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It’s day 41 since Canada’s 100th coronavirus case. The number of cases is 36,671 as of publication time, up 1,615 since yesterday, a 14 per cent increase in daily new cases from the three-day prior average. On their respective 41st day, U.S. daily new cases were down 16 per cent from the three-day prior average; the U.K. was up less than one per cent in daily new cases from the three-day prior; and in Italy, new cases were up two per cent.*
Italy reported its first drop in active COVID-19 cases since it recorded its first infection in February. Meanwhile, France now has 20,000 deaths from the disease, the fourth country to go beyond that threshold after Italy, Spain and the United States.
Who’s got next?: British Chancellor Rishi Sunak announced £1.25 billion ($2.2 billion) in COVID-19 support for the U.K.’s innovation economy on Monday. The package includes a £500-million convertible loan program called the Future Fund, which will disburse privately matched credit between £125,000 and £5 million. There’s also £750 million in R&D loans and grants. Sunak said innovative firms are “one of our great economic strengths, and will help power our growth out of the coronavirus crisis.”
Innovation Minister Navdeep Bains has similarly identified startups and scale-ups as a post-pandemic recovery engine. High-growth firms “continue to give us hope in terms of the ability to grow the economy after this crisis,” he said earlier this month, as the federal government announced changes to the Canada Emergency Wage Subsidy (CEWS) designed to help more such companies qualify. That bridged, but didn’t close, the innovation-economy support gap—the share of tech firms who believed themselves ineligible in successive Council of Canadian Innovators’ surveys dropped from 94 per cent to just under 40 per cent following those modifications.
So on Friday, Ottawa put more cards on the table, with $250 million for the National Research Council of Canada’s Industrial Research Assistance Program for R&D projects and $675 million for its six regional development agencies, reserved for companies that don’t qualify for the salary assistance. While terms for that second pot have yet to be announced, tech CEOs and lobby groups have greeted the announcement as a response to their concerns, albeit overdue. While the government will keep looking at its programs and policies, “at this stage, we feel this initiative does identify the gaps that existed in the wage subsidy and liquidity measures,” Bains told The Logic. “We feel we’ve covered significant ground.”
Still, Ottawa remains concerned about the health of innovative firms. “We also recognize that there are perhaps some startups with brilliant ideas that are facing a cash crunch right now, that we would very much want to remain Canadian for the coming years, who could be exposed to predatory foreign investors,” Prime Minister Justin Trudeau said Sunday. Over the weekend, the government announced it would be watching for “opportunistic investment behaviour,” subjecting any deals involving public health or antiviral supply chains to stronger scrutiny, regardless of their dollar value and whether a controlling stake is in play. That will continue “until the Canadian economy recovers from COVID-19,” Bains told The Logic in a statement. Other governments like Germany have matched increased scrutiny of foreign investment with buyout funds to acquire stakes in takeover targets, so firms get the capital they need. Asked by The Logic on Friday whether Canada was planning something similar, Bains said he already has “a robust Investment Canada Act … to examine these transactions.”
Other governments are also topping up startup and small-business support. In the U.S., lawmakers are reportedly nearing a deal to add US$300 billion to its emergency funding program, which dried up last week. Shake Shack will return the US$10-million loan it received from the scheme, after successfully raising additional capital from equity investors. Many small businesses have complained they were unable to apply for loans or receive the funds while larger businesses quickly received assistance.
For everything else, there’s Shopify Capital: The e-commerce giant launched its financing program in Canada on Monday, offering cash advances of between $200 and $500,000. Merchants pay back the money—plus a fee—as a share of their daily sales. The company uses “hundreds of data points based on a merchant’s history with the platform” to determine eligibility, spokesperson Sheryl So told The Logic; she did not specify what those were. The Ottawa-based firm has over 65,000 Canadian clients, “and based on our criteria we expect tens of thousands of them will be eligible.”
The company claims it provides funding faster than banks, and to businesses that don’t qualify for credit from traditional financial institutions; Kaz Nejatian, vice-president of the financial-solutions product group, tweeted that the first merchant accepted a financing offer just 34 minutes after Shopify sent out its email about the program. Shopify Capital first launched for U.S. merchants in April 2016. It provides loans in 14 states, but in Canada, it’s focusing on “merchant cash advances for now,” So said. The financing will be insured by Export Development Canada. Shopify’s So said the company’s Canadian merchants “export a good portion of their products.” She declined to disclose its standard factor rate, the multiple of the advance borrowers are required to return. The Canadian launch is part of a $200-million expansion of Shopify Capital in response to the pandemic. The company became the second-largest firm on the Toronto Stock Exchange by market cap, finishing the day up 6.74 per cent.
Over a barrel: The price of some oil products in Canada fell below zero on Monday; Alberta Premier Jason Kenney called for “significantly more action” from Ottawa to help the province’s sector survive. West Texas Intermediate, the main U.S. benchmark, saw May futures fall more than 300 per cent to below negative US$40 a barrel, before settling in the negative-US$30s, driven in part by low demand and shrinking storage capacity. Husky Energy has slashed its spending forecast for 2020 by another $700 million; the Calgary-based oil company now plans to spend about half of the $3.2 billion to $3.4 billion for which it had initially planned. The record drop in oil prices dragged on the markets. The S&P 500 and the Dow Jones dropped 1.79 per cent and 2.44 per cent, respectively; the Nasdaq was down 1.03 per cent, while the S&P/TSX gained 0.20 per cent. The Canadian dollar dropped below 71 cents U.S. closing at 70.78, its lowest mark in three weeks.
Investors are bracing for earnings reports from about a fifth of S&P 500 companies this week, many of which have been deeply impacted by the pandemic, including Delta Airlines and Netflix. IBM has withdrawn financial guidance for the rest of the year and said revenue was down by three per cent in the first quarter due to slower software sales as a result of COVID-19.
Analysts are now expecting the S&P 500’s profits to drop by 12.8 per cent, down from the 4.7 per cent drop predicted at the start of the month.
The Spanish government plans to propose a €1.5-trillion recovery fund for EU countries hit hardest by the crisis; it would be financed through perpetual debt and counted as transfers, not debt. German Chancellor Angela Merkel signalled she was prepared to increase the EU’s budget to help finance economic recovery for its members.
“We could have these things but we chose not to”: Venture capitalist Marc Andreessen’s essay posted over the weekend decried the western world’s lack of preparation for the coronavirus pandemic, citing politics, regulation and a lack of will.
Trace me on my cellphone: Amid growing public and government interest in using data and technology for contact tracing and other measures to combat COVID-19, the Canadian Civil Liberties Association is calling on Canadian authorities to ensure any such programs solve real public health needs, preserve privacy rights and protect the vulnerable. In a letter to the prime minister and premiers, the watchdog said any mandatory system should be used as a “last resort.” Véronique Simard, press secretary to Bains, told The Logic Monday the federal government “is in discussion with Canada’s artificial intelligence and scientific communities.” She declined to provide further details. But a government source told The Logic Bains has been in extensive contact with Yoshua Bengio, scientific director of the Mila institute in Montreal, who is co-developing an AI-based app. “We are exploring innovative COVID-19 solutions from all sectors of the economy, including data and digital technology players,” Simard said. “Canadians can rest assured that their right to privacy and data security remain top priorities.”
Meanwhile, university researchers from around the world—including Canada’s Waterloo and McGill—are concerned about “mission creep” in tech-driven antiviral programs leading to “unprecedented surveillance of society at large.” They’re backing Apple and Google’s Bluetooth-based system, which they say protects privacy and simplifies app development. But industry experts estimate two billion phones lack the necessary chips and software. European governments and scientists are lining up behind competing protocols, one German-led and the other Swiss-developed.
Cross-country checkup: More than a third of Canadian workers worry they could lose their jobs within the next four weeks due to COVID-19, according to a Statistics Canada survey, following a more than one-million drop in employment from February to March. Nearly a third of Canadians said the pandemic is impacting their ability to meet their financial obligations; just 47 per cent reported minor or no impact. Those that reported moderate or major impact on their ability to meet their financial obligations were also far more likely to report negative impacts on their mental health.
More than 350 cases of COVID-19 in Alberta have been linked to the Cargill meat processing plant in High River. The plant remains open with scaled-back production and staggered shifts. The province, which has among the highest per-capita testing rates in the country, plans to nearly triple its capacity to 20,000 tests a day by the end of May. Manitoba will likewise expand its testing as it extends its state of emergency for another 30 days. Nova Scotia reported 46 new cases Monday, the most in a single day. During a press conference, chief medical officer Dr. Robert Strang addressed Sunday’s mass shooting in the province, stressing the need to maintain physical distancing while mourning the victims.
Bay Street to Main Street: A suite of Canadian startups has bucked international trends, raising millions of venture capital in the midst of the pandemic: PocketHealth, which gives patients access to medical imaging online, raised US$6.5-million from Radical Ventures; fintech firm FundThrough raised $8 million led by Urbana and David Mirvish; and CleanSlate UV, which produces sanitizing products for medical equipment, raised an $8.4-million Series A from Prolog Ventures.
- Montreal-based telecom Videotron is extending its data-cap removal to June 30. Rogers, Bell and Telus have extended their data-cap amnesties to the same date.
- Canadian sawmills have reduced production by about 25 per cent, anticipating a slow spring building season due to COVID-19; the lower capacity could add further pressure on toilet-paper supply chains.
- Sun Life and Manulife will offer credits on some health-care benefits.
- Canadian Tire’s website is “over capacity,” and the company says it is working around the clock to meet demand.
Crowdsourcing the crisis: Clēan Works, a produce-sanitization company in Beamsville, Ont., has received Health Canada approval to sanitize N95 masks for health-care workers. Here’s how their technology works. MedTech Canada has created a COVID-19 product pathway for companies looking to develop medical devices. Prospect and The Help List are running a national survey to assess the virus’s economic impact on the country’s tech workforce. The survey, designed for startup founders and managers, will run from today until April 27.
CAE sells 100,000 N95s to Quebec: The Montreal-based tech firm has sold the province 100,000 N95 masks it acquired from China, The Logic has learned. Quebec is paying for the cost of shipping and the masks, but CAE is not making a profit on the sale. A shipment of 3,000 masks were sent to the province two weeks ago for testing, with the remaining 97,000 set to arrive on April 22, according to CAE public affairs director Pascale Alpha. “We wanted to help the frontline health workers,” said Alpha. CAE announced plans on Monday to bring back 1,500 employees it had temporarily laid off, after signing a contract with the federal government for 10,000 ventilators.
How to build it 101: Neil Godara, vice-president of medical-device company Baylis Medical, told The Logic he has halted all non-critical projects, shifting its Mississauga, Ont.-based manufacturing operations to build ventilators for COVID-19 efforts. “Our thinking has been how many people can we activate across the country, across the world, to help us make [ventilators] as quickly as possible,” he said. The company will hire at least 100 people, on top of the over 600 people already employed, “and many many more” who can join Baylis’s “rigid“ assembly line. “It’s not our goal to build ventilators long term,” Godara said. The shift came after Baylis began fielding calls from professors and researchers who were building ventilators in their homes and seeking the company’s expert advice. “We had to do something. We had the knowledge and the equipment,” he said. “We’re doing it to respond to the crisis. We’ll make it for as long as they’re needed. It’s challenging, but we’ll figure it out.”
A healthtech success: Curtis Khan, CEO of BookJane, said he is currently increasing his workforce by 20 per cent. The Ontario-grown healthtech startup, which matches health-care professionals to facilities that need staff, has partnered with the Ontario Medical Association to help meet the demand of doctors fighting COVID-19. Since April 3, over 1,500 physicians have signed up to find work. As plans for pop-up hospitals emerge and doctors are overworked, Khan said his platform has become vital in mobilizing health-care workers in “real time and more efficiently.” The company is in the middle of a raise, Khan told The Logic. “During the worst crisis, our business has grown.”
Drinking from the firehose: Researchers released a Facebook-powered county-by-county map of the U.S. on Monday, based on information collected from a voluntary survey, meant to track the spread of the disease. In an op-ed in the Washington Post on Monday, CEO Mark Zuckerberg wrote it was a way Facebook could “uniquely help” in the crisis. The program will be expanded globally starting Wednesday. The social media giant also launched the free Facebook Gaming mobile app on Monday, ahead of a planned June release. The company is the latest to join the gaming space, set to challenge Amazon’s Twitch, as well as Google’s YouTube and Microsoft’s Mixer.
- Microsoft is launching a self-screening tool called the CoVIg-19 Plasma Bot for people to check whether they qualify to donate their plasma to COVID-19 patients.
- Google is making its health-care technology available for COVID-19 research, which it said will allow for “storing and accessing healthcare data in Google Cloud, providing a critical bridge between existing care systems and applications hosted on Google Cloud.”
- Neiman Marcus Group, a major U.S. department-store operator co-owned by the Canada Pension Plan Investment Board, is preparing to seek bankruptcy protection.
- United Airlines expects to report a pre-tax loss of roughly US$2.1 billion for the first quarter. It also expects to borrow up to about $4.5 billion from the U.S. Treasury Department for up to five years, on top of the US$5 billion it will receive as a wage subsidy.
- Amazon will keep its six warehouses in France closed until at least Wednesday.
- Kickstarter is considering “potential layoffs across teams and at all levels of staff.”
- The Silicon Valley Community Foundation is privately asking its tech billionaire donors to give up to five percent of their assets to coronavirus efforts.
The grand reopening: Several beaches in Australia cautiously reopened on Monday, though only for exercise. “Activities such as sitting on the sand, sun-baking or gathering in groups will not be permitted,” said local mayor Danny Said. Iran has reopened intercity highways and major shopping centres, including Tehran’s historic Grand Bazaar. Small- and mid-sized firms in Italy that contribute to the supply chains of essential businesses have been greenlit to return to work, unless authorities explicitly say otherwise. Germany reopened some small shops as Chancellor Merkel said she was “greatly concerned” the public might let its guard down. New Zealanders will remain in total lockdown for another week, planning to ease restrictions if progress is maintained. France is set to begin reopening as planned on May 11, though its prime minister has warned life will not be the same “probably … for a long time.” U.S. state governors are pushing back on orders to open their economies, citing a test shortage. According to politicians and epidemiologists, antibody tests are key to reopening economies—but they aren’t yet accurate or readily available enough to do so.
Around the world: Singapore, praised for controlling the spread of the virus without a lockdown, now has the highest number of cases in Southeast Asia, with almost all new cases being among migrant workers living in shared housing. Sweden, which has kept businesses open and urged responsible behaviour, said its plan is working. Germany’s financial aid program may have had tens of millions of euros stolen from it through a phishing scheme after a province failed to properly check applicants’ identities. The FBI says reports of cybercrime have increased by 300 per cent since the pandemic started; a lot of the increased cybercrime is apparently coming from countries looking for COVID-19-related research. Russia has quarantined an estimated 15,000 soldiers who took part in rehearsals for a May 9 Victory Day parade.
“He went out to New Zealand to escape everything that’s happening”: Some Silicon Valley tycoons are hiding from the pandemic on the other side of the world, driving demand up for luxury bunkers that cost US$3 million to $8 million.
* 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 three-day prior average. Numbers may also vary based on countries’ individual testing capacity and reporting.
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