As we enter our second full week of the COVID-19 crisis, the common thread continues to be growth: both in terms of the number of cases – and fatalities – recorded across Canada, and also in terms of the scale and scope of governments’ responses.
The prime minister’s instructions for Canadians to “go home and stay home” got a bit more forceful today, as Ontario and Quebec ordered non-essential businesses to close, and British Columbia announced its own economic measures. A first ministers’ meeting today discussed further national collaboration on what additional measures may be required, and whether limiting interprovincial border traffic may be necessary to help flatten the curve.
Finally, the House of Commons will convene briefly tomorrow with bare minimal attendance (proportional to its regular makeup), in order to pass legislation giving effect to the government’s proposed stimulus measures. The session will be governed by the post-partisan environment of the crisis response, with all parties committing to support the government in ensuring a swift, bold response to support Canadians and the national economy.
ONTARIO AND QUEBEC CLOSE ALL NON-ESSENTIAL BUSINESSES
Premiers Ford and Legault today announced that Ontario and Quebec will both close all non-essential business effective midnight Tuesday to slow the spread of COVID-19. Ontario’s ban is for at least two weeks, while in Quebec, the shut-down will last until April 13. Ontario will tomorrow release a list of what constitutes essential and non-essential stores and services. In their announcements, the premiers emphasized that food and medicines will continue to be available for purchase.
USE OF THE EMERGENCIES ACT BEING CONSIDERED
As the number of COVID-19 cases being spread by community transmission rise, calls continue for the federal government to invoke the Emergencies Act. The concern is that some Canadians are continuing to fail to adhere to the recommended social distancing measures required to prevent the spread of COVID-19. Pressure is building for the federal government to take stricter enforcement action to compel Canadians to stay home and to standardize the patchwork of bans on assembly that have arisen by province and municipality across the country.
On the weekend, a visibly angry Premier McNeil of Nova Scotia proclaimed a state of emergency in his province saying: “Hundreds gathering on our beaches and in our parks, large groups of people congregating, young people playing street hockey, cars parked everywhere, people disregarding law enforcement. We are dealing with a deadly virus and this behaviour is unacceptable.”
While the Prime Minister said that the government is continuing to look at invoking the Emergencies Act, federal Health Minister Hajdu was much more direct, saying the federal and provincial governments are looking at ways to standardize public health advice, “Should we not be able to get consensus, that would indicate to us that we need stronger measures.” Referring to the powers she has as health minister under the Quarantine Act, the minister said, “Let me be perfectly clear. We will use every measure in our tool-box at the federal level to ensure compliance … we have measures that could include monetary penalties up to and including criminal penalties.”
In his remarks this morning, the prime minister issued a stern and perhaps final warning to Canadians to obey public health warnings on social distancing although he noted that invoking the Emergency Act would involve the federal government assuming certain powers that are currently within the jurisdiction of the provinces. Deputy Prime Minister Freeland subsequently said that use of the act would be discussed in the call between the prime minister and the premiers at 4:30 pm today.
BRINGING CANADIANS HOME
The federal government is continuing to work with airlines and governments in other countries to facilitate the return home of Canadians who are abroad. A planeload of Canadians returned from Morocco on Saturday, but many Canadians are trapped in countries with very strict restrictions on internal movements. Global Affairs Canada Minister Champagne reported that he has had conversations with counterparts in Peru, Spain, Morocco, Ecuador, El Salvador, Guatemala, and Honduras to facilitate the exit of Canadians. Flights to several of these countries will take place in coming days. The prime minister also assured Canadians abroad that they will not be abandoned and that further efforts will be made to provide information and financial support.
PARLIAMENT RETURNS ON TUESDAY
Government House Leader Rodriguez confirmed that following consultations with the political parties, Parliament will return for a one day sitting on Tuesday at noon. The purpose of the sitting is to pass the legislation necessary for the implementation of the economic support package the government announced last week. The Senate will sit on Wednesday.
The sitting will last for four and a half hours and involve approximately 30 MPs in proportion to the standings of the parties in the House of Commons: 14 Liberals, 11 Conservatives, three Bloc Quebecois and NDP members each and one from the Greens.
HOW BEST CAN THE GOVERNMENT HELP THE ECONOMY?
When the House of Commons meets tomorrow, it will take up the suite of measures the federal government announced last week to assist Canadians and business struggling financially. In addition to boosting the Canada Child Benefit and doubling the maximum credit allowance of the GST tax credit for the 2019-20 benefit year, the government will support companies through a limited wage subsidy program and help the unemployed by collapsing the one-week wait time for benefits to begin. Critics of this approach have voiced concern that the wage-subsidy proposal—10 per cent of payroll up a maximum of $1,375 for each employee and $25,000 an employer for three months—may be too small to prevent businesses from closing their doors, and faster Employment Insurance cheques will not prevent interim layoffs.
Business spokespersons have made it clear that this two-pronged approach is inadequate and have called on the federal government to opt instead for a program that would cover a much larger share of employee salary costs. They argue that job preservation is the key to retaining employees, which will minimize disruption to the economy with the COVID-19 crisis passes. In other jurisdictions, Denmark and the U.K have taken the most aggressive steps; Denmark with coverage of 75 per cent of workers’ pay, while Britain will cover 80 per cent. Sweden and New Zealand have made job protection a condition of support.
We will be hearing more about these issues in the coming days.
NEW ANNOUNCEMENTS: ASSISTANCE FOR FARMERS AND PRODUCERS AND SUPPORT FOR VACCINE DEVELOPMENT
The Prime Minister today announced support for the lending capacity of producers, agribusinesses, and food processors. Farm Credit Canada will provide for an additional $5 billion in lending capacity to these groups to provide increased flexibility to farmers who face cashflow issues and to processors who are impacted by lost sales. In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a Stay of Default, allowing them an additional six months to repay the loan. Applicable farmers who still have interest-free loans outstanding will have the opportunity to apply for an additional $100,000 interest-free portion for 2020-2021, as long as their total APP advances remain under the $1 million cap.
The PM also announced $192 million in five new projects under the new Strategic Innovation Fund COVID-19 stream to deliver direct support to Canadian companies for large-scale research projects. The five projects are to biotech companies, a university-based research group, the National Research Council and a digital health firm and will support research towards vaccine development and monitoring of the spread of COVID-19
UNITED STATES OF AMERICA
After a promising start to last week, the U.S. government appears to be fracturing on how to best respond to COVID-19 both from a public health and an economic perspective.
Over the weekend, President Trump began publicly musing about shortening the period of containment in favor of focusing on economic recovery. While the president may be ready to move on from containment, the governors of at least three more states enacted stay-at-home orders. Governor Cuomo of New York has ordered hospitals in the state to boost capacity by at least 50%. Governors, overwhelmingly, are leading the charge against COVID-19, regardless of party affiliation, despite clear partisan division within Washington D.C. on the extent and severity of the crisis.
The U.S. Department of Defense announced emergency public health deployments today, including the deployments of hospital ships (promised last week). The National Guard is supporting local health authorities, who are setting up temporary hospital facilities in the hardest hit states (NY, CA, and WA).
On the Economy
The Federal Reserve Bank announced before market opening that it will buy as much government-backed debt as needed during the crisis. The Fed, in fact, clearly stated that it would do whatever it takes to shore up businesses and ensure that the U.S. economy does not fail. Despite those assurances, the markets continue to fall, with the Dow and S&P both down just over 2% by midday.
Meanwhile, the U.S. Senate defeated the $1.8 trillion stimulus package for a second time today, after heated arguments on the Senate floor. In the background was the announcement on Sunday that Senator Rand Paul had tested positive for COVID-19. At no point was he in isolation, dining with other GOP Senators and using the Senate gym the day his test results were announced. This has led to imbalance on the Senate floor, giving the Senate Democrats a temporary majority while many Republicans self-quarantine.
The BC government announced a $5B COVID-19 Action Plan that mapped out a package of economic measures totalling $5 billion in income supports, tax relief and direct funding for people, businesses and services. Of note, a $2.2 billion plan to support business by deferring tax payment deadlines until September 30, 2020 and delaying the increase in carbon taxes and new PST provisions. Spending will also include work to lay the foundation for BC’s economic recovery. An additional $1.1 billion in relief was announced for workers and their families which would provide a one-time $1000 tax free payment to those affected by the outbreak. The Premier noted that this was “a first step but a critical step.”
Alberta Premier Kenney announced additional financial support for Albertans and employers, including measures cancelling the property tax increase in Budget 2020. Similarly, the government moved to defer education property tax for six months, leaving $458 million with employers. Also in the package is a deferral of Workers Compensation Board (WCB) premiums until early 2021, and paying 50 per cent of small and medium enterprise WCB premiums at a cost of $350 million.
The Saskatchewan government today announced a Business Response Team to deal with the economic challenges resulting from COVID-19. A single window information webpage developed for businesses to access information and receive timely updates on provincial support initiatives. The webpage includes information on both provincial and federal support measures, including the province’s recently announced financial support program. There is also outreach for workers and a call out to anyone with a service or product that can help fight COVID-19 through SaskBuilds Single Procurement Service (send an email to email@example.com)
Following a series of measures last week, Manitoba Premier Pallister announced the roll out of a web app tool (HelpNextDoorMB.ca), providing a matching service for those who need help and those offering it. This approach parallels the approach taken in Quebec to strengthen the fabric of society, having citizens support each other through the current crisis.
On Monday, the Government of Ontario announced a number of new measures in its escalating effort to help combat the spread of COVID-19 and to mitigate the impacts on business and to keep people safe. The province will order the mandatory closure of all non-essential workplaces effective Tuesday, March 24th at 11:59 p.m. This closure will be in effect for 14 days with the possibility of extending this order as the situation evolves. A full list of businesses that are permitted to stay open will be released tomorrow – we will be tracking this list carefully.
The province will be providing municipalities and organizations that administer social services with $200 million in funding to support them in their response to COVID-19. The funding will help municipalities and social service providers such as shelters, food banks, emergency services, charities and non-profits continue to deliver their critical services, hire additional staff, and find ways to promote social distancing and self-isolation to keep clients safe and healthy. Ontario’s municipal service managers will determine local needs and distribute the funding, ensuring clients are receiving the support they need.
Quebec ordered the closure of all non-essential businesses until April 13, including the construction sector and aluminum smelters. A list of operations that are deemed essential has been released. Seniors living in residences must stay in their rooms and only go out under supervision. Schools remain closed until May 1, 2020, outdoor parks are all closed and the state of health emergency decree has been extended.
The government stated that Quebec is still ahead of the curve and that the healthcare system is able to support current and future demand. Quebec now surpassed Ontario in COVID-19 cases, though they have been explaining this change to the public by explaining the influencing factors, including the rise in testing producing a clearer picture of confirmed cases and international travel considerations. In fact, international flights had not yet been cancelled during Quebec’s spring break, which happened a week earlier than in the rest of the country. Going forward, the statistics will also include probable cases, which will raise the numbers even higher.
Premier Legault said that he was in favour of limiting travel between the provinces, since this is consistent with limiting travel to the regions. However, he said that there are additional considerations between Ottawa and Gatineau that required separate attention.
Across much of the Atlantic region, the requirement to self-isolate is in place following both international and inter-provincial travel.
On Sunday, Nova Scotia followed suit with the rest of the provinces and declared a Public State of Emergency. Premier McNeil emphasized it was part of the province’s response to individuals failing to follow the direction of public health officials. The government noted that under this state of emergency police could issue fines for breaches of self-isolation and social distancing measures.
In Newfoundland and Labrador, the provincial Liberal party has changed direction again, announcing the leadership race to replace Premier Ball would be suspended until at least May 1, and that a new date would be set for the vote.
WE’RE HERE TO HELP
We know there is much uncertainty in a rapidly evolving and complex landscape. It’s times like these where we know how important it is to make the right decisions in order to help mitigate the impact of this global crisis on your organization, your employees and respond to a shifting public policy environment.
As one of Canada’s most experienced teams of government relations, public opinion research and strategic communications advisors, we’re acutely aware you are navigating rapidly changing circumstances and we want you to know, we’re here to help. We can act as a sounding board, help you design specific strategies and adapt to new ways of doing business and emerging public policy.
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The current situation presents a strikingly more complex crisis environment than we have seen in our lifetimes. Earnscliffe has the tools to safely, responsibly, respectfully and reliably conduct opinion research and give you a sense of the public mood. At this time, there is no reason to make decisions in the dark if opinion research can shed valuable light to develop strategies and test tactics.
Reach out. We’re here to help.