  The WHO just reported that cases fell by 10 percent over the past week. Even jurisdictions that have handled this whole nightmare badly -- Boris Johnson's UK, Ron DeathSentence's Florida -- are seeing lower case counts than the gloomsters had predicted.  Some scientists in the UK are suggesting that the virus is set to run out of ways to spin off ever more dangerous mutations, and will soon be no more lethal than the common cold. That may be a premature call and it won't make forecasting any easier, but it might mean (please!) that the rest of us don't have to pay quite so much attention. 

July jobs jump

Statistics Canada reported this morning that the Canadian economy added 94,000 jobs in July, with the unemployment rate falling 0.3 percentage points to 7.5 percent. The increase was below the analysts' extravagant consensus expectation, which called for a rise of 165,000. Still, combined with the 231,000 jobs added in June, today's data mean that all the jobs lost during the most recent round of tight COVID restrictions in April and May have been recovered. Total employment remains 246,000 below its pre-pandemic (February 2020) peak. 

StatsCan's release analyzes the data in a wide variety of ways, but a few key points stand out.  Most notably, the job gains were heavily concentrated in Ontario, which saw an increase of 71,000. Premier Doug Ford was widely castigated for being too quick to reopen the Province's economy earlier in the pandemic; this time he has been more cautious, with reopening moves at the end of June and the middle of July driving the job gains seen in today's report.

All the job gains reported in July are in the services sector, with a rise of 35,000 in the accommodation and food services category, which has been whipsawed throughout the pandemic. Virtually all of the month's new jobs are full-time in nature. The private sector accounted for 124,000 new positions in the month as public sector employment declined for the first time in more than a year. In further indications of the improving health of the jobs market, the percentage of Canadians working from home edged lower and the underutilization rate fell by 1.2 percentage points to 14.4 percent, though both of these measures remain above pre-pandemic levels. 

There are early signs of an emerging fourth wave of COVID in Canada. The country's high vaccine uptake is likely to mean that further tight lockdowns will not be needed, but continued easing of the remaining restrictions may have to be delayed. Job gains in August may again be strong, as the full impact of Ontario's mid-July easing feeds into the data, but the pace is likely to slow in the Fall, especially if the US COVID picture continues to darken.

US jobs data for July were also reported today and came in well above expectations, with a rise of 943,000 positions in the month, just above an upward-revised gain of 938,000 in June. The unemployment rate fell to 5.4 percent. Nevertheless, the US recovery from the worst impact of the pandemic lags behind Canada's, with employment still 5.7 million, or about 3 percent, below its pre-pandemic peak.

President Biden has been quick to claim credit for the jobs surge, but is wisely warning that "we doubtlessly will have ups and downs along the way as we continue to battle the Delta surge of COVID." That seems almost certain, given the remarkably rapid rise in the case count in recent weeks.  The US economy undoubtedly has considerable momentum, but unless vaccination rates increase sharply, its prospects for further gains in the coming months seem more uncertain than Canada's. 

This year's model (UK remix)

I have posted several times about the COVID-19 modelling that governments in Canada (specifically my home Province of Ontario) have been relying on to guide policies aimed at combatting the pandemic. As each successive wave of infections has started to build, governments have released modelling that supposedly shows catastrophic rises in infections lying just over the horizon. Without fail, these warnings seem to have been followed by a prompt reversal in the course of the disease, with new infections starting a steady decline.

I have tried to make the point that there is or at least should be a distinction between modelling, which takes account of a range of causative factors, and extrapolation, which simply assumes that the most recently observed growth rate will continue indefinitely. Just about every scary model here in Ontario has been extrapolation, sometimes from a very flimsy base indeed -- in one case, back in the winter months,  it appears to have been a projection based solely on the worst single day of the pandemic!

It's no surprise, but also no consolation, to find that the same thing may be happening in the UK. Boris Johnson's decision to proceed with his fatuous "Freedom Day" on July 19 led to an outcry from scientists and physicians. With cases of the delta variant rising sharply, they predicted an apocalyptic outcome, with cases soaring from the then-current rate of under 50,000 per day to 100,000 or even 200,000 in a matter of mere weeks.

Less than a week on from Freedom Day, what has actually happened?  Cases have begun to fall, and not just marginally. The daily infection count briefly moved above 50,000, but in recent days the figure has been around 30 percent below prior week levels -- and the number published today (July 25) was a startling 40 percent lower. Epidemiologists are lost for an explanation and are warning that this may be a false dawn, not least because Freedom Day itself may trigger a rise in new infections, which might not show up for another week or so. Fair enough, but when your forecast is wrong not just as to magnitude but as to the actual direction of change, you surely have some explaining to do.

I don't write these posts because I'm anti-vax or anti-lockdown -- very far from it. Nor am I anti-statistician -- that was part of my professional education. But the fact is, forecasts that consistently appear to overstate the threat run the very obvious risk of triggering a backlash: you were dead wrong the last time, and the time before that, and the time before that, so why should we believe you now?  Brits were on the streets of London yesterday protesting against the COVID restrictions, even though Freedom Day saw most of those restrictions removed across England. That's dumb -- although the English do love a good ruck --  but politicians need to ask themselves just what that kind of dumbness might be telling them. 

UPDATE, 27 July: This quote from the BBC website, attributed to one Professor Adam Kucharski, may inadvertently tell us more about the "modelling" than the Professor intended: "One of things you've got to remember is there is a lot of infection still out there. If behaviour changes, then you're only two doublings away from 100,000 (25,000 cases to 50,000 cases to 100,000 cases)."  Right. And if my granny had wheels she'd be a streetcar. 

11 and out

No, I'm not talking about the Toronto Maple Leafs' abysmal early exit from the Stanley Cup playoffs last night -- everyone knows that the Leafs never make it eleven games into the playoffs anyway. I'm talking about Canada's GDP, which grew for the eleventh straight month in March, but appears to have fallen in April as COVID lockdowns took hold. 

Data released by Statistics Canada this morning show that real GDP rose 1.1 percent in March, up from a 0.4 percent gain in February. The growth was broad-based, with both goods and services output posting matching 1.1 percent gains and eighteen of the twenty industrial sectors recording gains. Even so, real GDP remained about 1 percent below the pre-pandemic peak posted in February 2020.

The picture looks slightly different if we look at quarterly GDP data, also released this morning. Real GDP rose 1.4 percent in Q1, or about 5.6 percent at an annualized rate. This represented a deceleration from the 2.2 percent gain posted in the final quarter of 2020 and was slightly below the analysts' consensus. Oddly enough, the data suggest that real GDP for the full quarter was actually 0.3 percent higher than the pre-pandemic level seen in the first quarter of 2020. This reflects the very sharp fall in GDP in March 2020, as the first wave of the pandemic struck. As I have suggested here in the past, the monthly data will be more useful than the quarterly figures until the COVID-related gyrations are behind us. 

Growth for the month of March was led by the retail sector, which posted a 3.7 percent gain following a  5.9 percent jump in February.  This sector has been particularly hard-hit by COVID restrictions, and the all-too-brief easing of those restrictions during the first quarter of the year contributed to this strong rebound.  The sector was once again clobbered by fresh anti-COVID measures across the country in April as the third wave of the pandemic hit. Falls in retail trade, combined with weakness in manufacturing, real estate and educational services, resulted in a 0.8 percent decline in real GDP in April, according to StatsCan's preliminary estimate. 

There has been a gradual lifting of restrictions in parts of the country during May, but the lockdown in the most populous Province, Ontario, remained in force throughout the month and will only be lifted in stages during June.  This makes it unlikely that May will see any real GDP growth for the country as a whole, but the picture for June is looking considerably brighter. The strong "handoff" from the March data and the relatively modest scale of the decline seen in April could mean that a downturn in GDP for Q2 as a whole may be avoided, and all indications are that the second half of the year will see very strong growth.  

Dissecting the Canadian Federal Budget

Canada's independent Parliamentary Budget Officer (PBO) has just released its customary commentary on the recent Federal budget. The stated aim of the report is "to assist Parliamentarians in their budgetary deliberations", although it probably goes without saying that very few Opposition MPs have waited for this informed critique before unloading on the budget. 

In terms of the economic outlook for the budget's time horizon (out to fiscal 2025), there are no significant differences between the PBO's projections and those in the budget. (As usual, the budget projections for growth and inflation reflect the views of private sector economists). The PBO's forecasts for real growth are slightly slower than those in the budget, likely because the private sector economists made assumptions about additional fiscal stimulus in drawing up their projections. On the other hand the PBO's inflation forecast is slightly higher than that in the budget. As a result the nominal GDP forecasts,  arguably the key figure in projecting government revenues, wind up being very close. 

As for the fiscal outlook, the PBO projects that deficits will average about C$ 5.6 billion higher than the budget forecasts over the period to 2025. In the context of the forecast deficit for FY 2020/21 (already ended) of C$ 354 billion, or for 2021/22 of over C$ 150 billion, the discrepancies are not much more than rounding errors. They are, however, more significant in the "out years": for FY 2025/26, the PBO foresees a deficit of C$ 35.9 billion, against a budget projection of C$ 30.7 billion. The discrepancy is largely attributable to lower revenues in the PBO projections, reflecting shortfalls in both income tax revenues and income from Crown Corporations. 

The PBO report goes on to break down the additional stimulus spending in the budget. It notes that a significant portion of the "Recovery Plan" in the budget in fact represents the continuation of previously-existing COVID-related measures. It estimates actual new stimulus spending at about C$ 70 billion spread over three fiscal years, a much lower number than the budget claimed. That said, the PBO reiterates a concern it expressed pre-budget, that the stimulus may be misdirected. The stated goal in the budget is to restore labour market conditions to pre-pandemic levels, but in the PBO's judgment, the ongoing improvement in labour markets does not suggest this is the appropriate yardstick for determining the need for stimulus.  

Lastly, the PBO looks at the government's chosen "fiscal anchor", the debt-to-GDP ratio. While noting that the budget projects a slight fall in that ratio starting in FY 2025/26, the PBO notes that in the absence of the new measures in the budget, the ratio would have been 5 percentage points lower in that year, at 44.2 percent, than the government now projects.  Taking this together with the ultra long-term projections in the budget, which showed the debt-to-GDP ratio staying above its pre-pandemic level all the way to 2055,  the report concludes "the Government has decided to effectively stabilize the federal debt ratio at a higher level, potentially exhausting its fiscal room over the medium- and long-term."

This is, of course, the very point that the opposition Tories have been hammering away at since the budget was tabled. It may well turn out to be true, but we have still not heard very much from those same Tories about how they would have steered the economy through the pandemic without getting into exactly the same fiscal position. 

Ontario's COVID "modelling" revisited

Apologies for coming back yet again to this rather parochial topic, but the "modelling" that the Province of Ontario keeps rolling out to justify its wildly-gyrating decisions on the pandemic really is the gift that keeps on giving. I'm in no position to comment on the medical qualifications of the so-called "Ontario Science Table" that keeps coming up with this stuff: for all I know, they are worthy successors to Banting and Best. I can, however, safely assert that as statisticians, they are clearly not worthy successors to Poisson and Bayes. 

Here are some extracts from a post I wrote on the subject back on January 13, around the height of Ontario's second wave of COVID:

....it's quite apparent that most of the modelling consists of simply projecting the current trends for infections, hospitalizations and so on into the future in a linear fashion. 

This naturally produces some scary-looking numbers -- the Science Table noted that "on the worst days" recently the case count has grown by 7 percent. You only need the "rule of 72" to know that extrapolating that growth rate gives you a doubling of cases every ten days. If you project that rate forward for a full month (i.e. three 10-day doublings), you get a daily case rate of 20,000-plus in mid-February, compared to the 3,000 or so we have been averaging recently. 

....this kind of modelling can produce some very weird results. One member of the Panel commented that a faster growth rate would potentially lead to a 40,000 per day case rate, as indeed it would. Then again, it happens that the number of new cases reported this week has actually been slightly below the levels seen a week ago. Is that a new trend? Maybe, maybe not, but simply projecting it forward would lead to a much different outcome from the one the Province is using to justify its decisions.   

So, back in January the modellers used the worst single day's data to project a couple of months ahead, a technique which falls rather a long way short of good practice. They ignored the fact that the actual case count was moving lower at the time they did their projections. And they turned out to be dead wrong, as daily cases in the Province slipped close to 1000 in the weeks after the forecast was issued, meaning that the modelling was off by a factor of twenty. 

This is not just about smartypants second-guessing of the experts. It's more serious than that. The fall in case counts led the Ford government to ease restrictions in the Province, with the disastrous results we are now seeing in the form of the third COVID wave. Did the fact that the experts had been so wrong help to convince Ford and his team that they knew better? It seems quite possible.

Let's turn now to the Science Table's most recent set of COVID projections, issued on April 16: here is a link to the slide deck. Once again the modelling shows a dire situation that is set to get worse, and this time the data appearing around April 16 were continuing to deteriorate, so the panel has not made the second error it made back in January.

Instead it's found a different error to make. I mentioned in the first paragraph that the Ontario Government's pandemic response has been "wildly gyrating", particularly in the last month or so. On April 1 it implemented an "emergency brake" shutdown across the Province, but the April 16 projections prompted it to introduce a stay-at-home order and tighten restrictions on businesses.   

These dates are important in understanding the statistical error that was made. It is generally accepted that any new restrictions take about two weeks to have a measurable effect. This means that the impact of the "emergency brake" was not yet evident in the data by April 16, but unless you think the April 1 measures were entirely ineffective, that impact was just about to show up. The data the Science Table was using as the basis for its extrapolations in effect reflected the situation that had existed before April 1 rather than the situation as it actually was at the time the projections were made public.

You can probably guess where this goes next. The daily case count for Province peaked precisely on April 16 -- a nice touch by the Gods of statistics -- at  4812. It has since moved gradually lower: the count published today (April 27) shows 3265 cases, the lowest in almost a month. The seven-day moving average has also rolled over and is starting to fall. That's good news, of course, and the fact that it was probably going to happen even before the April 16 stay-at-home order was proclaimed means we can look forward to a continuing steady decline in the case count in the weeks ahead.

What message should the Ford government to take from this? First, please listen to the scientists when they talk about the science. If you had done that back in January/February you wouldn't have seen the third wave we're enduring now, and I wouldn't be writing these snarky posts. Second, when you get presented with this modelling, and preferably before you release it to the public, have some non-medical person with statistical experience interpret it for you. You must have a few economists around the place who can do that, and it could save you from some very short-sighted decisions. 

  

Plenty of blame to go around!

Canadians have spent much of the past year watching the progress of the COVID pandemic in the United States with a mixture of pity and scorn. Infection rates were much higher than in Canada and fingers of blame were being pointed in all directions. But suddenly we don't seem so clever. Our current infection rate is now higher than that in the US (although it is still much lower over the full course of the pandemic) and our vaccine rollout has been way slower, although we are starting to catch up.

So of course the finger-pointing is under way here, with parts of the media (led by the Toronto Star, for example here) blaming everything on failures at the Provincial level while other parts, (led by the National Post, for example here) lay all the problems at the foot of the Federal government. It's almost a straight-up political divide, as the Provinces the Star et al like to pick on the most (Ontario, Alberta) have right-wing Tory Premiers, while at the Federal level, Justin Trudeau is a Liberal.    

Let's look at some of the facts here, starting with the Federal government. Canada has come under some criticism internationally for allegedly "hoarding" vaccines.  Total orders placed with the manufacturers would be enough to vaccinate everyone in the country ten times over. There is, however, a big difference between placing orders and actually receiving the vaccines. Canada sold off its vaccine manufacturing capacity decades ago and is now entirely dependent on imports. With every country in the world clamoring for supply, Canada has had to wait its turn. This has meant that vaccine rollout has been much slower than in the US, UK and other countries, though it has picked up in recent weeks.

There's more...to compensate for the slow arrival of vaccines, Canada has opted to focus on giving as many first shots as possible, which means delaying second shots. For the Pfizer vaccine, the recommended gap between first and second shots is 21 days, but Canada is extending that to four full months!  This may well work out fine -- the 21 day recommendation is not cast in stone --  but it certainly leaves Trudeau open to criticism.  

If the main job of the Federal government has been to lay its hand on the vaccines, the Provinces have been tasked with distributing them to the public. The Provinces have also been responsible for day-to-day management of the response to the pandemic within their individual jurisdictions. If we focus particularly on Ontario, which accounts for 40 percent of the national population (including me), the report card is distinctly mixed.

All in all it would be fair to say that Doug Ford's government has been too slow to impose restrictions when they were clearly needed and too fast to loosen them at the first signs of any improvement in infection rates. We are now into our third lockdown and there is little sign that lessons are being learned. In a two-week period in late March/early April, Ford announced an easing of restrictions, then a Province-wide lockdown, and then a Province-wide stay-at-home order that is to last at least a month.

On the vaccine front we can be a little more forgiving. The huge variability in weekly shipments of doses has made it difficult for the Provinces to plan very far ahead.  For example, last week Canada received about 3 million doses (of which Ontario would likely get about 1.2 million), but this week only 1 million are expected to arrive for the whole country.  Pop-up clinics, including one bizarrely located at a theme park north of Toronto, have found it particularly difficult to maintain a reliable supply The Provincial booking system has mostly worked well, however, and the target of getting every adult in the Province a first shot by Canada day looks achievable.

Plenty of mistakes, then, at all levels, but we should perhaps be prepared to be a little charitable here. After all,  nobody has had to deal with this kind of problem on this kind of scale before. That's not likely to cut much ice with the politicians or their cheering sections in the media. There is every expectation that Justin Trudeau will look for an opportunity to call an early election in hopes of converting his current minority government into a majority. Next week's Federal budget (April 19) will very likely set out the Liberals platform for such a vote, which will probably come in early Fall. 

  

Strong, but for how long?

Last week's US non-farm payrolls report, which showed that the economy added almost a million jobs in March, was widely viewed as firm evidence that full recovery from the pandemic is now under way. Can we say the same about the equivalent Canadian data, published by Statistics Canada this morning?  Measured by the relative sizes of the two economies, the Canadian headline data -- a gain of 303,000 jobs in March -- was even stronger than the US figure. However, recent developments in the pandemic suggest that this may be the best number we see for some time. 

Just about everything in the Canadian data looks positive. Aside from the headline increase, we can note that: the unemployment rate fell to 7.5 percent, its lowest level since the last pre-pandemic month (February 2020); both full and part time employment posted significant gains; employment rose in seven out of the ten Provinces; labour underutilization fell to its lowest level since February 2020; private sector employment accounted for over 200,000 of the jobs added in the month; and total employment is now back to just 1.5 percent below its pre-COVID level.

All good, but it looks very much as if the positive outcome for the month was heavily influenced by the timing of StatsCan's monthly survey. There was a sort of "sweet spot" in the middle of the month when several Provinces, including the most populous, Ontario, had lifted many of their COVID restrictions -- and the timing of the survey coincided exactly with that sweet spot. The impact of that can be seen in the sectoral composition of the data, which showed strong employment gains in precisely those parts of the economy that have been most affected by lockdowns and such: retail trade (up 95,000 in the month), culture and recreation (up 62,000) and accommodation and food services (up 21,000).

Sad to relate, the removal of restrictions across the country proved very short term as the third wave of the pandemic picked up steam. Ontario hastily reimposed a lockdown at the start of April and quickly segued into a stay-at-home order just a few days later. There are ominous trends also in BC (with the so-called Brazilian variant becoming a major threat), Alberta and Quebec.  The hasty return to much tighter restrictions is certain to have a significant impact on the April employment data, for which data collection starts in just a few days. The latest restrictions may or may not last long -- Ontario's are set to run initially for just four weeks -- but they will create the opposite of a sweet spot for the jobs market for at least one month, if not longer.   

 

Spring thoughts

Just a few random thoughts on a spectacular spring day here in God's Own (wine) Country. I promise they're not all about COVID.

Vaccinations....my wife and I had our first Pfizer shots this morning. Booking the two appointments (actually four as we also have dates for the second shots) took eight minutes on the much-criticized Ontario online portal. Delivery of the shots took thirty minutes from the moment we entered the testing site until the moment we left -- and that included the fifteen-minute wait after the injection to make sure we didn't have an immediate anaphylactic reaction. 

I mention this because the Province's COVID response has been viciously slated in the media almost from Day One of the pandemic. It's true that Premier Doug Ford has vacillated about locking things down and been too willing to reopen, with the result that we are now starting our third lockdown. But that hardly makes us unique;  you don't even need the fingers of one hand to count the number of politicians who have really shone in this crisis -- there's Jacinda Ardern and...that's about it.

Ford is getting the gears for the Province's vaccine rollout even though Ontario is actually slightly ahead of the rest of Canada in terms of the proportion of people who have been vaccinated.  Ford is an unlovable oaf who I would never dream of voting for, but in the eyes of most of his vocal critics (led by the Toronto Star), his biggest crime is that he's a Tory. I'm not sure who I think would have done a better job over the past year, but I'm quite sure that the owners and columnists at the Star and elsewhere would not be the first people I would turn to. 

Modelling....I have talked about the COVID modelling from Ontario and the Federal Government here before. Today I saw a tweet from a journalist that began "Models are not projections". This is true, but as I responded to him, as a former business economist I know that models are used to make projections. Economists might relish the insight that models provide into how variables interact, but the people who pay economists aren't interested unless the models generate some actionable information, which means a forecast or projection. 

Canada's tallest free-standing economist John Kenneth Galbraith reportedly once said that economists don't make forecasts because they think they know the future. They do it because someone asks them to -- or, if you were a private sector economist like me, because someone pays them to.

The journalist I am riffing off here is clearly getting comments from readers saying that actual case numbers are lower than the "models" suggested, so this latest lockdown is not needed. We are currently at around 3300 cases per day in Ontario (population of 14.4 million). Back in January the models were predicting 20,000 cases per day, something seized on by both Premier Ford and the all-knowing media. As I wrote at the time, that wasn't a model, it was just an extrapolation of the worst single day's rise in infections in the pandemic to date. That rise was 7 percent, which meant that cases would double every ten days (rule of 72). It doesn't take long at that pace to go from 2000 cases per day (the rate at the time) to 20,000, or even higher.

Projections based on models are only as good as the underlying assumptions. Journalists (most, but not all) are not very good at that kind of subtlety. If you didn't stress the assumptions when the forecasts were first published, you don't really have the right to criticize your readers if they don't understand the numbers later.

Ever Given....all credit to Egypt for freeing the ship that launched a thousand memes in just six days. The vessel is still in the Great Bitter Lake while the government of Egypt negotiates compensation from the owners. Now I don't for a moment begrudge Egypt the right to shake as much money as it can out of this situation, but I must take issue with some of the grounds it is using to bolster the bill.

Egypt makes about $15 million a day from transit fees from vessels transiting the canal. If media reports can be trusted, it is claiming recompense for the loss of that amount as part of the compensation deal. But the money wasn't really lost, was it? All 300 ships held for six days at Port Said or Port Suez have now completed their transit (well, all except the Ever Given), and presumably paid the standard fee for doing so. The payment was delayed, not cancelled -- but as I said, Egypt has every right to get while the getting's good here, as I've no doubt they will. 

  

That's a lot of money for Band-aids!

My old investment banking colleague Peter Bethlenfalvy (hereafter, for obvious reasons. Peter B) is now Ontario Finance Minister. On Wednesday he tabled his first budget, Ontario's second of the pandemic. There's a torrent of red ink in there, but before we get to that, let's take a step back to look at the context.

Canadian governments at all levels, from the Feds in Ottawa to the smallest municipality, have seen their finances wrecked by the pandemic. Revenues have fallen while demands for additional spending have soared. The Federal government, as the issuer of the national currency, has by far the most latitude to act, and it has done so in spades: most international studies suggest that Canada has spent more to combat the pandemic than any other country. 

The Federal deficit for the 2020/21 fiscal year, which is just ending, is set to be around C$ 400 billion, give or take.  Ontario is home to about 40 percent of Canada's population, so you can say that Ontario's "share" of the Federal shortfall is about C$ 160 billion. That's not a number that has any practical implications, but it does allow us to put the Ontario deficit projections into some sort of perspective.

That's important because, as big as the numbers unveiled by Peter B are, they're a small fraction of the fiscal effort the Feds are exerting in the Province.  The Ontario deficit for the year just ending is pegged at C$ 38.5 billion. With an anticipated recovery in the economy and the removal of some COVID-specific spending, the deficit is projected to fall to C$ 33 billion in FY 2021/2022.  The budget includes projections for the entire decade; the Province does not expect a return to balance until 2029/30. Projecting that far out is frankly almost meaningless, but it's reasonable to assume that Peter B and his boss Doug Ford wanted at least to pay lip service to that great Tory shibboleth, fiscal responsibility. 

With the Feds doing most of the heavy lifting, Peter B's budget mainly consists of Band-aids for particularly hard-hit sectors. There's about C$ 5 billion for spending specifically on the pandemic, including the vaccination rollout;  there's expanded support for small businesses and families; and there's fresh funding for long-term elder care, in response to severe criticism of how poorly that sector has performed during the pandemic. 

Between the time that he and I worked together in a Bay Street trading room and his reincarnation as a politician, one of Peter B's most significant gigs was as head of Dominion Bond Rating Service. One of the key reasons he decided to enter politics seems to have been his concern over the way Ontario's finances were deteriorating under the feckless McGuinty and Wynne governments. Tabling large and long-lasting deficits like those in this week's budget must be painful for him, but here's an interesting quote: "Economic growth is the key to our fiscal recovery. That growth will create jobs, provide revenues to support critical public services and ensure a sustainable fiscal position."

That's very close to the infamous "budget will balance itself" comment by Justin Trudeau a few years ago, an insouciant attitude that Conservatives (of whom Peter B is one) have been mocking ever since. But of course Peter B is correct here: Ontario will never be able to reduce its deficit if it imposes as austerity program once the pandemic is over. It's tempting to think that the economy will grow faster and the deficit will shrink faster than the budget is projecting, but for now at least, the Ford Government is avoiding doing anything to make the situation worse. That's good.

Now we can sit back and wait for the Federal Budget, which after much humming and hawing has been set for April 19. That will almost certainly be a pre-election budget, setting the stage for a Federal vote in early summer or early fall. Just what we all need.   

Updating the model

I blogged back on January 13 about the latest "modelling data" from the Ontario Science Table, the expert group that has been providing advice to Ontario Premier Doug Ford about how to combat the pandemic.  Ford had said ahead of a report from that august body that the fresh projections would make Ontarians "fall of their chair", and the numbers were indeed scary: 20,000 cases of COVID per day in the Province by mid-February.

I felt at the time that the numbers represented extrapolation rather than modelling.  Here's part of what I wrote:

I don't intend to disparage the Science Panel here, but this kind of modelling can produce some very weird results. One member of the Panel commented that a faster growth rate would potentially lead to a 40,000 per day case rate, as indeed it would. Then again, it happens that the number of new cases reported this week has actually been slightly below the levels seen a week ago. Is that a new trend? Maybe, maybe not, but simply projecting it forward would lead to a much different outcome from the one the Province is using to justify its decisions.   

Well, here we are in mid-February, so let's have a mini-inquest. There are some issues with data collection, but in round terms the number of daily cases in Ontario seems to be close to 1000, which means the Science Table's scary projection was off by a factor of twenty! I'm not saying this just to have some finger-pointing fun: after all, as the man said, forecasting is difficult, especially when it's about the future. But being this wrong can be damaging. Ford and his team constantly claim to be guided by the science, and here's a piece of that science that has been spectacularly wrong. It makes much harder for the Government to justify its policies -- you were dead wrong last time, Doug, so why should we believe you now?  

On Thursday the Science Table produced its updated modelling results.  They seem to have learned some lessons. The report now looks at two elements of the scenario going forward: the future of the original  COVID strain, which seems to be under reasonable control, and the risks posed by the so-called UK variant. It looks as though infections from the original strain will continue to fade across the Province, but the overall outbreak could start to ramp up again if the UK strain gets out of control. Keeping it under control means getting the R-number, which is currently around 0.9, down to about 0.7. If that does not happen, the overall case count could head towards 5-6,000 per day by the end of March.

That all looks a whole lot more like actual modelling and less like extrapolation. It's also not fall-off-your-chair scary, and it requires a little time and thought to understand. So, needless to say, it has hardly been reported in the media at all. 

This year's model

For most of the past year Canadians have been watching the haphazard efforts to control the COVID pandemic south of the border with horror and pity. Sad to say, the time for any sort of Schadenfreude in Canada is long past.  In our most populous Provinces, we are now doing just about as badly as our American neighbours in controlling the spread of the disease, and early indications are that we are going to do a whole lot worse in getting our population vaccinated.

Let's take a look at the situation in my home Province, Ontario. Premier Doug Ford has tried from the outset to strike a balance between keeping COVID under control and keeping the economy moving. Any suggestion that you will never have a strong economy as long as the disease is raging has been largely ignored. Inevitably this led to the economy being reopened too quickly after the first lockdown back in the Spring, with the dreaded "second wave" really picking up momentum as winter set in. 

The Province has claimed all along to be "following the science" regarding the pandemic, and has paid particular attention to the modelling work done by the so-called Science Table. Last week Premier Ford announced that the latest modelling data would "make you fall off your chair", though in typical style he let another weekend go by before either revealing the data or announcing any further restrictions.

On Tuesday (12th) Ford announced a full lockdown in the Province (although in truth there are plenty of exceptions), backing up his decision with the actual modelling data. I have to admit that this is the first time I have looked at this modelling in detail. The data deck is impressive (link here to both English and French versions) but it's quite apparent that most of the modelling consists of simply projecting the current trends for infections, hospitalizations and so on into the future in a linear fashion. 

This naturally produces some scary-looking numbers -- the Science Table noted that "on the worst days" recently the case count has grown by 7 percent. You only need the "rule of 72" to know that extrapolating that growth rate gives you a doubling of cases every ten days. If you project that rate forward for a full month (i.e. three 10-day doublings), you get a daily case rate of 20,000-plus in mid-February, compared to the 3,000 or so we have been averaging recently. These are the numbers that Premier Ford promised would make Ontarians fall off their chairs.

I don't intend to disparage the Science Panel here, but this kind of modelling can produce some very weird results. One member of the Panel commented that a faster growth rate would potentially lead to a 40,000 per day case rate, as indeed it would. Then again, it happens that the number of new cases reported this week has actually been slightly below the levels seen a week ago. Is that a new trend? Maybe, maybe not, but simply projecting it forward would lead to a much different outcome from the one the Province is using to justify its decisions.   

As for vaccinations, the picture is confusing and not at all encouraging. The Federal government has ordered a staggering number of vaccines, enough to inoculate every one in Canada eight times over, but actual deliveries are painfully slow. In true Canadian fashion, there is massive finger-pointing between the Feds and the Provinces over whose fault this is. My guess is the Feds have screwed up, ordering humungous quantities of jabs in an effort to conceal the fact that their dilatoriness has left Canada well down the list to receive actual shipments.

How is this working on the ground?  Here in Niagara there was rejoicing at the news that the regional health body would  receive its first 11,000 doses of the Pfizer vaccine this week. Commentators pointed out that that would allow all care-home residents and workers to get their first shot by Friday. Except...that paltry initial shipment will in fact be arriving over the next few weeks, not all at once.

Let's "model" (i.e. extrapolate) that, shall we? Assume that the vaccines will arrive over a three-week period, and let's round the number for simplicity to 4,000 per week. The population of Niagara Region is about 450,000, so at this rate it would take about 112 weeks, or more than two years, just to give everyone a single shot!  The Trudeau Government is promising that everyone who wants a vaccine shot will get one by September: to put it mildly, that looks like a heck of a stretch.

What's more, it's not just rural backwaters like mine that are seeing these problems. The huge University Health Network in Toronto actually ran out of vaccine over the weekend, with many front-line workers still not treated. And in a sign of the lack of urgency at all levels of government, Toronto Mayor John Tory proudly announced the planned opening of a dedicated vaccine clinic at the Toronto Convention Centre. When it opens next week it will be able to administer.....250 doses per day! Meanwhile Los Angeles is opening a vaccine clinic at Dodger Stadium that will be able to offer up to 15,000 shots per day and the UK is preparing to offer shots through supermarkets. Now THAT should make Ontarians fall off their chairs.   

How bad will it get?

Employment in Canada fell by 63,000 jobs in December, the first decline since April, according to data released by Statistics Canada this morning.  The unemployment rate edged up to 8.6 percent. Total employment remains 636,000 below its pre-pandemic (February 2020) level and a further 488,000 people are still working less than half their normal hours.

The decline in employment was widely forecast, given the rapid re-imposition of lockdowns across the country in December as the COVID second wave gathered pace. We may note in passing that the analysts' consensus, always particularly inaccurate in gauging this highly volatile data series, was looking for the loss of only 39,000 jobs.  However, some details of the report were a little more encouraging than the headline. 

The services sector was inevitably the worst-hit, losing 74,000 jobs in the month as restaurants once again faced tough restrictions.  The part-time nature of much employment in this sector was reflected in the fact that part-time jobs more than accounted for the overall loss in employment, with 99,000 such positions lost in the month. Manufacturing, by contrast, added 15,000 jobs in the month, contributing to an overall gain of 36,500 full time jobs across the country. 

An indication of what may lie ahead can be found in the Ivey Purchasing Managers Index, released earlier this week. The index fell sharply to 46.7 in December from 52.7 in November; any reading below 50 indicates slowing activity. Although the latest reading is far stronger than those seen at the peak of the first wave of COVID, the fact that the index has been moving steadily lower since August is ominous.

With COVID restrictions tightening still further in January -- in Quebec, for example, an overnight curfew begins this weekend -- prospects for the economy and hence for employment look bleak for the first quarter of the year. And beyond that?  Canada's vaccine rollout is proceeding very slowly, with the Provinces blaming the Federal Government for not providing enough vaccines and the Feds blaming the Provinces for not doing a good enough job on distribution. (Spoiler alert: it looks very much as if the Provinces are in the right here). Without a level of immunity that will allow a return to more normal business activity, it is likely that the Canadian employment market will remain weak until the summer. 

Is the Bank of Canada getting complacent?

As expected, the Bank of Canada kept its interest rate settings unchanged today, with the overnight rate staying at 0.25 percent. The Bank also committed to maintaining its quantitative easing (QE) program at the current level of C$ 4 billion per week. There was no press conference this time, so the press release itself provides the only evidence we have of the Bank's current thinking. 

In general, the Bank believes that both the real economy and inflation are evolving in line with the projections in its last Monetary Policy Report in October.  The timing and scale of the uplift expected from the early approval of COVID vaccinations remain uncertain, and further restrictions and lockdowns may set back recoveries in Canada and elsewhere.  Measures of core inflation are below the 2 percent target, and the presence of substantial slack in the economy is expected to weigh on inflation for some time. Based on this, the Bank intends to keep interest rates at current levels and maintain its QE program until inflation is sustainably above the 2 percent target, something it does not expect to happen until 2023. 

Even if we allow that most of this is true, is it too soon to suggest that the Bank may be underestimating the risk that inflation could start to move higher sooner than it expects? Consider food prices, for example: this article suggests that household grocery bills could rise by 3 to 5 percent in 2021, reflecting the impact of both COVID (as labour shortages and logistics issues push up production costs) and climate change. This is the fastest growth that the Canada Food Price Report has projected in its eleven year existence. The Bank of Canada might prefer to "look through" such an increase, but it is not at all clear that Canadians or their politicians will be prepared to do the same. 

Then there is the massive COVID stimulus to consider. In last week's Fall Update, Finance Minister Chrystia Freeland noted that a significant proportion of the various emergency benefits that the Government has paid out has gone into savings accounts, rather than being spent immediately. She referred to this money as "pre-positioned stimulus" for the post-pandemic recovery.* With vaccines on the horizon, there is every reason to expect that as we move through 2021, much of that money will flow back into the economy, as COVID fatigue gives way to a tsunami of pent-up spending on restaurants, travel and just about everything else.

It seems inevitable that this spending will start to push up inflation, as businesses take advantage of the boost in consumption to rebuild profit margins and balance sheets. This creates an issue for the Government in its management of fiscal policy: it is promising C$ 75-100 billion in new spending to jump-start the economy, but what happens if the "pre-positioned stimulus" makes that largely unnecessary? It also, of course, creates an issue for the Bank of Canada, if inflationary pressures begin to mount all across the economy well before 2023. The Bank's current forecast may well turn out to be correct, but there are good reasons to think that the inflationary risks may now be biased to the upside.  

* This is presumably more palatable politically than admitting that the Government gave a lot of money to people who did not actually need it. 

Think twice, act once

My late father-in-law, an architect, frequently used the aphorism "measure twice, cut once". It's certainly good advice if you are a carpenter or a builder, but it has much broader applicability. It's advice that seems to have been lost on politicians as they struggle to come up with policy responses to the COVID pandemic. Here are a couple of local examples. 

The Premier of the Province of Ontario, Doug Ford, was initially judged by the media and public to be doing a good job of handling the pandemic. He was empathetic -- which not even his closest friends would have predicted -- and seemed willing to listen to experts.  No longer: as the second wave of the pandemic has unfolded, Ford has been unable to strike the right balance between keeping people safe and keeping as much of the economy open as possible. Given that he is a businessman, it is perhaps not surprising that the interests of the business community have seemed  to be top of mind for him.

Ford, flanked by a rotating cast of members of his Cabinet, holds a news conference just about every day. And just about every day, he has a new announcement to make -- tighter restrictions here, looser restrictions there, seemingly driven by the news cycle of the past 24-hours rather than by any overriding strategy. The latest set of Province-wide rules, establishing five colour-coded regimens based on the severity of the outbreak in each location, was introduced barely two weeks ago, yet already the Province has tabled fresh guidelines for household gatherings during the Christmas season.  It's no wonder people are confused, no wonder that willingness to comply with the restrictions is waning.  

Now we hear that Ford is looking to micro-manage the food delivery business, which has seen booming business in the past few months.  Responding to complaints from restaurants, he wants to limit delivery fees to 15 percent of the value of the food order. Now I hold no brief whatsoever for Uber Eats and the like, but I can do the math. Most of the restaurants in my small town are about five miles from my front door. If I order a couple of burgers and some fries for say $20, the delivery service will be allowed to charge me just $3 for a delivery run that is likely to take them at least twenty minutes. For comparison, the minimum wage in the Province is currently $14.25. If Ford's idea is put into practice, it will be a whole lot harder to get food delivered during the winter months. 

There's folly at the local level too. The region of Peel, west of Toronto, is currently under strict lockdown rules because of the high incidence of COVID.  Bonnie Crombie is the Mayor of Mississauga, the largest city in Peel. The lockdown rules there mean that small non-food businesses can only offer curbside delivery, whereas big box stores like Costco or Walmart are allowed to offer in-store shopping for food and non-food items alike.

Small business owners are upset and Ms Crombie wants to help. Her proposal is to ban the big box stores from selling non-food items for as long as the lockdown remains in place. That may or may not help the little guys -- we don't know how much appetite there will be for curbside pickup when the curb is covered by a foot of snow -- but there is one very predictable consequence. A whole lot of minimum wage workers at Costco and Walmart will find themselves out of a job just before Christmas. That's not what Ms Crombie wants, but it's what her city may well get if she doesn't take time to think again.  

Weird science

The astrophysicist Neil deGrasse Tyson likes to say that the great thing about science is that it's true whether you believe it or not.  That proposition has been tested to the breaking point during the coronavirus pandemic as expert advice, from the WHO down to your local health authority, seems to have lighted on a different definition of the truth on almost a weekly basis.

Masks!  From the outset of the pandemic, the advice has been to wear masks whenever social distancing is difficult, particularly in indoor settings. We should do this, so we were told, not because the masks protected the wearer from inhaling the virus, but because they helped reduce the quantity of virus particles that an infected person might breathe out and pass on to others.

This never did seem entirely logical. Layers of fabric don't have any way of distinguishing whether a wearer is breathing in or out.  If a mask can intercept virus particles on their way out of the lungs, it seems more than likely that it can also intercept some on their way in. 

Lo and behold, the Centers for Disease Control (CDC) in the United States are now admitting this. This week the CDC has updated its guidance on mask wearing: it now says that cloth masks act both as a "source control" to limit exhalation of virus particles, and as "filtration for personal protection" to limit inhalation of particles shed by others. The new guidance quotes various studies on the benefits of increased mask usage, including the suggestion that a 15 percent increase in mask usage could prevent economic losses of as much as $ 1 trillion.

A lot of people have been conscientiously following masking rules for many months now, so does this  change of heart really matter? It almost certainly does. In societies with relatively limited social cohesion -- a category in which I would include most of the developed world, including the US and Canada -- asking people to do something purely for the benefit of others is not going to work for a significant portion of the citizenry. Asking them to do it for their own health and safety is likely to produce a much higher level of compliance. If the CDC had issued this advice months ago, and if it had been backed up by local health authorities, it's not hard to imagine that many thousands of lives would have been saved. 

Still, better late than never, right? Not necessarily. It's a safe bet that there are plenty of people out there who will ignore the CDC's advice -- I mean, you're admitting that what you told us all along was wrong, so why should we believe that you've got it right now? 

Canada's job market in October: not too shabby

Statistics Canada reported this morning that employment across the country grew by 84,000 in October, leaving the unemployment rate unchanged at 8.9 percent. This was a better than expected outcome, and came despite the imposition of new restrictions all across the country as the second wave of the pandemic set in. 

The media, predictable as ever, opted to focus on the fact that this was the slowest growth in employment since May. This headline on the CBC website, for example, refers to "only 84,000 jobs", even though that pace, if it lasted for a full year, would see employment grow by a full million jobs, something that has never even come close to actually happening. However, it must be acknowledged that there are still 630,000 fewer persons employed in Canada than there were before the pandemic hit, with a further 430,000 working less than 50 percent of their normal hours.   

The details of the report were generally favourable. Full-time jobs accounted for 69,000 of the monthly increase. Although there remains a hard core of over 800,000 part-time workers who would prefer to have full-time positions, total hours worked across the economy grew faster than employment, as underutilization in the labour force continues to edge lower. Three sectors -- wholesale trade, professional services and educational services -- have now surpassed their pre-COVID employment levels.  

It is inevitable that employment growth will slow further in the coming months. The "easy" part of the bounce-back from the first wave of the pandemic is over, and it is only now becoming clear which sectors of the economy may never regain their pre-pandemic levels of activity and employment. Moreover, new restrictions are now in place across most of Canada, although as StatsCan notes, these are more targeted than the restrictions imposed in March, and should thus have a smaller impact on employment. A fresh round of outright job losses may be avoided between now and year-end, but employment will not complete its return to pre-pandemic levels until a vaccine becomes widely available. 

Meanwhile in Toronto...

It's hard to know if the Province of Ontario scheduled its much-delayed 2020 budget for this week in the hope that the bad news would be overshadowed by the US Presidential election. You wouldn't entirely blame them if they did, because the budget tabled on Thursday contains a whole lot of red ink, and no path back to balance. 

The projected budget deficit for this fiscal year (which is, of course, already half over) is C$ 38.5 billion, almost four times larger than the pre-pandemic forecast. Total spending is projected at a record $185 billion, but the forecast deficit is also the result of a sharp fall in major revenue streams as a result of the pandemic*. The Government promises to set out a path for a return to balance in next year's budget but in the meantime offers three scenarios. In the base case, which assumes moderate but steady economic growth, the deficit falls to $ 33 billion in fiscal 2021/22 and $ 28 billion in the year after that. Slower growth would see a deficit of almost $ 36 billion in 2021/22, while a more optimistic economic scenario would cut that figure to under $ 28 billion.  

There are a lot of new measures in the budget, some specifically relating to the pandemic, others designed to help the economy to recover once the situation starts to improve. Total COVID-related spending is estimated at $ 45 billion over three years, although as much as two-thirds of this has already been spent. There will be $ 7.5 billion in new health care spending over the three year budget horizon, but this does not include any costs for the Government's recently-announced plan for improvements to the long-term care home sector. 

In terms of plans to boost the economic recovery, the budget offers relief for  businesses' electricity bills and property taxes. Smaller businesses will be relieved of the burden of paying a portion of their employees' health care costs. Interestingly, the Province will also make permanent a measure it introduced earlier in the year to allow restaurants to sell alcohol for consumption off the premises, for example with take-home meals -- one more remnant of "Ontario the Good" cast into the garbage can of history. 

Truth to tell, the Doug Ford government is at the mercy of events here, as it has been basically since the pandemic started. Depending on how things evolve, the actual outcomes, especially beyond this year, may be very much different from what was tabled yesterday. One striking thing about the deficit projections is worth noting: although the Provincial deficit has ballooned to unprecedented levels, the projected 300 percent increase in the shortfall for this year is way smaller than more than tenfold increase projected at the Federal level. It's Ottawa that has been carrying most of the weight here, and will continue to do so. No wonder Doug Ford is making nice with Justin Trudeau.  

* The major exceptions to this: revenue from liquor and cannabis sales, both of which are sharply higher.