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Now is the Time to Fill Your Franchise Development Pipeline!
CFA Virtual Power Session | June 23, 2020
The Keys to Successful Franchise Development
Moderated by Jania Bailey, CEO, FranNet
Join us for a special two-hour, virtual Power Session, geared to empower you with insights and knowledge on franchise development in the “new normal” as the world moves past the COVID-19 crisis. If you want to ensure success and improve your franchisee acquisition, this session is for you!
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Keys to Successful Franchise Development Panel
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Planned CEBA Expansion Delayed
A promised expansion of a COVID-19 aid program that allows small businesses to access $40,000 loans guaranteed by the federal government will not launch today as planned.
Finance Minister Bill Morneau took to twitter late last night to announce the Canada Emergency Business Account expansion delay, saying: "Work continues around the clock to ensure the program can securely launch across over 230 financial institutions. We know how important the program is to small businesses and want to launch as quickly as possible. Updates to come."
There's no immediate word on why the program expansion is being delayed.
Several weeks ago the Feds announced the small business loan program would be expanded to allow more to access it, including owner-operated small businesses with payrolls under $20,000, sole proprietors receiving business income directly and family-owned corporations compensating in the form of dividends.
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Pandemic pushes Quebec into record $14.9 billion deficit
Finance Minister Eric Girard announced Friday, and it could take the province years to bounce back from "an unprecedented shock to the economy." Girard delivered an update on how the pandemic impacted Quebec's finances, and the numbers are grim: Quebec estimates that its deficit will reach a record $14.9 billion for the 2020-2021 fiscal year, and the government said it could take up to five years to balance its books again. That return to budgetary equilibrium "will not be achieved at the expense of public services or by increasing Quebecers’ tax burden," the government pledged.
The first few months of the pandemic in Quebec also took a huge bite out of the province's productivity (GDP), which is expected to contract by 6.5 per cent in 2020; that is the biggest downturn since the compilation of such statistics began in 1981. (Quebec's budget had estimated a 2 per cent increase in GDP for the year). Girard said the province hopes to return to its pre-pandemic levels of productivity by the end of 2021.
Girard said that Quebec spent some $6.6 billion in just the first few weeks of the pandemic to shore up the province's health care system, provide economic relief to Quebecers and otherwise mitigate the economic effects of the public health crisis. That amount is more than the province spent over two years to counteract the 2008-2009 global financial crisis, Girard noted.
The finance minister also reiterated his government's promise that taxes won't go up -- on individuals or on companies -- to help bring the province back to budgetary balance. "Quebecers are already sufficiently taxed" he said.
Girard's March budget included a $14-billion financing program to stimulate the economy with infrastructure projects. Now, with a $14.9 billion deficit, the province will be borrowing more than $30 billion this year alone.
However, Girard said Quebec has a "credible plan" to balance the budget in five years and a strong track record of sound fiscal management that he said is appreciated by investors who will be buying the province's debt.
"We have the capacity to face a second wave," he said. Quebec responded to the pandemic by injecting $3.7 billion in the health sector, as well as $1 billion to help workers and another $2 billion for companies.
The deficit for fiscal 2020-21 includes a $4-billion contingency fund as well as a $2.6-billion payment to a fund dedicated to paying down the provincial debt, which will stand at just below $200 billion in 2020.
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Ontario Releases School Safety Plan for the 2020-21 School Year
Premier Doug Ford, along with Minister of Health Christine Elliott and Minister of Education Stephen Lecce, announced the government’s plan for the resumption of in-person classes in Ontario’s public schools in September. Readers will recall that last month, Minister Lecce revealed the government would cancel in-person classes for the remainder of the academic year due to the pandemic, but noted that schools would reopen in the fall.
Ontario’s plan to safely reopen schools will provide optionality for parents (i.e. parents will have the choice of sending their children to school for in-person instructions, or parents can enroll children into online learning) in accordance with the province’s health and safety guidelines. The safety plan for schools was created following extensive consultation with the Chief Medical Officer of Health, health experts on the COVID-19 Command Table, medical experts at The Hospital for Sick Children, education sector partners, parents and students. Further, Premier Ford outlined that Ontario’s 72 school boards have been asked to plan for the following three scenarios, one of which will be implemented in September, depending on the public health situation at the time:
- Normal school day routine with enhanced public health protocols: Students going to school every day in classes that reflect standard class size regulations;
- Modified school day routine: Based on public health advice, an adapted delivery model has been designed to allow for physical distancing and cohorts of students. Under this model, school boards are asked to maintain a maximum of 15 students in a classroom, and adopt timetabling that would allow for students to remain in contact only with their cohort and a single teacher for as much of the school day as possible. This model would require alternate week delivery to a segment of the class at one time;
- At home learning: Should the school closure be extended, or some parents choose not to send their children back to school, school boards need to be prepared to offer remote education.
Premier Ford also outlined that the government has instructed school boards to be prepared with a plan that includes an adapted delivery model, which could include alternate day or alternate week attendance, staggered bell times and recess, and different transportation arrangements to ensure the safety of students and staff.
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Franchise premises leases have been impacted by Gov't Lockdowns
NFI is helping CFA members save on Franchise sales overhead. Many leases will need to be restructured for franchisees to survive, and Operations Manuals need updating to meet COVID-19 Protocols.
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Alberta: Protecting Commercial Tenants
The provincial government is proposing Bill 23: the Commercial Tenancies Protection Act to protect eligible commercial tenants from having their leases terminated due to non-payment of rent during COVID-19. The act, if passed, would also prevent landlords from increasing rent, charging late fees or enforcing penalties on missed rent. The legislation would cover the period from March 17 to August 31; any rent increases that occurred during that time would require landlords to reimburse tenants.
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Alberta: Continued support COVID-19 – extending unpaid leave
The Alberta government is proposing Bill 24: the COVID-19 Pandemic Response Statutes Amendment Act to support Albertans as the province reopens. The bill, if passed, will make amendments to current measures and introduce new measures. These include extending unpaid job-protected leave due to COVID-19 until August 2021, increasing the child care cohort size from 10 to 30 staff and children at day cares, and allowing for remote signing and witnessing of estate and care documents through two-way video conferencing.
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Retail sales plunged 26.4 per cent in April: StatCan
Retail sales fell by more than a quarter in April due to the COVID-19 pandemic, but Statistics Canada said Friday that they regained some of the lost ground in May. The agency said retail sales plunged by a record 26.4 per cent to $34.7 billion in April leaving them down 33.6 per cent since physical distancing measures were implemented in mid-March. However, Statistics Canada said early estimates suggest retail sales rose 19.1 per cent in May.
Economists on average had expected a drop in April of 15.1 per cent, according to financial markets data firm Refinitiv.
However, many retailers started or expanded their online presence and curbside pick-up services in response to the closures. Statistics Canada says online sales surged to a record high, representing 9.5 per cent of the total retail market.
Sales were down in all 11 subsectors in April, while motor vehicle and parts dealers took the largest hit in dollar terms as the sector fell 44.3 per cent for the month.
Sales at food and beverage stores fell 12.7 per cent as supermarkets and other grocery stores saw a drop of 12.0 per cent compared with March when Canadians stocked up.
Retail sales in volume terms fell a record 25.2 per cent in April, following an 8.2 per cent drop in March, leaving them down 31.3 per cent since the onset of the pandemic
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Business Council of B.C. Report: The 2020 Shutdown: How Deep is the Economic Hole?
The World – Under a best-case scenario, global GDP declines by 6% in 2020 and rises by 5.2% in 2021. But if there is a second pandemic wave later this year global GDP would likely decline by 8% in 2020, according to a recent OECD forecast. A second wave would also see a much more modest upturn of 2.8% in 2021.
Canada – In either scenario, the demand for Canadian exports will fall sharply. Canada tottered into 2020 with a debt and immigration reliant model of economic growth. This model will be difficult to restart in the post pandemic world, especially considering the depth of the economic hole Canada has fallen into. Emerging from it will be uncertain and challenging given the scarcity of catalysts for private sector GDP generation and job growth.
Under the OECD’s scenario of no further outbreaks, Canadian GDP would decline by 8% in 2020 and rise by 3.9% in 2021. Canadian GDP is projected to decline by 9.4% in 2020 and rise by just 1.5% in 2021 if a second COVID-19 wave occurs later this year. Canada’s GDP and employment levels will not recover to 2019 levels of activity by the end of 2021 under either scenario.
British Columbia – Turning to B.C., we expect the provincial economy to shrink by 7.8% in 2020, a bit worse than our preliminary estimate for a 7.3% decline released back in March. In 2021, we forecast the provincial economy will expand by 4.8%. This is a strong growth number by historic standards, but comes in the wake of a very steep downturn and will only result in B.C. regaining just over half of the economic output lost in 2020.
The magnitude of job losses is especially concerning. Since February, the number of people working in the province has plummeted by roughly 350,000. B.C.’s greater exposure to hard-hit sectors (especially accommodation and food services, and wholesale and retail trade) resulted in the unemployment rate nearly tripling in three months and now sits around 13%. As the shutdown is lifted, employment will rebound significantly. But the process will be uneven and slow. Many businesses will not re-open and several tens of thousands of jobs will be permanently lost.
Read the Full Report
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Quebec drops physical distancing rules for children in daycares
As of Monday, children in groups of 10 or less in Quebec daycares will no longer have to respect physical distancing rules between one another or their educators.
However, adults will still have to follow the two-metre guideline while in a day care centre.
Daycares outside of the Montreal, Joliette, and l’Épiphanie regions will also be able to operate at 100-per-cent capacity as of Monday; this applies to home daycare providers as well.
Daycares in the regions exempt from this new phase will still have to operate at 50 per cent capacity, and home daycare providers will still only be allowed to watch four children at a time.
Health officials say this may change as of June 29, but it will depend on whether or not the COVID-19 situation in the province will allow it.
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UPCOMING WEBINAR
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JUNE 25, 2020
AT 2:00 PM ET
Leadership Panel Discussion
50 CFE PARTICIPATION CREDITS
MODERATOR: John Dehart, Hartify Franchise Brands
SPEAKERS: RLenka Whitehead, Oxford Learning Centres; Murray Oxford, Jani-King
In only three short months, the COVID-19 pandemic has completely changed the way we work and do business. While no two businesses have been impacted in exactly the same way, this webinar will provide you with the opportunity to ask questions and gain insights and advice on how to lead through the next phases of change from experienced franchisors.
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Feedback from our Members
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“Thank you, CFA. Well done on your daily notices. They are a big help for all of us during these uncertain times. Thanks again for being the trusted voice of the Canadian franchise industry.”
- Ken LeBlanc, President, PropertyGuys.com
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COVID-19's impact on the world is creating waves across all sectors and industries.
Every member of the CFA community is dealing with an issue that is affecting the world, our industries, our communities, our businesses, and our people.
We would like to hear from you if you have any topics, issues or questions to navigate turbulent times in order to support you further:
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Subscribed to the Daily Update
If you would like to subscribe all your franchisees to receive our Daily Update, please contact Alex Mann at amann@cfa.ca.
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