July 31, 2020
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July 31, 2020

Your CFA Update on COVID-19

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Commercial rent relief program extended into August

The federal government has extended Canada Emergency Commercial Rent Assistance (CECRA), its rent subsidy program to support small businesses, by another month.

Under the original rent program known as CECRA, small businesses that have lost 70 per cent or more of their revenue due to the COVID-19 pandemic only have to pay 25 per cent of their rent. The provinces, territories and federal government combine to cover 50 per cent, while landlords cover 25 per cent.

Salmonella outbreak in Canada linked to American red onions

Health officials have tracked a salmonella outbreak in Canada reported earlier this week to red onions imported from the United States. According to a release from the Public Health Agency of Canada, there have been 55 additional illnesses in Canada since the outbreak was first announced for a total of 114 cases of salmonella across five provinces. 

People in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario are being asked to not eat any red onions imported to Canada from the U.S., including food products containing red onions, until more is known about the outbreak.

Health officials are urging retailers and restaurants in these provinces to not use, sell or serve red onions imported from the U.S

Ontario releases plan to reopen schools in September

Elementary students in Ontario will be heading back to school full time come September, the provincial government revealed today, while most high school students will split their time between the classroom and online learning. 

Elementary level students will remain a single cohort, five days per week, including for recess and lunch. Further, school boards will be required to provide the full curriculum. Class sizes will remain at the mandated maximum levels in place before the COVID-19 outbreak.

Secondary students in 24 "designated boards" — mainly in urban and suburban areas with relatively high student populations — will attend school on alternating days, in cohorts of about 15. High schools in non-designated boards, which typically have smaller enrolment, will be able to offer full-time learning, the province says. (A full list of designated and non-designated boards can be found at the end of the PDF slides at the bottom of this story.) 

Students in Grades 4 through 12 will be required to wear a non-medical mask or cloth face covering while at school. Younger children will be encouraged, but not required, to do so.

Medical masks will be provided for teachers and other staff. 

Parents will be able to opt their children out of in-person classes, if they wish. Children with special education needs who struggle with remote learning will be allowed to attend school daily for instruction.

The province says other measures that will be in place to ensure the safety of students include:

  • "Self-screening" by families and teachers.
  • Emphasis on hand hygiene.
  • Distancing when possible.
  • Limiting visitors in schools.
  • Directional signage to limit the cross-flow of students in hallways and on playgrounds.

When the academic year begins, schools can offer clubs and organized sports if physical distancing is possible and spaces are cleaned and disinfected between each use.

Manitoba students to return to school, some high schools won't be full time

All Manitoba students will return to school on Sept. 8 with some restrictions in place, the provincial government announced Thursday. Learning will be full time in classrooms for all students from kindergarten to Grade 8 and students with special needs, while students in high school may have some remote learning, depending on whether schools can ensure physical distancing. Many students in kindergarten to Grade 8 will be in cohorts of up to 75 students.

School divisions are developing plans and time tables to allow for the highest number of high school students to attend classes in-person at one time, while still physically distancing. High school students will need to be in school for at least two days a cycle, but the province is expecting schools will achieve a higher level than that. Divisions may bring in more buses

The return to classes will begin at Level 1 in September, but this may be scaled up depending on COVID-19 cases in the province. Level 1 involves enforcing two metres of physical distancing between students to the greatest extent possible. When not possible, students will be organized in cohorts and space will be arranged to encourage separation, according to the province's school guidelines for September. In this scenario, there will be a minimum of one metre between students as they sit in their classrooms. Schools will also need to limit gatherings in common areas such as lunch rooms and will be encouraged to use outdoor venues as much as possible. The province is not recommending or requiring the use of masks, but students and staff are welcome to wear them if they want. 

Under Level 2, schools would prioritize kindergarten to Grade 8 students for in-class learning, while high school students would use remote learning, with limited use of school facilities for specific programming and assessment.

If the province needs to go to Level 3, all students would return to remote learning and schools would be closed, with the exception of kindergarten to Grade 6 students of critical workers.

If a students starts showing COVID-19 symptoms while at school, they will be isolated in a predetermined space until a parent or caregiver can come pick them up. Where a separate room is not available, they must be kept at least two metres away from others, according to the province's guidelines. The sick student will be given a medical mask to wear until they are taken home, unless there are safety issues that prevent the student from wearing a mask. If a staff member or volunteer becomes symptomatic while in school, they will be required to immediately isolate themselves from other staff and students, notify their supervisor and go home to monitor symptoms.

Voluntary COVID-19 notification app rolls out in Ontario

COVID Alert is the federal government's latest move in the battle to prevent the spread of COVID-19 as Canada's economy gradually reopens. Here's how it works:

  • You start by downloading the app to your smartphone.
  • That will allow the phone to use Bluetooth technology to exchange signals with nearby phones.
  • If someone tests positive for COVID, their public health authority will give them a one-time key to enter into the app.
  • The app will then send out notices to every phone that has been within two metres of the infected person's phone for at least 15 minutes over the previous 14 days — as long as those other phones also carry the app.
  • Those who receive a notification will receive instructions on what to do next.

Officials say that the app will become more effective as more people download it — and they stress that it's a notification app, not a contact-tracing app.

Other provinces, such as New Brunswick, have worked to develop their own apps. Alberta launched a contact tracing app called ABTraceTogether on May 1.

EI-like benefit for gig, contract workers will be available after CERB ends,

Prime Minister Justin Trudeau says the government plans to move out-of-work Canadians into the employment insurance system and provide parallel support for millions of people who are set to exhaust their emergency pandemic aid, and who don't have EI to fall back on.

The $80-billion Canada Emergency Response Benefit is set to wind down over the coming weeks, and those who are EI-eligible are to start drawing assistance that way.

At a media event on Friday morning, Trudeau said many people who don't qualify for CERB, such as gig or contract workers, will gain access to a transitional, parallel benefit that is similar to EI. It will also include access to training and the ability to work more hours without a steep clawback in benefit payments, Trudeau said. More details of the program will be unveiled at a later date.

The most recent figures on the CERB show that as of July 26, the government had paid out $62.75 billion in benefits to 8.46 million unique applicants since its launch.

Canadian economy grew 4.5 per cent in May: Statistics Canada

Statistics Canada says the economy grew by 4.5 per cent in May as businesses began to reopen after severe lockdowns of March and April. The average economist estimate was for a 3.5 per cent increase in gross domestic product for May, according to financial data firm Refinitiv.

Rebounds were seen across multiple industries with the easing of COVID-19 restrictions, including retail trade that registered a 16.4 per cent bump to mark its largest monthly increase since comparable readings began in 1961. Motor vehicle and car sales contributed the most to the retail growth. Statistics Canada says the sector would have grown by 11.4 per cent had they been excluded from calculations.

In a preliminary estimate for June, the agency says the economy continued to pick up steam, with a five-per-cent increase for the month.

Despite the two months of growth after two months of negative readings, Statistics Canada's preliminary estimate is that economic output contracted by 12 per cent in the second quarter compared to the first three months of 2020. The June and second-quarter figures will be finalized late next month.

CIBC economists noted that a 12-per-cent drop in the second quarter would be the largest decline ever by a long shot, even if such a decline was expected.

The Bank of Canada's most recent economic outlook expected the second quarter of 2020 to be worse than the first, estimating a three-month drop in GDP of 14.6 per cent. The central bank expected an economic contraction of 7.8 per cent this year, warning that after an immediate turnaround as restrictions eased, a recovery would be long and bumpy with some businesses and jobs not surviving the downturn.

Statistics Canada says economic activity still remained 15 per cent below pre-pandemic level despite the gains over May as business activity was slowly allowed to resume.

U.S. economy shrank at fastest pace on record last quarter

The U.S. economy contracted at its steepest pace since the Great Depression in the second quarter, as the COVID-19 pandemic shattered consumer and business spending, and a nascent recovery is under threat from a resurgence in new cases of coronavirus.

Gross domestic product collapsed at a 32.9 per cent annualized rate last quarter, the deepest decline in output since the government started keeping records in 1947, the Commerce Department said on Thursday. The drop in GDP was more than triple the previous all-time decline of 10 per cent in the second quarter of 1958. The economy contracted at a five per cent pace in the first quarter.

Economists polled by Reuters had forecast GDP plunging at a 34.1 per cent rate in the April-June quarter. The bulk of the historic tumble in GDP occurred in April, when activity ground to an abrupt halt after restaurants, bars and factories, among others, were shuttered in mid-March to slow the spread of the coronavirus.

Economists say without the historic fiscal package of nearly $3 trillion US, the economic contraction would have been deeper. The package offered companies help in paying wages and gave millions of unemployed Americans a weekly $600 supplement, which expires on Saturday. Many companies have exhausted their loans.

This, together with the sky-rocketing coronavirus infections, is keeping layoffs elevated. In a separate report on Thursday, the Labour Department said initial claims for unemployment benefits totalled 1.434 million in the week ending July 25.

Eurozone GDP drops 12.1% in record pandemic plunge

The coronavirus pandemic caused the largest GDP drop ever recorded for the 19 EU countries using the euro as currency, according to estimates. The eurozone economy has shrunk by over 12%, with Spain bearing the brunt.

TD, Scotiabank and RBC extend work from home policy until 2021

Royal Bank of Canada and TD Bank Group say most of their staff will work from home until at least 2021. The move comes after the Bank of Nova Scotia informed head office employees in the General Toronto Area currently working remotely that they can continue to do so until 2021 and after all of the major banks in the city agreed to a May request from mayor John Tory, who asked companies in the area to keep their workers home for the summer.

Air Transat to cancel all flights from Western Canada to U.S., sun destinations this winter

Air Transat plans to cancel all flights from Western Canada to sun destinations and the United States this winter, with refunds en route to customers — a policy about-face in the COVID-19 era. The airline is cancelling all southbound routes that were slated to take off from Winnipeg, Calgary, Edmonton, Vancouver and Victoria, Air Transat parent Transat AT told customers this week. The only routes out of western gateways between Nov. 1 and April 30 will be from Vancouver to Toronto and Montreal, and some connecting flights to Europe via Toronto. Passengers will automatically receive a full refund rather than the company credit that has previously been offered for flights cancelled due to the COVID-19 crisis, Transat said.

Webinar Series On Demand

UPCOMING WEBINAR

AUGUST 4, 2020
AT 11:00 AM ET

Update on Government Programs: Canadian Emergency Wage Subsidy

 50 CFE PARTICIPATION  CREDITS  

SPEAKER: Justin Mastrangelo, BDO Canada LLP

Recently the federal government announced it was extending the Canada Emergency Wage Subsidy (CEWS) until December 19, 2020. The extension is great news for franchised businesses but it also is significantly more complicated. The extended CEWS:

  • Expands the program to more employers by eliminating the 30% business decline in qualifying threshold
  • Changes the maximum wage subsidy that some businesses were receiving
  • Enhances the wage subsidy for employers with more than a 50% business decline

Join experts from BDO Canada to learn about the recent changes to the Canada Emergency Wage Subsidy and understand how they will affect your business as you recover.

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“My husband, Jim and I would like to thank everyone at the CFA who has worked so hard and tirelessly to provide us with updated information on the Covid-19 crisis, for the webinars, lobbying for change and for all of the support you provide to members on a regular basis. We are sincerely grateful. To everyone at the CFA, take care and stay healthy.”

 - Nadine Cartman, CEO, Chicken Delight of Canada Ltd

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