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It’s day 17 since Canada’s 100th coronavirus case. The number of cases is now 4,662 as of publication time. On their respective 17th day, the U.K. had 5,018 cases, the U.S. had 13,779 and Italy 10,149.* The following day, the U.K. jumped to 5,683 cases, the U.S. 19,367 and Italy 12,462.
Italy has suffered the deadliest single day of the pandemic with 919 casualties over the past 24 hours.
“I want to speak directly to small businesses”: Prime Minister Justin Trudeau announced a significant expansion of measures to help small businesses and entrepreneurs navigate the economic impacts of COVID-19. Ottawa is hiking its wage subsidy to 75 per cent for as-yet-unspecified firms (up from 10 per cent), while banks will offer government-backed loans of up to $40,000 to companies that show they paid between $50,000 and $1 million in total payroll in 2019. The Business Development Bank of Canada will also backstop credit of up to $6.25 million. Companies will also be allowed to defer sales-tax remittances and import duties that would normally be due next week until June—a measure Trudeau called “the equivalent of giving $30 billion in interest-free loans to businesses.” The government is still working out the details of the wage-subsidy increase, for which many startups and small business groups have been calling. But Trudeau said he hopes “that employers who are being pushed towards laying off people because of COVID-19 will think again.” Innovation-economy executives told The Logic the measures could indeed help prevent major job losses, but await further details on what businesses will qualify and how the program will work. Trudeau has promised those by Monday.
Meanwhile, the Bank of Canada unexpectedly slashed its overnight rate Friday from 0.75 to 0.25 per cent, the lowest in over a decade and the second cut this month. The central bank has also launched a new program to boost short-term funding markets and is set to buy government bonds, beginning with a minimum of $5 billion a week. “The intent of our decision today is two-fold,” said governor Stephen Poloz: “to immediately support the financial system so it keeps on providing credit, and, over the longer term, to lay the foundation for the economy’s return to normalcy.”
In the markets: The major North American markets dropped Friday after three days of gains. The Dow Jones fell 4.12 per cent after climbing more than 20 per cent this week. The S&P 500 dropped 3.37 per cent, while the Nasdaq fell 3.79 per cent. The U.S. House of Representatives passed a US$2.2-trillion stimulus package, which will become law after President Donald Trump signs it, new worldwide economic outlooks continue to be dire. Global foreign direct investment is set to decline by 30 to 40 per cent in 2020–2021 due to the impacts of the coronavirus, according to the United Nations’ global FDI tracker. The OECD projected that “for each month of containment to slow the spread of coronavirus, there will be a loss of 2 percentage points in annual gross domestic product growth.” Canada, the OECD said, could see a loss of approximately 23 per cent of its GDP due to partial or complete shutdowns. On Friday, the Toronto Stock Exchange opened lower for the first time in four sessions; at close, it had fallen 5.11 per cent. The Canadian dollar increased 0.30 per cent to trade for 71 cents U.S.
“It feels like strapping on a flak jacket and jumping on hand grenades going off every day”: That’s how the head of a U.S. hedge fund described the current state of affairs in his industry, which is being tested once again after the turmoil of the 2008 financial crash.
Cross-country checkup: Police in Canada have made a number of coronavirus-related arrests. A man in Toronto was charged with fraud for allegedly shipping COVID-19 testing kits across the U.S. and Canada; a McDonald’s employee in Hamilton, Ont. was arrested for allegedly faking a doctor’s note saying she had the virus; in New Brunswick, a man was arrested for assault after allegedly coughing intentionally on someone’s face while feeling sick; and a suspect of a break-and-enter in Ottawa allegedly spat on police, claiming he had COVID-19. Canadian nurses are in Lombardy, Italy, treating patients and training for Canada’s own emergency response to the virus. Guelph General Hospital has declared a COVID-19 outbreak, with at least four staff infected this week. Ontario regulators are fast-tracking certification for students studying respiratory therapy, as hospitals anticipate a shortfall of people trained to operate ventilators. The province also sent an emergency message to Ontarians’ phones Friday afternoon reminding returning travellers of proper quarantine rules. And power demand in the province is down as much as 2,000 megawatts—roughly equivalent to the peak demand of London, Ont. and Ottawa combined. The federal government has closed its 317 Service Canada centres—where people can apply in-person for employment insurance—after employees refused to work. Meanwhile, the Canada Revenue Agency, tasked with processing unemployment benefit claims, is operating at “reduced capacity.” Canada’s largest banks have received over 200,000 mortgage-deferral requests. And the U.S. has backed down on a plan to post troops near the border.
Nothing ventured: Canada’s venture capital community is anticipating a plunge in new deals as investors focus on minimizing the damage to their portfolio companies amid the COVID-19 pandemic. In a letter sent Thursday night to Small Business Minister Mary Ng, the Canadian Venture Capital and Private Equity Association (CVCA) warned of “prolonged fundraising timelines and the inability to start deploying capital into the market, resulting in a severely constrained flow of capital into the Canadian innovation ecosystem.” The organization is urging the Business Development Bank of Canada launch a fund-matching program to stimulate deal activity, among other measures. “We need to ensure more dollars flow to these high-growth companies to keep them alive so when we hit recovery, they can continue to grow, create employment and create value for the Canadian economy,” CVCA CEO Kim Furlong told The Logic. “The matching program will make every dollar a VC has go further. The need for liquidity of Canadian startups rose significantly in the last couple weeks.”
Weakest GDP growth since 1962: That’s the newest forecast from the parliamentary budget officer (PBO), taking into account both the pandemic and record low oil prices. The PBO is estimating real GDP growth of -5.1 per cent, a 6.5 percentage-point drop since the office’s November 2019 projection. A surge in global supply of oil, driven by increased production from Saudi Arabia and Russia, is driving down prices and hitting Alberta particularly hard. Yesterday, a Barrel of Monkeys toy was worth more than a barrel of oil from the province. The PBO is estimating 15 per cent unemployment by the third quarter of the year. During the 2008 recession, unemployment peaked at 8.7 per cent; economists at RBC predict it could exceed 11 per cent as early as April. The PBO’s estimates are based on a six-month timeline, but many of the federal government’s relief programs, including the $2,000 monthly benefit for unemployed Canadians, last up to four months.
Crowdsourcing the crisis: Innovators across Canada are creating new tools seemingly by the hour, looking to coordinate efforts and share knowledge to fight COVID-19. Camp Tech CEO Avery Swartz is putting together a list of technology, communications, marketing and web professionals volunteering their services to companies and non-profits during the pandemic. “I’m plugged in to the tech community, where I’ve seen amazing offers of help from people with digital skills. I’m also plugged in to the small business and charitable communities, where so many have said they need help,” Swartz told The Logic. “It just made sense for me to build a bridge between them, and creating the list of volunteer tech help for small businesses, charities and non-profits was an easy way for me to lend a hand.” Ryerson University’s DMZ is holding an online hackathon from April 8 to 22, in which teams will seek innovative solutions to flatten the curve, while competing for $10,000. The CIO Strategy Council is hosting a series of webinars for technology and business leaders to share best practices on responding to the changing environment. The next one is on April 2.
- Ontario plans to buy one million coronavirus testing kits from Ottawa-based medtech company Spartan Bioscience, a move that could help fill the testing backlog and offer insight into the spread of the disease.
- Three auto manufacturers in Ontario—Magna, Linamar and Martinrea— and the Automotive Parts Manufacturers Association have reached an agreement with the province to build ventilators needed to treat patients with COVID-19.
- Retailer Indigo Books & Music is temporarily laying off 5,200 of its 7,000 or so staff, after initially shutting stores for 10 days and continuing to pay workers through the closure.
- Quebecor is laying off 10 per cent of its staff, citing the province’s shutdown of non-essential businesses amid the virus outbreak.
- IoT startup Ecobee has laid off 47 people—about 10 per cent of its staff—and cancelled a new product line “to preserve the long term viability and value of the business.”
- A&W Canada has asked landlords for a two-month rent deferral for its nearly 1,000 restaurants in the country. At least one landlord isn’t budging: “If no money comes in, how are you supposed to pay the mortgage, hydro, gas, insurance?” said Cierra Watson, executive vice-president of Watson Properties.
- Thawrih, an Ottawa-based company that makes sports hijabs, is producing masks to protect people against COVID-19.
Postcard from Hangzhou: Nikk Mitchell knows it sounds strange, but he “really enjoyed being quarantined” for a month with his puppy in his apartment in the eastern Chinese city where he has lived for 12 years. In early February everything changed for the Canadian CEO of FXG, a 32-person virtual reality film company. He received a call from Ken, a government official, who told him very politely that if he and his employees didn’t follow the nationwide lockdown measures, they would be held responsible for the spread of the virus. He, along with everyone else in the country, was also assigned a QR code that the local government would use to track where people were going. The code was coloured to indicate a person’s contagion; Mitchell’s remains green to this day. Under the lockdown, his business had its worst two months in the three years since it started, right after its two best months. “We had no new contracts come in. There were companies that owe us money who still haven’t paid us,” he said. However, determined not to let it bring morale down, Mitchell turned to improving what he could. The team redid the website and prepared promotional and sale material. “We got a lot of housework done.”
Once that was done, Mitchell read a lot and spent his time travelling the world in sweatpants and a headset, revisiting the virtual reality documentaries his company had created across Africa and Europe. Through his avatar, he visited an online conference about virtual reality and education, hung out with friends at a talk show and danced at a virtual club. Social distancing worked, he said, and, as he tells his family back in Canada, “worrying or panicking isn’t going to make the [pandemic] end any sooner. Make sure to stay safe, but other than that, you should relax, knowing one day it will be over, and prepare yourself and your business for that day, so you will come out on top in any way you can.” As Hangzhou reopens, things are getting back to normal for Mitchell, although he still has to show his QR code to get into his office building. “I think I’m a good cook, but I really missed pizza,” he said. “Once deliveries opened up, I ordered pizza.”
42 per cent: The year-over-year increase in the number of calculations users have performed in the first 25 days of March on Blue J Legal’s tool for predicting the reasonable notice employers must provide before dismissing workers, the company told The Logic. Law firms and businesses use the Toronto-based AI firm’s Tax Foresight and Employment Foresight systems for legal research and to game out scenarios. The company’s seeing the increase as companies cut staff amid the COVID-19 outbreak. Employers are trying to “reduce the risk of litigation … and ensure employees are treated fairly and consistently,” said Blue J CEO Benjamin Alarie.
Around the world: The U.S. government has dozens of high-level vacancies across departments, sparking concern about the effectiveness of the national emergency response. MIT researchers are launching possibly the first large-scale project in the U.S. to track the movements of COVID-19 patients through their phones’ location data. The European Commission has been working with telecom companies to collect data that would “analyse mobility patterns including the impact of confinement measures on the intensity of contacts, and hence the risks of contamination.” The European Central Bank has ordered all banks to freeze dividend payments and share buybacks until at least October. France has asked all companies in which the government has a stake not to pay dividends, as well. China’s central bank believes the economic impact of the epidemic is manageable; the country is closing its cinemas again due to a spike in cases among foreigners. U.K. Prime Minister Boris Johnson has tested positive for the virus and is self-isolating in Downing Street. The country’s health minister has also tested positive. In a video on Twitter, Johnson said the public should “be in no doubt that I can continue thanks to the wizardry of modern technology to communicate with all my top team to lead the national fightback against coronavirus.” In India, 40,000 residents from 20 villages in the northern state of Punjab have been asked to quarantine following a COVID-19 outbreak linked to just one man. And the material that was used to make MLB uniforms will now be used to make masks.
- Apple has launched a COVID-19 screening app and website in partnership with the U.S. Centers for Disease Control and Prevention and the Federal Emergency Management Agency.
- Google announced a US$800-million coronavirus aid package, including US$340 million in ad credits for small- and mid-sized companies with active Google ad accounts.
- The Chan Zuckerberg Initiative has committed US$25 million to the COVID-19 Therapeutics Accelerator, which coordinates drug and treatment research; the Gates Foundation, among others, has committed up to US$50 million to the cause.
- OneWeb, a London-based satellite-internet startup, is preparing for bankruptcy and to lay off most of its 500-plus staff after failing to secure funding, including from SoftBank, its biggest investor.
- New York state’s top court ruled that couriers for the food-delivery company Postmates are employees, making them eligible for unemployment insurance.
- Instacart shoppers in the U.S. are planning to strike on Monday; they won’t accept orders until the company provides an extra US$5 in hazard pay per order, free safety gear and offers paid sick leave to workers with pre-existing conditions whose doctors have advised them not to work.
- E-scooter company Bird has laid off 30 per cent of its employees, after pausing operations in more than two-dozen markets.
A very Animal Crossing wedding: When COVID-19 scuttled Sharmin Asha and Nazmul Ahmed’s planned Easter wedding in Brooklyn, the young couple instead married in the immersive and altruistic universe of Animal Crossing: New Horizons. Ahmed designed an approximation of the suit he’d planned to wear, lined the beach with tiki torches and potted flowers, then invited his soon-to-be (and blissfully ignorant) wife to join him in the game along with five of their friends.
* Numbers aren’t adjusted for population because the virus spreads at roughly the same pace regardless of country size. Numbers may also vary based on countries’ individual testing capacity and reporting
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