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It’s day 51 since Canada’s 100th coronavirus case. The number of cases is 53,021 as of publication time, up 1,424 since yesterday, a less than one per cent decrease from the seven-day prior average of new cases. On their respective 51st day, U.S. daily new cases were up four per cent from the seven-day prior average; the U.K. was up eight per cent in daily new cases from the seven-day prior; and in Italy, new cases were down almost 20 per cent.*
Nunavut has reported its first case of COVID-19 in Pond Inlet, a community of just over 1,600 people.
AMZN, AAPL and TWTR: Amazon’s stock fell five per cent after the bell on Thursday, after missing Wall Street’s earnings expectations in its first quarter. The e-commerce giant reported better-than-expected sales, bringing in US$75.45 billion in revenue for the quarter, US$1.84 billion above consensus estimates. But the surge in online shopping also adds to Amazon’s expenses and places pressure on profits; the company expects to spend all of its US$4-billion operating profit on COVID-19-related expenses in Q2. The strong revenue, up from US$59.7 billion for the same period last year, sheds light on how the pandemic is affecting global shopping habits and the e-commerce industry at large.
Apple reported earnings per share of US$2.55 compared with analyst estimates of US$2.26. The firm also beat on revenues, reporting US$58.3 billion compared with estimates of US$54.54 billion. Apple hiked its quarterly dividend by six per cent and increased its share buyback program by US$50 billion. The company’s shares popped two per cent in post-market trading. The strong quarter was driven by services revenue, which beat analyst estimates, while iPhone revenue fell short as COVID-19 shut factories in China and curbed consumer demand.
Meanwhile, Twitter had a strong first quarter on paper, with its stock up as high as 12 per cent during pre-market trading. Investor confidence reversed during this afternoon’s earnings call, however, as executives did little to reassure investors that the firm’s advertising business would be stable this quarter. The social media company reported one day after Facebook said its ad revenue was recovering, while sounding a note of uncertainty about the immediate future. Twitter’s stock fell by 7.8 per cent by close.
Playing defence: Ottawa is looking out for “predatory behaviour” from foreign entities trying to buy up Canadian firms during the pandemic, deputy innovation minister Simon Kennedy told a parliamentary committee Thursday. The government is particularly keeping an eye on companies in the health sector and trying to safeguard the supply chain in terms of medical goods and services. “There are firms that have depressed valuations because of the crisis, and we wouldn’t want to have very important Canadian companies necessarily be taken out because they happen to be in a weak position,” said Kennedy, adding that any potential acquisitions from state-owned actors will be closely scrutinized. “There’s a particular, I would say, focus on state enterprises and non-commercial actors that might be engaged in those kinds of purchases.” Kennedy’s comments echo concerns Prime Minister Justin Trudeau voiced earlier this month about “predatory” investors.
“I speak with him on a regular basis”: Innovation Minister Navdeep Bains told a House of Commons committee meeting Thursday he speaks frequently to Palantir Canada president David MacNaughton. “He’s engaged with many including myself and giving us solutions and ideas of how to help Canadians so I speak with him on a regular basis,” Bains said, although he noted there was no “formal commitment” and later added that he speaks to MacNaughton “as a friend.” His statement came under questioning from Conservative MP Michelle Rempel Garner after The Logic revealed MacNaughton told a private event that the controversial data-mining firm was working with the federal government, Ontario, Alberta and British Columbia on their response to the COVID-19 pandemic.
MacNaughton, previously Canada’s ambassador to the U.S. and a close adviser to Prime Minister Justin Trudeau, said Palantir was working to gather COVID-19-related data in 18 countries, and was providing its services pro bono during the pandemic. But Ottawa and two of the three provinces told The Logic they hadn’t yet hired Palantir as part of their antiviral efforts. On Wednesday the Prime Minister’s Office had declined to answer The Logic’s questions about whether MacNaughton has advised Trudeau or his staff on the outbreak or any other issues since he left his post.
Earlier this week, the company declined to answer questions about MacNaughton’s comments, or any COVID-19-related work it was doing with Canadian governments, instead directing The Logic to two recent corporate blog posts about privacy for organizations using its Foundry platform, which lets users integrate and analyze different sets of data, during the pandemic.
In the markets: All major North American stock indices dropped today, although the month-long increase is still on track to be one of the highest in decades. The TSX fell more than the U.S. indices, down 2.94 per cent. The Canadian drop came on news that global energy demand could drop by six per cent in 2020, with oil the hardest hit with a potential nine per cent drop, according to the International Energy Agency. In a sign of that impact, oil major Shell cut its dividend for the first time since the Second World War.
Meanwhile, China is facing a flurry of requests for debt relief under money lent out under its Belt and Road initiative. Both the European Central Bank and the U.S. Federal Reserve expanded their economic relief programs, with the former releasing its cheapest loans ever and the latter agreeing to lend to firms with up to 15,000 workers, up from the initial cap of 10,000. The programs come as early economic indicators show that workers in countries like Germany and Japan are likely to fare better than their U.S. counterparts due to stronger job-retention programs. U.S. Federal Reserve chairman Jerome Powell similarly warned that the U.S. could face a bumpier economic ride than many are predicting. More than 3.8 million Americans filed for unemployment benefits last week, bringing the six-week total to over 30 million. Export Development Canada is predicting global growth will fall by 2.8 per cent this year, with developed markets the worst hit at a 4.2 per cent drop and Canada falling 9.4 per cent, with the dollar hovering in the low U.S. 70-cent range. The dollar dropped slightly in late afternoon trading to 71.78 cents U.S.
“The past two months have seen digitisation progression that would ordinarily take two years”: Microsoft CEO Satya Nadella is calling for “an unprecedented alliance between business and government” to create an economic recovery plan that is “inclusive.” In an op-ed for the Financial Times, he urged citizens and customers alike “to demand co-ordination and partnership across sectors.”
In the lab: Gilead Sciences said it can produce “several million” rounds of its antiviral drug remdesivir, a day after the publication of promising clinical trial results. Here are five things to know about the drug. British drugmaker AstraZeneca will make and globally distribute the University of Oxford’s potential COVID-19 vaccine. The partnership is looking to produce 100 million doses by the end of the year and prioritize supply in the U.K. AstraZeneca didn’t disclose the commercial terms of the agreement, but it and the university said they would make the vaccine available on a non-profit basis. India’s Serum Institute, the world’s largest vaccine maker by volume, has already said it would produce up to 60 million doses of the Oxford University shot. More than 90 vaccines are being developed against the coronavirus across the world. At least six groups have begun clinical trials with human volunteers. Here’s a graphic explaining each vaccine design.
Trace me on my cellphone: Apple and Google are among the companies in discussions with the federal government about digital contact tracing, the deputy innovation minister confirmed Thursday. “We’ve actually had a lot of different organizations approach us with possible options. We wanted to look at those and try to make sense of which ones might be more problematic,” Kennedy told a parliamentary committee, adding that the department is consulting both the privacy commissioner and the justice department on contact tracing. At the same committee meeting, Bains highlighted that the federal government is talking with provincial and territorial governments to make sure that they buy into any potential solution, but emphasized that there’s been “no official arrangement with any company around contact tracing.” France, which is working with Apple on a contact-tracing app, is on track to have something available for download by the end of May. Meanwhile, some security experts are raising concerns about using Bluetooth, something on which Apple and Google’s solution relies, to track COVID-19 infections.
See you in the fall, fintechs: Ottawa has put the second phase of its open banking consultations, originally scheduled for the spring, “on hold until the fall at the earliest,” citing “restrictions on public gatherings, put in place to stem the spread of COVID-19,” according to an email to previous participants obtained by The Logic. In January, Finance Minister Bill Morneau’s four-member advisory committee called for a federal “framework to enable consumer-directed financing,” and warned that “without a proactive and strategic approach, Canada will lag other jurisdictions.” The next phase of discussion was meant to focus on data security, with a report due later in the year. Fintech firms have called for Ottawa to mandate that large financial institutions share data at customers’ request, and said Canada is already behind other countries. They’re not pleased about the new delay. Fintech lenders have also lobbied for a role in the distribution of COVID-19 support funds, saying they work with small businesses that aren’t well served by traditional financial institutions. Finance Canada had not answered The Logic’s questions about the postponement by publication time.
Right on CEWS: The Canada Emergency Wage Subsidy (CEWS) program will cost the federal government $76 billion, according to a new report from the parliamentary budget officer (PBO). Finance Canada had estimated $73 billion, although department officials have said the final tally will depend on how many workers go back to their old employers, instead of collecting the direct Canada Emergency Response Benefit. While it’s under-budgeting on the CEWS, the PBO said the government has overestimated its expenses for the separate 10 per cent wage subsidy, which is available to small, Canadian-controlled firms. The watchdog projected that program will cost $844 million between April and June, while Finance Canada has set aside $975 million. Overall, the PBO estimated Ottawa’s COVID-19 support measures coupled with a 12 per cent reduction in real GDP this fiscal year will leave the government with a $252-billion deficit, up from $25 billion in 2019–2020.
The rent is due tomorrow: Almost 35 per cent of the 1,082 Canadians ACORN Canada surveyed said they won’t be able to make rent tomorrow. Some small-business owners said they will not be eligible for relief from the Canada Emergency Commercial Rent Assistance Program (CECRA). On Monday, Prime Minister Justin Trudeau said it was up to the provinces to fund any additional rent relief. The Logic surveyed the provinces and territories, asking what their rent-relief programs entailed for small businesses and residential renters alike. All but Newfoundland and Labrador and the Northwest Territories responded. Here’s what they said:
- Prince Edward Island: The province introduced the Temporary Rental Assistance Benefit, which provides $1,000 over three months to renters. It has also put a moratorium on evictions.
- Nova Scotia: The province’s COVID-19 Rent Deferral Support Program provides a 100 per cent provincial indemnity on rent deferred by landlords for business tenants between April and June; the tenant is required to pay back the deferred rent. A spokesperson said 379 landlords with 1,157 tenants have registered for the program so far, and $10.7 million in rent has been deferred. The province is contributing about $9 million to the CECRA. All evictions have been banned.
- New Brunswick: The province said it is a partner in the CECRA, but didn’t specify its contribution. Commercial tenants cannot be evicted before May 31.
- Ontario: The province has halted all eviction orders. On April 24, it committed $241 million to the CECRA to help deliver over $900 million in relief to small businesses and their landlords. A spokesperson said approximately 80 per cent of total rent due to Ontario private-sector landlords for April has been paid at least partially.
- Quebec: The Société d’habitation du Québec is offering a $1,500 interest-free loan to renters whose revenues have decreased as a result of the pandemic. The province’s rental board has also suspended eviction hearings.
- Manitoba: All rent increases between April 1 and May 31 have been frozen.
- Saskatchewan: The government has suspended evictions, announced March 26. Landlords and tenants are encouraged to “come to mutually agreeable solutions in this difficult time,” according to a spokesperson.
- Alberta: Landlords who apply to evict their tenants for non-payment must show that they have tried to find alternative payment agreements, or that they weren’t followed, a government spokesperson said. Albertans are also encouraged to apply for various supports, like the CERB, “so they can continue to meet their financial obligations.”
- British Columbia: The CECRA will see B.C. small businesses receive a total of over $300 million in federal-provincial relief, with B.C. contributing an estimated $80 million. The government has also reduced most commercial property taxes by 25 per cent. Most evictions have been halted during the crisis. Temporary rent supplements are also available, at up to $500 a month for eligible households with dependents and up to $300 a month for those without.
- Nunavut: According to a spokesperson for the Nunavut Housing Corporation, the province has put “immediate rent reductions” in place for tenants who have lost income due to COVID-19. All evictions have been halted.
Cross-country-checkup: Households in Newfoundland and Labrador can now socialize with one other household, as part of the province’s reopening plan. Low-risk activities like golf, hunting and fishing will also be allowed, and some businesses can reopen, including garden centres, law firms and daycares. Data from Ontario, Quebec, Alberta and B.C.—the provinces with the most COVID-19 cases—shows most travel-related cases came from the U.S., not China. Canada continued to allow travel to and from the U.S. for several days in March after banning all other international travel. Ontario Premier Doug Ford told companies to “start getting ready” to reopen, announcing 65 new health and safety guidelines for businesses. Saskatchewan has extended its state of emergency for at least two more weeks.
The federal government passed the $9-billion Canada Emergency Student Benefit on Wednesday; it includes additional aid for students with disabilities and those with dependents than what was initially announced on April 22. B.C. Premier John Horgan said the province needs permanent rules in place to prevent people from going to work sick, even after the pandemic. An Alberta court is hearing a potentially precedent-setting case on whether a buyer can back out of an acquisition deal signed weeks before the pandemic. Canadians are being urged to eat more fries as restaurant closures create a glut in potato supply.
Bay Street to Main Street: Canadian businesses have started to deliver badly needed medical supplies ordered by the federal government en masse, Bains told a House of Commons committee Thursday. The federal government has purchased close to 35 million face shields and 30 million gowns from in-country firms like Canada Goose. Deliveries have started for both products, as have those for N95 masks, of which the government has received over five million. In addition, the government has purchased 79 million units of hand sanitizer and over 300 million surgical masks, with 18 million delivered so far. It has also started receiving some of the over 30,000 ventilators it has ordered produced domestically.
- Foodora has launched bankruptcy proceedings in Canada, declaring $4.7 million in debt after announcing plans to leave the market on May 11.
- Roots is permanently closing seven U.S. stores and filing for bankruptcy for its U.S. subsidiary.
- Bonjour Startup Montréal is partnering with Google Canada and Desjardins to launch a virtual competition asking entrepreneurs to come up with solutions to societal issues resulting from the pandemic in Quebec.
- Large Canadian retailers, including Indigo, are seeking rent assistance; government aid announced so far is only available to business tenants with less than $20 million in annual revenue.
- The University of Saskatchewan is temporarily laying off as many as 500 staff, according to the union representing them.
- Airbnb is working with Canada’s largest health-care union to offer free accommodations to frontline health-care workers in the GTA.
“We’re probably taking the most pessimistic view as we build forward so we’re in a position to react to that rather than pull back from it”: In a conversation with Canadian Club Toronto, Tim Strauss, vice-president of cargo at Air Canada, said the company’s “central focus” in all its product discussions was protective equipment for passengers and employees alike, predicting that the entire industry would be working “in tandem” with one other to make air travel feel safe again. Strauss, along with Sunwing Airlines president Mark Williams, lauded the federal government for providing some relief and remained “optimistic” that more was on the way. “It’s not reasonable to expect that any airline in Canada can go on like this for six months without getting some kind of financial support from the government,” Williams said. Strauss said Air Canada was “in the beginning steps of a rebound” thanks to the CEWS, positive signs of a vaccine and increased demand for international cargo travel. “Hopefully the globe will open up [by Christmas],” he said.
Crowdsourcing the crisis: Two construction professionals founded WeCleanCOVID19.ca to provide pro bono cleaning services for facilities that need it. A coalition of healthcare workers and data scientists have teamed up to create #HowsMyFlattening, a dashboard that monitors Ontario’s public health response to the coronavirus as well as local public health units in the province.
Drinking from the firehose: While hiring is still deeply depressed around the world, some industries—including those in finance, technology and consumer goods—are on a recruiting tear, according to data from LinkedIn. Numbers from China also offer a glimmer of hope for the rest of the world: in mid-February, at the height of the crisis in the country, hiring was down 50 per cent compared to the year before; last week, it was just three per cent below the 2019 rate.
- SoftBank expects to lose US$6.6 billion on its WeWork investment this year as the pandemic compounds the firm’s financial troubles.
- Zoom Video Communications has walked back its previous claim that it has 300 million daily active users, clarifying that it has 300 million daily meeting participants, which can be counted more than once; the firm did not provide an updated number for daily active users.
- E-scooter company Lime is cutting as many as 190 more staff on top of the 50 to 70 it laid off in March due to the pandemic. The firm had already announced plans to cut about 100 employees in January.
- Lysol maker Reckitt Benckiser Group reported a surge in first-quarter sales; the firm told investors it expects a sustained increase in cleaning-product sales even after the pandemic.
- Disney Plus has added over 21 million new subscribers since early February, but with less content than rival Netflix, the relatively new streaming service could be particularly hard hit by the shutdown of Hollywood.
- Alphabet is defying market trends with a record amount of share buybacks in its first quarter.
Around the world: Denmark said the spread of COVID-19 has not accelerated since it eased restrictions; the country has gambled on an “intelligent lockdown” to beat the virus, which advises people to stay home and keep five feet of distance. Starting Saturday, adults in Spain will be allowed to do specific outdoor activities in time slots, like walking; it will be the first day people will be allowed outside in six weeks. U.K. Prime Minister Boris Johnson said the country is “past the peak of this disease” and promised to deliver a “menu of options” next week on how the lockdown could be relaxed. China’s Forbidden City will reopen on Friday after three months of closure due to the virus. Los Angeles is the first U.S. city to offer tests to everyone, even those without symptoms. INTERPOL reports that drug dealers are using food-delivery services as a cover to transport drugs and other illegal goods during the coronavirus crisis.
A prime ministerial library: Canadians were given a glimpse of Trudeau’s private book collection through the first virtual sitting of Parliament. His shelves include books by Elon Musk and Steve Jobs, a series of literary anthologies and Traffic: Why We Drive the Way We Do (and What It Says About Us) by Tom Vanderbilt.
* 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.
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