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COVID-19 roundup: Counting to 30 per cent

Minister of Innovation, Science and Industry Navdeep Bains speaks at a press conference on COVID-19 in West Block on Parliament Hill in Ottawa, in March 2020. The Canadian Press/Justin Tang
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It’s day 23 since Canada’s 100th coronavirus case. The number of cases is now 11,078 as of publication time, up 1,387 since yesterday, the largest number of new daily cases reported to date, and a 28 per cent increase in daily new cases. On their respective 23rd day, U.S. daily new cases jumped 21 per cent, the U.K. had a 36 per cent increase in daily new cases and in Italy, new cases were down 10 per cent.* 

More than 51,000 people have now died from the virus. The number of confirmed cases worldwide has increased to over one million.

What Ottawa has to offer: Startups and high-growth companies continue to worry they won’t be eligible for the Canada Emergency Wage Subsidy (CEWS) because of a requirement they show their monthly revenue has declined year over year. Joseph Fung, CEO of Waterloo-based Kiite, told The Logic that the rule doesn’t capture how many tech companies—particularly software-as-a-service subscription ones like his—operate. “We’ve all seen some cancellations, but we’re not likely to see a sudden 30 per cent drop in revenues,” he said. Instead, “future sales evaporate, because people delay [and] cancel buying decisions.” And unlike, say, a wireless service provider, fast-growing firms and scale-ups have already made investment decisions based on those anticipated future sales. “As a general rule, those future sales are fairly predictable [and] manageable,” said Fung. “So we raise money from investors to hire a lot of people to help make them happen.” 

Fung said he recognizes that Ottawa’s policies need to be designed for the “the largest swathes of our economy,” but there’s room to fix issues like this one “at the edges.” He’s more concerned about the tech sector as a whole than about Kiite, which is still at an early stage and has made operational changes in response to the economic effects of COVID-19, including eliminating one role. The Council of Canadian Innovators called Thursday for Ottawa to use metrics like billable hours or receivables, the number of units shipped, gross bookings or net new subscribers as alternatives to revenue in calculating business decline for tech firms. 

That isn’t the only government money tech firms are having difficulty accessing. On Monday, The Logic reported that nearly $200 million in tax credits for startups have been delayed amid COVID-19. Some CEOs say they need that money to avoid layoffs, and two technology industry associations want Ottawa to make it easier for money to flow under the program, which disburses over $5 billion a year. 

In the U.S., venture capital-backed startups learned today that they will be eligible for government loans as part of the country’s coronavirus stimulus package. 

In the markets: Despite bleak unemployment numbers, Wall Street rose Thursday on signs of potential easing in the oil-price war between Saudi Arabia and Russia, as tweeted by U.S. President Donald Trump. The Dow Jones gained 2.24 per cent, the S&P 500 added 2.28 per cent, and the Nasdaq Composite was up 1.72 per cent. Oil prices witnessed their biggest one-day rally, rising nearly 50 per cent, while the Toronto Stock Exchange rose by 1.72 per cent. The Canadian dollar held at 71 cents to the U.S. dollar. 

Meanwhile: Governments and global banks continued to deliver coronavirus-fighting financial measures. The World Bank approved an initial US$1.9 billion in emergency funds for 25 countries. Goldman Sachs unveiled plans to spend US$300 million to help “small businesses and communities” navigate the crisis. That includes US$250 million of emergency “low-interest loans” to help small businesses “fund their operations, weather the current crisis and meet their commitments to their landlords, suppliers, and employees.” The British government is also expected to release emergency loans for mid-sized companies. U.S. banks are worried the federal government’s US$350-billion lending program for small businesses won’t be ready when it launches tomorrow; startups are gearing up to access it. “Banks are ready and willing to lend, but they need clear rules of the road and a streamlined process to be able to get funding into the hands of small business owners in the coming days,” said Greg Baer, president and CEO of the Bank Policy Institute. TD Bank has approved 60,000 requests for mortgage deferrals so far; CEO Bharat Masrani said the approvals are “virtually all” the requests it has received. 

Historic unemployment numbers: The U.S. Department of Labor reports that 6.6 million residents applied for unemployment benefits last week, nearly 10 times the seven-day record prior to the COVID-19 outbreak, set in 1982. There were 3.3 million claims the week before. Its Canadian equivalent, Employment and Social Development Canada, does not routinely disclose weekly claims figures for employment insurance (EI). Instead, Statistics Canada releases monthly reports, typically two months after the fact. On Wednesday, Employment Minister Carla Qualtrough said the government had received 1.3 million EI claims in the previous two weeks, but her disclosure came in remarks at a press conference rather than an official data release, much like the previous figure Prime Minister Justin Trudeau provided on March 20. 

Benefits claims alone don’t provide a full picture of who’s out of work and in need right now, according to Gregory Mason, a professor in the University of Manitoba’s economics department. “There are a lot of people who are now idle, but are not claiming EI because they were never part of that system,” he said. “They’re independent tradespersons and things like that who didn’t pay into [the plan].” And Mason said the COVID-19 outbreak has disrupted the historical association between the number of applications and the unemployment rate. 

The soonest we’re likely to get a regularly scheduled government release of information that sheds light on COVID-19’s employment effects is April 9, when Statistics Canada is due to release its Labour Force Survey for March. 

Another way to see the impact of the outbreak is to look at companies cutting staff. The Logic is tracking some of the announced and reported job losses across the country. Our analysis encompasses some 134,171 workers in Canada who have lost their jobs with 68 employers. If your company has experienced layoffs or furloughs and is not on our list, please fill out this form.

As the job outlook becomes more bleak in Canada (and around the world), concerns abound about how effectively EI or the Canada Emergency Response Benefit (CERB) will support laid-off workers at home. A new report from David Macdonald, the Canadian Centre for Policy Alternatives’ senior economist, found that some 862,000 people—or a third of all unemployed Canadians at present—will receive no income support. 

Geetha Philipupillai, a Toronto-based employment lawyer, said she was concerned that “there is no requirement for employers to commit to a freeze on layoffs and terminations in order to access the wage subsidy.” Without a mandated halt on firings, Philipupillai worries that the number of terminated or laid-off workers will increase drastically and will have to fend for themselves in accessing either EI or CERB, which are both much less than the wage subsidy, and will take weeks to get to workers. She provided an example: if a company laid off 30 per cent of its employees, it could still access the wage subsidy for the remaining 70 per cent. The laid-off 30 per cent would be made to earn less under CERB. “If the goal is to keep workers with employers, shouldn’t the government say you cannot lay off workers to access the wage subsidy?” she said. “Because right now, it’s up to your employer to determine what stream of income support you get to access.” 

Meanwhile, the hiring website Indeed found that searches for grocery and household-delivery jobs have increased dramatically, with Amazon-related searches as a share of all Canadian queries rising by 303 per cent on March 17, and Walmart searches surging by 374 per cent. 

“Let me warn you, if you use Tinder or Grindr and you swipe right, you might get more than you bargained for”: Stern words from Newfoundland Health Minister John Haggie, who said the province has noted an uptick in dating-app usage during the pandemic.

Ritual lays off over 50 per cent of its workforce: The Toronto-based food-ordering app has laid off 196 workers and is entirely pulling out of Germany and the Netherlands. The layoffs primarily affected workers in sales, marketing and operations, a source with knowledge of the situation told The Logic. Ritual lets customers order ahead from restaurants on its app, making the takeout process faster. Many restaurants are now closed or limiting their operations to takeout and delivery only. In a note, CEO Ray Reddy cited the pandemic for the layoffs: “Ritual will continue to operate with heightened safety measures in our other cities, as we monitor and adhere to guidance and protocols set by the local governments and health authorities related to COVID-19.” He did not immediately respond to The Logic’s request for comment. Ritual has raised US$127.5 million from investors since launching in 2014. Its pullback comes almost seven months after The Logic reported it was launching in Hong Kong, Berlin and Hamburg. 

Bay Street to Main Street:

  • Shopify’s stock dropped 10.54 per cent after suspending its 2020 guidance due to disruption from COVID-19. The company will report first-quarter results on May 6, and expects revenue for the period to align with or exceed expectations. The company is still pulling down stores that sell products with false medical claims attached.
  • The head of Ontario’s electricity operator said crucial employees of the essential service may eventually have to live at their worksites. 
  • Canadian home sales could drop 30 per cent to a 20-year low, according to RBC.  
  • Eighty per cent of food and consumer-goods manufacturers in Canada have had to increase production to meet demand that’s surged as much as 500 per cent
  • Auto sales in Canada dropped 48 per cent in March compared to the same month last year.
  • Foreign film production in Canada hit a record high of US$4.86 billion in 2019, up 3.2 per cent from the year before; much of that business has since shut down since the virus outbreak. 
  • Foodora couriers in Toronto are now delivering medication, while still having to buy their own protective gear.
  • Eighty-six per cent of companies have employees who need to attend work in person, according to a new survey from the Conference Board of Canada. Despite that, only 21 per cent of companies are providing pay premiums to non-unionized frontline employees who are still coming into work.
  • Cenovus Energy is temporarily suspending its dividend and cutting another $150 million from its planned capital expenditures for the year, on top of a $450-million cut last month. Canadian energy companies’ capex cuts this year now total at least $6.7 billion. 
  • CIBC is launching a new digital application through which clients can apply for the Canada Emergency Business Account, which is part of the government’s $25-billion loan program for small businesses. Loans will be available starting April 6.

Cross-country checkup: The federal government is refusing to release its estimates of how many people could contract COVID-19 or die from the illness, instead telling Canadians to expect weeks or months of social distancing. The Ontario government reversed its decision to withhold modelling data from the public; health officials will release the data tomorrow. “You deserve to know what I know when you’re making decisions for yourself, your family and your community,” said Premier Doug Ford. Alberta’s public health modelling suggests cases will peak in early May, with about 250 patients in intensive care unit beds at that point. The province is also suspending environment-reporting requirements for industries as it focuses on the immediate impacts of COVID-19. Nova Scotia’s chief medical officer said the province’s lockdown will last between six and 10 weeks, at least. Across the country, at least 600 nursing and retirement homes have had COVID-19 outbreaks. Data from Ontario shows that one in 10 COVID-19 cases are health-care workers. Canada is struggling to purchase medical gear, with export restrictions pricing them exorbitantly high.

Meanwhile, BC Hydro is giving residents credits on their power bills. Federal immigration services are now using video conferencing to conduct hearings and interviews. A 23-year-old from Brampton, Ont. is facing a fine of up to $100,000 for allegedly ignoring social-distancing rules and hosting a 20-person party. Toronto Mayor John Tory signed a bylaw making it illegal for people not of the same household to be within two metres of each other in parks or public squares, with a $5,000 maximum fine. The Toronto Public Library has loaned its 3D printers to Toronto General Hospital so that a University of Toronto researcher can make face shields for health-care workers. A gamer in Toronto has been projecting video games onto the apartment building next door for passersby to observe. Yukon public signage on social-distancing guidelines measure in caribou. 

Crowdsourcing the crisis: Two weeks after starting a Google Sheet of available tech talent who’ve been laid off amid COVID-19, a group of entrepreneurs led by Marianne Bulger, founder of recruiting platform Prospect, have launched a website full of resources for companies and individuals, like how to run a remote workforce, finding virtual events and recruiting laid-off talent. Meanwhile, Manitoba-based e-retail company Bold Commerce has launched a platform to encourage Canadians to shop from local merchants. Businesses can add their stores to the directory for free, and consumers can shop based on location. Lighthouse Labs has launched a scholarship fund totalling $500,000 for people whose jobs or studies have been impacted by the virus. And Angel Investors Ontario, a non-profit, is seeking input from startups on the challenges they’re facing. 

Postcard from the Eastern Townships: Tim Eldridge is the production manager at the Knowlton, Que. plant of KDC/One, which manufactures an array of beauty and personal-care items—among them, one crucial item in the fight against COVID-19. 

“We make cosmetic products, antiperspirants, deodorant, creams, acne medication, hair gels. We also make soap and hand sanitizer, so we’re considered a company that needs to stay open,” he said. “I’d say the demand for hand sanitizer has quadrupled, and we can’t quadruple production. We run 24/7, and tomorrow, we’re going to make probably 150,000 units of hand sanitizer. The biggest problem has been plastics. Everything we send out of here is in bottles, but the plastic manufacturers can’t keep up with the spike in demand. We’re looking to see if we can put it in tubes to get them out faster. We had one company ask us if we could just fill up gallon jugs.

“We’ve got security guards at the gates reminding people that they can only be two people per car. There’s somebody at the door with an infrared camera taking our temperatures at a distance. One of the things we had to figure out is where to put people if there’s a power outage. We can’t pack 200 people into the cafeteria. It’s not respecting the rules. We’re still making hair gel and cosmetics, though. It’s like in a grocery store. Are chips critical in a grocery store? Probably not, but since the grocery store is open, the chip makers are still open.” 

Around the world: The U.K. is considering handing out immunity certificates to people who have developed resistance to COVID-19. Russian President Vladimir Putin has extended a national holiday period until April 30 to keep people at home. Saudi Arabia has announced a 24-hour curfew in Mecca and Medina as the kingdom enforces stricter measures to contain COVID-19. Greece has quarantined an asylum-seekers’ camp after 23 people tested positive for the coronavirus, marking the first confirmed cases at one of the country’s 30 mainland migrant facilities. The U.S. Democratic Party has pushed back its presidential convention from July to August. Lawyers for ex-Theranos CEO Elizabeth Holmes asked a U.S. federal judge to deem the team’s work essential, exempting them from coronavirus restrictions; the judge declined. Indian farmers are feeding their cattle strawberries, broccoli and other produce they can’t sell under lockdown. A million N95 masks are heading to the U.S. from China on the New England Patriots’ plane. Fountains of Wayne singer-songwriter Adam Schlesinger and jazz patriarch Ellis Marsalis Jr have died of COVID-19. WrestleMania 36 is still on this weekend. 

Briefly: 

  • Amazon will start performing temperature checks on workers at all its U.S. and European warehouses and at Whole Foods stores, and will give them all masks, early next week. It has also hired over 80,00 workers after reporting a labour shortage, and stopped selling protective gear to the public to prioritize sales to hospitals and governments.  
  • Some third-party Amazon merchants are subverting the e-commerce platform’s pandemic-profiteering restrictions by promising coronavirus protection in their product images.
  • In an open letter to users, Eric S. Yuan, founder and CEO of Zoom Video Communications, apologized for falling short of privacy and security expectations and offered a 90-day road map that includes a comprehensive security review, a transparency report and a weekly update webinar. Yuan said in March, the company saw “more than 200 million daily meeting participants, both free and paid.”
  • Uber and Lyft have seen their businesses decline by over 50 per cent in the last few weeks. 
  • British Airways is temporarily suspending over 30,000 of its cabin crew and ground staff. 
  • Boeing is providing its workers with voluntary buyouts “to reduce the need for other workforce actions.”
  • Google is donating 4,000 Chromebooks and 100,000 Wi-Fi hotspots for rural students in California.
  • A San Francisco-based workplace productivity startup has turned a spike in new customers into a US$50-million funding round that values it at US$2 billion—and that it closed in just 36 hours.
  • As traditional manual contact-tracing procedures struggle to trace the fast-moving coronavirus, medical researchers are now looking to digital technology that “can make contact tracing and notification instantaneous.”
  • Google will allow some advertisers to run ads about the coronavirus, changing its restrictions on “sensitive events.”
  • The 1,000 ventilators that Tesla CEO Elon Musk donated are actually five-year-old bi-level non-invasive ventilators, typically used to treat sleep apnea, that doctors warn could spread the virus further.

“This is a high-stakes mission”: Robert Irwin, the 16-year-old Australian zookeeper, ventured into the wild to document a “critically rare, endangered” species—a roll of toilet paper—and an “even more endangered” bottle of hand sanitizer. “I never thought I’d see one of those,” Irwin said.

* We’re now 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. Numbers may also vary based on countries’ individual testing capacity and reporting.

Our reporting team is working tirelessly around the clock to deliver the very latest information on the COVID-19 crisis. If you like our journalism, please consider subscribing. You can get a subscription today for more than $100 off your first year.