Reopening the Canadian economy too soon after COVID-19 lockdowns will be more damaging than reopening it too late, The Logic subscribers say.
It’s been two months since Canadian public health authorities first introduced social-distancing measures to slow the spread of COVID-19. In that time, roughly three million jobs have been lost across the country, and Statistics Canada estimated the sharpest one-month drop in GDP on record in March. However, 60 per cent of all subscribers who responded to the survey said we shouldn’t rush to reopen.
“The risk of a second wave is too great to rush this,” one subscriber said.
The Logic’s subscribers were emailed a private link to an online survey on Monday, May 11, and the survey closed Wednesday, May 13. Respondents’ identities were kept anonymous and duplicates were removed as needed. Subscribers were asked whether they agreed or disagreed with the statement “Reopening the Canadian economy too soon will be more damaging than not reopening soon enough.” Their choices were: strongly disagree, somewhat disagree, neither disagree nor agree, somewhat agree, strongly agree. Secondly, they were asked, “How optimistic or pessimistic are you feeling about the Canadian economy’s ability to recover from the pandemic?” They were given the choices: very optimistic, somewhat optimistic, neither optimistic nor pessimistic, somewhat pessimistic, very pessimistic, I don’t know. Thirdly, they were asked whether they agreed or disagreed with the statement “COVID-19 will lead to a prolonged, structural reorganization of the global economy.” Their choices were: strongly disagree, somewhat disagree, neither disagree nor agree, somewhat agree, strongly agree. Finally, they were asked, “Is your company making or anticipating structural changes related to COVID-19?” They were given the choices: yes, no, I don’t know.
Reopening plans are underway across the country. Provinces with fewer infections have been easing their lockdowns for several weeks, and harder-hit Quebec and Ontario are not far behind.
In the survey, conducted between May 11 and May 13, 38 per cent strongly agreed, and 22 per cent agreed somewhat with the statement “Reopening the Canadian economy too soon will be more damaging than not reopening soon enough.”
Reopening has become a polarizing issue, particularly in the United States, where epidemiologists have said large parts of the country are easing lockdowns prematurely.
Many of The Logic’s subscribers were similarly concerned that easing restrictions could lead to a second wave of infections—something B.C.’s provincial health officer Dr. Bonnie Henry has said is inevitable.
“I feel the result will be one step forward and three back if the country isn’t governed by science in the transition,” one subscriber wrote.
“Opening too early will subsequently lead to additional waves of illness and need to re-shutter the economy,” another said.
Some Ontario businesses opened their doors this week after being closed for two months; golf courses, marinas and private parks reopened over the long weekend. Elementary school students returned to some Quebec classrooms last week. The province is allowing some Montreal retail stores and businesses to reopen on Monday, and Premier François Legault has said daycares can reopen on June 1.
Several subscribers pointed out that a second wave would further delay reopening, and be especially hard on businesses that had reopened already. One subscriber wrote that the expenses attached to reopening and closing again could be “ruinous for many.” Restaurants, for example, swallow significant startup costs when reopening, including replacing perishable food.
“If we need to return to stringent lock-down provisions for a second time, plans businesses may have made assuming the economy was re-opening would not be valid and might leave companies more stressed than had the original lock-down remained longer,” a subscriber wrote.
Other subscribers were skeptical about whether enough had been done to mitigate the spread of the virus before reopening, citing necessary advances in testing, treatment, contact tracing and vaccination.
“I am worried that we currently don’t have the right data to make this decision,” one wrote. “Testing … needs to be higher and we should be doing a better job of understanding where all new cases are coming from.”
Public health experts say widespread testing is key to reopening safely. In Wuhan, China, where the virus first emerged, officials are planning to test all 11 million residents after the city saw its first cluster of new infections since lifting its 76-day lockdown. On Thursday, Ontario Premier Doug Ford pledged to improve the province’s testing system after missing targets four days in a row.
Although some subscribers felt that reopening too soon would amount to “trading lives for prosperity,” others did not see economic and public health priorities as contradictory. “Until people are trustful that it’s safe to go out again, they won’t. Can’t fix the economy without fixing the virus first,” one subscriber wrote.
Several of those who did not agree that reopening too soon would be more damaging than the alternative cited the consequences of extended lockdown, including job losses and impact on mental and physical health.
Many subscribers supported a staggered approach to reopening. “We should start the process,” one wrote. “Cannot treat all areas equally. Low risk areas should be allowed to open,” another said.
Several subscribers made the point that “the virus is here to stay, irrespective of when we reopen.”
“We have to learn to live with [COVID-19],” another subscriber said.
Last week, Michael Ryan, the World Health Organization (WHO)’s emergencies director said that the virus “may never go away,” becoming endemic instead. But the WHO also warned that easing restrictions could trigger a second wave of infections.
Another respondent suggested that their support for reopening was conditional upon it being done “in a methodical way [in phases] with proper testing.”
The Logic also asked subscribers how optimistic they are about the Canadian economy’s outlook post-COVID-19. Fifty-seven per cent of respondents were optimistic about economic recovery; 33 per cent were pessimistic; and 10 per cent were neither optimistic nor pessimistic.
This is the second time The Logic has posed this question. With an additional month of economic insights—including mounting unemployment and a clearer picture of government assistance programs—subscribers were more firm in their positions.
Several subscribers wrote that they felt confident in Canada’s economic foundations, and that government policies introduced during the crisis have been reasonable. However, there was uncertainty about how soon consumer spending would resume, and how it could affect recovery. Some linked the question back to economic reopening.
“It seems that there has been enough responsive support from the federal and provincial governments to allow businesses enough latitude to reopen. If a second wave of [COVID-19] occurs in the fall and we have to shutter again, I am very concerned about economic recovery,” one wrote.
Many subscribers predicted that recovery would look different across sectors and regions, with energy, aviation, commercial real estate and hospitality and tourism at greater risk. Sector-specific and regional support has been top of mind in Ottawa, with new relief for western provinces and a bridge-loan program for large businesses unveiled in recent weeks. The Large Employer Emergency Financing Facility (LEEFF), which comes after Finance Minister Bill Morneau signalled he was working on sector-specific support measures in late March, began accepting applications on Wednesday.
Some subscribers see a shakeup of traditional industries as a good thing. “Canada needs to continue to shift our economy to technology and software based industries,” one wrote, adding that driving growth in new industries could be a “silver lining with this pandemic.”
For the third time since the pandemic began, The Logic asked subscribers whether they believed COVID-19 will lead to a prolonged, structural reorganization of the global economy. This month, 74 per cent of respondents agreed that the virus will lead to a structural reorganization, up three percentage points from March. Nineteen per cent of subscribers disagreed, down from 20 per cent in March.
Like in previous months, many subscribers said they expected supply chains to be reconfigured, while manufacturing and trade become more local.
Several subscribers expressed a desire to see the crisis result in some kind of economic reorganization. “It could, it should, but it probably won’t,” one wrote. “I hope so. I am not optimistic, but I strongly want it to be true,” another said.
One subscriber noted generational attitudes.
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“I had a discussion with my 3 millennials (25, 27, 29) about this very thing on Mother’s Day. Each of them hopes the answer is yes. That was interesting to me.”
Finally, The Logic asked subscribers whether their companies were making, or anticipating making, structural changes related to COVID-19. A smaller percentage of respondents reported changes at their companies than the nearly 70 per cent who did in March, when we first posed the question. This month, that number dropped to 54 per cent, a slight increase from the 50 per cent who reported changes during a second survey concluded in early April. During the same period, the number of respondents not anticipating changes grew from 18 per cent to 28 per cent.
For the first time, many subscribers said their companies had given up real estate or cancelled an office lease. In previous surveys, respondents indicated that they had begun working from home, a trend many expected to continue. A handful of major companies have made working from home permanent for some employees since the pandemic started, including Shopify and Facebook, which made their announcements on Thursday. Twitter and Waterloo-based software giant OpenText previously made similar announcements.
“I think our company is quite clear that there is no going back to normal,” one subscriber wrote.