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Closed borders: Canada is closing its borders to travellers who are not Canadian citizens or permanent residents, one of several measures against the spread of COVID-19, Prime Minister Justin Trudeau announced Monday afternoon from self-isolation. U.S. citizens will still be allowed into the country, as will immediate family members of citizens and permanent residents, air crews and diplomats. Canadian airlines are asked to ban anyone with symptoms from boarding flights. “I know that these measures are far-reaching. They are exceptional circumstances calling for exceptional measures,” Trudeau said, adding that the restrictions will not apply to trade and commerce in order to keep Canada’s supply chain open. B.C.’s health minister went further, asking U.S. citizens to stay home.
Who’s “essential?”: Transport Minister Marc Garneau said exceptions to the border closure focus on “essential workers,” but didn’t provide a direct answer on what it means for foreign workers and students on temporary permits who are currently abroad. Clients of Ottawa immigration law firm Capelle Kane travelled to Asia at the start of the month to conduct business on behalf of Canadian companies, “and it’s not clear whether they can get back,” founding partner Betsy Kane told The Logic.
Open banks: The Bank of Canada, which cut key interest rates on Friday, announced even more liquidity measures Monday. RBC said it is in the process of instituting certain fee-waivers and reversals, as well as short-term payment deferrals on mortgages, personal loans and credit cards. “RBC clients who may experience financial hardship as a result of COVID-19 should know that financial relief programs are being put into place,” spokesperson AJ Goodman told The Logic, adding that the bank decreased its prime rate by 50 basis points, from 3.45 per cent to 2.95 per cent.
Circuit-breakers tripped again: Trading at New York and Toronto stock exchanges was halted Monday morning for the third time in a week, one day after the U.S. Federal Reserve slashed its benchmark interest rate to near zero—its second emergency rate cut this month. The Dow Jones dropped 12.9 per cent; the S&P 500 fell 12.0 per cent; the Nasdaq lost 12.3 per cent. The Toronto Stock Exchange opened more than 11.0 per cent in the red; the S&P/TSX Composite Index fell 9.9 per cent at close. According to some economists and analysts, the global recession is here. “This is what panic looks like,” said Patrick Healey, president and founder of Caliber Financial Partners.
Dollar drops: The Canadian dollar fell against all the major currencies, dropping 1.33 percent against the U.S. dollar to 71.47 cents; 1.92 per cent against the euro; and 3.19 per cent against the Japanese yen.
Meanwhile in Canada: “Most of Canada’s cases continue to be travel-related,” said Dr. Theresa Tam, Canada’s chief public health officer, in a press conference after Trudeau announced the border closures. Her Alberta counterpart Dr. Deena Hinshaw is reportedly in self-isolation. Lynn Valley Care Centre, the B.C. nursing home where the first Canadian died from COVID-19, has reported three more deaths from the disease. The federal government is considering telework for all its employees, while the Federal Court is moving to teleconference for “urgent motions or requests.” Ontario has shelved its 2020 budget, set for March 25, in favour of a “realistic, one-year outlook” based on current economic conditions. After the panic-shopping of the past week, the City of Toronto is enabling 24-hour retail deliveries to ensure that stores remain fully stocked; its chief medical officer is recommending restaurants, bars, nightclubs and theatres close tonight, though takeout and delivery can continue. Uber Canada is waiving delivery fees for independent restaurants, and pledging 300,000 free meals to first responders and health-care workers in the U.S. and Canada. An “act of God” provision is being considered as a possible safeguard for businesses dealing with commercial disruptions and fallouts. WestJet Airlines is set to cut its international seat capacity by 60 per cent, reduce its domestic flights by approximately 40 per cent and could be considering layoffs, while Air Canada is looking to reduce costs by at least $500 million.
Britain backtracks: A lot changed for the Brits over the weekend. On Friday, Patrick Vallance, the U.K.’s chief science adviser, said the country would “build up a degree of herd immunity” that could see 60 per cent of the population become infected. On Saturday, more than 400 people, including scientists and medical professionals, wrote an open letter arguing that did not “seem a viable option” because it could overwhelm the National Health Service, and urged the government to consider strict social distancing measures. By Sunday, reports emerged that in the coming weeks, the government will tell people over 70 years of age to self-isolate for four months, either at home or in care facilities. On Monday, Prime Minister Boris Johnson urged people to work from home, falling in line with the policies of neighbouring countries.
Global shutdowns: Canada’s travel restrictions came hours after the EU introduced a proposal to close its borders, and Russia followed suit. More than 100 million Europeans are under lockdown across the continent. India has banned all travellers from the U.K., Europe and Turkey. The San Francisco Bay Area is the site of the strictest lockdown in the United States. Meanwhile, the U.S. health department has been the target of a cyberattack, and Tuesday’s Ohio Democratic primary has been cancelled. On Monday, G7 leaders—who, like many other workers, met via videoconference—promised to do “whatever is necessary” to support the global economy. The United Arab Emirates has suspended prayers at mosques and all other places of worship, while concerns about the pandemic’s impact on war-torn Syria grow and COVID-19 prevention training has begun in Rohingya refugee camps in Bangladesh. Even ISIS has restricted travel to Europe.
Ripple effect: The coronavirus has the cruise industry—worth US$45 billion in the U.S. alone—in uncharted waters, as falling stock prices and layoffs abound. Many airlines are looking at bankruptcy by the end of May. Germany’s travel tech startups are readying for a “nuclear winter.” Most WeWork locations are still open. Starting Monday, luxury brand LVMH—known for making Christian Dior and Givenchy perfumes, among others—has ordered all its perfume and cosmetics factories to make “large quantities” of hand sanitizer, to be provided “free of charge to the French health authorities.” Italian hospitals are turning to 3D printing as a way to bypass the country’s struggling healthcare supply chain, while the White House is challenging AI researchers to tackle the coronavirus. Amazon announced it is hiring another 100,000 workers to keep up with demand.
While you were self-isolating this weekend: There was chaos at Canadian airports as people scrambled to get home, with reports of lax screening policies, little information about the coronavirus being shared and one border services employee working at Toronto Pearson International Airport contracting the disease. Tesla CEO Elon Musk sent an email to employees saying that based on the evidence he had seen about COVID-19, he doesn’t think it’s “within the top 100 health risks in the United States.” Second Cup is no longer accepting cash; Starbucks and Tim Hortons no longer have any seating. For the first time in her 68-year-reign, the Queen has cancelled her public events.
Closed until further notice: Apple announced it was temporarily closing over 450 stores across 21 countries. Makeup retailer Glossier “made the difficult decision” to shut its stores for now, as have Everlane, Lush Cosmetics, Aritzia, Lululemon and more. Knix Wear, a Toronto-based undergarments startup, was among the first major retailers in Canada to shut its retail operations. Founder and CEO Joanna Griffiths made the decision on Thursday. “As business owners, we all have to wear a new hat and make decisions that forgo short-term financial gains for the broader benefit of our community and our employees,” she said. “That’s the role of a leader in this time: to consider all stakeholders. It won’t be easy, but that’s the position we’re all in now.” Griffiths is confronting an economic crisis of this scale for the first time since founding her company in 2013. While 95 per cent of Knix’s business is through channels like online direct-to-consumer ordering, she told The Logic she’s concerned about the company’s fulfillment centre in Vaughan, Ont. in the event of a full lockdown of workplaces, or in the face of future restrictions on borders and shipping. Griffiths said she’s been trying to diversify the company’s manufacturing supply chain since January, as COVID-19’s impact has spread.
The innovators’ dilemma: On a Monday afternoon conference call in which members of the Council of Canadian Innovators shared best practices, David Ossip, the CEO of HR software company Ceridian, said his company has “readjusted our contracts to eliminate some of the upfront risk to customers.” That includes deferring some payments owed it by its clients. It’s also been talking to its major investors about how it’s planning to work effectively with employees at home. He’s emailing all staff every day, and the firm’s business continuity team—previously pressed into action after hurricanes that affected offices in Georgia and Florida—reports to executives twice daily. Meanwhile, the CEOs of 31 business associations or large Canadian companies—including the six big banks and from four major pension funds—have issued an open letter calling for other firms to “facilitate work-from-home for all non-critical functions” and push employees to stop all non-essential business and personal travel.
The smart money: Amid the global panic, Inovia Capital’s Sarah Marion and Chris Arsenault told The Logic the Montreal-based fund is still “actively investing,” with term sheets signed last week and the week previous that involved international investors. Companies looking to survive this crisis must “protect and provide purpose to employees, stress-test their financials, stabilize the supply chain, engage customers, and integrate all these efforts under an organization control centre [to] mitigate the impact of exogenous risks,” they said, adding that CEOs must remain calm. Here’s what other venture capitalists told The Logic about investing in the time of a pandemic.
Down, but not out: Professional wrestlers John Cena and Bray Wyatt put on a show in a ring surrounded by blue-lit empty seats after attendance at sporting events was restricted. “If I fail I put the blame on no one else but myself,” Cena said, unblinkingly, to the camera. “I adapt, I overcome and I get my ass back in the fight.”