COVID-19 roundup: Is Canada’s economy ready for its close-up?

Minister of Finance Bill Morneau rises in the House of Commons on Parliament Hill in Ottawa, as Parliament was recalled for the consideration of measures related to the COVID-19 pandemic in April 2020. The Canadian Press/Justin Tang

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It’s day 99 since Canada’s 100th coronavirus case. The number of cases is 99,777 as of publication time, up 310 since yesterday—a 14 per cent decrease from the seven-day prior average of new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day. 

“We should not be thinking of a lockdown, but of ways to increase physical distance,” said Tom Frieden, chief executive of Resolve to Save Lives, a non-profit public health initiative, urging governments to focus on strengthening distancing measures and indoor ventilation. 

Now if the economy could just stand still and smile…: Finance Minister Bill Morneau will deliver an “economic and fiscal snapshot” on July 8. The federal government originally scheduled its first post-election budget on March 30, but the pandemic put paid to those plans. Opposition MPs and policy experts have been calling for several weeks for a report on Ottawa’s financial position. But Prime Minister Justin Trudeau has repeatedly insisted the government can’t make projections and commitments because of the uncertainty caused by COVID-19. It remains to be seen what a “snapshot” entails—a traditional budget outlines new programs and spending priorities, while a fiscal update such as the one Morneau provided in December 2019 includes deficit projections. On Wednesday, Trudeau said the upcoming announcement “will give Canadians a picture of where our economy is right now, how our response compares to that of other countries and what we can expect in the months to come.”

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Finance Canada is already publishing an ongoing list of announced COVID-19 programs. It shows that Ottawa’s direct measures, tax and duty deferrals, and science and health spending total 10.6 per cent of GDP. Parliamentary budget officer Yves Giroux estimates the deficit at $252 billion for the 2020–2021 fiscal year, and says doing the math is “not rocket science.”      

In the markets: The TSX, Dow Jones and S&P 500 closed down Wednesday after Texas, Arizona and North Carolina reported record daily coronavirus-related hospitalizations and global infections passed eight million. The Nasdaq closed up 0.15 per cent on the strength of tech stocks like Netflix and Amazon. The Canadian dollar fell to 73.66 cents U.S. in late afternoon trading. 

The losses were pared slightly by U.S. Federal Reserve chairman Jerome Powell urged Congress not to pull back too quickly from the support it’s providing. Bank of Canada Governor Tiff Macklem said interest rates would remain low indefinitely, in his first public appearance since taking the top job on June 3. Macklem also said a full recovery for Canada was a long way away. Consumer prices dropped 0.4 per cent in May year over year, double the 0.2 per cent drop in April. 

OPEC maintained its forecast of oil demand falling by 9.1 million barrels a day this year. Meanwhile, U.S. oil production fell to its lowest level since 2018. U.K. economists expect the Bank of England to expand its bond-buying program in an announcement scheduled for Thursday. And over half of the world’s largest pension plans have investments in climate-related passive funds. 

“Over the years, we’ve had this kind of undulating attention to it, where we have a crisis, and people jump on board and react, and then it goes away and their attention drops off. COVID-19 should make the case that, at the highest level, political leaders and health leaders should never let pandemics off of their priority list again”: Tom Ingelsby, an infectious-disease physician and director of Johns Hopkins University Center for Health Security, is among those calling for an investigation to ensure the United States is prepared for the “always-present” threat of a pandemic. 

Canada loses bid for UN Security Council seat: Norway and Ireland claimed the spots, despite Ottawa’s concerted campaign. Canada’s last campaign for a seat, in 2010, was also unsuccessful

Cross-country checkup: Manitoba is expanding eligibility criteria for emergency pay to frontline staff working during the pandemic. Quebec will allow gyms and arenas to resume operating next week for nearly all indoor and outdoor sports and training activities. Players will need to respect two-metre distancing rules if possible, said Deputy Education Minister Isabelle Charest. Ontario has extended all emergency orders until the end of June. Doctors from SickKids hospital in Toronto, meanwhile, are urging the province to send kids back to school in the fall. The group’s recommendations include diligent hand hygiene and some physical distancing indoors when possible, but not outdoors. It doesn’t recommend wearing masks or checking students’ temperatures “because fever is not a consistent symptom in children … and would result in lines and delayed school entry.” 

Ottawa rejects fintechs: The federal government rejected multiple proposals from Canadian fintechs looking to distribute aid to businesses affected by COVID-19, The Logic has learned. 

The Canadian Lenders Association, PayPal and Wave all offered to help. Small Business Minister Mary Ng championed the fintechs’ proposals within government, but Finance Minister Bill Morneau’s office blocked them, according to four sources with knowledge of the situation. 

Bay Street to Main Street: Export Development Canada (EDC) is prepared to spend up to $250 million on its investment-matching program, launched to support firms struggling due to COVID-19. Its budget now exceeds the $150 million allocated for the Business Development Bank of Canada’s matching program, but not much money has been deployed so far. EDC has currently invested less than $15 million across five closed deals, although 16 have been approved in total. It has adjusted the program requirements since its launch in early April, and is now permitting non-exporting firms to apply and is also removing the minimum amount it will invest. 

  • Federal aid for the oil sector is still in development three months after Finance Minister Bill Morneau said help would be coming in “hours, potentially days.” 
  • The federal government is committing over $492 million to researchers studying a variety of scientific disciplines including biology and artificial intelligence. 
  • Ontario has tabled legislation to temporarily ban commercial evictions, now retroactive to May 1, a month earlier than what was previously proposed.
  • Many Canadian companies are struggling to secure the personal protective equipment needed to reopen their businesses. 
  • Forty-three per cent of Canadians said they’ll prioritize their personal lives over their jobs moving forward, and 29 per cent want to pursue a more meaningful or fulfilling role, according to a survey from global staffing firm Robert Half. 
  • Steve Nash Fitness World announced an unnamed group of investors has acquired the rights to Steve Nash Fitness World & Sports Clubs, and that it intends to reopen its gyms as soon as it can. 
  • Venture capitalists invested $1.36 billion across 126 deals in Canadian companies in the first quarter, according to data compiled by CPE Analytics. 
  • Nationwide house sales are slowing although prices are up in Toronto and Ottawa-Gatineau, according to the Teranet-National Bank Composite House Price Index. 
  • The top one per cent of Canada’s families hold 25.6 per cent of the country’s riches, about $3 trillion, according to the Office of the Parliamentary Budget Officer. 
  • Canada exported 959,900 tonnes of wheat in the week ended May 10, as lowered demand for oil frees up railway space. Canola exports are also up. 
  • Ottawa-based construction-delivery startup GoFor Industries raised a $9.8-million seed round led by Builders VC. 
  • Ride-sharing firm Facedrive is hoping to raise $10 million through a private placement offering while it prepares to expand to Europe and launch a food-delivery platform. 

Crowdsourcing the crisis: Koen Swinkels has compiled a database of over 1,100 COVID-19 superspreading events around the world, including 11 in Canada. You can view it here

In the lab: The European Commission unveiled a new proposal to use EU funds to purchase vaccines before testing and approval to guarantee the production of any that work. “There is a very real risk that none of the supported candidates will be successful,” the Commission wrote in its proposal. “However, the value of earlier access to a vaccine is enormous, in terms of lives saved and economic damage avoided. This makes the risk worth taking.” Israel has signed an agreement with Moderna, which said it sees a high probability of success in its human trials, to buy its vaccine. Scientists in Singapore have discovered five antibodies that can fight COVID-19. German biotech firm CureVac will launch human trials with 144 participants. In China, the race to develop a vaccine first is being portrayed as a patriotic effort: trial volunteers are deemed “revolutionary comrades in arms.” 

The World Health Organization is changing its guidelines for treating COVID-19 to include dexamethasone, a steroid that was found to cut death rates in severely ill coronavirus patients yesterday. Elsewhere, medical experts in the U.S. say clinical trials of any COVID-19 vaccine won’t be effective if they don’t include Black people. Microsoft is turning to its deep-underwater data centres to model viral proteins for COVID-19 vaccine research, while Bay Area labs are synthetically recreating the virus using genome technology to help develop vaccines faster.

Trace me on my cellphone: Germany’s contact-tracing app was downloaded 6.5 million times on its first day; Christian Klein, CEO of SAP, which co-developed the app, deemed it “a big success.” Spain will test its decentralized app on La Gomera, one of the popular tourist destinations in the Canary Islands, before deciding whether to release it across the country. Thousands of people in Moscow have launched legal appeals against the government’s app after they say it wrongly fined them for alleged quarantine violations. 

Drinking from the firehose: 

  • Silicon Valley-based Y Combinator is relaunching its free online bootcamp Startup School as a year-round program. 
  • Target is raising its minimum wage for U.S. workers to US$15 an hour starting July 5, a US$2 hourly increase. Workers will also get a one-time US$200 bonus for their work throughout the pandemic. 
  • Google is raising its annual ad grant commitments from US$800 million to US$1 billion to help non-profits fighting COVID-19 and racial injustice. 
  • Oracle’s stock was down more than five per cent in late afternoon trading after missing its revenue estimates for the fourth quarter. 
  • AT&T is closing 250 stores and cutting more than 4,000 jobs, citing lower demand for some legacy products and impacts of the pandemic.
  • HSBC is moving ahead with plans to lay off 35,000 employees worldwide after putting the cuts on ice when the pandemic hit.
  • Tesla saw registrations in California fall 37 per cent in April and May.
  • Zoom Video Communications will offer end-to-end encryption for all users amid pressure from Congress and the public to improve its privacy. 
  • Some gig workers for companies including Uber and Doordash have faced legal challenges for violating lockdown rules and curfews. 

Around the world: Two Australian universities are planning to fly in hundreds of foreign students so they can resume their education. The Japanese government is urging citizens to stagger their vacations, suggesting a “workation,” where people would work remotely at their holiday destination. Beijing has been placed on its second-highest emergency level after an outbreak in the city; more than 60 per cent of flights have been cancelled. The local government has adopted a contact-tracing and “grid management” system (where people monitor small sections of communities) with extensive testing instead of a full lockdown. Local authorities expect cases to increase for the next while. 

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Spending by foreign visitors to the U.S. has plummeted by 77 per cent year over year. The country’s small-business relief program has failed to help businesses most impacted by COVID-19. The U.S. Pandemic Response Accountability Committee warned of “potentially significant transparency and oversight issues” in monitoring the government’s US$2-trillion recovery package. The English Premier League resumes today without any spectators. Tunisia is hoping tourists will return later this month—with test certificates showing they’re virus-free. Anyone visiting Russian President Vladimir Putin must go through a special disinfection tunnel outside his residence. In India, people are adopting pets virtually. Swiss researchers have created a transparent, biodegradable mask you can smile through.

A concert “for the vegetable kingdom”: On Monday, 2,292 potted plants will be the attendees of the first post-lockdown concert at Barcelona’s Liceu opera house, in recognition of how “nature has crept forward to occupy the spaces [humans] have ceded.” The plants will then be donated to health-care workers.

* 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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