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It’s day 115 since Canada’s 100th coronavirus case. The number of cases is 105,026 as of publication time, up 255 since yesterday—a 16.9 per cent decrease from the seven-day prior average of 307 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
Nearly 5,500 patients in 39 countries have been recruited into the World Health Organization’s clinical trial testing drugs that can treat COVID-19; results are expected within two weeks.
“An utter failure”: The federal government’s business rent relief program continues to see low uptake, despite policymakers’ repeated calls for landlords to apply for the aid and eviction moratoriums in some provinces.
As of Monday, property owners had received approval for $194 million in funding on behalf of over 25,600 tenants through the Canada Emergency Commercial Rent Assistance (CECRA), according to figures Finance Canada provided The Logic. That accounts for just five to six per cent of the 400,000 to 500,000 firms the Canadian Federation of Independent Business estimates meet the eligibility criteria. “It’s an utter failure,” Michael Smith, an organizer of the Save Small Business lobby, told The Logic.
The program gives landlords forgivable loans worth 50 per cent of what they charge occupiers monthly, as long as they waive another quarter; tenants must pay the remainder. It’s open to businesses that pay up to $50,000 in gross rent per location per month, with annual revenues up to $20 million that have dropped 70 per cent or more during the pandemic. On Tuesday, Ottawa extended the program, which it expects to total $2.97 billion, through July.
Property owners applying to the program face a high cost and compliance burden, according to Raman Bayanzadeh, a commercial realtor with Vancouver’s Klein Group Royal LePage Commercial. “In the best-case scenario, the landlord is out 25 per cent,” and there’s “a lot of paperwork,” he said. Many are also concerned that the federal government will sanction them for inadequately verifying that tenants fulfilled the revenue-reduction requirement. “The landlord is not in the business of auditing—they don’t have the financial capability,” Bayanzadeh said.
On Wednesday, British Columbia extended its commercial-eviction ban, instituted last month. Smith said an increasing number of small- and mid-sized landlords there and in Ontario—where the moratorium runs until September—are now applying for the CECRA. Larger property owners such as real estate investment trusts are already committed to participating, but must file for all the tenants in a property at once, which takes time. “It’s possible that some of the larger commercial landlords have now submitted, and that would reflect the sort of increase in numbers to date,” said Smith. Finance Canada did not disclose how many landlords have received loans through the program.
Main Street businesses’ ability to start generating revenue again depends in large part on the speed of reopening in their local areas, but details of the CECRA’s regional uptake are trapped in an intergovernmental loop. Finance Canada directed The Logic’s question to the provinces. But Ontario, Quebec, Nova Scotia and Prince Edward Island said the figures are held by the Canada Mortgage and Housing Corporation (CMHC), which administers the program. CMHC directed inquiries about the CECRA to Finance Canada.
In Alberta, 1,495 landlords have received about $22 million in funding for 2,341 tenants. One province over, 305 Saskatchewan businesses had been approved for around $2.45 million. In Manitoba, the program has funded over 150 applications worth about $1.7 million for more than 220 tenants. New Brunswick’s eviction ban ended on May 31, less than a week after CECRA applications opened, and the program has seen little uptake there. So far, 172 landlords have received just over $1.29 million in funding for 282 tenants—0.66 per cent of the CECRA’s outlay, and far less than the province’s two per cent population share.
In the markets: Thursday’s global market rally, largely driven by positive U.S. job numbers, stalled on Friday. With American markets closed for the holiday long weekend, European stocks bore the brunt of record-high new daily COVID-19 cases in the U.S.—the pan-European Stoxx 600 closed around 0.9 per cent, with basic-resource stocks driving the losses at a 1.7 per cent drop. In Canada, the TSX was down 0.26 per cent at close after nearly a week-long rally. The loonie closed at 73.76 U.S. cents. Oil markets also dipped Friday after a relatively strong week, with Brent and U.S. crude falling 0.65 per cent and 0.66 per cent, respectively.
Asian markets bucked the downward trend. All major indices closed up on Friday on news that expansion in China’s service sector was at its fastest in a decade. Chinese shares reached five-year highs and pan-Asian stocks traded at their highest prices in four months.
“What is normal life? It’s going to concerts, taking flights, fully fledged work and travel. In my view, it’s unlikely that this will happen before February”: Russian Health Minister Mikhail Murashko believes the road to recovery will take a long time, noting that the coronavirus has increased Russia’s mortality rate by around 1.5 to two per cent since the beginning of 2020.
Cross-country checkup: The four Atlantic provinces lifted restrictions Friday to allow residents to travel between borders without needing to isolate upon arrival. Ontario reported its lowest daily increase in COVID-19 deaths since March. About 370 families in Quebec are without leases for the month, according to a report from a local housing rights group, which found that housing insecurity has worsened during the pandemic. Residents of 28 First Nations in Saskatchewan would have to travel at least 50 kilometres to seek care for COVID-19, a new report shows.
Bay Street to Main Street:
- Prime Minister Justin Trudeau is “disappointed” by Air Canada’s decision to cut its domestic routes: “We know Air Canada profits from the most profitable routes in the country, but we expect them to serve … people who live in more distant regions.”
- Vancouver home sales rebounded in June, rising 65 per cent from May and 18 per cent from last June.
- Canada’s fashion industry is grappling with rising e-commerce sales and demand for casual wear, as it braces for more shops to seek statutory protection.
Postcard from São Paulo: “Brazil’s been through quite a lot of crises in the 20 years I’ve been here,” Philippe Jeffrey told The Logic. A tax lawyer originally from Quebec City, Jeffrey now lives in Brazil, which currently claims a coronavirus outbreak second only to the U.S. Despite the “scary” headlines, Jeffrey is calm. “I do a lot of business with Canadian companies. My role is to tell them that when you look at a Brazilian crisis versus a Canadian crisis, you can’t make the same comparison,” he said. “It will hit harder, but the capacity of the country to recuperate is much faster than other countries. Brazil always survives a crisis.”
The country has changed, Jeffrey admits, but they’re not much different from the changes in Canada he hears about from his friends and family. “[COVID-19] changed everything; it is still changing everything,” he said. São Paulo was “a ghost city” when the pandemic started, he said. Jeffrey saw street vendors disappear for a month and then return as things reopened slowly. He got used to being a lawyer working from home: legal documents were being prepared faster, and larger companies started calling for his services. He went to the office for the first time last week after three months to spend some time with his team. “It’s good to work from home, but we will need to learn until what point [the] home office is good, and what other point you need physical contact with people to do your work,” he said.
“What is much more challenging here isn’t the coronavirus itself. It’s what’s happening with the current government,” Jeffrey said. “In other countries you saw and felt the governments were 100 per cent focused. [Brazil President Jair] Bolsonaro took a very strange approach.… Sometimes we joke that what [U.S. President Donald] Trump is doing, Bolsonaro will try to do here.”
In the lab: The EU has conditionally approved Gilead Sciences’ experimental COVID-19 drug remdesivir. The U.K. is looking to join the EU’s plan to secure vaccine supplies. India has approved for human trials a second vaccine candidate, this time from Zydus Cadila, as the daily number of cases rises to record highs. The WHO has collected 60,000 samples of the virus, finding almost 30 per cent have exhibited signs of mutation, but there is no evidence those mutations have led to a more severe disease.
Trace me on my cellphone: The Open Rights Group, a U.K.-based privacy advocacy organization, has sent a legal letter to U.K. Health Secretary Matt Hancock and the Department of Health and Social Care for failing to conduct a risk assessment before collecting more than 150,000 people’s personal information for contact tracing. The case will be taken to court if the government doesn’t perform a full review by July 8.
Drinking from the firehose:
- Three-quarters of U.K. manufacturers are poised to cut jobs this year, according to an industry survey ahead of an economic stimulus announcement expected from the government next week.
- German car company Daimler plans to sell its factory in Hambach, France—where it makes its smart two-seater cars—to fit with its sweeping restructuring plans set to deal with the impact of COVID-19.
- British Airways’s parent firm IAG has withdrawn its suit with the U.K. government over a policy to force visitors to self-isolate for 14 days.
- Downloads for Match Group’s Tinder app are starting to resurge after a pandemic-induced dry spell.
Around the world: The number of new coronavirus cases in the U.S. rose by more than 50,000 for a second straight day on Thursday, spurred in part by a sharp rise in Florida, which reported an increase of more than 10,000 for the first time. Local officials in Victoria, Australia said they were disappointed that more than 10,000 people had refused to be tested for COVID-19 over the past eight days. The U.K. revealed a list of over 70 safe destinations where travellers can go without needing to self-isolate for 14 days upon return; the list excludes the U.S., Sweden and Canada. A leading obstetrician in Papua New Guinea is advising women not to get pregnant for up to two years, saying fears of COVID-19 transmission have seen expecting mothers turned away from hospitals. A five-star hotel in Vietnam is hoping to attract guests with a new gold-plated interior—everything from the rooftop pool to the wash basins.
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Radical transparency: Bernardo Bustillo, a municipal councillor in northern Spain, has offered to resign after he virtually attended a council meeting while showering and forgot to turn off his camera. “I can’t help but regret that the end of my political life … has to do with my nakedness, which isn’t a big deal.”
* 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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