March 16, 2021

Your CFA Update on COVID-19

STILL TIME TO REGISTER!

Majority of Canadians (58 per cent) still spending less nearly a year following Canada declaring state of emergency due to pandemic

On March 9, Payments Canada released the latest data on Canadian payments trends since the onset of COVID-19, showing that spending below pre-pandemic levels continues, and that Canadians demonstrate an ongoing reluctance to handle cash, payment terminals and ATMs. Around 58 per cent of Canadians report spending less overall -- compared to 61 per cent in September 2020 -- while 42 per cent report that COVID-19 has changed their payments preferences to digital and contactless for the long-term. The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-COVID-19, and acts as a follow-up to prior study waves in May and September 2020.

The new data indicates that many payments trends observed in September 2020 resulting from the pandemic continue, including:

• Decline in handling of cash, payment terminals and ATMs 
• 53 per cent of Canadians report using less cash than pre-COVID (cash usage is up slightly from September 2020 when 57 per cent of Canadians reported using less cash) 
• 37 per cent report they do not expect to return to using cash payments to the same extent as pre-COVID once the pandemic recedes
• 38 per cent of Canadians are uncomfortable handling cash, compared to 42 per cent in September 
• 67 per cent are using ATMs less, compared to 64 per cent in September
• 37 per cent report being uncomfortable when they have to touch debit or credit card payment machines 

Preference for contactless payments 

• 47 per cent of Canadians report tapping their credit cards more versus 42 per cent who report tapping their debit cards more, compared to 47 and 46 per cent respectively in September 2020
• 54 per cent try not to exceed the contactless limit when buying something in-store, compared to 50 per cent in September 
• 37 per cent try to avoid shopping at places that do not accept contactless payments, compared to 36 per cent in September   

While spending is down, Canadians favour credit/debit cards and e-Transfers 

• 33 per cent of Canadians report using credit cards more often than pre-pandemic, compared to 32 per cent in September 2020
• 20 per cent report using debit cards more, compared to 21 per cent in September 
• 25 per cent say they use e-Transfer more, with no change since September

Increased use of e-commerce platforms

• 49 per cent of Canadians report using e-commerce platforms more often than pre-pandemic, compared to 48 per cent in September 2020

Dramatic increase in spend on food and food delivery services; Canadians tipping more 

• 58 per cent of Canadians report spending more on food overall, compared to 54 per cent in September 2020  
• 28 per cent of Canadians report using food delivery services such as Uber Eats and Instacart more often than pre-COVID, compared to 29 per cent in September 
• 40 per cent report tipping more than pre-COVID, compared to 41 per cent in September.

The payments trends during COVID-19 study was compiled by Payments Canada. 1,501 Canadians, 18 years of age or older were interviewed from December 3-16, 2020. The findings in this report are sourced from the Leger/Payments Canada, 2020 Consumer Payments Behaviour Tracker Survey. 

Manitoba unveils relief program for hospitality sector

Premier Brian Pallister announced a new, $8-million relief program is aimed at helping Manitoba's hotel and tourism sector, which has suffered due to the COVID-19 pandemic. The program will be administered by the Manitoba Hotel Association and the Manitoba Lodges and Outfitters Association to help hospitality-related business with fixed costs that have not been covered by other relief programs.

Costs include property insurance and property taxes, mortgage interest payments, land leases and service fees. Grants will be provided as a reimbursement for a percentage of eligible expenses.

More information about the Hospitality Relief Sector Program and how to apply will be available soon.

B.C. economy rebounds to near pre-pandemic levels, adding 26,600 jobs in February

New Statistics Canada numbers show British Columbia's economy is nearly as strong as it was before the COVID-19 pandemic shut down. Overall, the Canadian economy added 259,000 jobs in February, to which our province contributed nearly 10 per cent, according to the latest Labour Force Survey for February 2021.

B.C. added 26,600 jobs, with the majority of those jobs going to women. B.C.'s unemployment rate dropped to 6.9 per cent in February from eight per cent in January.

Some of the province's biggest gains were in professional, technical and scientific services in the month of February, the numbers show. The number of people working in those industries was 5.6 per cent higher nationally than a year earlier, adding about 86,000 people working in jobs such as accounting, advertising and information technology, nearly all of which Statistics Canada attributes to gains in British Columbia and Ontario.

B.C. has returned to 99.4% of pre-pandemic employment levels, and B.C.'s economy remains one of the strongest in Canada.

Nationally, the survey shows the economy lost almost 213,000 jobs in January this year as added lockdown measures erased months of gains, and marked the worst monthly declines since last April. February's survey shows the gains now leave the country 599,100 jobs short of where it was in February of last year or 3.1 per cent below national pre-pandemic levels. It also shows the employment increase in February was virtually all in part-time work and largely in retail trade and educational services.

Sobeys parent company to buy 51% stake in Longo's, Grocery Gateway

The parent company of Sobeys said it has signed a deal to buy a 51 per cent stake in specialty grocery store chain Longo's and its Grocery Gateway e-commerce business for $357 million.

Empire Company Ltd. said the deal adds two high-quality banners to its business and helps it grow in Ontario. Empire said Longo's will be able to benefit from its infrastructure and capabilities in areas such as sourcing, logistics and real estate.

Under the deal, Toronto-area grocer Longo's and Grocery Gateway will continue to be led by CEO Anthony Longo. During an investor call on Tuesday, Empire CEO Michael Medline said it will not "change or spoil" the specialty grocer.

"This model of keeping the brand separate has been extremely successful with Farm Boy and we believe it is imperative to do the same with Longo's," he said, referring to the company's 2018 acquisition of Farm Boy.

Head of Ontario's vaccine task force set to leave as province's vaccine booking system launches

The head of Ontario's vaccine task force will leave his job in the coming weeks, Premier Doug Ford said Monday. During the province's news conference, Ford said Hillier will only be around "for a couple more weeks," as his Order in Council is running out.

"I tried to get him to renew it, but as he said, 'Doug, I did the job I came for, and we got everything set up,'" said Ford, who indicated he agreed with that sentiment.

In a statement issued Monday afternoon, Ford spokesperson Ivana Yelich said Hillier's contract expires on March 31.

"The general was tasked with overseeing the development of Ontario's vaccine rollout plan and associated infrastructure," she said. "The plan and infrastructure are now in place, and the province is administering more and more vaccines each day."

Curfew pushed back to 9:30 p.m. in Quebec's red zones

The curfew in Quebec's red zones will be pushed back from 8 p.m. to 9:30 p.m. local time starting tomorrow and three rural regions will be upgraded from orange to yellow zones, allowing people there more freedom.

Premier François Legault announced the change on Tuesday, saying the situation is improving in Quebec despite the threat of variants and a possible third wave. He said people have been requesting the curfew be pushed back as days are getting longer. However, the premier warned, people cannot hold private gatherings with friends and family.

Legault announced the loosening of several measures, including allowing theatres and show venues in red zones to reopen on March 26. Audiences of up to 250 people will be allowed but they will need to wear procedural masks and remain distanced. Places of worship in red zones will be allowed to host up to 25 people; the current limit is 10. As in theatres, people will need to wear masks and keep their distance.

New Brunswick budget predicts growing economy and deficit

The Higgs government says the economy will rebound in the coming fiscal year as COVID-19 wanes, but it won't be enough for the province to avoid a large deficit.

Finance Minister Ernie Steeves is projecting the provincial economy will grow by 2.9 per cent this year, after shrinking 3.5 per cent in 2020 because of pandemic restrictions. Government spending will still outpace revenue, leading to a deficit projection of $244.8 million for 2021-22. Overall, spending will be up 3.4 per cent in the coming year while revenue will grow only 1.2 per cent

The large deficit projection is based in part on federal funding for a range of COVID-19 programs expiring at the end of the fiscal year on March 31.

Conditional grants from Ottawa jumped from $324 million to $599 million this year, with almost all of the extra money to support the province's pandemic response. Those grants are budgeted to drop back to $357 million in the coming year. Steeves said the provinces would push the federal government to continue the funding.

Ottawa hasn't yet said precisely how much it will fund in 2021-22, but if there's a new influx of money after April 1 it could lower New Brunswick's deficit figure. A massive influx of federal dollars this year brought a once-ballooning pandemic deficit down to $12.7 million.

Opposition Liberal MLA Rob McKee said despite the red ink, the PCs are still not spending enough in sectors hit hard by the pandemic, such as small and medium-sized businesses, tourism and the arts. 

P.E.I. budget deficit for next year forecast at $112 million

The P.E.I. budget deficit is on the way down, but the King government does not see it being eliminated in the next three years as the province continues to emerge from last year's pandemic-induced recession. Finance Minister Darlene Compton presented the 2021-22 budget in the legislature on Friday March 12.

Overall, the province did much better in 2020-21 than it was projecting last June, when Compton predicted a record $173 million deficit. On Friday, she projected the deficit for the current fiscal year, ending this month, will be $120 million.

That improved performance takes the deficit out of record territory. Back in 2003-04, the deficit was $125 million.

The deficit for next year is projected to be $112 million. A three-year plan presented with the budget has the deficit falling to $27.9 million in 2023-24.

Looked at broadly, the current forecast for 2020-21 bears little resemblance to the estimates tabled in June.

• Provincial revenues: Up $13M to $1,218M.
• Federal Transfers: Down $58M to $944M.
• Program expenditures: Down $80M to $2,070M.

The drop in program expenditures and federal transfers are related. Infrastructure spending was $49 million lower than the estimate. That corresponded to $67 million less in federal infrastructure funding.

New Procurement Service in Place with the Government of Canada

Public Service and Procurement Canada has a new procurement service (SAP Ariba) that is now open to businesses wishing to bid on upcoming tender opportunities. We understand the government is aiming to make a full transition to the new service by mid-summer, though this date has not officially been announced.
 
During the transition to the new service, tender opportunities will still be posted to the current BuyAndSell.gc.ca, which is the authoritative source of federal tender opportunities. Some opportunities, however, will require bidding through the new procurement service, SAP Ariba. For those tenders, businesses must be registered in SAP Ariba to both view the solicitation details and to submit a bid.

To register for a free account in SAP Ariba, go to the CanadaBuys Getting Started page where you can find:

• A registration check-list to help you understand what you need before creating an account
• Step-by-step instructions on how to create an account
• A link to the SAP Ariba supplier registration page
• For support with registration, contact the CanadaBuys service desk.

Stay informed about website updates and procurement news by subscribing to the Email notification service for Buyandsell.gc.ca news.

Ontario entering a third wave of COVID-19 

As case numbers continue to trend upwards, the Ontario Hospital Association (OHA) warned Monday that the province has entered a third wave of COVID-19. In its declaration, the OHA noted that cases involving variants of concern are steeply rising and the number of patients in intensive care is trending upwards in Ontario, noting that "strong adherence to public health measures is urgently needed to prevent overwhelming hospitals." While some say it's still too early to declare, Ontario's top doctor agreed that the province is "into that base of a third wave" and that modellers are assessing the situation.

U.S. House Advances PRO Act; Heads to Senate for Consideration

Last week, the U.S. House of Representatives passed the Protecting the Right to Organize (PRO) Act, legislation that would severely disrupt the franchise business model, in a 225-206 vote.

The bill now heads to the U.S. Senate for consideration. Under current filibuster rules, a majority of 60 votes is required to advance in the Senate and move to President Biden’s desk for signature. There will be significant pressure on Senate Democrats to advance the legislation and calls to change the filibuster rules to allow for passage with only 50 votes. 

In case you missed it, IFA President and CEO Robert Cresanti penned an op-ed in The Hill arguing how the PRO Act would decimate the franchise business model and upend the opportunity to bring our nation to back to recovery. Read the op-ed in The Hill here. IFA also expressed strong opposition to the PRO Act in a letter to Congressional leaders.

IFA continues its grassroots campaign asking IFA members to express opposition to the PRO Act to their elected officials. Please click here to send a pre-filled email to your Senators!

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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.

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