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   JANUARY 2021
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   Regulators have raised their own bar
Canada’s securities regulators performed admirably during the Covid-19 crisis. Both the Canadian Securities
Administrators (CSA) and the investment industry’s self-regulatory organizations dis- tinguished themselves by providing firms with the flexibility to traverse unprecedented conditions.
The industry, so far, has weathered the crisis well. If firms hadn’t been pushed to create business continuity plans, or if regulators had insisted on adhering to pre-crisis requirements, the results could have been very different — particularly for small firms, which typically have less capacity to absorb disruption.
With plaudits come higher expectations. The fact that regulators have demonstrated their ability to move quickly and decisively raises the bar for their future performance.
Ordinarily, investor protection initiatives can take years, if not decades, to come to fru- ition. Regulators too often entertain endless debate, are too credulous of lazy industry objections and too willing to let known issues fester, ignoring the harm inflicted through inertia.
The nimble response of regulators and the industry to the pandemic shows that both are capable of more than we previously throught. Hopefully this won’t be forgotten once the
pandemic subsides.
Ideally, this unwelcome period will serve as
a catalyst to innovation, allowing regulators to shed their fears of change. Regulators usually seem to know the right thing to do when it comes to investor protection, but are too timid to act.
Ultimately, the industry will adapt to what- ever comes its way, as it always has. This episode demonstrates how quickly and dra- matically things can shift when required.
Regulators can’t function in emergency- response mode all the time. But nor should they return to their previous state of progress at a glacial pace.
   Quebec adapts to living with Covid-19
Downtown Montreal resembles a ghost town these days.
The offices of Place Ville-Marie, the
cruciform skyscraper considered the heart of the city, remain largely empty. The normally busy food court and stores at the base of the building are deserted. Working from home is the new pandemic norm.
Outside, McGill College Avenue — lik- ened by one-time mayor Jean Drapeau to the Champs-Élysées in Paris — is an open sore. Construction of Montreal’s new Réseau express métropolitain light rail rapid tran- sit system has shut down the key McGill College–Ste-Catherine Street intersection.
As Prime Minister Justin Trudeau likes to remind the premiers, Ottawa has put up $8 of every $10 in government support to offset the impact of the pandemic across Canada. But Quebec has gone from a balanced budget with a likely surplus in early March 2020 to a projected $15-billion deficit.
Quebec has spent $5 billion on health care since March, including $1.9 billion in bonuses for health-care workers, $2.2 billion for personal protective equipment and $1 billion for testing and contact tracing.
Another $5.1 billion has been budgeted for the economy, including $2.9 billion for speeding up infrastructure projects in order to offset the economic slowdown; $459 million for job training, including for up to 10,000 additional long-term care orderlies; and $1.1 billion to “spur economic growth.”
Finance Minister Eric Girard has prudently set aside reserves of $4 bil- lion for the remainder of the 2020-2021 fiscal year. In a webinar, Girard said Quebec’s economy is in better shape than expected and the new lockdown will actually cost the province less than half of that reserve.
“We have adapted,” the minister said, noting that working from home and online transactions have lifted Quebec’s economy.
Deaths from Covid-19 in Quebec were approaching 9,000 at press time,
The finance minister says the economy is in better shape than expected, but will cities ever be the same?
accounting for more than half the Canadian total. About 97% of Quebec’s coronavirus deaths are among those aged 60 and older. The most vulnerable are residents of long- term care centres, who account for 55% of all Covid-19 deaths, according to the province’s public health institute.
Last March, Premier François Legault announced Quebec’s schools would close, with only essential services — grocery stores, pharmacies and gas stations, along with the provincial alcohol and cannabis monopolies — remaining open.
Restaurants and bars, museums, cinemas and casinos all closed. Quebecers were urged
to remain at home and not travel to different regions.
In May, students returned to schools and, with the number of cases
dropping, the economy reopened — until the fall, when new shutdowns began as coronavirus infections grew.
Quebec’s unemployment rate was 4.5% in February. By April, unemployment in the province had risen to 17%. Before the new lock- down that began Dec. 25, Quebec’s unemployment rate was 6.7%.
Still, spurred by quantitative easing, the financial economy has posted gains.
With mortgage rates below 2%, real estate brokers reported a 36% annual increase in sales volume for 2020, according to Quebec’s real estate brokers association.
Home prices have also increased. In metro Montreal, the median price for houses was $430,000 in 2020, a 21% increase from 2019; for condos, the median price of $325,000 marked a 14% year-over-year increase. With more people working from home, home sales outside of city centres have been rising — and so have the prices.
The question now: When the pandemic is over and Montreal has its new transit system, will life return to the city’s downtown core? IE
    Quebec injected $5 billion into health care and budgeted another $5.1 billion for the economy

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