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It’s day 59 since Canada’s 100th coronavirus case. The number of cases is 66,313 as of publication time, up 1,391 since yesterday—an 11 per cent decrease from the seven-day prior average of new cases. On their respective 59th day, U.S. daily new cases were up three per cent from the seven-day prior average; the U.K. was down one per cent in daily new cases from the seven-day prior; and in Italy, new cases were down 12 per cent.*
The big ugly numbers: Employment in Canada dropped by 1.99 million in April, Statistics Canada’s latest Labour Force Survey (LFS) shows. Add the million jobs lost in March plus the 2.5 million people working less than half their usual hours compared to February, and “the cumulative effect of the COVID-19 economic shutdown” are severely impacting more than a quarter of the jobs that existed two months ago, the agency said. The unemployment rate increased 5.2 percentage points to 13 per cent, the second-highest level on record after the last month of the 1981–1982 recession. That’s better than the 14.7 per cent the U.S. Bureau of Labor Statistics reported on Friday, the country’s worst figure since the Great Depression.
Economists had predicted a four-million-person drop in April, although LFS results are notoriously difficult to forecast, even outside a pandemic. “We’ll have to wait to see if April marks a low-point for the labour market as provinces gradually re-open their economies,” said Brendon Bernard, an economist at hiring platform Indeed.
Canada’s job losses in March were concentrated in service sectors affected by social distancing, like accommodation and food services and recreation. Workers in goods-producing industries took the brunt of the April cuts, with employment dropping by 21.1 per cent in construction (314,000 people) and 15.7 per cent in manufacturing (267,000 jobs). The retail workforce fell by 14 per cent. Workers in fields where it’s easier to work remotely—like professional, scientific and technical services (down 4.5 per cent), finance and insurance (down 1.9 per cent)—have largely been spared the job cuts; strong growth in the run-up to the pandemic means employment in those sectors is almost flat compared to last year.
Lower-income workers lost the most—72 per cent of people who lost jobs earned less than $800 a week, according to University of Calgary economics professor Trevor Tombe. One StatCan finding that could prove positive longer term: 97 per cent of the 1.29 million people who became unemployed in April said they had been laid off temporarily, “indicating that they expected to return to their former employer as the shutdown is relaxed.” Women were more likely to lose those links to their companies however, Wilfrid Laurier University economics professor Tammy Schirle pointed out. The employers also have to survive—21 per cent of respondents to a Modus poll said they won’t make it three more months if the lockdown lasts.
Also: The LFS numbers leaked to Bloomberg before their official release this morning, which has prompted a StatCan investigation.
The government responds: “If you’re out of work, you don’t need to hear that other people are out of work, too,” said Prime Minister Justin Trudeau, announcing that Ottawa is extending the Canada Emergency Wage Subsidy beyond June, though he said details would have to wait until next week. The program, which allows employers to claim up to 75 per cent of the first $58,700 of staff salaries if their revenues have dropped due to COVID-19, started taking applications on April 27, and was scheduled to begin paying out this week.
Also on Friday, Innovation Minister Navdeep Bains launched a new Industry Strategy Council to advise him on the pandemic’s sector-specific economic effects. Trudeau said the government will start “looking at specific sectoral supports for various industries that have been hit particularly hard by COVID-19” in “the coming days”; Finance Minister Bill Morneau first promised those aid packages in March. Monique Leroux, former CEO of financial services giant Desjardins Group and an economic adviser to Morneau’s Conservative predecessor Joe Oliver, will chair the new council. The body will draw from the six economic strategy tables set up to advise Bains in the government’s first term and add new retail and transportation groups. Some original members previously told The Logic in 2019 that Ottawa hadn’t made much progress on their recommendations, delivered in September 2018.
Mary Ng on line one: The federal government remains committed to working with all stakeholders to help Canada’s economy “cross the other side and restart when it’s safe to do so,” Small Business Minister Ng told The Logic’s editor-in-chief David Skok in a conference call. Ongoing efforts include coming up with“a better solution” for the eligibility requirements currently stipulated by the Canada Emergency Business Account (loans of up to $40,000 to small businesses and non-profits), which has reportedly shut out one in five small businesses from getting relief. Ng added that businesses that applied for the wage subsidy program should have started seeing funds as of yesterday or “very shortly, if they haven’t already.” On rent relief, Ng made “an appeal” to landlords to take advantage of the federal commercial rent assistance program, adding that she was working “very intently” with provinces on the issue.
Ng said the Business Development Bank of Canada (BDC) and Export Development Canada had served as “the government’s guarantee facility to the financial institutions … to make sure that we are standing up the significant liquidity that … the government has put out into the marketplace, and to enable that kind of lending and that kind of additional support.” You can listen to the full conversation here.
In the markets: All major North American indices rose today as job reports in both Canada and the U.S. were better than expected. The dollar rose to 71.77 cents U.S. in late afternoon trading. Earnings season is nearing its end, with 85 per cent of S&P 500 firms having reported, earnings are predicted to have dropped about 14 per cent. Tech stocks have been a rare bright point recently, as investors hope that e-commerce and the pivot to work-from-home will yield long term economic benefits. The Nasdaq closed in positive territory for 2020 on Thursday, the first time in two months. The tech-heavy index extended those gains today, with a 1.58 per cent rise by close.
Macroeconomic indicators remain grim, however. India is on track for zero per cent GDP growth this fiscal year, according to Moody’s. Investors withdrew US$16.2 billion from stocks over the past week, the largest redemption since March’s market drop, and the Bank of America reported that nine out of 10 clients believe the current uptick in stocks is a “bear market rally.” Norway’s Norges Bank, the world’s largest sovereign wealth fund, is liquidating assets for the first time in its history, as it suffers from the same dual headwinds as Canada: low oil prices and the impact of COVID-19. France is proposing the European Commission issue bonds to establish a €150-billion €300-billion recovery fund, equal to one to two per cent of annual gross national income, to fuel the continent’s economic recovery.
“We are sharing anything and everything right now”: Jacqueline Guichelaar, Cisco’s group chief information officer, and her counterparts in the IT industry are seeing an “unprecedented level of peer-to-peer support” as they come together to share best practices and strategies.
Palantir’s Ottawa plans: NDP ethics critic Charlie Angus is calling for federal lobbying commissioner Nancy Belanger to investigate whether Palantir Canada president David MacNaughton is lobbying on behalf of the controversial data-mining firm. His request followed The Logic’s report last week that the former Canadian ambassador to the U.S. told a private event that Palantir was working with Ottawa on its response to the COVID-19 pandemic, and Bains’s testimony to a parliamentary committee that MacNaughton had “engaged with many” in the federal government. Neither MacNaughton nor Palantir are registered as lobbyists with Belanger’s office. He told Politico he has not “lobbied anybody as defined by the [Lobbying] Act,” and that while he discusses policy with members of the Prime Minister’s Office and some cabinet members, he has not “gone and tried to sell Palantir.”
He also said the firm has engaged with the Public Health Agency of Canada (PHAC) and the Canadian Institute for Health Information (CIHI). In response to The Logic’s questions last week, Cole Davidson, a spokesperson for Health Minister Patty Hajdu, said her office was “not aware of any work by Palantir, nor any discussion of work with Palantir.” PHAC and CIHI are both part of Hajdu’s portfolio. Her office did not respond to repeated requests to explain the discrepancy between Davidson’s and MacNaughton’s claims. The PMO has repeatedly declined to comment on Trudeau’s interactions with MacNaughton. Foreign Affairs Minister François-Philippe Champagne’s office said he has not spoken with the former ambassador since taking the role in November 2019.
Trace me on my cellphone: A survey by three Canadian senators found that 80 per cent of Canadians would use a contact-tracing mobile app to curb COVID-19; 65 per cent said such an app should be mandatory. The survey comes as U.S. public health authorities push against the technology, citing a lack of trust in institutions. Clashes are also occurring in the private sector. Blyncsy, a Utah-based data company, said it has held patent rights to “tracking proximity relationships and uses thereof” through smartphones since February 2019. That could set up a potential legal battle against Apple and Google, whose technology the U.K. is now using to build a second contact-tracing app. MIT Technology Review has created a database with details of apps around the world.
Cross-country checkup: New Brunswick has entered the second phase of its reopening. Businesses including daycares, retail stores and restaurants are permitted to open while following specific health and safety protocols, as are some cultural institutions like libraries and museums. Some elective surgeries and dental procedures can resume. Gatherings of up to 10 people are allowed, as long as they take place outdoors. Nova Scotia has shared with businesses its five-phase reopening plan, which could take years to complete; the plan was soft-launched last Friday. A First Nation community in Manitoba is getting a mystery shipment of medical tents from Ottawa that it didn’t ask for and doesn’t need. Practice facilities for professional sports leagues are allowed to reopen in Ontario, provided teams establish “health and safety protocols in response to COVID-19.” Montreal is urging all public transit users to wear masks.
Bay Street to Main Street: Canadian tech stocks are riding high as investors seek out firms with growth prospects despite the pandemic. Ottawa-based software company Kinaxis reported Thursday it would meet its 2020 growth forecasts, prompting a near 10 per cent rise in its stock by the end of the day, increasing it by almost 70 per cent year to date. The company’s report came the same day Telus and Bell withdrew guidance for the year, and Enbridge and Bombardier reported disappointing first quarters. Meanwhile, Shopify’s market cap has nearly doubled since the start of the year (although its rein as the TSX’s top stock was short-lived and its shares are under pressure after a new stock offering). Electronics manufacturer Celestica, enterprise software company Enghouse Systems and logistics software firm Descartes Group were all up at least 50 per cent since the market rebound on March 23.
- Residential rent collection for May averaged between 75 and 90 per cent, similar to April’s collection rate, according to initial estimates from the Canadian Federation of Apartment Associations.
- The Canadian Labour Congress is calling for the end of privately owned long-term care facilities, as over 80 per cent of COVID-19 deaths in Canada have been connected to long-term care homes, both public and private.
- Ottawa’s new restrictions on foreign investment are getting their first test as China-controlled gold firm Shandong Gold Mining is buying Canada’s TMAC Resources for $207.4 million.
- The Canada Pension Plan Investment Board’s stake in Neiman Marcus Group will be wiped out if the luxury retailer’s restructuring plan is approved following bankruptcy protection.
- TD Bank is anticipating $1.1 billion in loan-loss provisions for its U.S. unit and $600 million of set-asides tied to U.S. credit cards.
- On Monday, Edmonton City Council will discuss creating a new innovation organization.
- Edmonton-founded AI startup Social Asset Management, which helps predict global crises, has raised $3.6 million.
- Rural Canadians have internet download speeds nearly 12 times slower than urban residents, according to a report from the Canadian Internet Registration Authority, which found that urban internet has gotten faster during the pandemic.
Postcard from the gig economy: It’s been five weeks since Dina Masri started working for Instacart, the app-based grocery-delivery company that’s seen its business spike amid global lockdowns.
Masri said it feels good to help fulfill an essential need for people in self-isolation, that she feels like she’s contributing to the country’s recovery. That keeps her going while she waits in long, sparse lines outside Costco and Walmart in Kitchener-Waterloo, Ont., and when every reapplication of hand sanitizer stings her raw skin.
Masri is among the fleet of new shoppers who have helped Instacart reach profitability for the first time in its eight-year history. The company’s sales for the first two weeks of April were reportedly up 450 per cent compared to December 2019, driving its expected net profit that month to around US$10 million. The firm has hired some 300,000 shoppers to fulfill the onslaught of orders and plans to add another 250,000, more than doubling the size of its pre-pandemic workforce.
While Masri said she’s enjoyed the work for the most part, she worries about her own safety. “We’re in high-touch situations all day, providing a service to people in self isolation and quarantine,” she told The Logic. “We’re trying to do our best to protect ourselves, but I’m putting myself at risk for the orders coming in.”
Instacart has started offering safety kits to its shoppers, which include a washable cloth mask and hand sanitizer. But Masri and other shoppers say their orders have taken weeks to ship: she placed an order on Monday; by Wednesday, it was still pending. “We shouldn’t have to go source these items ourselves,” said Masri. “Especially now, Instacart is in a financial position where they should be able to make sure their workers are safe.”
Drinking from the firehose: Tech giants are divided on whether to send employees back to work. Tesla CEO Elon Musk welcomed California’s rules to allow manufacturers to start reopening Friday, and Apple plans to reopen some stores in the U.S. next week. While Alphabet plans to reopen at 10 to 15 per cent capacity starting in June, it’s telling most of its employees—as is Facebook—they should plan to mainly work from home for the rest of the year.
- In an open letter, U.S. senators have asked Amazon to explain how firing whistleblowers who spoke out against the firm’s handling of COVID-19 and other issues doesn’t constitute retaliation.
- Japan has named 518 companies in which prospective foreign investors seeking a stake of one per cent or more will need to be pre-screened—from the standard 10 per cent threshold—as the country aims to prevent foreign firms from taking advantage of local companies’ lower valuations.
- Lyft will require drivers and passengers to wear masks and to confirm before every ride that they aren’t experiencing COVID-19 symptoms.
- Kingsoft Cloud Holdings, a Chinese cloud service provider, raised US$510 million in its IPO; it is the first Chinese company to go public in the U.S. since the pandemic began.
- China’s 3.5 per cent year-over-year export increase in April was likely boosted by overseas shipments of medical supplies.
- Forty-one publicly traded U.S. companies secured a combined US$104 million dollars in government relief funding, despite having considerable cash to get them through the pandemic.
The grand reopening: Kuwait will impose a “total curfew” from May 10 to May 30. Australia will ease most of its restrictions by July through a three-step process. Japan is considering another stimulus package as it readies to open more parts of the country. Denmark will reopen museums, theatres, cinemas and other public spaces on June 8; teachers have installed plastic shields around desks and hand-sanitizer dispensers in preparation for elementary schools opening Monday. Swiss restaurants reopen Monday; they are asking customers to leave their contact information to help track the spread of the virus.
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Around the world: United Nations secretary general António Guterres said the pandemic has unleashed a “tsunami of hate and xenophobia, scapegoating and scare-mongering,” and appealed for “an all-out effort to end hate speech globally.” The pandemic has led to the largest decrease in man-made carbon emissions on record. As researchers attempt to understand the effects of COVID-19, they are clamouring for access to patient samples through autopsies. Tickets sold out in minutes for the first days of Shanghai Disneyland’s reopening.
Fungie the dolphin gets company: An Irish fisherman is keeping the world’s oldest solitary bottlenose dolphin company amid the country’s lockdown.
Correction: Social Asset Management raised $3.6 million. This story has been updated.
* 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 seven-day prior average. Numbers may also vary based on countries’ individual testing capacity and reporting.
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