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COVID-19 roundup: ‘The Great Lockdown’

Chief Economist and Director of Research Department at the IMF, Gita Gopinath, speaks during a news conference at the World Bank/IMF Spring Meetings, in Washington, Tuesday, April 9, 2019. AP Photo/Jose Luis Magana
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It’s day 35 since Canada’s 100th coronavirus case. The number of cases is 26,897 as of publication time, up 1,217 since yesterday, a seven per cent increase in daily new cases from the three-day prior average. On their respective 35th day, U.S. daily new cases were up 15 per cent from the three-day prior average; the U.K. had a 24 per cent increase in daily new cases from the three-day prior; and in Italy, new cases were up four per cent.* 

There are now nearly two million cases of the coronavirus worldwide. France has become the fourth country to pass the 15,000 death-toll mark, after Italy, Spain and the U.S.

“It’s going to be a while still”: Ottawa is “having ongoing discussions with the provinces” about when and how to lift isolation measures, Prime Minister Justin Trudeau said on Tuesday. But any such step toward a return to normal is still weeks away. “We recognize that it is going to be important to get our economy going and that we will have to do it in phases,” he said. On Monday, Saskatchewan Premier Scott Moe said he may release a plan next week to start reopening the province if new case numbers stay low. “There is no magic switch that we can flip that sends everything back to normal overnight,” he warned. Quebec Premier François Legault said last week his government was working on a plan, citing young workers in construction as a starting point. All three first ministers stressed the continued importance of containing COVID-19’s spread. 

Sobering assessment: “It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” International Monetary Fund (IMF) chief economist Gita Gopinath said after the organization released its new forecasts in a report titled “The Great Lockdown.” 

The IMF projected Canada’s economy will contract by 6.2 per cent in 2020, a swing of eight percentage points from its January forecast of a 1.8 per cent increase for the year. Globally, it’s predicting a three per cent reduction, compared with a fall of 0.1 per cent in the 2009 recession. The fund predicted a small Canadian rebound in 2021. The U.K.’s fiscal watchdog warned the country’s economy would plunge 35 per cent in the second quarter if the lockdown lasts three months. The U.S. fiscal deficit may nearly quadruple, according to one assessment.

The IMF and the World Bank are meeting virtually this week amid concerns that international organizations have been slow to unify around a coordinated approach to address the financial fallout from the pandemic. Gopinath said 100 of the IMF’s 189 members have contacted it for emergency funding.

“Greeks have been through crisis; they know what it is”: Saddled with debt from the aftermath of the late-aughts financial crisis, Greece and its health-care system could have been overwhelmed by the pandemic; however, it has flattened the curve by locking down weeks before other European countries and enacting digital governance reforms. 

More to come: Ottawa is “working to enhance” the Canada Emergency Business Account, the $40,000 partially forgivable loan program delivered through the banks, and is planning “new supports on commercial rent,” Trudeau said Tuesday; he did not provide further details. An analysis conducted over the weekend by Save Small Business, an advocacy group representing small business owners, showed Canada is lagging behind the U.K., Australia, France, Denmark and the U.S. in its support programs. The group is also calling for commercial rent relief on top of the existing loan program.

Alberta’s energy minister said she expected the federal government to announce a hefty “liquidity package” this week to help Canadian oil and gas companies, which face uncertainty despite oil-producing countries striking a historic agreement over the weekend to cut global production by about 9.7 million barrels per day in May and June. 

In the markets: The Dow Jones jumped 2.39 per cent; the Nasdaq was up 3.95 per cent; and the S&P 500 and S&P/TSX increased 3.06 and 1.26 per cent, respectively.

Four planes full of N95 masks: The masks, which arrived in Canada over the weekend, are being checked to make sure they can be shipped nationwide, Trudeau said. There are 1.1 million N95s ready to be distributed, in addition to the 820,000-plus sent to provinces last week. Automaker Ford plans to make 100,000 or more of a new type of respirator for health-care workers. Despite increased production, the U.S. is still short 70 million to 100 million face masks per month. The U.S. Justice Department has stopped a foreign group allegedly trying to fraudulently sell 39 million N95 masks, and 3M has filed its first COVID-19 lawsuit over trademark-infringement and price-gouging concerns. 

Trace me on my cellphone: The Logic broke down how different countries are using our phones to combat COVID-19—and how the tech giants are getting involved. On Friday, Apple and Google said they were setting up a Bluetooth-based system on iOS and Android devices, which will link to public health authority-issued contact-tracing apps. New York University researchers said Facebook friendship patterns predicted the spread of the virus in their analysis. And on Tuesday, Apple released aggregated data on the change in search volume for directions on its Maps app; Canadians’ routing requests for transit dropped 85 per cent between January 13 and April 12, while driving and walking paths fell 65 per cent and 59 per cent, respectively. Torontonians’ activity dropped the most of the seven Canadian cities listed.   

Cross-country checkup: The Royal Canadian Mint is retooling to manufacture hand sanitizer and face shields, in the first time it’s switched gears to help in a global crisis since the Second World War. Universities—which are facing a financial hit from COVID-19—are recruiting new students and convincing existing ones to stay enrolled, despite uncertainty around whether in-person classes will resume in the fall. Two unnamed Canadian institutions working on COVID-19 research—one university and one public health agency—have been targets of unsuccessful ransomware attacks, as hackers increasingly use the pandemic to try and bait people into unwittingly handing over encrypted files. Travel between Canadian and the U.S. fell dramatically in March: the number of Americans entering Canada by car dropped almost 60 per cent, and Canadians returning from the U.S. by car declined by 45 per cent compared to the same period last year. International travel by air also plunged, with arrivals into Canada falling 61 per cent in March compared to a year ago. 

Bay Street to Main Street: Clearbanc is offering financing for software-as-a-service and business-to-business companies for the first time. The Toronto-based lender’s new product, called Runway, is designed to help firms weather COVID-19. Companies with minimum monthly revenue of $10,000 and at least six months of consistent revenue history are eligible. The new product comes as Clearbanc itself is cutting back: the firm has laid off 17 staff, about eight per cent of its workforce. 

Toronto-based TouchBistro has been “significantly impacted by COVID-19,” CEO Alex Barrotti said in a public note, announcing the restaurant point-of-sale technology firm was temporarily laying off 131 of its 560 employees across Canada, the U.S. and U.K. Earlier this month, some of the company’s biggest investors told The Logic it had a healthy balance sheet, and was better placed than its competitors to survive the downturn; on Tuesday, they said that was still the case. Damien Steel, managing director and head of OMERS Ventures, told The Logic the cuts “are another step in our strategy to set up TouchBistro for long term success.” Richard Nathan, managing director of Kensington Capital Partners, said all businesses must “adapt to the new conditions, including with regard to their total number of active employees.” Last week, Boston-based rival Toast cut 50 per cent of its staff of more than 2,500.

  • The U.S. and Canada are discussing whether to keep current border restrictions in place for another 14 days or another 30, as the current restrictions on non-essential travel lapse on April 19. 
  • An Amazon warehouse employee in Balzac, Alta. has tested positive for the coronavirus.
  • Indigo has rehired 545 of the 5,200 employees it laid off, after the federal government’s 75 per cent wage subsidy became law. 
  • TekSavvy and the Canadian Network Operators Consortium, which represents 31 internet service providers, are asking Ottawa to lower the rates they pay to the Big Three, as they grapple with increased internet usage due to people working from home.
  • Waterloo-based TextNow is offering free phones and phone plans for people who have lost their jobs. 
  • Shopify has launched its email marketing tool, a service similar to Mailchimp, which will be free until October 1. The company’s CEO Tobi Lütke and his wife Fiona McKean are shifting the focus of their $150-million charitable foundation from decarbonization to fighting COVID-19, through which they’ve already donated $6 million. 

Crowdsourcing the crisis: Corona Support is a new web tool created by a group of Ontario-based software engineers and entrepreneurs to match people with the federal and provincial support programs for which they are eligible. The website launched last week and has served nearly 10,000 people so far. York University’s Schulich School of Business and Pycap Venture Partners have established the COVID-19 Business Support Centre to help small businesses and entrepreneurs determine their eligibility for financial support and prepare applications. A fundraiser organized by Tristan Sharma, son of venture capitalist Ray Sharma, has raised $5,800 for groceries for a Toronto subsidized-housing building. The initiative is designed to create a “sister-relationship” between the building and the nearby Queens Quay East condos. Carleton University’s therapy dogs are now live on Instagram for everyone to (virtually) enjoy. 

Postcard from Chennai: Jonathan Bhaskar moved back to his hometown in southern India in December 2019 after five years studying and working in Canada, the last three at Toronto-based InteraXon. He’d hoped to work in India’s growing local tech sector. “Right when I started looking for jobs, this happened,” he told The Logic. When the central government imposed a 21-day lockdown on March 25 in response to COVID-19, “InteraXon was nice enough to extend my contract.” Bhaskar is a data scientist for the firm, which makes brain-sensing wearables, and primarily works with the marketing team. He logs on around 1 p.m Chennai time, and keeps going until 9 p.m., giving him a “two-hour or three-hour overlap” with the Toronto office. “The projects I work on are pretty independent,” he said. He typically has about three meetings a week via video, but now his colleagues are working from home, too. 

“The lockdown’s really strict” in the state of Tamil Nadu, he said: “If you go out, you’re going to be questioned by the police.” Government officials have been going door to door, checking whether anyone is sick. But essential supplies are still available. “You have food delivery; the vegetable guy does come to your street … to reduce the number of people going to the store,” said Bhaskar. Tamil Nadu is “taking it very, very seriously, and because of that we haven’t really seen a spread.” The state had 1,043 confirmed cases as of Monday, and 11 deaths—a seventh the mortality rate of Maharashtra, where commercial capital Mumbai is located. On Tuesday, the central government extended the lockdown to May 3.

Drinking from the firehose: SoftBank is bracing for historic losses, predicting a US$16.7-billion drop in asset value of its US$100-billion Vision Fund for the fiscal year that just ended, thanks to “the deteriorating market environment.” To mitigate losses, the firm is looking to raise up to about US$42 billion through asset sales; Bloomberg reported SoftBank has put its Vision Fund 2 on ice as it waits out the pandemic. 

  • Tech workers at companies’ satellite offices are being hit hardest by their firms’ layoffs, according to a layoff tracker by Y Combinator grad Roger Lee.
  • Amazon is hiring 75,000 more workers in its warehouse and delivery units after filling the 100,000 jobs it advertised last month. The company now has a waitlist for new online grocery-delivery customers as demand surges. 
  • Food-delivery companies are beginning to see an increase in orders in some markets, including Germany and the Netherlands, after a sharp decline in mid-March.
  • Groupon expects to lay off or furlough about 2,800 employees, or 44 per cent of its workforce.
  • Venture funding for startups and technology companies in China rose in March, driven largely by a US$1-billion round for an online education startup led by Tencent. 
  • Streaming service Roku expects a 49 per cent jump in the number of streaming hours in the first quarter of the year, during which it added nearly three million new subscribers.
  • Dating app Bumble is offering women-led small businesses financial relief quicker than the U.S. government’s stimulus package. 

Around the world: On Thursday, U.S. President Donald Trump will convene another video conference of the heads of the G7 governments to coordinate their national pandemic responses. The governors of 10 U.S. states representing 38 per cent of the country’s GDP have joined East and West Coast regional pacts to coordinate the reopening of their economies. Life in Europe is cautiously restarting, as Brussels urges the EU to create “a task force-like structure” to coordinate lockdown exits. In Spain, workers returned to some factory and construction jobs. Bookshops, laundromats, stationers and children’s clothes stores reopened on a trial basis in some parts of Italy. In Denmark, elementary schools up to Grade 4 and kindergartens will reopen tomorrow. France will be in lockdown for another month. In Pakistan, where at least eight million people have been financially impacted from the shutdowns, the government is experimenting with an online and SMS-based welfare system to provide relief. Today is the last day for people in Hong Kong to send airmail to dozens of countries including the U.S. amid flight cancellations. Israel’s spy agency has been its secret weapon in procuring medical supplies. The Tour De France has been postponed. A new Harvard University study suggests “prolonged or intermittent” social-distancing measures “may be necessary into 2022.” 

“The woman was walking with a turtle”: In Italy, where dog walks are a justifiable reason to leave your house, a 60-year-old woman was fined €400 for walking her pet turtle, which was “as big as a pizza” and not on a leash. 

* We’re now 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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