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It’s day 44 since Canada’s 100th coronavirus case. The number of cases is 41,752 as of publication time, up 1,562 since yesterday, a seven per cent increase in daily new cases from the three-day prior average. On their respective 44th day, U.S. daily new cases were also up seven per cent from the three-day prior average; the U.K. was up 16 per cent in daily new cases from the three-day prior; and in Italy, new cases were down 21 per cent.*
New estimates from Hong Kong suggest that more than 232,000 people may have been infected in the first wave of COVID-19 in mainland China—four times the official figures.
“A gradual, methodical, and cautious process”: Saskatchewan’s five-phase plan to reopen the province, released today, kicks in May 4. Over the first two weeks, medical services like dentistry, optometry and physical therapy can resume and residents can go back outside to fish and boat. On May 19, retail businesses including apparel, toy, and bookstores, as well as hairdressers and massage therapists, can open again. The provincial government doesn’t yet have dates for later stages, but the third phase will include child care, as well as gyms and restaurants atno more than half capacity. Other entertainment like casinos, swimming pools, theatres and summer camps will open in the fourth phase, while caps on public gathering will be the last to go. Businesses freed up in each stage will still need to follow stricter-than-usual sanitation and physical-distancing rules.
Addressing Saskatchewn residents on Wednesday night, Premier Scott Moe emphasized that his government wouldn’t simply rush through the phases—there were five references to “caution” in his prepared remarks. The plan requires “aggressive testing and contact tracing” to work, and public health officials can adjust timelines based on daily case numbers. “It’s not like flipping on a light switch,” Moe said. “If anything, it’s more like a dimmer switch that’s been turned down. Over the next several weeks, we will gradually be turning up the light once again on Saskatchewan’s economy.”
Business groups are lobbying governments at all levels to re-open the economy, or at least lay out their timelines. In Ottawa on Thursday, Conservative leader Andrew Scheer called for a federal framework to prevent a provincial patchwork of restart plans, but did not offer his own. “Until we have either a vaccine or significant treatments for COVID-19, we’re not going to be able to talk about getting back to normal,” Prime Minister Justin Trudeau said at his morning press conference, adding that provinces “are in different places in their fight against COVID-19” and that Ottawa is trying to coordinate guidelines.
While Saskatchewan’s is the first public, itemized provincial plan, other governments are also talking about timelines. P.E.I. chief public health officer Dr. Heather Morrison said the province plans to begin opening up again on May 1, starting with elective medical procedures and outdoor activities like recreational angling. B.C. Premier John Horgan said the province was working on a plan for “sometime in the not-too-distant future,” but warned final decisions are “weeks” away.
Real-time data: Toronto-based fintech Wave saw a 15 per cent drop in invoicing volume in March and is trending towards a 30-to-40 per cent drop in April, CEO Kirk Simpson revealed on a Canadian Club of Toronto conference call hosted Thursday by The Logic’s editor-in-chief David Skok. Ontario and Quebec have been hardest hit. The company also has access to payroll data: “Layoffs spiked in March, to about five times what we would typically see. And we essentially issued a record of employment for one out of every five employees on our payroll system. Thankfully that has begun to really slow in April, and hiring is now back in line with typical norms,” Simpson said. Borrowell CEO Andrew Graham, who was also on the call, said his data showed the number of new mortgages, auto loan and credit card applications was down dramatically. “We were speaking with Equifax the other day and they’re seeing a 30 per cent decline in new account openings, which certainly matches data that we see,” said Graham.
In the markets: Stocks were generally down today, with the TSX dropping 0.26 per cent, the S&P 500 down 0.05 per cent and the Nasdaq down 0.01 per cent. The Canadian dollar, however, rose to 71.03 cents U.S. in late afternoon trading. The uptick was partially driven by a second strong day for oil. The U.S. benchmark West Texas Intermediate was up 57 per cent over the past two days. The Canadian Crude Index, which rose 31 per cent on Wednesday, was up an additional 16 per cent. The rise followed Wednesday’s news that Ottawa would backstop 75 per cent of bank loans of up $100 million for oil firms.
More than 4.4 million Americans filed for unemployment benefits last week, bringing the total to 26 million since the pandemic started. Texas, which has received more than 1.4 million claims since early March, is using AI-powered chatbots to keep up with the flood of questions. Business activity in the U.S., Europe and Japan dropped more than expected by economists, an indication that the coming economic contraction may be worse than previously estimated. In the U.S., the Purchasing Managers Index (PMI), which measures private-sector activity, hit its lowest level in data collected since October 2009. In the eurozone, the PMI hit its lowest reading since the survey began in 1998. This new economic environment already has several winners: the four largest banks in the U.S., which received more than half the US$1 trillion in new deposits in the first quarter.
“People are shaving less”: Unilever CEO Alan Jope believes the pandemic has changed consumer habits, and that they’ll be “lasting changes.” The company reported a slump in sales and saw a big drop in skin- and hair-care products. However, he said, “the whole hygiene thing will carry on.”
Speaking of a vaccine: Trudeau also announced another $1.1 billion for medical programs and research to address COVID-19. It includes $115 million for development work on vaccines and treatments; $662 million for research on how the virus affects brain and airway cells, as well as for clinical trials for treatments; and $350 million for national testing, modelling, data-monitoring and tracking of COVID-19 in Canada. Some of the money will go to existing scientific programs and facilities, including Genome Canada ($40 million) and the National Research Council of Canada ($29 million). The Vaccine and Infectious Disease Organization – International Vaccine Centre in Saskatchewan will receive $23 million from Western Economic Diversification Canada, adding to a same-sized cash injection announced last month.
Ottawa is putting the largest batch of the cash—$600 million—into the Strategic Innovation Fund over two years for testing projects and domestic biomedical manufacturing expansion.
“Our priority is securing access to these potential therapies and vaccines for Canadians, as soon as they become available,” Véronique Simard, press secretary to Innovation Minister Navdeep Bains. The funding will be open to “any firm that chooses to conduct this research and manufacturing activity in Canada,” including the local subsidiaries of foreign pharmaceutical firms. Separately, the government announced another $675,000 for the Stem Cell Network for research and clinical trials on using cell therapy to treat COVID-19. It’s also setting up a task force, including chief public health officer Dr. Theresa Tam, chief science adviser Dr. Mona Nemer and former University of Toronto president Dr. David Naylor, focused on immunity—“how many people beyond those we’ve already tested have had COVID-19, whether you are immune once you’ve had it, and if so, how long that lasts,” said Trudeau.
Meanwhile, Biomérieux, a French company that produces chemicals needed for coronavirus tests, has given its proprietary formula to the Canadian government for free. The Public Health Agency of Canada (PHAC) said the licence was temporary. Remdesivir, the potential coronavirus antiviral drug developed by California-based Gilead Sciences, did not improve patients’ conditions or reduce the virus’s presence from their bloodstreams in the first clinical trial, according to draft documents published accidentally by the World Health Organization (WHO) and seen by the Financial Times. Gilead said the study was shut down early due to low enrollment.
A bridge too far?: BDC Capital has allocated $150 million for a bridge-financing program meant to help Canadian startups weather the COVID-19 pandemic, but investors say it isn’t enough—and that the program’s terms are too prohibitive to address the sweeping need companies face as venture capital retreats from the economy.
“While VCs are working hard to keep these companies going, BDC is coming into the round to help double up the money—that’s good,” said Patrick Lor, managing partner at Panache Ventures. “The bad: it’s debt, and it’s not cheap. This debt sits senior to equity, so in a downside liquidation event, they get paid before shareholders. In an upside acquisition, they get the chance to take advantage of the upside and get their interest.”
A CEWS by any other name: Ottawa’s new aid package for tech companies that can’t access the Canada Emergency Wage Subsidy (CEWS) also caps payouts at $847 per employee per week. The $250-million Industrial Research Assistance Program (IRAP) Innovation Assistance Program began accepting applications on Wednesday. But unlike the CEWS, meeting eligibility criteria is no guarantee of funding. The National Research Council, which administers the IRAP, will evaluate whether firms are research- or technology-oriented, as well as whether they have high growth potential, president Iain Stewart said on a Friday conference call with the Council of Canadian Innovators.
Cross-country checkup: In response to Ontario and Quebec’s calls for military backup at long-term care facilities, Trudeau said such aid was a short-term solution, and that the situation requires deeper examination of how conditions at the facilities became so dire. “In Canada, we shouldn’t have soldiers taking care of seniors,” he said. Ontario Premier Doug Ford’s 95-year-old mother-in-law, a resident of a Toronto long-term care home, has tested positive for COVID-19. Meanwhile, municipalities are calling for at least $10 billion in emergency funding from the federal government. The Federation of Canadian Municipalities estimates that local governments are facing near-term losses of up to $15 billion due to COVID-19, including $400 million a month in lost public transit revenue. The Canadian Civil Liberties Association is calling for amnesty for people ticketed for violating emergency orders, saying the fines are an abuse of power. The Toronto Transit Commission will lay off 1,200 workers in the wake of plunging ridership. PHAC says one million masks it bought from China failed to meet the proper standards and will not be distributed to provinces.
Bay Street to Main Street: Economic Development Minister Mélanie Joly’s office told The Logic it can’t yet provide information about the geographic breakdown, eligibility requirements or funding caps for the $675 million in additional money for small- and medium-sized businesses through Ottawa’s six regional development agencies announced last week. Meanwhile, Small Business Minister Mary Ng faced repeated questions about the rollout of the Canada Emergency Commercial Rent Assistance at a parliamentary committee teleconference on Thursday. “We’re all working hard to make sure that, with the provinces and the territories, we’re able to come up with that support for our Canadian businesses as fast as we can,” she said. She did not provide a timeline. The rent is due in eight days.
- Alberta’s $18-billion Heritage Savings Trust Fund was hit particularly hard by a bet from AIMCo that the market wouldn’t swing wildly.
- Alberta’s tech sector has written an open letter calling for urgent government support due to COVID-19 and falling oil prices.
- ArchAngel, a new investor network, has launched in response to COVID-19, with a target fund size of $10 million. Meanwhile, tech hub Kanata North Business Association has created a $200,000 fund to help tech firms struggling because of COVID-19.
- Seventy-nine per cent of Canadian entrepreneurs are “very worried” about the impact of COVID-19 on their businesses, down from 83 per cent two weeks ago.
- WestJet is laying off an additional 3,000 staff as its guest load is at less than five per cent of pre-pandemic levels.
- First Capital REIT, RioCan REIT and SmartCentres REIT have all collected two-thirds or more of their April rent. Far fewer commercial renters paid than residential ones.
- Vancouver-based SaNOtize Research and Development has received Health Canada approval for a nasal spray that seeks to block the transmission of COVID-19.
- Score Media and Gaming’s quarterly revenue dropped to $6.7 million, despite a surge in interest in e-sports that pushed average monthly sessions on its app to a record high of 453 million.
- Canada’s mutual fund industry had its worst month ever in March, with $14.1 billion in redemptions.
- Only five Canadian hedge funds out of 61 made money in the first quarter. Globally, hedge funds are down about 10 per cent this year.
Crowdsourcing the crisis: Vidyard, a Kitchener, Ont.-based video platform company, is offering free access to its secure video messaging and screen-sharing tools for school districts and teachers. Concordia University’s Institute for Investigative Journalism and its partners have created a pool of resources about the pandemic and its aftermath, including up-to-the minute local maps.
Drinking from the firehose: A German research institute is developing a contact-tracing app for the national government; the organization revealed Thursday that the technology will also include a feature for health authorities to notify users about their COVID-19 test results. Apple CEO Tim Cook said the first version of the contact-tracing API it’s building with Google will be ready for use starting next week. Washington state is the latest jurisdiction to adopt the idea: it is creating a contact-tracing “fire brigade” with 1,500 employees. Bill Gates is skeptical about how big a role tech will play in contact tracing.
- Jeff Bezos, who had stepped back from managing Amazon’s day-to-day operations, has resumed daily oversight of the company as it grapples with COVID-19.
- U.S. billionaires, including Bezos and Tesla’s Elon Musk, have seen their wealth increase a combined nearly 10 per cent over the pandemic.
- A Wall Street Journal investigation found Amazon uses data from third-party sellers on its platform to develop its own private-label products.
- Google will require all advertisers to verify who they are and where they operate starting this summer, in a bid to improve transparency amid a rise in fraudsters advertising fake products related to COVID-19.
- Snapchat parent company Snap is raising US$750 million through a convertible bond offering, after reporting strong quarterly results this week.
- Online travel firm Expedia plans to raise US$3.2 billion to help float it through the pandemic; the firm’s shares have dropped 43 per cent this year so far.
- Almost half of the world’s small- and mid-sized businesses fear they will go under within three months, according to an OECD survey.
- Instacart is hiring another 250,000 shoppers to help meet rising demand for grocery delivery.
Grand reopening: Greece is extending its lockdown to May 4; it said any easing will be spread out across May and June. Some British MPs are concerned that the U.K. will no longer have a functioning economy if its lockdown isn’t relaxed within the next few weeks. Scotland outlined its exit strategy in a 24-page document, which states restrictions will be eased in phases, with some measures remaining in place into next year “or beyond.” German Chancellor Angela Merkel said some of the country’s 16 states were moving to reopen, and that it remained “on the thinnest ice” despite its early achievements. France said it wanted some retailers to reopen when the nationwide lockdown ends on May 11. French President Emmanuel Macron told mayors that the lockdown would likely vary by region depending on severity.
Around the world: European Union leaders met today to discuss a €2-trillion recovery plan for the continent, but expectations are generally low, with some suggesting a deal won’t be reached for months and others that no deal will be reached at all. Alok Sharma, U.K. business secretary, has revealed that 2.8 million workers from 387,000 companies will receive wage subsidies through the Treasury’s furlough scheme, set up just two days ago. The U.K. has lent almost £3 billion to over 16,600 small businesses; officials say more than £300 million is being lent every day on average.
The WHO said deaths from malaria in sub-Saharan African countries could double to more than 700,000 this year if the coronavirus disrupts malaria-prevention programs. China will give the WHO an additional US$30 million. France has extended the list of drugs covered by its export restrictions, which include several drugs being tested as possible treatments for COVID-19. Italy could release dozens of mafia bosses from prisons due to the risk of infection. Two cats in New York have become the first pets in the U.S. to test positive for the coronavirus, while eight big cats at the Bronx Zoo have tested positive. Hollywood’s A-listers are entertaining themselves in a password-protected Zoom.
A virtual spa: Japanʼs oldest hot-spring town, Arima Onsen, wants to help you relax. Grab your bath salts, wear a pair of VR goggles and choose a hot-spring bath scene from the city’s YouTube channel, featuring sounds of thermal waters and cherry blossoms fluttering in the wind.
* 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 three-day prior average. Numbers may also vary based on countries’ individual testing capacity and reporting.
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