This is the week when worries about the pandemic economy moved from the back seat to the front seat, alongside worries about health care — doubling up the pressure decision-makers are under as they try to plot a path forward.
As every public health officer will tell you, we are still very much in the grip of COVID-19 — even though the curve is flattening in some places, even though hospitals are coping, even though deaths are concentrated in long-term-care facilities.
And as businesses are quick to say, they can only tread water for so long — even if the federal government offers wage subsidies, even if banks provide lots of loan capacity, and even if workers have found new ways to adapt.
New data published Wednesday shows that a third of Canada’s companies are barely hanging on, and the longer the lockdown persists, the greater the chances of them shutting their doors — despite astounding measures to adjust to the pandemic’s restrictions, work from home and serve customers online.
The agility only goes so far.
The Canadian Chamber of Commerce collaborated with Statistics Canada in a huge, innovative survey of how 13,000 Canadian companies have fared in the lockdown and, as you’d expect, it tells a harsh tale of layoffs, reduced hours, brutal revenue losses, and how 81 per cent of them have seen demand for their products and services nearly evaporate.
It’s also a tale of resilience. Almost half of companies have found new ways to interact with their customers, and almost half have turned to working from home.
Firms are trying out e-commerce, changing their product lines or changing their production methods to deal with the restrictions and loss of business. And commercial banks have been willing to work with them, showing flexibility to about three-quarters of those who asked.
For now, almost two-thirds of the companies — especially the smaller ones — say it would take them just a month to bounce back once social-distancing requirements are lifted.
But it’s a race against time. Only half of the companies had enough of a cash buffer to carry them through more than 90 days of this. Right now, we’re at about day 45, and many of the government subsidies and liquidity facilities are set to expire by day 90.
So, it’s no coincidence that premiers have been rolling out reopening plans in quick succession this week, even while the number of new COVID-19 cases is still rising in many areas.
The most dramatic tension is in Quebec, where new cases rose by 837 to 26,594 on Wednesday and the number of deaths climbed by 79 to 1,761.
Premier Francois Legault forged ahead with his plan to reopen primary schools in the next few weeks, as well as many retail outlets, construction services and factories. The plan would put about 450,000 people back to work, while also making sure children are looked after, if their parents agree.
Bombardier Inc. immediately responded with a commitment to recall 11,000 workers, and Legault basked in the praises of Quebec’s business community, while parents and unions recoiled.
In Ontario, Premier Doug Ford is taking a far more cautious approach, presenting a plan without fixed targets or timelines — but clearly feeling the pressure to give some kind of hope to those companies that are hanging on by a thread.
The lack of co-ordination between the provinces will pose a problem for any company with interests beyond its provincial borders.
But that’s the least of many companies’ worries at this point.
Even as businesses and politicians try to balance the spread of the pandemic with the financial devastation, a third element in this tension between health and economics hovers over all the calculations: confidence.
The Conference Board of Canada’s business confidence index released on Wednesday shows a deep plunge in faith that the economy will come back to life in six months. And such a gloomy outlook implies a steep drop in investment and planning for the future, which compounds the downturn further.
Consumers are nervous, too, and they’re being pulled in two directions, says pollster David Coletto of Abacus Data.
About half of Canadians in his recent polls have said they’re worried about catching COVID-19. But they’re also quite worried about the long-term prospects for the economy — a fear that has replaced earlier worries about having enough hospital beds and personal protective equipment.
Consumers have been slow to resume their buying habits in China after restrictions were lifted, and after all the messaging we have heard from our political and public health officials about the need to stay home and the dangers of going out, it’s easy to see how that could happen here, too.
Navigating the pandemic without destroying the long-term prospects of the economy has been the most intense of policy challenges in history, and it’s not getting any easier. Patience and financing are wearing thin, but fear and illness loom large.
Heather Scoffield is a columnist with Torstar Syndication Services.