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It’s day 134 since Canada’s 100th coronavirus case. The number of cases is 112,073 as of publication time, up 376 since yesterday—an 18 per cent decrease from the seven-day prior average of 458.7 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
The bright side: Small businesses have felt the financial fallout of COVID-19, but as the economy starts to reopen things are looking up, per a new BMO report. In particular, “the tech sector is a beacon of light in a very cloudy economic outlook,” wrote chief economist Douglas Porter, citing its growing share of the country’s output and the 7.5 per cent average annual increase in employment in computer systems design and related services between 2014 and 2019.
Rehiring is a “persisting headwind” for small firms, wrote Mike Bonner, BMO’s head of Canadian business banking, suggesting that labour issues should ease as government relief programs wind down. But many companies have leaned on Ottawa’s wage subsidy to continue making payroll—employers with 25 or fewer staff filed just under three-quarters of approved applications for the Canada Emergency Wage Subsidy through the end of June. The government will keep the program going to the end of the year and expand eligibility, even as it has yet to extend its direct-to-worker $2,000-a-month benefit past August.
The BMO report is based in part on its own client base; fintech firms have said small-business owners to whom major financial institutions don’t traditionally lend have faced difficulty getting money during the pandemic because Ottawa has chosen to partner with the big banks to distribute many of its private-sector support programs.
The bank’s outlook for the post-pandemic recovery is sunnier than other economists’ forecasts. BMO projects real GDP in Canada will drop six per cent in 2020, and increase six per cent in 2021. Last week, the Bank of Canada forecast a 7.8 per cent decrease this year, and 5.1 per cent growth the following year.
In the markets: European and Asian stocks faltered after the U.S. ordered China to close its consulate in Houston amid cybertheft allegations, with Beijing promising to retaliate. The TSX was also weighed down by a drop in oil prices but closed up 0.05 per cent. The Canadian dollar rose to 74.54 cents U.S. in late afternoon trading, despite a surge in June inflation. The loonie was helped after the greenback fell for the fourth straight day on concerns about rising coronavirus cases.
Major U.S. indices closed up as optimism about a deal between Pfizer and the federal government for doses of a potential vaccine outweighed concerns that daily deaths topped 1,000 for the first time since May. The U.S. Securities and Exchange Commission voted to regulate firms that offer advice on proxy voting more closely. Meanwhile, the Bank of Canada is reducing purchases of government debt since the market is stabilizing.
The U.S. Federal Reserve isn’t expected to roll out new policy to boost the economy at its meeting next week. The Singapore Exchange inked a deal with the Nasdaq to streamline dual listings in a bid to attract Asian firms pulling away from U.S. exchanges due to rising Washington-Beijing tensions.
“The last thing you want to do is take people from a dangerous situation involving a hurricane and move them into a dangerous situation involving COVID”: U.S. emergency-management authorities are preparing for the devastating convergence of hurricane season and the pandemic.
Cross-country checkup: A medical unit inside the Canadian Forces Intelligence Command briefed Defence Minister Harjit Sajjan on COVID-19 on January 17, according to a document presented in Parliament this week. The government’s incident-response group led by the prime minister didn’t meet to discuss the virus until 10 days later. Canada’s four largest provinces are experiencing surges in new COVID-19 cases, with public health officials saying many of the cases are linked to reopening businesses including bars and restaurants, as well as private gatherings. Nova Scotia has released its back-to-school plan: all students are expected to return to the classroom in September, though there’s a contingency plan that blends classroom and home learning. Alberta plans to join Nova Scotia and several other provinces in sending students back to school full time in the fall, despite the growing number of new coronavirus cases in the province. Calgary is making it mandatory to wear masks in indoor public spaces starting August 1.
Bay Street to Main Street: Empire Company, the parent firm of Sobeys, intends to spend $2.1 billion over the next three years to expand its e-commerce offerings, renovate stores and expand its private label. The firm is looking to “Win Canadian Grocery E-Commerce,” according to Wednesday’s announcement. Empire will add two more Ocado warehouses, where robots pick groceries, in Western Canada.
Its four total warehouses—one is already open in the Greater Toronto Area and another is planned for Quebec—will reach about 75 per cent of Canadians. The firm also intends to use Ocado to scale up grocery delivery using robots in areas where it isn’t building large warehouses. “This store pick solution will serve customers in areas where the [warehouses] will not deliver, or are not yet built, and will begin in Nova Scotia at the end of the summer, before expanding and moving West,” the statement reads.
- Cineplex wants Ontario to increase theatre occupancy limits.
- Zurich won’t renew the insurance coverage it had offered the Canadian government for its Trans Mountain oil pipeline.
- RBC has brought together a coalition of business groups to offer grants of up to $5,000 that small businesses can use for things like personal protective equipment.
Trace me on my cellphone: The Canadian Digital Service (CDS) has launched a beta version of Canada’s exposure-notification app and is asking Canadians to test it “for accessibility, reliability, and usability.” CDS did not respond to The Logic’s request for additional information by time of publication. Meanwhile, several U.S. states, including Pennsylvania, have asked to use Ireland’s open-sourced contact-tracing software.
Around the world: Liability protections for businesses and hospitals will be a top priority in the next week’s negotiations about the U.S. coronavirus relief package, which may include US$70 billion for K-12 schools. President Donald Trump wants it to include a payroll-tax cut as well. Japan is attempting to boost domestic tourism with a subsidy, ahead of a four-day weekend originally set to mark the start of the now-postponed Tokyo Olympics. The government has stopped people from visiting Tokyo, which has reported more than 10,000 cases in total. Brazilian President Jair Bolsanoro has tested positive for COVID-19 again.
* 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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