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It’s day 121 since Canada’s 100th coronavirus case. The number of cases is 106,742 as of publication time, up 309 since yesterday—a 31 per cent increase from the seven-day prior average of 236 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
This week marks six months since Stat reporter Helen Branswell reported that the cause of “mysterious pneumonia cases” in Wuhan, China were still unknown.
Ramping up for recovery: Ottawa’s fiscal snapshot on Wednesday promised to announce “soon” how exactly it will expand its wage subsidy to help employers through the economic reopening and recovery. “Sooner rather than later,” urged Trevin Stratton, the Canadian Chamber of Commerce’s vice-president of policy and chief economist.
Employees can currently claim up to $847 per worker per week to pay staff salaries if they’ve lost 30 per cent of their revenues due to the pandemic. The chamber favours modifying that to a “ramping” model, in which smaller declines yield less money from the program. That’s how the Netherlands’ wage support works. “You’re being weaned off support until you’re able to get back to something close to normal operations,” Stratton told The Logic Thursday. Otherwise there’s “a perverse incentive to stop growing revenues” as a company reaches the threshold in order to maintain access to the program.
“Over the next month, we’ll work with business and labour stakeholders on any adjustments that may be needed,” Prime Minister Justin Trudeau said on May 15, announcing an extension to the wage subsidy and singling out the revenue reduction requirement as one potential change. Almost two months have passed since. Stratton said the chamber participated in Finance Canada’s consultations on the program in early June, and there was “a consensus among the business community” on the ramping model.
Canada needs to transition from COVID-19 subsidies propping up the economy to business investment and growth driving the post-pandemic recovery, according to Stratton. Employers appear to be taking that lead slowly. On Tuesday, job website Indeed reported new postings for the week ended July 3 were down 21 per cent year over year, significantly better than the 49 per cent gap in late April and early May, but worse than the 19 per cent drop the previous week. It was “the first time momentum has softened since the start of June,” wrote in-house economist Brendon Bernard. The year-over-year difference in total positions on the platform continues to close slowly.
So far, Ottawa has paid out $18 billion to 252,370 unique applicants via the wage subsidy, but Thursday’s update projected a significantly higher ultimate outlay of $82.3 billion. Employers need certainty on the details of the program changes, and when they will take effect. “If the eligibility is expanded and [the] program is adapted to bring people back to work, there will be a lot of uptake from business,” Stratton said.
In the markets: The Dow Jones, TSX and S&P 500 all closed down after Florida recorded its largest single-day jump in coronavirus-related deaths, raising concerns that the U.S. economic recovery could falter. The Nasdaq bucked the trend, closing up 0.53 per cent due to gains posted by Amazon, Microsoft and Apple. The TSX’s losses were tempered somewhat by data showing national housing starts rose by 8.3 per cent, more than expected. The Canadian dollar fell 0.55 per cent in late afternoon trading to 73.53 cents U.S.
China’s benchmark CSI 300 continued its rise, pushing weekly gains to over nine per cent after the country reported factory gate deflation improved in June. New applications for unemployment in the U.S. dropped to 1.3 million last week, although the number of people receiving benefits remains at 18.1 million. Investors turned to sovereign debt amid the volatility, including German Bunds and U.S. Treasuries.
Total Canadian debt issuance topped $100 billion in the second quarter, an increase of more than double year over year. However, deal flow slowed in June as companies reassess their debt needs and bankers go on vacation.
“We will probably never know how many people have been tested for the virus”: Insiders reveal that U.K. officials “hand-cranked” the numbers of those tested to ensure a constant stream of rising numbers for each press conference. The haphazard data collection “completely buffed the system,” one official told Sky News, and included handwritten data tables and one minister calling around for data to fill into an Excel spreadsheet.
Cross-country checkup: A new Senate report has found Canada is unprepared for a second wave, and urged the government to strengthen testing, contact-tracing efforts and collaboration between provinces. Ontario is urging all schools to maximize classroom time when they reopen. Quebec has launched a public consultation for the upcoming launch of its contact-tracing app. Starting tomorrow, last call at Quebec bars will be at midnight instead of 3 a.m., with everything closed by 1 a.m. The mayor of Souris, P.E.I. is concerned by reports of Quebec residents violating coronavirus rules and heading to islands north of the Atlantic province. Manitoba is now on day nine of no coronavirus cases. A 102-year-old woman in Alberta has survived the “Spanish flu, the dirty thirties, World War II … three floods in Winnipeg” and now COVID-19.
Bay Street to Main Street: Home prices nationwide will slow for the rest of 2020 before declining in 2021, according to a new report from TD Economics. One of the major drivers is Canada’s falling population growth, as the country added just 75,000 people in the first quarter of this year, the lowest number since 2015. Coronavirus-related travel restrictions, as well as a downturn in the global economy, will reduce population growth for several years, according to TD.
The pessimism comes despite fresh data showing housing starts rose by 8.3 per cent nationwide in June. There are, however, some data showing a contracting market. Condo rental supply in the Greater Toronto Area was up about 70 per cent year over year in June.
- Via Rail is planning 1,000 temporary layoffs due to the pandemic and doesn’t expect its ridership, which dropped by over 95 per cent in March, to recover in the near future.
- Venture capital funding for Toronto startups fell 25 per cent in the first three months of 2020, according to a report from Hockeystick. Meanwhile, 48 per cent of VC firms nationwide have seen at least a 25 per cent decline in deal flow, according to OMERS Ventures.
- Alberta is launching a billion-dollar program that will give money to firms that build new petrochemical facilities in the province.
- Applications for the Ontario government’s $150-million program designed to get faster internet to rural areas has opened. The deadline is August 21.
- An Ontario government panel is recommending significant changes to the province’s securities regulator and is calling for a ban on a specific type of short-selling.
Fintechs across the border: Toronto-based fintech Boss Insights has forged a number of partnerships with U.S. community banks to help automate the delivery of the US$349 billion in government-backed Paycheck Protection Program loans. CEO Keren Moynihan told The Logic she is hoping Canadian banks are taking note, predicting that the pandemic will make way for more digital partnerships in the country’s financial sector “to provide agility.” But the Canadian Bankers Association points to the big banks’ $100 billion in spending on technology as an argument in favour of “proven institutions” in times of crisis.
In the lab: Precision Biomonitoring is the first company in Canada to send out a mobile COVID-19 testing kit for use in non-hospital settings. Meanwhile, Bruce Clark, the CEO of Quebec-based Medicago, which this week announced two deals to help develop a vaccine, said the company is in discussion with the White House’s Operation Warp Speed, as well as with several other countries. “We haven’t had discussions with who gets dibs on products first,” Clark said. “We’d rely on cross-border transfer in some fashion. It is a concern to us, because we’ve seen strange things happen to borders in this pandemic.”
Officials from five of the world’s largest drug makers will testify before a U.S. House of Representatives subcommittee on July 21 about their vaccine efforts. Since April, the U.S. Centers for Disease Control and Prevention and an advisory committee of health experts have been working on a ranking system to decide who gets the first doses of a vaccine. Contenders include medical and national security workers, senior citizens and Black and Latino people, who have been disproportionately impacted. A new study from Spain concluded herd immunity may be “unachievable,” finding that antibodies disappear from some COVID-19 patients in weeks.
Drinking from the firehose:
- A U.S. subsidiary of Shenzhen-based genomics company BGI Group nabbed a Paycheck Protection Program loan of between US$350,000 and US$1 million.
- From craft festivals to addiction centres to car rental agencies, more than 110 U.S. businesses have declared bankruptcy this year, all blaming the effects of the pandemic…
- …while almost 70,000 tech startup employees have lost their jobs since March.
- European leaders are considering buying into small- and medium-sized businesses to prevent mass bankruptcies.
- The union representing hundreds of Walt Disney World performers have filed a grievance against the company, saying it reneged on hiring back members after the union demanded COVID-19 tests for them.
- I, for one, welcome our new robot overlords.
Around the world: The World Health Organization announced the creation of an independent panel to investigate its response to the pandemic and that of governments. U.S. President Donald Trump’s campaign rally in Tulsa last month, which drew thousands of participants and large protests, “likely contributed” to a dramatic surge in new coronavirus cases in the city, according to its top health official. An Italian hospital at the centre of the country’s outbreak response no longer has any coronavirus patients. Some 200,000 seafarers who have been stranded at sea for months due to pandemic lockdowns may finally get home.
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* 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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