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It’s day 108 since Canada’s 100th coronavirus case. The number of cases is 102,733 as of publication time, up 111 since yesterday—a 63 per cent decrease from the seven-day prior average of 301 new cases. At its peak on May 3, the seven-day average was 1,603 new cases a day.
Scientists are just starting to understand how the coronavirus affects the human body: “We thought this was only a respiratory virus. Turns out, it goes after the pancreas. It goes after the heart. It goes after the liver, the brain, the kidney and other organs. We didn’t appreciate that in the beginning,” said one U.S. doctor. Here’s a video showing its extensive impact.
“The public deserves to know”: Ottawa doesn’t plan to reveal how much individual employers received from the federal wage subsidy program to pay their workers during the pandemic. While the Canada Revenue Agency (CRA) plans to release the names of employers using the salary assistance measure at an unspecified future date, it won’t say how much each got or how many employees’ salaries the money covered. “The confidentiality provisions of the Income Tax Act prevent the CRA from commenting on the details of specific businesses,” spokesperson Christopher Doody told The Logic.
The Canada Emergency Wage Subsidy (CEWS) currently provides up to $847 per employee per week to firms whose revenues have declined significantly during the pandemic, and was recently extended through late August. The CRA has paid out $15.77 billion to date across 515,420 applications, 100 of which were for more than $5 million.
NDP finance critic Peter Julian told The Logic he thinks it’s unacceptable that the tax department is attempting to “hide information that should be publicly accessible” and called for greater transparency on the program. “In cases where businesses have been able to save a lot of jobs because of the wage subsidy, that’s great to know,” he said. “If a company was fudging the figures and [it] turns out there weren’t that many employees that were saved, but they got a lot of money [anyway], that’s something the public deserves to know, too.”
Conservative small-business critic James Cumming said disclosing the names of CEWS recipients makes sense, “as long as it doesn’t affect someone’s competitive position in the marketplace.” Publicly traded companies already face rigorous financial-reporting requirements, noted Trevin Stratton, chief economist and vice-president of policy at the Canadian Chamber of Commerce. While aggregate information is useful to measure the success of the program, he said “businesses should have flexibility on whether they choose to disclose” that they’ve taken the CEWS.
Earlier this week, the U.S. Treasury Department and Small Business Administration said they would disclose the names, addresses, demographic data and the range of the financing that companies received through the federal Paycheck Protection Program (PPP). The small business-focused scheme provides forgivable loans that are meant to be used for wages, rather than a direct per-worker subsidy. Treasury Secretary Steven Mnuchin had earlier said the details were confidential and indicated they would not be released. He also faced criticism after reports that large firms with access to other sources of capital had obtained PPP funding.
In Canada, few firms have publicly disclosed that they’re using the CEWS. In April, Air Canada and WestJet both said they were bringing back laid-off workers via the program, although the former has since stopped. Montreal-based point-of-sale technology firm Lightspeed has “pursued the various available government relief programs in the many markets we serve around the world,” CFO Brandon Nussey said on an analyst conference call in May; the company declined to answer The Logic’s questions about whether it had applied to the PPP or the CEWS.
Julian said Finance Minister Bill Morneau has generally been “very open and accessible and transparent” on the progress of COVID-19 measures, but “needs to be much quicker [about] correcting errors,” such as the low uptake of its commercial-rent assistance. But Cumming said the government has only recently begun to provide real progress reports on programs, and “never with any great detail.”
He cited the Business Credit Availability Program. While Export Development Canada reported issuing 135 loan guarantees worth over $210 million as of June 10, the Business Development Bank of Canada has yet to disclose how many loans have been issued via its co-lending facility. Finance Canada officials told a parliamentary committee last month that a lag in reporting from financial institutions—which issue the loans—was to blame. Cumming said that explanation is “completely unsatisfactory,” given that the program was announced in March. “How can you possibly manage these massive programs without the data?”
In the markets: All major U.S. stock indices dropped about 2.5 per cent after the country recorded 40,000 coronavirus infections, an all-time high. Bank stocks led the decline after the U.S. Federal Reserve ordered financial institutions to cap shareholder dividends and blocked third-quarter share buybacks. The TSX was dragged down by falling oil prices, but still fared better than its American counterparts, ending the day down 1.66 per cent. The Canadian dollar fell to 73.13 cents U.S. in late afternoon trading.
Tensions between Washington and Beijing continued to weigh on markets. The U.S. Senate unanimously passed a bill sanctioning Chinese officials, and firms that do business with them, who undermine Hong Kong’s autonomy from China. Hong Kong’s Hang Seng Index dropped 0.9 per cent. U.S. consumer spending rose 8.2 per cent, but is still down 12 per cent from pre-pandemic levels in February. The European benchmark Stoxx 600 outperformed world stocks by about 1.5 per cent last month, while the S&P 500 fell by about the same amount. Europe’s relative strength comes as it’s been able to open up parts of its economy without triggering the widespread increases in cases the U.S. is seeing.
“In a crisis of this magnitude, each and every one of us is expected to do what needs to be done. What needs to be done in this case is something extraordinary”: German Chancellor Angela Merkel called for a European response to the pandemic that matched the multilateral response to the 2008 financial crisis. She said she was “under no illusions” about how difficult this would be today: “For Europe to survive, its economy needs to survive.”
Bay Street to Main Street: Thirty-six per cent of Canadians have a high level of trust that businesses will protect the health of their employees, according to a survey of about 37,000 people conducted by Statistics Canada. That’s below the 65 per cent of Canadians who expressed a high level of trust in municipal authorities deciding when to reopen public spaces and workplaces. Federal and provincial officials came in at 74 per cent. People between the ages of 15 and 34 were the least likely to trust business, at 27.3 per cent, compared with 44 per cent for those over 65 years old.
- Major airlines are lifting safety restrictions enacted earlier in the pandemic. WestJet and Air Canada will start selling middle seats on July 1, and American Airlines said it won’t restrict the number of seats sold.
- A Michigan judge temporarily shut down an Enbridge pipeline at the request of the state. On Tuesday. the court will rule on whether to close the pipeline indefinitely.
- U.S. beer firms, which rely on Canadian aluminum to make cans, are pushing back against a Trump administration proposal to impose tariffs on the metal.
- Toronto-based fintech lender FundThrough is committing $10 million to waive fees for small businesses. The firm said it’s trying to fill a gap left by Ottawa’s rejection of a proposal from fintech lenders to distribute COVID-19 aid, on which The Logic reported last week.
- Shopify is partnering with four Indigenous-led organizations to provide e-commerce education. Two of the groups are in Canada and the other two are in New Zealand.
- Vancouver-based agtech firm Terramera is working on a project using AI to predict future COVID-19 strains.
- Executives at Calgary’s 100 largest publicly traded firms saw their compensation drop by a median 9.5 per cent last year as economic growth in Alberta fell.
Cross-country checkup: Red Cross workers will begin taking over from military members at long-term care facilities in Quebec, as COVID-19 outbreaks stabilize in some homes. Quebec has reversed its decision to report COVID-19 statistics on a weekly basis; starting Monday, it will return to daily reporting. P.E.I. moved into Phase 4 of reopening today, which includes opening casinos and allowing indoor gatherings of up to 50 people and 100 people in large spaces. Eighteen new cases in Kingston, Ont. have been linked to one salon; the outbreak represents almost a quarter of all cases in the area.
In the lab: The World Health Organization (WHO) and its partners announced a plan to purchase two billion doses of COVID-19 vaccines by the end of 2021 for those most at risk, including health-care workers and people over the age of 65. Countries will be offered “shares” of the nine potential vaccines, with financial help offered to lower-income countries. The WHO is also looking to raise US$31.3 billion in the next 12 months (of which US$13.7 billion is “urgently needed”) to develop and deliver 500 million COVID-19 tests and 245 million courses of new treatment. Gilead Sciences’ remdesivir shouldn’t cost more than US$2,800 for one treatment, according to one estimate.
Researchers from Britain, the U.S. and China have found that one in 20 people who contract COVID-19 will need to be hospitalized. Many doctors globally say they are better prepared for a second wave, having learned what works and what doesn’t. More than 300 studies globally have found roughly 50 per cent of COVID-19 patients have exhibited neurological abnormalities, including headaches, loss of smell and tingling sensations, as well as aphasia (the inability to speak), strokes and seizures. Said one doctor, “We are facing a secondary pandemic of neurological disease.” Some scientists are trying to figure out how to slow the aging process to limit the impact of coronavirus on the elderly.
Drinking from the firehose:
- Microsoft is permanently closing its retail stores. Its flagship locations in some major cities, including London, New York City, Sydney and its campus in Redmond, Wash. will remain open as “Microsoft Experience Centers.” Seven Canadian stores will be affected, company spokesperson Lisa Gibson told The Logic. “Our team members will continue to serve consumer, small business, education, and enterprise customers, focused on sales, training and support. They will work from Microsoft corporate offices and remotely,” said Gibson.
- A JPMorgan analysis found that higher restaurant spending was linked to a faster spread of COVID-19. The study of 30 million of its Chase cardholders also found that higher spending at grocery stores was linked to a slower spread of the virus.
- Valdi Dombrovskis, the European Union’s executive vice-president for financial-services policy, is calling for an investigation into Germany’s banking regulator following the collapse of fintech Wirecard.
- Amazon has launched Smart Stores in India, a program that provides small brick-and-mortar retailers with software to digitally keep track of inventory, as well as a QR code.
- The presidents of three universities in Virginia are asking the government for US$200 million to increase testing of COVID-19 on campus in what they claim is essential for resuming classes in the fall.
- Luckin Coffee shares will be suspended from the Nasdaq on Monday; the firm recently disclosed an investigation into its COO for overestimating up to 2.2 billion yuan in 2019 sales.
Around the world: Texas has rolled back its reopening amid a surge; bars have been ordered to close and dine-in capacity at restaurants have been lowered to 50 per cent. Florida has banned alcohol consumption at bars, after reporting a single-day increase of 9,000 coronavirus cases. The U.S. broke its coronavirus record for a second consecutive day, with the Centers for Disease Control and Prevention warning the country likely has had 10 times the number of known infections.
Australian supermarkets have reintroduced rationing of essential groceries after panic-buying resumed in the wake of a surge. Spain will extend its paid-leave subsidy program for another three months to September. Anders Tegnell, Sweden’s state epidemiologist, said the WHO made a “total mistake” by naming the country as one of 11 in Europe at risk of a COVID-19 resurgence; he attributed the recent rise in new daily cases to increased testing. U.K. Health Secretary Matt Hancock threatened to close beaches after reports of packed seasides emerged. Those who want to see the Mona Lisa when the Louvre reopens on July 6 will have to stand in one of two lines for about 10 to 15 minutes before getting “a special moment” with her from a distance of 10 feet.
M-m-m-my corona: Bioengineer Markus Buehler at MIT has turned the molecular code of the coronavirus protein into music, finding that “there are many, many melodies layered into each other. It has a balance of order and disorder.” You can listen here.
* 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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