This article is a preview of The Logic’s Daily Briefing newsletter, sent every weekday.
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It’s day 76 since Canada’s 100th coronavirus case. The number of cases is 85,677 as of publication time, up 978 since yesterday—an eight per cent decrease from the seven-day prior average of new cases. On their respective 76th day, U.S. daily new cases were down 13 per cent from the seven-day prior average; the U.K. was down 28 per cent in daily new cases from the seven-day prior; and in Italy, new cases were down 11 per cent.*
Lombardy, the region of Italy most affected by coronavirus, registered zero deaths yesterday for the first time since the beginning of the epidemic. The good news was short-lived, with an additional 34 deaths recorded on Monday.
Crisis talent: Ottawa should set up an “innovation corps” for co-op students whose placements have been cancelled by U.S. firms, Council of Canadian Innovators (CCI) chair Jim Balsillie told a parliamentary committee on Monday afternoon. “We [need] to make sure that these people actually find better jobs in Canada for the summertime … because the border may not open for eight to 12 months,” he said. “We have an unusual opportunity to reverse the brain drain.” The scale-up lobby group has set up a new database for companies to find work-seeking students.
The former co-CEO of Research in Motion (now BlackBerry) also called for sector-specific data strategies for industries like health care, agriculture and smart cities. Innovation Minister Navdeep Bains’s to-do list for this mandate includes turning the Liberals’ high-level digital charter into specific laws and regulations; in a January interview with The Logic, he identified improving workers’ digital skills through training benefits as a way to help businesses take advantage.
CCI is recommending Ottawa implement its intellectual property collective pilot, and expand its “scale and scope” across the economy. In August 2019, the federal government announced it had chosen Innovation Asset Collective for a four-year, $30 million program focused on cleantech. The non-profit has yet to launch. Some innovation and IP experts have expressed concerns that the pilot is taking on too large a sector.
Balsillie also repeated his longstanding calls for Ottawa to develop policy for the “intangible” economy of IP and data.
Dear landlord: The Canada Mortgage and Housing Corporation (CMHC) began accepting applications Monday for the Canada Emergency Commercial Rent Assistance (CECRA) program, which gives landlords forgivable loans worth 50 per cent of rents up to $10,000 a month. They must pass that break, plus another 25 per cent, on to tenants. The registration process is staggered by property owners’ locations and size. “To landlords: please apply,” said Prime Minister Justin Trudeau. Small Business Minister Mary Ng argued the program makes “financial sense for you as a landlord,” because tenants going bankrupt and being evicted will cost property owners “the steady stream of income you depend on” and create “additional costs while you search for new tenants.”
Business lobby groups have urged the federal and provincial governments to do more than ask. On Monday, five associations, including the Canadian Federation of Independent Business and the Retail Council of Canada, called for a commercial eviction moratorium in Ontario. CMHC declined to provide The Logic with information on the number of applications it received Monday. The agency is “closely monitoring those numbers, but they are not yet available,” said spokesperson Audrey-Anne Coulombe. While CMHC is “planning on reporting on the program’s take up,” Coulombe would not say when it would do so.
In the markets: Major stock indices in Canada, Europe and Asia closed up today while U.S. and U.K. exchanges remained closed for holidays. The TSX ended the day up 1.08 per cent, while Japan’s Nikkei rose 1.7 per cent and the benchmark European index Stoxx Europe 600 rose 1.5 per cent. Some investors are concerned business investment will drop in Hong Kong, where protesters and police clashed on Sunday over national security laws Beijing wants to impose.
The New York Stock Exchange will reopen its trading floor Tuesday, but will only permit one-quarter of traders; they must wear masks and must not have taken public transportation. Meanwhile, some bankers are questioning the traditional IPO roadshow after several firms, including Zentalis Pharmaceuticals and JDE Peet, pulled off successful video-call tours. German business sentiment ticked up slightly following a record low in April, but GDP fell 2.2 per cent in the first quarter compared with the preceding three months. European consumers are increasing savings, adding to the economic downturn. Global trade volume fell 4.3 per cent from a year earlier, the largest decline since 2009. On Monday, the European Banking Authority warned some financial institutions on the continent may not be able to survive.
Canada’s bank earnings season kicks off tomorrow, with Scotiabank and National Bank reporting, and the rest of the Big Six reporting over the next two days. Analysts are predicting a dire quarter for the institutions, with loan-loss provisions dragging down earnings. The Canadian dollar rose to 71.48 cents U.S. in late afternoon trading.
“Consider a thought experiment in which we are all immunized overnight. What might remain is the uncertainty of coordination: how quickly will everybody else resume normal activity?”: Nobel Prize-winning economist Paul Romer is urging the U.S. government to launch a national testing program to boost economic confidence.
Proxy season: The world’s biggest tech firms will face an onslaught of shareholder proposals on human rights, climate change and gender and racial pay gaps, starting May 27 when Amazon and Facebook convene virtually for their annual general meetings. Amazon shareholders filed at least 14 resolutions—12 of which are moving forward to a vote—more than any other company. Alphabet shareholders, who will convene on June 3, have 10 items on the ballot; Facebook shareholders have eight items up for a vote; and Apple has three. The firms refute many of the claims laid out in the resolutions and urge shareholders to vote against each resolution. The shareholder resolutions follow mounting pressure to address Big Tech’s growing impact on social, environmental and governance issues globally, and signals a shift in proxy voting that traditionally saw resolutions concentrated in the energy sector.
Cross-country checkup: Two-thirds of students in health-related programs at the master’s or professional degree level have had work placements cancelled or delayed because of the pandemic, compared to 35 per cent of students overall, Statistics Canada reports. The B.C. minister of education is partnering with Canada Learning Code to teach computer programming skills to kids ages nine and up as schools remain closed. Ontario will test asymptomatic people in high-risk groups, including first responders, taxi drivers and meat-packing workers, as part of a new strategy to better understand how the virus is spreading. Alberta Energy Minister Sonya Savage said “now is a great time to be building a pipeline” since COVID-19 restrictions prohibit large groups of protesters from gathering.
Bay Street to Main Street: Justin Trudeau met one-on-one with the Big Six banks’ CEOs to discuss current relief efforts and which parts of the economy may need additional support. The meetings are a rarity. Trudeau called the CEOs in 2018 during trade negotiations with the U.S. and Mexico. The prime minister has built much of his economic recovery plan around the major banks—they’re helping process everything from the $40,000 business loans to the 75 per cent wage subsidies. That hasn’t stopped some public disagreements between the two sides. In April, Trudeau asked the banks to do more to help during the pandemic. The same month, the CEOs of Desjardins and National Bank called for more government support for the oil sector.
- Trudeau is asking provinces to offer 10 days of paid sick leave for all workers, a key demand of the federal NDP, whose support the prime minister is seeking on a motion limiting votes throughout the summer.
- Inflation could return to two per cent more slowly than on average, outgoing Bank of Canada governor Stephen Poloz said Monday. It’s the second time in less than a week Poloz has indicated record low interest rates are unlikely to increase soon.
- Ride-sharing firm Facedrive emailed customers about a new partnership with Foodora, whose assets it’s seeking to acquire.
- EU antitrust regulators are investigating Air Canada’s takeover of Transat over concerns the purchase could raise prices and reduce choice for flights between Canada and Europe.
- Alberta closed the online portal for its $1-billion inactive-well cleanup program two weeks early, after receiving nearly 37,000 applications, although only 3,000 companies will receive funding.
- Vermilion Energy CEO Anthony Morino has stepped down and is being replaced by an executive committee.
- Canadian internet download traffic increased as much as 48.7 per cent during the pandemic. Meanwhile, rural download speeds jumped significantly in 2019.
- Toronto-based e-commerce firm Emerge Commerce is looking to go public on the TSX Venture Exchange.
- Consumer confidence in Canada ticked up slightly last week, but sentiment around the housing market remained near record lows.
- Drug discovery firm AbCellera is partnering with U.S. pharmaceutical giant Eli Lilly and Company to search for antibodies for nine therapeutic treatments. The federal government announced an investment of up to $175.6 million in AbCellera earlier this month.
- Many Montreal retailers reopened on Monday for the first time since March.
- The director-general of the World Health Organization is speaking at the Collision from Home conference.
Crowdsourcing the crisis: Ottawa has partnered with the Canadian Chamber of Commerce to launch the Business Resilience Service hotline (1-866-989-1080) to advise small- and medium-sized businesses, entrepreneurs and non-profits on COVID-19 relief programs, recovery plans and more. About 125 business advisers will staff the bilingual hotline every day for four weeks starting today.
Trace me on my cellphone: Switzerland began piloting its official contact-tracing app today. The app, which uses Google and Apple’s technology, will be ready for the public by mid-June. According to one poll, 70 per cent of the country’s population supports using the app. Latvia released a contact-tracing app, also using Apple and Google’s technology, last week. China is looking to make a permanent version of its contact-tracing app, a decision that is being seen as a step toward state surveillance.
In the lab: University of Saskatchewan researchers reported their vaccine candidate has proven “highly effective in ferrets.” Researchers at Oxford University are concerned their chances of creating an effective vaccine are lessening as cases decline. Said one researcher, “It is a race, yes. But it’s not a race against the other guys. It’s a race against the virus disappearing, and against time.” India’s health minister said four out of the 14 vaccines the country is developing could enter the clinical trial stage in the next three to five months; here are the Indian biotech companies leading the effort. Despite reporting positive results, Chinese drugmaker CanSino Biologics’ shares dropped 28 per cent on Monday. The world’s biggest pharmaceutical companies, including GlaxoSmithKline, Novartis, Pfizer and Johnson & Johnson, reportedly blocked a European Commission proposal in 2017 that would have fast-tracked vaccine development for pathogens like coronaviruses.
Drinking from the firehose:
- German airline carrier Lufthansa has reportedly reached a deal with the government on a bailout package that will give the airline US$9.8 billion in loans; in exchange, Germany will take a 20 per cent stake in the company and possibly an additional five per cent.
- TikTok and sister company Douyin brought in more revenue through in-app purchases than any other app in April. Their combined revenue grew tenfold to US$78 million.
- A cafe in South Korea has hired a robot barista to help maintain physical distancing after reopening for business.
- Ford, Smithfield Foods and UnitedHealth Group are among the employers conducting COVID-19 tests on staff as part of their return-to-work strategies.
Around the world: The U.S. has barred entry for most non-U.S. citizens travelling from Brazil, which has the world’s second-highest number of COVID-19 cases. Japan fully lifted its state of emergency, hailing “the power of the Japanese model,” which forwent national testing and masks in favour of cluster tracing. India allowed domestic air travel to resume after a two-month pause. Dominic Cummings, the U.K. prime minister’s chief of staff, admitted to travelling to the north of England during the country’s lockdown, but insisted he acted reasonably. Switzerland’s top court has reportedly ruled that employers must contribute to workers’ rent payments if they are expected to work from home. A single church service held in early May in Frankfurt, Germany appears to have led to at least 107 reported cases of coronavirus in the area. Denmark will allow cross-border couples to meet if they can prove they’ve been in a relationship for at least six months.
* 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. Numbers may also vary based on countries’ individual testing capacity and reporting.