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It’s day 36 since Canada’s 100th coronavirus case. The number of cases is 28,206 as of publication time, up 1,143 since yesterday, a less than one per cent increase in daily new cases from the three-day prior average. On their respective 36th day, U.S. daily new cases were up 11 per cent from the three-day prior average; the U.K. had a one per cent increase in daily new cases from the three-day prior; and in Italy, new cases were down 13 per cent.*
New York City has revised its death toll sharply upwards to more than 10,000 people; the city is now the epicentre of the pandemic.
“The largest one-month decline in GDP”: Canada’s economy shrank nine per cent in March and 2.6 per cent across the first quarter, Statistics Canada estimated on Wednesday. It’s the sharpest month-over-month drop since the agency began measuring GDP change this way in 1961, although it cautioned its calculations—a special release amid the COVID-19 pandemic—are based on less data than usual. StatCan said personal transportation, restaurants and accommodation were “among the hardest hit by social distancing measures and government restrictions,” while personal services and retail also suffered. Health, e-commerce and streaming saw growth.
While Prime Minister Justin Trudeau didn’t directly address the new numbers on Wednesday, he acknowledged the growing discussion around restarting the economy. “We cannot be in a rush to get things going again because if we move too quickly to loosen all these controls, everything we’re doing now might have been for nothing,” he said. Another viral peak “will be extremely damaging both to how Canadians feel, but also to our economy.” He also announced Ottawa is expanding the Canada Emergency Response Benefit (CERB), the $500-a-week direct aid measure for individuals, to people who earn up to $1,000 a month; having any income—say, from freelance work—had previously been disqualifying. The CERB will also cover workers whose seasonal jobs have disappeared due to COVID-19, and those who have run through their employment insurance.
Canada frozen: Traffic, energy usage, flights and restaurant reservations have plummeted, while the number of internet-connected devices has soared. To capture the state of Canada’s economy today, The Logic compiled real-time data in six interactive charts that show a country fundamentally transformed. Airplane departures from the country’s 10 busiest airports are down 84 per cent. Energy demand in Ontario alone has already decreased by about as much as 2,000 megawatts—the equivalent of the cities of Ottawa and London, Ont. suddenly not using any power.
Bank of Canada holds at 0.25 per cent: “The Canadian economy is experiencing a significant and rapid contraction,” Governor Stephen Poloz said Tuesday. And while the downturn is global, he said “commodity-producing countries like Canada are being hit twice.” Oil, for example, now trades at under $6 a barrel for Western Canadian Select. While the central bank opted not to provide a full economic forecast, it said real activity could fall between 15 and 30 per cent in the second quarter compared to the last three months of 2019. But it considers the current policy interest rate—reached after three quick cuts in March—to be the “effective lower bound,” meaning it’s not planning to drop to zero or move into negative levels to boost the economy further. Instead, the BoC is acquiring more financial assets. It’s launching a $10-billion program to buy the debt of “high-quality corporate borrowers,” and spending up to $50 billion on provincial bonds. The BoC’s move came the same day the Conference Board of Canada said the pandemic has “devastated the economic outlook for all provinces.” Alberta will see the largest drop, with GDP contracting 5.8 per cent in 2020, down nearly eight percentage points from the think tank’s February forecast. Among the most populous provinces, Ontario and B.C. will see the smallest drop (3.2 per cent), followed by Quebec (3.8 per cent).
Confidence lacking: Almost 60 per cent of Canadians are unsure about how long the economic fallout of the coronavirus will last and have to be careful with how they spend their money, according to a new McKinsey & Company survey conducted between April 3 and 5. More than half of the respondents said they had cut spending over the previous two weeks, with more cuts to come. Online spending is expected to increase in groceries, household items and at-home entertainment. Around 95 percent of those surveyed believe it will take two or more months for things to go back to normal.
In the markets: North American stocks fell sharply on Wednesday as dismal economic data continued to fuel concerns over the economic impact of the coronavirus. The Dow Jones dropped 1.86 per cent; the Nasdaq Composite was 1.44 per cent lower, while the S&P 500 and S&P/TSX decreased by 2.20 and 2.01 per cent, respectively. A report from the Commerce Department published Wednesday found that March retail sales in the U.S. plunged a record 8.7 per cent—the largest one-month decline since the department began tracking the series in 1992. Major U.S. banks all reported over 40 per cent declines in earnings, with Goldman Sachs reporting a 46 per cent decline in first-quarter profit. Oil prices also fell by five per cent to around US$28 a barrel. The International Energy Agency said global demand will “fall by 9.3 million barrels a day versus 2019, erasing almost a decade of growth.” Global net public debt will rise from 69.4 per cent of national income last year to 85.3 per cent in 2020, according to the International Monetary Fund.
“I’ve become the travel agent of Canada”: Foreign Affairs Minister François-Philippe Champagne has been texting world leaders and directly negotiating with airline CEOs to help repatriate over 16,000 Canadians on 119 flights from 65 countries.
Ahead of the curve: At least 47 countries have postponed elections due to the outbreak, while others, like the United States and New Zealand, are undecided on how to proceed. South Korea, however, held a national election yesterday. Over 3,500 polling stations were disinfected and all voters were required to use hand sanitizer and wear a mask and gloves. Those who failed a temperature check were directed to special booths; separate polling stations were set up for more than 3,000 COVID-19 patients and 900 medical workers in Seoul and Daegu, once the country’s outbreak epicentre. The country hasn’t been on lockdown and has used aggressive testing, social distancing and technology to become one of the first countries to bring the outbreak under control: of the more than 10,500 confirmed cases, some 7,400 infected people have recovered.
Elsewhere, Switzerland’s success in delivering financial relief for small- and medium-sized businesses within 30 minutes of receiving an application has become a litmus test for its European counterparts. Created over four days, the Swiss scheme offers interest-free loans worth up to 10 per cent of a company’s revenue, and through a second facility, up to CHF20 million through existing banking infrastructure, which already had the necessary credit history and data on their clients. The government has deployed 300 extra employees to facilitate the relief program and is using 100 algorithms to automatically scan and process applications.
The end of the month: On Wednesday, Trudeau again promised Ottawa will soon have more to announce for “businesses worried about commercial rent.” Save Small Business (SSB), a lobby group launched amid the COVID-19 crisis, called for a quick rollout, noting that 70 per cent of respondents to a survey it conducted said they won’t be able to pay rent on May 1. It also wants broad eligibility instead of a targeted program for sectors like hospitality and tourism, and for rent to be waived rather than deferred, covering the first $10,000 due each month between April and July, for which the federal government would reimburse landlords up to 66 per cent. SSB cited a similar program from Australia. Organizer Michael Smith said the group has put its proposals to officials in the offices of Small Business Minister Mary Ng and Finance Minister Bill Morneau, but that it hasn’t been told what shape the measure will take. He expects an announcement Thursday. “There’s no reason why they can’t get this right, now,” he said, citing past programs that have been modified after the initial release following business feedback, such as the wage subsidy.
Cross-country checkup: Dr. Theresa Tam, the country’s chief public health officer, expressed “cautious optimism” in a press conference Wednesday that the spread of COVID-19 was slowing in the country. The number of new cases is now doubling roughly every 10 days, compared to every three days in late March. However, like Trudeau, she warned against easing social-distancing measures any time soon, saying that doing so would “be like making our way down the mountain in the darkness.” Meanwhile, the federal government is reportedly considering new legislation that would make it illegal to knowingly spread disinformation. A CBC investigation has revealed that the federal government threw out two million N95 masks and 440,000 medical gloves when it shut down an emergency stockpile warehouse in Regina last year; the equipment had expired, according to the Public Health Agency of Canada, and was never replaced.
Bay Street to Main Street: Sobeys’ parent firm Empire Company reported a 37 per cent increase in same-store sales in the four weeks starting March 8 compared to the same period the year before. Empire is the first Canadian grocer to report on how COVID-19 has impacted sales; its stats roughly align with Statistics Canada’s report showing a 38 per cent spike in grocery sales for the week of March 11.
- As food supply chains get squeezed, small-scale farmers are filling in the gaps with direct-to-consumer deliveries.
- The University of Toronto has established the Toronto Emergency Device Accelerator, part of a broader effort to use digital fabrication tools such as 3D printers to build medical supplies and personal protective gear.
- Fairfax Financial Holdings is bracing for a US$1.4-billion loss for the first quarter due to the pandemic.
- Canada’s banks approved more than $5 billion in interest-free loans for small businesses in the first five days for which the Canada Emergency Business Account was available, but some business owners say the requirement to show they spent between $50,000 and $1 million on payroll in 2019 is barring them from accessing the funds.
- Barrick Gold has bought over 800,000 antibody testing kits to screen workers and the communities living close to its mines.
Crowdsourcing the crisis: EBay Canada has launched Up & Running, an accelerator to help retailers that don’t have e-commerce platforms sell online. The company is waiving most selling fees until June 20 and offering a basic store free for 90 days. ResQ, a Toronto-based startup whose app connects restaurants to repair and maintenance contractors, has created a program to deliver meals to frontline workers impacted by the crisis. The program is funded through donations from tech companies and VCs like Inovia Capital, Polar Equity Partners, Silicon Valley Bank, iGan Partners and Golden Ventures. It will hire out-of-work restaurant staff to do the deliveries; by the end of this week, the company said it will have delivered over 1,500 meals. A group of VCs and executives have come together to create Distantly.ca, an online donation platform powered by Buildable to allow people to directly donate to small businesses so they can meet their overhead costs. Medical students at the University of Toronto have relaunched an online and phone service to reduce isolation among seniors.
Postcard from Arlington, Va.: Chris Hamoen was supposed to come back to Toronto the second week of March. But that was the first week the pandemic hit North America hard, so Hamoen, founder and CEO of CRM software firm Sales Canvas, decided to stay in the U.S. through it all to be with his wife, who works there. “Being here is very different from Canada,” he told The Logic. Half the grocery stores and shops in his district aren’t implementing social-distancing policies at all, so he loaded up with three months’ worth of groceries and hunkered down inside. From his home, he can see the bridges that connect Arlington to Washington, D.C., usually gridlocked but now empty. He’s worried about social unrest. “You just feel it a little bit,” he said. “I’ve seen crime happen from our window. I’ve never seen that before. Just people running from the cops.”
His company of four people was in discussions earlier this year to possibly be acquired after its business slowed down. That process ended as corporate development stopped across the board and layoffs began. Instead, the company is now trying to redefine itself. “We just found runway in the form of time,” he said. He’s now working on software called Shoulder Tap that will automatically remind people using Microsoft Outlook to follow up on emails. “There’s 10 times more emails being sent than there were before, because, of course, everybody is working from home,” he said.”It’s becoming even more important for people to try and find ways to manage their inbox.”
While Hamoen works on that, he worries about his father, who is quadriplegic and in long-term care in Kitchener-Waterloo. One day, his father’s laptop died. “I couldn’t do anything,” he said, “other than call and harass other people to try and fix that, which is incredibly frustrating.”
Drinking from the firehose: Amazon is slashing the sales commission it pays affiliates for linking to products on the e-commerce platform. The rate for furniture and home improvement products, for example, was cut from eight per cent to three per cent and commission on grocery products fell from five per cent to one per cent. The cuts come even as Amazon’s stock soars amid a surge in business. Meanwhile, the firm is facing backlash from warehouse workers concerned it isn’t doing enough to protect them from COVID-19; the company has fired three workers who criticized the conditions, citing workplace violations. In France, the company was ordered to sell only essential items and improve its health and safety measures, to which it responded by temporarily suspending all deliveries in the country.
- Just 13 days after launching, a US$349-billion federal loan program for U.S. small businesses is expected to run out of money today, with many eligible companies still waiting for support.
- The slowdown in online ad sales is now reaching tech giants Google and Facebook.
- Launching months before the pandemic, Disney Plus has amassed 50 million paid subscribers worldwide.
- Streaming services like Netflix and Hulu are being inundated with pitches from movie studios looking to sell films they can’t show in theatres.
- Instagram has rolled out new features to make it easier for small businesses to promote gift cards, fundraisers and online orders on their profiles.
- ByteDance is hiring 10,000 new employees as usage of its subsidiary TikTok booms amid the pandemic.
- BestBuy will furlough 51,000 workers in the U.S. starting next week; employees will retain their health benefits, and about 82 per cent of its full-time workers will keep getting paid.
- Airbnb has secured a new US$1-billion loan days after closing a US$1-billion debt deal.
- Lyft has launched Essential Deliveries, a program that uses its fleet of drivers to deliver essential products like groceries, meals and medical supplies to health-care and government organizations.
- Hotel startup Oyo is looking to move its employees onto investor SoftBank’s payroll, a week after it announced that thousands of workers would be furloughed.
Around the world: U.S. President Donald Trump has created an “Opening the Country” council made up of business and labour leaders including Apple’s Tim Cook and Facebook’s Mark Zuckerberg, as American states craft their own reopening policies. Trump is suspending funding to the World Health Organization (WHO), and has ordered an investigation into the WHO’s handling of the coronavirus pandemic, in a move that leading health experts called a “crime against humanity.” The CIA has privately instructed its employees against taking Trump’s medical advice. The European Commission has also set out a roadmap for its members to ease their coronavirus lockdowns, warning they should move very cautiously to prevent further serious outbreaks. The WHO has advised that countries should wait two weeks in between any significant lockdown changes to analyze the impact. Germany is lifting some restrictions next week. Australia wants schools to reopen so parents can go back to work. India will allow IT hardware makers, farmers and industries to rural areas to resume after April 20. New Yorkers will be required to wear masks when in crowded public areas, Governor Andrew Cuomo said Wednesday. G20 finance ministers agreed to suspend debt service payments for the world’s poorest countries. Major League Baseball team employees will be the subjects of the first and largest COVID-19 antibody study in the United States.
“Mars isn’t standing still for us; we’re still exploring”: NASA scientists are operating the Curiosity Mars rover from their homes.
* 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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