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It’s day nine since Canada’s 100th coronavirus case. The number of cases is now 770, as of publication time. On their respective day nines, the U.K. had 798 cases, the U.S. had 1,301 and Italy 2,036.*
Italy’s 3,405 coronavirus deaths have now overtaken those registered in China, and took 41 fewer days to reach that grim mark.
Cabinet calling: The Council of Canadian Innovators (CCI) is calling for Ottawa to set up a “stimulus program for small and medium sized businesses” worth up to $100 billion. Banks, credit unions and fintech platforms would offer low-interest credit to existing clients for four years or so; loans to companies that survive the downturn would convert to regular repayment terms, while the government would cover any that go sour. On a Thursday morning conference call with Small Business Minister Mary Ng, CCI co-chair John Ruffolo noted governments had set up “bad banks” to absorb such defaults during the 2008 financial crisis. “This is really the only thing that’s going to stave off a whole lot of bankruptcies,” he said. Ng responded, “I will take that away, and you’re not hearing disagreement from me.” Asked whether the government is currently working on such a program, her office told The Logic, “Nothing is off the table.”
A role for fintech?: On the call, Ng also said she had encouraged the Business Development Bank of Canada (BDC) to expand its delivery system for the $10-billion Business Credit Availability Program (BCAP) announced last week. “I just got confirmation today, they’re going to work with fintech platforms … [to] have a faster, easier way of pushing [money] out to those clients,” she said. “Fintech is one of the scenarios we are exploring as part of BCAP,” BDC spokesperson Jean Philippe Nadeau said in response to The Logic’s follow-up questions. However, he said it is “too early to provide details.” Ng’s office said it is “working closely with BDC to confirm these details of the [BCAP],” and aimed to “make this program as straightforward and easy as possible.” Innovation Minister Navdeep Bains will join another CCI conference call at 5 p.m. ET this afternoon.
A respite in the markets: Global stock markets were subdued on Thursday relative to the circuit-tripping drops of previous days. The S&P/TSX was up 3.83 per cent, the S&P 500 and the Dow Jones saw a 0.47 and 0.95 per cent lift, respectively, and the tech-heavy Nasdaq ticked up 2.30 per cent. The iconic trading floor of the New York Stock Exchange is closing starting Monday, with trading going completely online after two confirmed cases of COVID-19. It last closed in 2012 when trading was halted during Hurricane Sandy; the fully online model has never been tested. Meanwhile, U.S. oil prices saw their biggest one-day gain on record, but after hitting an 18-year low, that leaves the price per barrel still at just over US$25. The Canadian dollar is hovering at around 69 cents against the U.S.
A question of confidence: “The government is really trying to avoid too much panic, and hopefully [to] shore up sentiment in the economy,” Pedro Antunes, chief economist at the Conference Board of Canada, told The Logic of the economic response plan announced Wednesday. A day earlier, the think tank said Canada was “on the brink of a recession.” Antunes said financial transfers to households “don’t really have big economic stimulus effects, in the sense that they have a big multiplier.” So while consumers will spend the aid on staples like food and rent, it’ll take longer for purchases of homes or durables like cars and appliances to pick up.
“This is a short-term complete collapse of local demand. It is not a financial crisis”: So said Jon Shell, managing director and partner at Social Capital Partners, on today’s conference call with The Logic’s subscribers. Shell said the federal government’s $82-billion relief plan doesn’t help boost consumer demand, which is at a complete halt at present. Any money provided “will get sent to Amazon or will get kept” as businesses remain closed, he said. “If it’s 18 months of social distancing, for a lot of businesses there’s literally nothing we can do…. They’re just going to go under. And that will be awful and we will have to build the economy from scratch,” he said. “So, there’s not a lot of time. We’re probably going to sacrifice that many businesses by April 1 if this isn’t solved.” Here’s a recording of the conversation, moderated by The Logic’s Fatima Syed and also featuring The Logic’s founder and editor-in-chief, David Skok.
Over 50 per cent: That’s the size of the revenue decrease that Vancouver-based Poparide, an intercity carpooling platform, has seen in the last few days because people are staying home, CEO Flo Devellennes told The Logic. “And we expect things to get worse in the next few weeks.” He called the federal government’s business-focused economic measures in response to COVID-19 “underwhelming,” predicting they “will inevitably cause many small businesses to close down and lay off workers in the near future.”
ICYMI: According to the Canadian Federation of Independent Business, one in four companies are unable to survive more than a month of significant income strain. The CFIB says the aid measures Ottawa has unveiled to date aren’t enough.
Cross-country checkup: The Logic reported this morning that federal departments are instructing the growing numbers of public servants working from home to stay off internal networks and VPN systems to prioritize essential services, as the government tries to buy more software licences, hardware and bandwidth to increase its technology capacity.
Canada’s Health Minister Patty Hajdu announced the government is doubling the number of funded COVID-19 research projects, bringing the total up to 96. Last week, the federal government earmarked $275 million for research on coronavirus R&D. Health Canada said it is “expediting access” to products like hand sanitizer, disinfectants and medical swabs that aren’t currently approved for sale in the country, letting them be sold before they meet all regulatory requirements like licensing and bilingual packaging. Global Affairs Minister François-Philippe Champagne is self-isolating after experiencing flu-like symptoms following a trip abroad.
Saskatchewan and B.C. are the latest provinces to declare states of emergency, giving them broad powers to deal with the crisis by, for example, banning travel, fixing prices on food and supplies and accessing private property if necessary for response efforts. The president of the Saskatchewan Medical Association tested positive for COVID-19, and believes he was exposed at a bonspiel attended by doctors from across Western Canada. The country’s tourist communities are eschewing business to help curb the spread of disease, telling visitors to stay away—including by setting up roadblocks. One system keeping its doors open: women’s shelters. “We know home is not safe for many women and that is the location in which women are experiencing the most harassment, violence and, in certain circumstances, mortality,” said Marlene Ham, who oversees a network of over 70 shelters in Ontario. The shelters are open 24 hours a day and have screening programs in place. A local Victoria, B.C. shop that shut down Monday is seeing an unexpected surge in demand for a periodic-table dress worn this week by Deena Hinshaw, Alberta’s chief medical official. The printer, cutter and seamstress can do their jobs isolated from one another, but customers will have to wait a few weeks.
Help wanted: Ottawa is soliciting people to make supplies, including masks, gloves and hand sanitizer, and offer services like nursing, security, laundry and IT support. In Ontario, thousands of nurses are coming out of retirement to help fight the pandemic. B.C.’s Ministry of Health is asking citizens to help develop digital health tools to respond to the virus, as the demand for telehealth spikes across the country. Big Tech companies have joined the effort: Alibaba and Tencent helped build health-rating resources for the Chinese government; social media platforms are collaborating to stop the spread of misinformation about the virus; and Amazon is prioritizing the delivery of medical supplies and household staples. Sunwing Airlines is offering free flights home for stranded Canadians. Tesla CEO Elon Musk said he’d shift to making ventilators “if there is a shortage.”
Bay Street to Main Street: Toyota plants in North America, including in Woodstock, Ont., are taking two days off next week to deep-clean the facilities. The company’s Cambridge, Ont. plant will take a longer break, after an employee tested positive for COVID-19. Air Canada will suspend the majority of its international flights, including to and from the U.S., by March 31, as countries lock down their borders. Domestic flights will continue, but service will be “significantly reduced.” Economists are predicting sweeping and potentially long-lasting impacts across all industries—not just supply chains. “I’m pressed to think of any sectors that will be unscathed,” said Robert Hogue, senior economist at RBC. Meanwhile, some companies are dealing with more welcome challenges: telehealth firms, grocery stores and pharmacies have launched hiring sprees across the country to fill a new shortage of store clerks, pharmacists, health-care and warehouse workers.
Factory closures: Tesla will reduce its workforce from 10,000 employees to 2,500 at its Fremont, Calif. factory after the local sheriff’s office said the company was not complying with a three-week shelter-in-place order. It’s unclear when the scaleback will take place, or what the company is doing to prevent those workers from being infected with or spreading the virus. Rolex has also shut down all its plants as the industry braces for its worst six-month stretch in history. The Big Three Detroit automakers—Ford, General Motors and Fiat Chrysler—will close their U.S. factories. (Ford and GM are in discussion to make ventilators.) The shuttering of auto plants across the world has been deemed the “biggest factory closing since World War II.” But the pandemic isn’t stopping tech companies from hiring: on Tuesday—the day after the Bay Area’s shelter-in-place announcement for six counties—2,414 new tech jobs were posted.
Who’s profiting: The response to the pandemic has minted a cohort of new billionaires. Eric Yuan, the founder of video-conferencing company Zoom, added about US$20 million to his net worth on Monday alone, bringing his wealth to about US$5.6 billion even as global markets tank. Shares of Allmed, a company that makes gauze products like surgical masks, have more than doubled this year, making its chairman Cui Jinhai a billionaire. Guangzhou Wondfo Biotech, which makes rapid-testing kits, has seen more than 40 per cent gains, making its president, Li Wenmei, and chairman, his wife Wang Jihua, billionaires.
Who’s raising: Sequoia Capital sent shockwaves through the markets earlier this month when it called COVID-19 “the black swan of 2020.” Now, the venture capital firm is raising US$7 billion, even as other investors brace for a global recession. The move fits Sequoia’s playbook: it made big bets during the last financial crisis, funding startups like Airbnb and Dropbox. “I think a lot of funds have plenty of cash to invest,” said Sequoia partner Alfred Lin. “We are open for business. If you fundamentally have a good business, I believe you will get funded.” Meanwhile, Hockeystick published a list of active Canadian investors to help companies scout capital during the pandemic.
Winner take all: On Wednesday night, workers at an Amazon warehouse in Queens, N.Y.C. got the dreaded text: “We’re writing to let you know that a positive case of the coronavirus (COVID-19) was found at our facility today.” Meanwhile in France, Amazon workers found an unexpected ally in the country’s finance minister, who said that it was “unacceptable” for those who stopped working due to COVID-19 fears to not get paid. Many of the company’s workers say they can’t keep up with the surge in demand—the Prime Pantry has been temporarily closed to restock—or protect themselves.
Briefly:
- Netflix will reduce its video quality In Europe for the next month to help lessen the load on internet infrastructure.
- Uber’s stock rose after it told investors it still expects to have a cash cushion of at least US$4 billion by the end of the year.
- Lime is pausing its electric-scooter operations in Canada, the U.K., U.S., France and Spain, among others, to keep riders safe during the pandemic.
- Microsoft says Teams has reached 32 million users, as of March 11, while Slack has added a record 7,000 users in 47 days.
- India’s dabbawalas, who have carried tiffins of food to workers through heavy monsoons, have had to temporarily stop deliveries.
- A new toilet paper calculator tells you how long your stock will last.
Around the world: While China gets ready to release trillions of yuan to revive its economy, analysts have slashed growth forecasts for the country to their lowest point since the Cultural Revolution ended in 1976. The European Central Bank announced a €750-billion Pandemic Emergency Purchase Programme, enabling the central bank to buy both public- and private-sector securities in a “flexible manner.” The U.S. Census Bureau has called off field work. The “Friends” reunion on HBO Max has reportedly been delayed, but the Queen and her family “stand ready to play our part.”
“Lying on my ass and locking the door”: That’s what 90-year-old astronaut Buzz Aldrin plans to do for the foreseeable future. This isn’t Aldrin’s first time self-isolating—he spent 21 days quarantined after becoming one of the first humans to land on the Moon in 1969. – Catherine, Murad & Fatima
* Numbers aren’t adjusted for population because the virus spreads at roughly the same pace regardless of country size.
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This article is a preview of The Logic’s Daily Briefing newsletter, sent every weekday.
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