March 31, 2020
CFIB Pleased With Emergency Wage Subsidy
The Canada Emergency Wage Subsidy announced March 27 by Canadian government will be a significant relief for tens of thousands of employers and hundreds of thousands of employees during the COVID-19 pandemic, says the Canadian Federation of Independent Business (CFIB). It says although details on the subsidy are urgently needed, the decision to make the wage subsidy widely available to employers of all sizes and structures is the right approach given the unique nature of the pandemic. “The wage subsidy is the single best measure to help Canada prepare for a quick recovery the minute the emergency phase of the pandemic is over.” CFIB is also pleased that there does not appear to be a cap per employer over the duration of the program. While it is reasonable for government to require evidence of a financial impact on businesses in order to qualify for the program, CFIB has heard from several businesses with very small margins, where even a modest reduction in sales can require significant changes in their staffing levels. For other businesses, the primary impact has been an increase in their costs, rather than a reduction in business income. CFIB is pleased government intends to keep the administrative requirements light to ensure the support can quickly flow to the businesses to need it.
Emerging Technologies To Change Delivery Models
Delivery robots (bots), robotic delivery vehicles (RDVs), and drones are set to displace millions of truck and van deliveries over the next decade, as they are far smaller, more flexible, lower in cost, and naturally suitable for automation and electrification, says a report from Navigant Research. As a result of rising labour and fuel costs, along with concerns about increasing vehicle emissions, many logistics stakeholders are experimenting with these emerging technologies to reduce driver miles and fuel usage. “These technologies are expected to make last-mile logistics (LML) more efficient and sustainable, while also transforming local commerce and user experience through new business models such as on-demand store-hailing,” says Ryan Citron, senior research analyst at Navigant. To position for success, companies should aggressively develop bot and drone programs to remain competitive and governments should establish regulatory frameworks that support the growth of the bot and drone industries.
Belgard Launches Bonneville Plank In Canada
Belgard has launches its Bonneville Plank to the Canadian market. The Bonneville Plank offers a wood grain profile in multiple patterns and in two classic colour choices – charcoal and canyon brown – suitable for multiple design applications including walkways and paths, patios, and pool areas. The planks are 24” by 8” by 2.4” and is shipped with 66 units per pallet (64 for soft pallets).
Calgary Lawyers Launch Free Hotline
Albertans with legal problems due to COVID-19 are being offered a free resource to get them out of difficulties and on the right track – a free lawyer from Resolve Legal via a legal hotline. “People have legal problems and we have answers. We wanted to put those two things together and ease the burden for a lot of really stressed people during the COVID-19 pandemic,” says Cyndy Morin, principal at the Calgary-based firm. With Legal Aid in hiatus due to the crisis, through word-of-mouth communication, the hotline was inundated with calls in its first week. Calls for help have come from employers who have to lay off employees and don't know their obligations in this crisis; working parents without childcare who have paid in advance for services; isolated seniors who have no personal directive should they need medical help; and even distraught brides who have to cancel wedding plans. “If local Calgary brewers can retool their lines to make hand-sanitizer, we can re-organize and use our skills to provide free interim legal help,”says Morin.
Backorders Affect RH Revenues
RH had net revenues of $665 million for the fourth quarter of its fiscal 2019 year, a decrease of 0.9 per cent compared to net revenues of $671 million in the fourth quarter of its 2018 year. The decrease was due, in part, to higher than expected backorders due to inventories being down 18 per cent year-over-year. Gross profit was $283 million for the quarter, up from $258 million in the year-ago period. Operating margin increased 190 basis points to 15.2 per cent versus 13.3 per cent last year and adjusted operating margin increased 230 basis points to 17.4 per cent versus 15.1 per cent. Net income was $68.4 million compared to $27.3 million last year.
March 30, 2020
Government Offers More Help To Small Business
The federal government will implement additional measures to help small- and medium-sized businesses to keep employees on the payroll and access credit during the COVID-19 pandemic. These measure include a 75 per cent wage subsidy for qualifying small- and medium-sized businesses impacted by COVID-19. This is a significant increase from the previously announced 10 per cent wage subsidy. This wage subsidy will be provided for up to three months, retroactive to March 15. The government will also create a ‘Canada Emergency Business Account’ through which up to $25 billion will be made available to eligible financial institutions so they can provide interest-free loans to small businesses. The ‘Small and Medium-sized Enterprise Loan and Guarantee’ program will allow financial institutions, working with Export Development Canada, to issue new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized companies. For more information, see Prime Minister Trudeau’s announcement
Lumber Demand High, Prices Low
U.S. and Canadian softwood lumber demand remained high but stocking wholesalers and resellers struggled with issues around the need to quarantine and keep social distance for their staff, says Madison’s Lumber Reporter. Lumber prices continued to fall and sawmills and lumber producers were often occupied with customers who were trying to cancel, or even get refunds on, orders already made. The Canadian federal government as well as most U.S. states deemed lumber and other construction material as ‘essential’ – meaning these operations and stores were not required to close, even as the Canadian/U.S. border was closed to public travel. Meanwhile, the delivery of goods and trade material was also not subject to a restriction. Some operators had difficulty sourcing trucks or rail cars, while others reported smooth and speedy delivery by truck, as highways were empty of traffic and the border was open only to returning citizens and business supply chain. However, scattered reports of logistical headaches began to surface, including sharply increasing freight costs and stranded or undelivered loads.
Make Critical Small Choices In Uncertain Times
Some small choices that leaders make in the short run could loom very large over the long term as the COVID-19 crisis unfolds. They can be hard to spot, but leaders must look for them, says McKinsey & Company. Unfortunately, the typical approach of many companies, big and small, will be far too slow to keep up in such turbulent times. The business consulting firm says leaders should pause and take a breath, giving themselves a moment to step back, take stock, anticipate, and prioritize. They should involve many more stakeholders and encourage different views to lead to smarter decisions without sacrificing speed. Big decisions may seem obvious, but some small or routine decisions can have large long-term strategic implications. Leaders should anticipate multiple possible scenarios for how things might unfold over time. They can make a list of five to 10 choices or actions that made today might, depending on what happens, make a difference later. The should also engage others to help identify which small decisions or actions should be addressed now, in case they become the difference makers down the road. These decisions could range from actions to save cash and ensure liquidity to actions to beef up the resilience of a supply chain by quickly exploring alternative suppliers. The full article is available here
CMHC Expands Insured Mortgage Purchase Program
The Government of Canada, through its crown corporation Canada Mortgage and Housing Corporation (CMHC), is expanding its revised Insured Mortgage Purchase Program (IMPP) to further bolster the financial system and the Canadian economy. This expansion is part of a suite of measures passed in the Emergency Response Act, which was developed in response to COVID-19 to protect Canadian’s health and safety and stabilize the Canadian economy. As a result of additional authorities granted by the minister of finance, the government stands ready to purchase up to $150 billion of insured mortgage pools through CMHC, an increase of $100 billion from the $50 billion announced on March 16. This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses. It is also ready to expand the issuance of Canada Mortgage Bonds, which is part of its standard mortgage-funding suite of products, to a total annual issuance amount of up to $60 billion. This additional issuance would depend on market conditions and investor demand.
Stella-Jones Considered Essential Workplace
Lumber distributor Stella-Jones Inc. says it will continue to provide products essential to construction services in the residential sector and to ensure continuity of supply of forestry products critical to multiple facets of the economy. The announcement comes out in the face of the COVID-19 pandemic and orders issued by Canadian provincial and U.S. state authorities. The company falls is considered an essential workplace as a business that provides priority services and activities and carries out critical manufacturing. It will continue operations at all of its North American treating facilities and supporting distribution networks while being mindful of potential impacts in light of the current context.
March 27, 2020
Deep Economic Contraction Expected In Ontario Before Rebound
The Ontario government forecasts COVID-19 to be a short-term economic shock, with economic activity to gradually rebound in the second half of 2020, says Central 1 Credit Union. However, the credit union anticipates a deep contraction in 2020 before a stronger rebound in 2021 as the COVID-19 epidemiologic curve eases. The province is experiencing increased expenditures and challenged revenues, as the economy remains sidelined, and this will lift the net debt-to-GDP ratio from 39.9 per cent in 2019/20 and to 41.7 per cent by 2020/21. The government expects a deficit of $9.2 billion in 2019/20 and, given its goal to protect households and businesses, an increased deficit of $20.5 billion in 2020/21 is forecast. The province has promised to table a full budget by late November.
GTA Had Busy New Home Market In February
The Greater Toronto, ON, Area (GTA) new home market had an exceptionally busy February, says the Building Industry and Land Development Association (BILD). There were 4,665 total new home sales in February, which was up 211 per cent from February 2019 and 57 per cent above the 10-year average. It was the highest number of new homes sold in February since 2002 and the third highest in the past 40 years. It was also the strongest February since 2004 for sales of new single-family homes. With 2,247 new single-family homes sold, sales were up 228 per cent from last February and 44 per cent above the 10-year average. Sales of new condominium apartments, at 2,418 units sold, were up 197 per cent from February 2019 and 48 per cent above the 10-year average. It was the second strongest February of the past 40 years for new condominium apartment sales, after the record high of February 2017. Total new home remaining inventory at the end of February was 17,199 units, representing about five months of inventory at the pace of sales in the past 12 months, well below the longer-term average of about eight months.
Co-op Offers Appreciation Pay
While grocery store employees are emerging as unsung heroes on the frontline of the COVID-19 pandemic, Federated Co-operatives Limited (FCL) wants to also recognize the unseen efforts of its warehouse distribution centre teams. The co-op is implementing an appreciation pay program that increases hourly wages by $2 per hour for employees in roles delivering essential goods. This includes employees at warehouse distribution centres in Winnipeg, MB; Saskatoon, SK; and Edmonton and Calgary, AB. Each day they supply food, pharmacy, home and building supplies, and general merchandise to more than 600 western Canadian communities where co-ops serve. The events of recent weeks have drastically increased demand on these distribution centres, sometimes more than 2.5 times the normal volume for this time of year. Amidst these demands, employees have adjusted protocols and prioritized ordering to ensure supplies get to where they’re most needed. The appreciation pay is retroactive to March 8.
Leon’s Reduces Workforce, Stores
Leon's Furniture Limited (LFL) is in the process of adjusting its retail operations in response to the global COVID-19 pandemic. The company will temporarily close 72 of its 205 corporate retail locations across Canada. As a result of these closures, and in order to adjust to significant changes in overall customer traffic, the company will also immediately layoff approximately 3,900 employees on a temporary basis, representing approximately 50 per cent of its current total workforce. LFL will enhance the EI benefits with supplemental payments and extend company-paid benefits to affected individuals. LFL banners – Leon's Furniture, The Brick, Appliance Canada, and Midnorthern Appliance – will continue to serve Canadians by providing essential products for the home through physical locations that are still open and their websites. It will also maintain its repair and installation services for the home through Trans Global Service.
West Fraser To Further Reduce Production
In response to the continuing COVID-19 pandemic, West Fraser is taking additional steps to respond to changing operating and market conditions. As a result of the continuing proliferation of the COVID-19 pandemic and the imposition of mandatory and recommended governmental restrictions on movement, travel, work, and trade that are impacting operations and creating uncertainty in the demand for forest products, the company will curtail lumber production at all British Columbia sawmills for one week effective March 30. This will result in the elimination of an additional 24 million board feet of production for the week in addition to previously announced curtailments. The company will also temporarily suspend production at its Alberta Plywood and Slave Lake Veneer facilities from March 30 to at least April 6. This will reduce the plywood production by an additional 6,500 million board feet per week.
March 26, 2020
Governments Must Step Up For Small Business
Canadian small businesses are heading for extinction if the government doesn’t step up, says Cato Pastoll, CEO of small business finance company Lending Loop. A survey by the company shows that small businesses in the retail, food service, travel, tourism, and education industries are looking at March revenue declines of 70 per cent or more. “Revenue declines of this magnitude will initially result in layoffs, delaying payment to vendors and suppliers (other small businesses), and eventual closure,” he writes in an opinion piece in the Globe and Mail. “As layoffs continue to grow, consumer demand will decline significantly, further compounding the economic challenges for our economy.” He adds, “While the magnitude of the effects of COVID-19 do depend on the industry and size of business, almost every single small-business owner is staring at the possibility of closing their doors for good. No current measure in Canada goes far enough to keep small businesses ... alive or with any viable prospect of future return.” He says Canadians need the municipal, provincial, and federal governments to step in and support the real engine of our economy: small businesses.
Small Business Confidence At Historic Low
Small business confidence fell to a new historic low amid impacts of the COVID-19 pandemic, says the Canadian Federation of Independent Business (CFIB)'s latest Business Barometer. After a 10-point drop earlier in the month, the national confidence level fell a further 19 index points to 30.8 from February's level of 60.5. Only one in five owners say their business is in a good state, compared to 38 per cent who say it is doing poorly. Hiring plans have ground to a halt, with just five per cent of business owners planning to add on full-time staff in the next three months and 50 per cent planning layoffs. An index level nearer to 65 indicates that the economy is growing at its potential. Quebec experienced the sharpest drop in optimism, falling 44.5 index points to 15.7, while Alberta (26.2) and Newfoundland and Labrador (27.8) had the next lowest results, although they experienced the smallest drops in optimism. Saskatchewan (28.3) and British Columbia (28.8) both posted levels close to the national average after experiencing 16-point drops, while Ontario (37) and Manitoba (37.5) fared a bit better. Nova Scotia (44) and New Brunswick (44.6) both experienced large drops in confidence, but remained more upbeat than the rest of the country. Retail posted one of the highest industry levels of confidence at 33.4 per cent, though it was still well below the norm.
Emergency Response Benefit Good Start
Although it doesn’t replace the need to increase the 10 per cent wage subsidy to 75 per cent of wages for all employers, the Canadian Federation of Independent Business (CFIB) says it does welcome the federal government's announcement of the Canada Emergency Response Benefit which will provide $2,000 per month to workers who have lost their job, including the self-employed. This is a significant step forward in addressing the growing economic emergency that accompanies the nation's efforts to avoid the COVID-19 health crisis, says the organization. “We are particularly pleased that the federal government has indicated an employer will not have to lay off a worker to allow them to qualify for the benefit.” CFIB also calls on provincial governments to amend labour legislation to ensure an employer can move an employee to be paid by the CERB or temporarily lay them off to collect Employment Insurance without triggering normal termination pay requirements. However, the organization still believes that a direct wage subsidy to employers would be a far faster way to ensure workers are paid than the CERB, particularly as the new program will not begin until early April and will pay workers only once per month. A wage subsidy would also help employers who can keep their employees working from home but have no or limited business income with which to pay them.
Canadians Experiencing Financial Stress Due To COVID-19
COVID-19 is causing an economic crisis for many Canadian families, with nearly 30 per cent reporting extreme stress. In total, 74 per cent report feeling some degree of stress brought on by the crisis, says financial technology company Borrowell. Over 40 per cent of Canadians say their biggest financial worry is how to pay for basic necessities such as food and rent. Almost 30 per cent say COVID-19 has already had an extremely negative impact on their finances and 30 per cent also say they have no plans in place if funds run too low to pay bills.
Canadian Tire Dealers Offer Special Support Program
Canadian Tire Corporation says its associate dealers have implemented a temporary special support payment of $2 per hour for all active Canadian Tire store employees. This premium, a 'thank you' to employees for their hard work in continuing to serve their communities during the COVID-19 pandemic, begins March 22 and will continue until May 2. Canadian Tire Retail stores across the country remain open with reduced hours to allow for enhanced cleaning and restocking. The demand for supplies ranging from bathroom tissue, hand sanitizer, and cleaning products to other household staples has been high as Canadians take precautions to help slow the spread of COVID-19. In addition to the temporary support payments by its associate dealers, Canadian Tire continues to explore measures that will support the safety and well-being of employees including the installation of plexiglass cashier shields. Stores are also offering curbside pick up for online orders.
Dollarama Recognized As Essential Business
The governments of Ontario and Quebec have recognized Dollarama Inc. as an essential business following the announcement of temporary exceptional measures to fight the spread of COVID-19. The value retailer says it will continue to operate its Montreal, QC-based distribution centre and warehouses as well as retail locations with street access in these provinces. The company will respect official health directives and provide recognition bonuses for front-line employees. The 10 per cent pay increase is effective March 23 to July 1 for all store-level employees as well as hourly distribution centre and warehouse employees. Dollarama will also continue to re-evaluate measures to be taken to support all its employees in the short-term and long-term as the situation evolves.