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It’s day 112 since Canada’s 100th coronavirus case. The number of cases is 103,821 as of publication time, up 571 since yesterday—a 147 per cent increase from the seven-day prior average of 231 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
In just over six months, the coronavirus has infected over 10 million people in 188 countries and territories, killing over 500,000. World Health Organization chief Tedros Adhanom Ghebreyesus warned, “The hard reality is that this is not even close to being over.”
In search of a new Alberta advantage: The Alberta government hopes the technology sector will play a key role in the province’s post-pandemic economic recovery. On Monday, Premier Jason Kenney announced $175 million in new money for the Alberta Enterprise Corporation, which invests in VC funds that back local startups, as well as a new Innovation Employment Grant, details of which were not immediately made available. “If you want to do a tech startup, do it in downtown Edmonton, or do it in another community in Alberta,” he said. “You’re going to benefit from the strongest incentives.”
The province will also cut its corporate tax rate to eight per cent on July 1, two years ahead of schedule. It is accelerating infrastructure spending, budgeting $10 billion—a 40 per cent increase on its previous plan for the 2020–2021 fiscal year—for roads, schools and hospitals as well as pipeline projects. And it’s launching a new investment-attraction agency to “make sure companies know that I think they’re being irresponsible if they don’t consider moving operations to Alberta,” Kenney said, citing the tax differential, low office-space prices in Calgary and the city’s quality of life.
The new grant will partly replace five tax credits for investors, scientific research and experimental development (SR&ED), and digital media, which the United Conservative Party (UCP) government eliminated in October 2019. Some innovation-economy executives criticized the cuts, and the federal regional development agency for Western Canada subsequently saw an increase in inquiries for support from Alberta firms. In December 2019, The Logic reported Wattpad chose Halifax over Calgary for its second headquarters in part because of the elimination of the tax credits.
On Monday, Kenney argued the existing incentives were not “working effectively.” The new grant will “reward growth in a much more significant way than [the] SR&ED credit did,” said Finance Minister Travis Toews, adding that the other programs were “full of red tape” and created high compliance and administrative costs for applicants and the government.
The province will release a new technology and innovation strategy in the fall. Kenney said Bay Street banks and insurance firms can save on taxes and operational expenses as well as employees’ cost of living by “relocating financial and fintech jobs to places like downtown Calgary [and] downtown Edmonton.”
James Lochrie, capital partner of Calgary-based investment and product firm Thin Air Labs, tweeted that the plans announced Monday represented “major advancements for the technology and innovation sector in Alberta.” The new grant “seems like an excellent program,” although few details are available, the former Wave executive said.
Alberta also wants to reduce immigration in the near term. The province will ask Ottawa not to conduct the assessments which allow firms to bring people in under the Temporary Foreign Worker Program (TFWP) for “the vast majority of occupational categories,” Kenney said, citing the province’s high unemployment rate. “It is extremely difficult for me to justify employers looking outside Alberta to bring people into a labour market in the midst of an unprecedented crisis,” he said.
Innovation economy firms have used the Global Talent Stream (GTS), a subset of the TFWP, to bring in highly specialized experts and executives as well as skilled workers for in-demand fields like engineering and programming. Alberta-based employers received approval to fill 177 roles via the program between June 2017 and December 2019, The Logic’s ongoing analysis shows. They included prominent names like Benevity, a corporate social responsibility-software startup that raised $40 million in October 2019, and Solium Capital, a stock option-management platform that Morgan Stanley acquired for $1.1 billion in February 2019. Adrienne South, a spokesperson for Alberta Immigration Minister Jason Copping, said the TFWP changes the province is seeking will not impact the GTS.
As well, Alberta will reduce the number of people who receive a provincial nomination—a selection that all but guarantees a candidate entry via Canada’s main economic-class permanent-residence program—from 6,250 to 4,000. But it’s continuing to work on a system overhaul that the UCP promised in last year’s election, which includes fast-track programs for entrepreneurs. Ottawa similarly launched a startup visa program in April 2013, when Kenney was federal immigration minister; as The Logic reported, it has so far seen limited success.
In the markets: All major U.S. stock indices posted gains on Monday, recovering some of Friday’s losses despite an increase in COVID-19 cases across many parts of the country, with record-high daily infection numbers over the weekend. The gains followed better-than-expected housing data showing a record monthly increase in pending home sales, tempering fears of just how severe the economic impact could be. At the same time, banks are pulling back lending to consumers, as debt-payment deferrals create confusion around who’s credit-worthy.
The TSX was up more than one per cent in late afternoon trading, aided by a boost in oil prices despite Chesapeake Energy—a leader in the fracking industry—filing for bankruptcy protection; analysts said the filing could be a harbinger of insolvencies in the industry on the horizon. The loonie dropped slightly on Monday, closing at 72.48 cents U.S.
While European markets broadly reflected gains in North America, major Asian indices dipped on Monday. Analysts said the drop could be a slight correction of what may have been a too-aggressive rally in the market since March; it comes as the number of global COVID-19 cases surpassed 10 million, with over half a million deaths.
“We, emphatically, do not seek to create a competitive public service ‘Olympics’ in response to this pandemic”: More than 165 admissions deans from schools across the U.S. released a statement laying out how they’ll evaluate applications from prospective students amid the pandemic. They will assess students’ applications “in the context of the obstacles students are facing,” including their family responsibilities and need for self-care.
Cross-country checkup: The number of migrant farm workers in Ontario with COVID-19 is rising; Windsor-Essex County reported 87 new cases in the agrifood sector on Monday, following 96 new cases reported in the sector on Sunday. Yukon has received 23 complaints of outside travellers breaking rules that require them to pass through the territory within 24 hours of entry, as some Yukoners call for the government to cut off the Alaska Highway to Americans. Newfoundland and Labrador has gone a month without a new case of COVID-19, as the province prepares to open its borders to other Atlantic provinces on Friday.
Bay Street to Main Street: The Cirque du Soleil Entertainment Group has filed for bankruptcy protection. The Montreal-based company has entered a stalking-horse agreement with its biggest shareholders, which includes private equity and investment firms in the U.S., Canada and China, which will take over some of Cirque’s liabilities and invest US$300 million. Investissement Québec, the provincial government’s investment arm, will provide $200 million in debt financing. The Quebec Superior Court will hear the application tomorrow; Cirque will also seek its immediate recognition in the U.S. under Chapter 15. Under the stalking-horse deal, the company will provide refunds and financial help to laid-off workers.
- The federal government has extended the Canada Emergency Commercial Rent Assistance program by a month to cover July.
- Lululemon has agreed to acquire New York-based Mirror, a home-fitness startup that sells a US$1,495 wall-mounted machine for streaming workout classes, for $500 million. This is the Vancouver-headquartered athleisure company’s first acquisition.
- The value of Canadian building permits rose by 20.2 per cent between April and May—the largest percentage increase since March 2009—amid relaxed coronavirus restrictions.
- After a four-month slump, Canadian industrial product prices increased 1.2 per cent in May due to higher prices for meat, fish and dairy products and gains in energy prices.
In the lab: Chinese troops will be among the first to get injected with CanSino Biologics’ vaccine candidate, which has also been approved for testing and production in Canada. The potential vaccine has produced mixed results in trials so far. Gilead Sciences’ coronavirus drug remdesivir, which has been found to shorten recovery time in COVID-19 patients, will sell for US$390 per vial to advanced economies around the world—or about US$2,340 for a typical five-day course of treatment. Privately insured patients in the U.S. will be charged about $520 per dose. The U.S. government, which on May 1 authorized emergency usage of remdesivir, said it has purchased enough to treat more than 500,000 treatment courses in hospitals through September. According to Politico, that amounts to Gilead’s entire planned production for July and 90 percent of its production in August and September.
Trace me on my cellphone: Singapore has started distributing the first batches of TraceTogether Tokens, the government’s wearable Bluetooth contact-tracing device that has a unique QR code and a battery that lasts nine months, to “the most vulnerable seniors who are currently not digitally connected and at higher risk from COVID-19.” The government said the data cannot be accessed remotely, as the tokens have no internet or cellular capabilities. A new Irish contact-tracing app set to be rolled out on July 10 has been found to be “less invasive than Alexa.” The British government is adding new features to its revised contact-tracing app, including a map, a timer to count down quarantine periods and barcodes for buildings and restaurants; it is also rebranding the app as “PPE in your pocket.”
Drinking from the firehose:
- At least 2,000 Amazon warehouse workers in Germany have gone on strike over what they call unsafe working conditions during the pandemic. Meanwhile, the company is offering frontline workers a one-time bonus: full-time workers in its warehouses, in delivery and at Whole Foods will get US$500, part-time staff will get US$250 and Flex drivers will receive US$150.
- American Airlines will resume booking all seats on its flights July 1, even as the number of COVID-19 cases continues to climb in the U.S.; the company had not been filling its flights to capacity to allow for some social distancing between passengers.
- Oklahoma-based Chesapeake Energy, a pioneer in fracking, has filed for bankruptcy protection; the company has US$9 billion in debt.
- Single-use plastic is having a resurgence thanks to the pandemic. Demand for “flexible packaging” in the U.S. is expected to jump 10 per cent this year, compared to three per cent last year; in Europe, demand could rise by over five per cent, compared to 1.5 per cent in 2019.
Around the world: U.K. Prime Minister Boris Johnson said the pandemic has been “an absolute nightmare for the country,” adding that it was not the right time for a full inquiry into his government’s response. With a death toll of over 43,000 people, the U.K. is the worst affected country in the G7. Johnson, who performed push-ups in a recent interview to exhibit his good health, will outline the next phase of the government’s economic response tomorrow, including a promise to “build, build, build” its way out of the crisis. According to a new Reuters investigation, the U.K. government committed a slew of missteps during the pandemic.
This story has been updated with comment from the office of Alberta’s immigration minister.
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Meanwhile, U.S. Health Secretary Alex Azar said “the window is closing” to stop the spread of the virus in the southern and western U.S. The country will join next week’s International Energy Agency summit on a global green recovery plan. Social distancing continues to be impossible for the one million Rohingya refugees who live in Cox’s Bazar; here’s why. A virtual Tour De France begins this week. Scientists have a new name for the COVID-19 era: “anthropause.”
An 85-day odyssey across the Atlantic: When his flight was cancelled in March, Juan Manuel Ballestero set sail in a 29-foot boat packed with canned tuna, fruit and rice from Porto Santo, a small Portuguese island, to Argentina to spend “the end of the world” with his 90-year-old father. He made it back in time for Father’s Day.
* 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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