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It’s day 42 since Canada’s 100th coronavirus case. The number of cases is 38,205 as of publication time, up 1,374 since yesterday, a five per cent decrease in daily new cases from the three-day prior average. On their respective 42nd day, U.S. daily new cases were down 12 per cent from the three-day prior average; the U.K. was down seven per cent in daily new cases from the three-day prior; and in Italy, new cases were up three per cent.*
Over 2.5 million people worldwide have now been infected with the coronavirus. A team from the University of Oxford will begin a vaccine trial on human subjects starting Thursday.
Waiting for answers: Some of Canada’s largest commercial landlords are still waiting to hear what exactly Ottawa is offering them and their tenants. Last week, Prime Minister Justin Trudeau announced the Canada Emergency Commercial Rent Assistance (CECRA) program, which will provide loans—some forgivable—to property owners “who in turn will lower or forgo” what they’re owed by small businesses between April and June. But implementing it requires that Ottawa “work with the provinces and territories, as they govern rental relationships,” he said.
Some publicly traded real estate investment trusts (REITs) are waiting until their first-quarter earnings calls later this month to disclose the impact of COVID-19 on their businesses. But Toronto-based H&R REIT—which owns 181 properties across Canada occupied by department stores, grocery chains and banks—provides an early indication. H&R is offering rent deferrals on a case-by-case basis. It collected 56 per cent of rent due from its retail tenants on April 1; it received just 40.5 per cent of expected payments from occupants of enclosed malls, but sites anchored by grocery stores deposited 83.9 per cent. H&R’s collection rate for office, residential and industrial properties was above 90 per cent.
The company is one of three major lessors that told The Logic they’re eager for more details about the CECRA. The program “is welcome news and we are waiting to see the details to understand how these new initiatives might impact our business,” said Sandra Kaiser, vice-president of corporate affairs at SmartCentres, a Toronto Stock Exchange-listed REIT with 157 properties, whose major tenant is Walmart. It is considering deferrals individually, with “priority to our smaller independent tenants.” Ivanhoé Cambridge, the real estate arm of the Caisse de dépôt et placement du Québec, also said it will review the CECRA, but declined to share its April rent-collection figures.
Rent is due again on May 1. Federal money doesn’t necessarily need to start flowing before then, but it’s important to have the program’s “framework” in place so landlords and tenants can reach agreements, Jon Shell, managing director of Social Capital Partners and an organizer of lobby group Save Small Business, told The Logic last week.
Finance Canada did not answer The Logic’s questions about the timeline or design of the CECRA. “We expect more details soon, but I can’t confirm when,” said department spokesperson Anna Arneson.
“As quickly as possible”: As reported by The Logic last week, Trudeau confirmed the Canada Revenue Agency (CRA) will start taking applications for the Canada Emergency Wage Subsidy (CEWS) this coming Monday. Treasury Board president Jean-Yves Duclos said he expected 90 per cent of those first applications for the program—which pays up to 75 per cent of the first $58,700 of an employee’s salary for qualifying firms—to be cleared by May 5, with direct-deposit payments to businesses going out in the following days. The CRA has also launched an online calculator companies can use to estimate how much they’ll receive.
The CRA plans to batch-process the first week’s applications on May 4, so employers don’t need to submit theirs on the very first day. After that, claims could be auto-cleared quicker. The agency will conduct some fraud checks before paying out funds, such that firms aren’t claiming significantly more than their previously disclosed payroll. Employers will have to attest that they meet the program’s revenue-reduction requirement—15 per cent for March and 30 per cent for April and May—but won’t have to present their accounts at the application stage. However, the CRA will test for it later on. It’ll assign more than 3,000 auditors to CEWS reviews, and is adding 2,000 call-centre agents to answer applicant questions.
Over a barrel: U.S. President Donald Trump has promised help for America’s beleaguered oil companies in riding out the oil price crash. He wrote on Twitter that he has asked energy and treasury secretaries to “formulate a plan which will make funds available” to support companies and jobs. The additional money comes as U.S. debt levels are on track to hit almost US$4 trillion, which would exceed the record set during the Second World War. Canadian oil is faring better than the U.S., but it still isn’t doing well. The Canadian Crude Index, for example, was down 46 per cent in late afternoon trading. Canada is unlikely to return to pre-coronavirus GDP levels until at least 2021, but more likely 2022, according to new reports from TD Bank and audit firm RSM Canada. A recovery is contingent at least in part on sound government economic policy. The European Union, however, looks unlikely to agree to a plan when it meets Thursday.
Dollar down: The Canadian dollar fell to 70.44 cents U.S. in late afternoon trading as markets generally had a difficult day. The S&P/TSX Composite Index closed the day down nearly 450 points, or 3.12 per cent. The Dow Jones Industrial Average dropped 2.67 per cent while the Nasdaq Composite dropped 3.48 per cent, the S&P 500 lost 3.07 per cent and the S&P/TSX fell 3.03 per cent. Things were little better outside North America, with the Nikkei 225, Shanghai Composite and the U.K.’s FTSE 100 all down.
“I think it’s a question of whether you’re sustaining a viable business or not”: So said BlackRock managing director and chief Canadian investment strategist Kurt Reiman about possible government aid for Canada’s energy sector, in an interview with The Logic. Reiman also said the pandemic was a boon to the technology sector—and will serve as a “massive accelerant” to decarbonization efforts around the world.
Mask on: 3M is suing Caonic Systems in an Ontario court, claiming the company’s directors “falsely affiliated themselves” with the Minnesota-based firm to sell N95 respirators at “exorbitant prices.” Two men allegedly set up successive Shopify sites claiming to retail masks sourced from suppliers in Singapore and the U.K., and then moved to another unnamed platform after the Ottawa-based e-commerce firm shut them down twice. One of the defendants said the two are students, and planned to use the proceeds to support firms that had closed because of COVID-19. It’s 3M’s first such Canadian lawsuit; it’s filed four in the U.S. so far.
Trace me on my cellphone: France has become the first country to publicly urge Apple and Google to weaken privacy protections around digital contact tracing, two weeks after the firms announced their landmark partnership. “We’re asking Apple to lift the technical hurdle to allow us to develop a sovereign European health solution that will be tied [to] our health system,” said digital minister Cédric O. Apple’s operating system doesn’t allow contact-tracing apps using Bluetooth to run in the background if data is going to be moved off the phone, preventing France from implementing its app. Early results show modest adoption of phone apps for tracking the spread of the virus, even among the tech-savvy population of Singapore, where trust in government is relatively high: it launched the first app of this kind last month, but only about one in five people have downloaded it. A similar app in India has reached 50 million downloads on Android phones, a small fraction of the 500 million who have smartphones. As the debate over this technology rages on, some people are turning to artificial intelligence instead.
Cross-country checkup: Public health experts warn that returning to normal levels of economic and social activity requires more robust testing across the country, but with protocols left to each province to decide for themselves, the federal government said it has little power to scale up testing country-wide. Ontario, which is hitting around 500 cases daily, needs to hit 200 daily cases to consider reopening things, according to the province’s top doctor. Traffic data in B.C. and Alberta show residents are mostly heeding advice to avoid travel destinations. Manitoba Premier Brian Pallister said he’s taking a 25 per cent pay cut on his $94,000 base salary, as the province redirects money to health-care efforts. A union representing over 60,000 health-care workers is asking the Ontario Labour Relations Board to order three long-term care facilities to improve safety protocols and access to protective gear, and that workers be placed under the purview of the Ministry of Health and Long-Term Care in the meantime.
Bay Street to Main Street: Shopify stock dipped today, ending an eight-day streak that saw the firm become the second-most valuable Canadian company. The firm is benefitting from a surge in online shopping, and was up more than other e-commerce companies including Amazon and eBay. In other news, cleantech firm Clear Blue Technologies received $2 million from the Business Development Bank of Canada as part of its $5-million loan facility.
- Canada’s largest supplier of restaurants is selling directly to consumers for the first time ever. Sysco Canada is offering delivery in the Greater Toronto Area, and plans to expand to other cities in the coming weeks.
- Cargill, one of Canada’s largest slaughterhouses, is closing its doors in High River, Alta., after hundreds of people were infected with the coronavirus.
- Air Canada is suspending all flights between Canada and the U.S. after April 26, and plans to resume flights to the U.S. May 22.
- Ride-sharing firm Facedrive and the University of Waterloo have developed a contact-tracing app.
- AMD Medicom will make up to 50 million N95 masks a year for Canada and is opening its first facility in the country, thanks to $4 million in funding from the Quebec government.
Crowdsourcing the crisis: Sampler, a Toronto-based consumer product-sampling company, has launched the ComeTogetherTO initiative, which will help produce 20,000 non-medical masks for essential workers. Wello, a virtual health-care company, has partnered with RBC to offer small businesses telemedicine support. Wello also has created a COVID‐19 Resource Hub that gives access to free webinars and more. The Accelerator Centre is giving out $30,000 in seed funding and $10,000 in-kind business support to accelerate the launch of COVID-19 products and services from Southern Ontario-based companies. Recipients must match the seed funding; applications open today and close April 28.
Postcard from London: When the pandemic started, Sarah—not her real name—took two days off from her job at an arm’s-length government organization to deliver groceries and essentials to her husband’s mother and grandmother, both of whom are in quarantine. One of her colleague’s sisters died from the disease. “It traumatizes you,” she told The Logic. “You start thinking of your own parents, and your friends and relatives scattered around the world.” Her brother in Toronto is doing his law degree from home. “He’s enjoying Mom’s cooking,” she said. Meanwhile, her parents worry as they see the number of cases increase in the U.K.
Sarah’s office shut down over a week before the government announced a lockdown, after one employee presented with symptoms. She and her colleagues were equipped with work laptops, and made the transition to working from home easily. “I’m privileged,” she said. “I’m married. I’m renting. I have a stable public-service job. In a really bizarre way, I’m able to save money right now.” She said she worries about what happens when the lockdown ends: “I don’t want to go in when our offices open again.” The job itself has changed to become all about the coronavirus. The advice and guidance she used to give citizens has shifted entirely to focus on the impacts of the disease. The spaces around her have changed, too: everything is quieter. Her building is close to Heathrow Airport. “I used to be able to see planes pass by,” she said. “Now I hear a lot more birds. It’s beautiful. They’re always chirping; you never noticed that before.”
“We have a deal”: The U.S Congress and the White House have reached an agreement on a small-business financial relief package; the initial US$350-billion fund ran out of money last week. The relief bill allocates an additional US$310 billion to it, as well as US$60 billion for a separate grant and loan program. The agreement also includes a national strategy for testing with “significant federal involvement,” Schumer said. Research from Morgan Stanley shows that the U.S. government has allocated at least US$243.4 million of the total US$349 billion to publicly traded companies. At least 75 companies that have received the aid were publicly traded and received a combined US$300 million in low-interest taxpayer-backed loans, according to a separate report from The Associated Press.
Barriers to entry: Trump announced on Twitter that he will “temporarily suspend” immigration to the U.S. “in light of the attack from the Invisible Enemy,” a term he has used to refer to the coronavirus. The order would temporarily halt the issuance of new green cards, though it exempts guest-worker programs for those in fields like health care and high tech, for roughly 120 days. American citizens will still be allowed to bring their children or spouses to the United States. The decision could be a big blow to Silicon Valley. “Trump’s immigration ban will hurt U.S. tech companies’ ability to recruit the talent necessary to remain competitive and focus on innovation,” said Shaun Rein, managing director of the China Market Research Group. “Instead of staying in America and building America’s tech prowess, top talent will return to their home countries and build the next round of innovation powerhouses.”
Drinking from the firehose: On Tuesday, Coca-Cola reported that its sales volumes have dropped by 25 per cent this month. The drink maker had an initial boost as people stockpiled at home, however, closing bars, restaurants and stadiums—the away-from-home channels that account for about half its revenues—has hit the U.S. company hard. One potential winner this earnings season is Netflix. Shares of the streaming platform were up 35 per cent year over year, as of Monday, and analysts expect a strong quarter for the streaming platform when it reports results after the bell Tuesday.
- Fundraising in Silicon Valley has plummeted since the pandemic hit, according to a report from law firm Fenwick & West. Just 44 startups in the region raised money in March, down from 126 firms in January. Raises in March boosted firms’ valuations by 46 per cent on average, compared to 117 per cent in January.
- Last week marked the first since September 2004 in which no mergers and acquisitions worth more than US$1 billion were announced worldwide.
- Startups that access the U.K.’s bridge-loan VC-matching program will have to pay the government at least eight per cent interest.
- Hundreds of Amazon warehouse workers at 50 U.S. facilities walked off the job Tuesday to protest the company’s response to the pandemic; at least 75 workers have contracted the virus across more than half of its 110 U.S. warehouses.
- Google will stop charging businesses for using its Shopping service to sell goods, in a move to ease the financial burden on small businesses.
- U.K. startup Babylon Health is offering to test its employees for COVID-19 for free—if they agree to share their results with the company.
- Palantir, the data-mining firm co-founded by Peter Thiel, is reportedly considering delaying its IPO originally planned for this year, as corporate clients retreat and it offers many of its government services for managing their COVID-19 responses pro bono.
- International airlines have slashed their capacity from 5.9 million seats per week to half a million since the pandemic caused borders to close.
- Uber’s global gross bookings have fallen 80 per cent below year-ago levels over the past few weeks; Lyft’s U.S. bookings are down 75 per cent. Meanwhile, Uber Eats food delivery is up 70 per cent year-over-year, according to The Information.
- Peloton will start live-streaming classes from its instructors’ homes tomorrow.
The grand reopening: Singapore extended its lockdown to June 1 as the city state fights a surge in cases driven by infections in foreign-worker dormitories. The lockdown had been due to end May 4. Turkey, which has overtaken China to become the seventh-most affected country in the world, aims to begin transitioning to normal after Ramadan, which ends in late May. Italy is set to outline its plans to reopen by the first week of May. Denmark will test everyone with symptoms as part of its reopening strategy. New York state will reopen its economy on a regional basis based on severity.
Researchers at Israel’s Weizmann Institute of Science and Tel Aviv University have laid out a possible exit strategy that includes a 14-day cycle, where people are divided into two sets and, on alternating weeks, go to work for four days and are locked down for 10. According to their study, most people with COVID-19 are non-infectious for the first three days and peak in infectiousness from days four to seven. “The 14-day cyclical lockdown-work policy has better health outcomes than the no intervention option,” writes Eran Yashiv, economics professor at Tel Aviv University. “Fewer jobs are lost and the outcome for both GDP and consumption improves.”
Zoom democracy: Starting Wednesday, Britain’s House of Commons, one of the world’s oldest parliaments, is preparing to continue its raucous debates via Zoom. The speaker doesn’t expect to shout “Order! Order!” and parliamentarians won’t chant “Hear, hear.” Members are expected to dress formally, and must remove distracting art or personal items from the backgrounds of their feeds. “It will feel much more difficult to hold the government’s feet to the fire,” said opposition Labour Party lawmaker Chris Bryant. “A fire that is remote is not much of a fire.”
Canada’s federal parties have agreed to host virtual Parliament twice a week, along with a reduced in-person one once a week. Meanwhile, in Lebanon, MPs had their temperatures taken and were sprayed with sanitizer as they arrived for a legislative session on Tuesday that was relocated from the Beirut parliament building to a theatre to allow for social distancing.
Around the world: The World Health Organization said it has evidence that the coronavirus originated in animals in China late last year, and was not manipulated or created in a laboratory, as suggested by Trump last week. “It most likely has its ecological reservoir in bats but how the virus came from bats to humans is still to be seen and discovered,” said a WHO spokesperson. The United Nations believes the coronavirus crisis will push more than a quarter of a billion people to the brink of starvation. The Queen is celebrating her 94th birthday with a series of video calls with her children, grandchildren, and great-grandchildren. Milan will experiment with reallocating 35 kilometres of its streets for cycling and walking space after it emerges from lockdown. Oktoberfest has been cancelled; the popular German beer festival was cancelled twice before due to epidemics in the 1800s. Spain’s Pamplona bull run has also been suspended, with the acting mayor saying, “In this context, there’s no place for fireworks, bullfights or bull runs.”
Hömemade meatballs: Ikea has released its coveted Swedish meatball recipe as a step-by-step visual diagram. No Allen key required.
* 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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