Economic measures , the bottom line and

competition

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Table of Contents
Response Economic Plan............................................................................................2
Comparison with Other Countries..............................................................................3
Condition of Employment............................................................................................4
Debt Condition...............................................................................................................4
Rent..................................................................................................................................4
Wages..............................................................................................................................4
Efficiency Vs Equity......................................................................................................5
Canada's Pharmaceutical Sector................................................................................5
Demand and Supply in Pharmaceuticals...................................................................5
Characteristics of Monopolistic (Vaccine)................................................................6
Long-Term Effects.........................................................................................................7
Economic Profit.............................................................................................................7
Creative Destruction.....................................................................................................8
Bibliography......................................................................................................................9

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Response Economic Plan
As a result of their attempts to keep their economies afloat during the
pandemic, nations all over the world racked up significant amounts of
debt. Hundreds of billions of dollars are spent annually in Canada on
emergency assistance programmes such as the Canada Emergency
Wage Subsidy (CEWS) and the Canada Emergency Response Benefit
(CERB). In point of fact, during the pandemic, the Canadian government
on all levels—federal, provincial, and local—borrowed more money than
the governments of any other industrialised country (with the exception
of Japan), but this did not translate into a stronger economic
performance for Canada in comparison to its peers.

Even before the implementation of COVID, the ratio of Canada's gross

debt position (a measure of total government indebtedness) to the size
of the economy was not particularly favourable. According to information
provided by the International Monetary Fund (IMF), in 2019, Canada had
the tenth-highest gross debt as a percentage of the economy (87.2%),
ranking it 10th among the 33 industrialised countries. This number
reached 112.1 percent in 2021, which is an increase of 24.9 percentage
points. This gave Canada the second-highest increase in gross debt as
a share of the economy out of the 33 countries surveyed between 2019
and 2021.

Comparison with Other Countries

Many people had the misconception that Canada's economy would do
better than those of its peers due to the fact that Canada's government
racked up more debt relative to the size of our economy than any other
nation in our peer group, with the exception of Japan. Unfortunately, the
conclusion is not supported by the facts. According to the findings of a
recently released report by the Fraser Institute, Canada underperformed
in comparison to our other industrialised nations in terms of both
economic growth and unemployment rates in the years 2020 and 2021.

In terms of the overall economy, Canada placed 21st out of 33 nations,

with a GDP growth (adjusted for inflation) that was projected to be
negative by an average of 0.3% in both 2020 and 2021. To put it another
way, over two-thirds of our peer group, which includes the United States
and Australia, performed far better than Canada did. The ratio of
Ireland's gross debt to its GDP fell between 2019 and 2021, making it
the leader among the group of 33 industrialised nations in terms of GDP
growth after adjusting for inflation.

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Condition of Employment
Over the course of the same two years, our performance with regard to
unemployment was considerably worse (the IMF data are standardised
to allow for inter-country comparisons). In 2020 and 2021, Canada had
the fifth highest average unemployment rate out of all 33 nations, trailing
only Greece, Spain, Italy, and Sweden.

Debt Condition
To put it another way, while being first in the world in terms of the
accumulation of debt, Canada fell behind the bulk of its peers in terms of
important economic metrics. And the growth of debt is accompanied by
repercussions. If all other factors remain the same, a higher debt will
result in a greater proportion of tax dollars being allocated to the
payment of interest on the debt; as a result, there will be less money
available for health care, social services, and/or tax relief. (Tegan Hill,
2022).

Rent
Last but not least, the accumulation of debt—particularly in situations in
which the central bank buys government debt to finance spending (as
happened in Canada during the pandemic)—can be a contributor to
inflation. Inflation occurs when the expansion of the money supply
exceeds the capacity of the economy to satisfy that demand. When the
Bank of Canada was financing debt during the pandemic, it printed
money. This meant that there were more dollars chasing the same
amount of goods, which drove inflation higher.

Wages
In Canada, there has often been a strong correlation between real
salaries and the country's labour productivity. However, according to the
research presented in the article titled "Real wages and productivity
during the COVID-19 pandemic," real wages fell by 7.1% between 2019
and 2022, while labour productivity fell by 0.3% over that same time
period.

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Efficiency Vs Equity
During the pandemic, Canadian governments, including the federal
government, racked up massive amounts of debt in an effort to support
Canadians. However, despite the fact that Canada accumulated more
debt (as a share of the economy) than any other country except Japan,
our economy underperformed in comparison to those of our peers.
Instead, the accumulation of debt simply resulted in additional expenses
for Canadians. The rent has much higher. The people have to pay more
rent in order to generate additional income from businesses.

Canada's Pharmaceutical Sector

The pharmaceutical industry in Canada is often regarded as one of the
most inventive in the world. Companies that specialise in the research,
development, and production of novel pharmaceuticals, generic
pharmaceuticals, and over-the-counter medicinal items make up its
membership. The industry may be broken down into a number of sub-
industries, each of which caters to a certain portion of the market. These
include medications with brand names, generic pharmaceuticals, small
and medium sized biopharmaceutical businesses (biopharmaceutical
SMEs), contract research organisations (CROs), and contract
manufacturing organisations (CMOs).

Demand and Supply in Pharmaceuticals

Because Canada's pharmaceutical industry only accounts for 2.1% of
the worldwide market, the country's market is only the ninth largest in the
world. The compound annual growth rate has stayed unchanged at 5.1%
since the year 2015. Research and development (R&D) is the process
that businesses use to create new or improved patented remedies.
Other businesses, however, create bio-equivalent copies of ground
breaking drugs once patents on such drugs have expired. Gene and cell
treatments, as well as nanomedicines, are examples of developing areas
of the biopharmaceutical industry. Products sold under their respective
brand names make up 81.3% of the value of Canadian sales and 27.1%
of the amount of prescriptions.

In the manufacturing subsector of the economy in 2020, there were on

average roughly 31,500 people working, and employment levels had
increased by 15.5% over the course of the previous five years. The

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metropolitan regions of Toronto, Montreal, and Vancouver are home to
the greatest concentrations of businesses in this sector.

Characteristics of Monopolistic (Vaccine)

In a market that is highly competitive, multiple organisations are present

in the market and sell items that are comparable to one another. In
contrast to monopolistic markets, which have demand curves that slope
in a declining direction, this market has a demand curve that is
horizontal. Businesses that are participating in a competitive market
have the ability to sell any quantity they want at the current market price.

The following are the characteristics of a monopolistic market:

1. Single supplier

A monopolistic market is one in which there is only one major supplier.

As a result, the demand for a product or service that exists in the market
is the same as the demand for the product or service that the firm offers.

2. Barriers to entry and exit

In a market that is monopolized, some of the obstacles to entering the
market include government licenses, patents, and copyrights; ownership
of resources; a decrease in total average costs; and significant startup
costs.

Other businesses are unable to compete in a monopolistic market

because it is controlled by a single supplier who has production and
supply monopoly over a particular good or service. It is possible that the
company will not be allowed to leave the market if the government
maintains the view that the good or service provided by the monopoly is
essential to the general public's well-being.

In general, it may be impossible for public utility companies like

electricity companies and telephone companies to leave their respective
markets. This is because of antitrust laws (CFI, 2022).

3. Profit maximiser

In a market where it has complete monopoly power, the company

increases its profit margins. It is able to earn higher profits by charging

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higher prices than they would have been in a market where there is
more competition. Because there is only one supplier, there is no other
option for consumers than to pay the prices that the monopoly decides.

4. Unique product

In a market that is monopolistic, the company's goods or services are

the only ones available to customers. On the market, you won't find
anything that comes close to being a suitable alternative.
5. Price discrimination

A business that is functioning in a market that is monopolistic has the

ability to alter both the price and the quantity of the product or service
that it offers. When a corporation sells the same product to different
customers at various rates, this business practise is known as pricing
discrimination.

Due to the elastic nature of the market, the corporation will sell a greater
amount of the product at a lower price, but they will sell a less number
when the price is higher.

Long-Term Effects
Canada will continue to make sure that Canada is prepared to manage
COVID-19 and its possible evolutions. To date, Canada has also
secured vaccines from Pfizer, Moderna, Novavax and Medicago for
2022 and 2023, with options to extend into 2024.

In addition to providing booster vaccine doses, the agreements provide

flexibility to procure new second-generation COVID-19 vaccines
adaptations, such as those to protect against mutations or variants of
concern, and vaccines developed for younger populations.

Economic Profit
The pandemic caused by COVID-19 is continuing to have a significant
impact all across the world, particularly on groups that are vulnerable.

Women and children who are already subjected to more severe forms of
poverty, exclusion, and/or marginalisation will feel the effects to a greater
extent. According to a proposed resolution for the World Health
Assembly, the European Union has proposed the voluntary pooling of
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patents for coronavirus vaccines, treatments, and diagnostic tests. If this
were globally mandated, it would assure that any country that needs a
vaccination, medicine, or diagnostic test could easily develop or import a
low-cost version. Nonetheless, it has been revealed through leaked
papers that the Trump administration is attempting to remove all mention
of pooled patents and replace it with robust wording guaranteeing
pharmaceutical patents. This would allow pharmaceutical companies to
charge whatever they want for vaccines, treatments, and diagnostic tests
they create, regardless of whether or not public funds were used in their
initial development. (John, 2021).

Creative Destruction
The People's Vaccine Alliance stated today that the provision of safe
and effective vaccines for everybody is being artificially rationed due to
the protection of exclusive rights and monopolies of pharmaceutical
firms.

The alliance has cautioned that the world's three largest vaccine
manufacturers are sitting on their hands; they expect to create just
enough COVID-19 vaccines to cover 1.5% of the world's population in
2021. Some other major pharmaceutical companies have yet to begin
mass-producing the very effective and safe COVID-19 vaccine.

Approved vaccine manufacturers Pfizer/ BioNTech, Moderna, and

AstraZeneca plan to manufacture enough doses to vaccinate around
one-third of the world's population. However, the real number of people
protected is far lower because wealthy nations have purchased
numerous doses of these vaccines. In contrast to Astra Zeneca, which
has sold the bulk of its doses to developing countries, Pfizer/BioNTech
and Moderna have sold nearly all of their doses to affluent nations
without openly sharing their effective technology while receiving
substantial public subsidies. Many developing countries cannot afford to
use their immunizations. (OXFAM, 2021).

Bibliography
Tegan Hill, M. P. (2022). Canada’s economy underperformed during COVID—despite massive
debt accumulation. Retrieved from Institut Fraser:
https://www.fraserinstitute.org/fr/node/14720?language=en
CFI. (2022). Monopolistic Markets. Retrieved from CFI:
https://corporatefinanceinstitute.com/resources/economics/monopolistic-markets/

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OXFAM. (2021). Monopolies causing “artificial rationing” in COVID-19 crisis as 3 biggest
global vaccine giants sit on sidelines. Retrieved from OXFAM:
https://www.oxfam.org/en/press-releases/monopolies-causing-artificial-rationing-
covid-19-crisis-3-biggest-global-vaccine
John. (2021). Vaccinating poorest half of humanity against coronavirus could cost less than
four month’s big pharma profits. Retrieved from OXFAM:
https://www.oxfam.org/en/press-releases/vaccinating-poorest-half-humanity-
against-coronavirus-could-cost-less-four-months