March 2, 2021

Your CFA Update on COVID-19

Canada's economy shrank by 5.4% in 2020 (worst year on record)

Canada's economy shrank by 5.4 per cent last year, official data from Statistics Canada showed Monday, making 2020 the worst year for the country's economic output since record keeping began.

The data agency said Tuesday that Canada's gross domestic product — the total value of all goods and services it produced — grew by 2.3 per cent during the last three months of the year, but that was nowhere near enough to offset the record-setting plunge it experienced during the the middle half of 2020.

The drop for the year was due to the shutdown of large parts of the economy in March and April during the first wave of the COVID-19 pandemic.

But since the summer, economic activity has slowly and steadily grown.

For comparison purposes, Canada's economy contracted almost twice as much as the U.S. did during the COVID-19 pandemic, despite the U.S. seeing far more cases per capita.

Preliminary data suggests the U.S. economy shrank by 3.5 per cent last year.

Federal NDP unveils election-style promises to support small businesses during pandemic

Jagmeet Singh is promising that a federal NDP government would provide more support for small businesses struggling during the pandemic — including a federal bonus for companies that hire new employees or bring back those laid off. Singh unveiled the promises during a campaign-style event in British Columbia today, less than a week after he said the New Democrats would not provoke an election as long as the COVID-19 pandemic persists. 

The hiring bonus proposed by the NDP would see the federal government cover the portion of employment insurance and Canada Pension Plan contributions normally paid by employers for new staff that are hired or staff rehired after being laid off. The NDP did not offer an estimate of how much this measure — or any of the other measures the party proposed today — would cost the government.

The federal NDP leader said last week that his party would support the minority Liberal government on confidence votes in the House of Commons during the pandemic. Parties are still preparing for an election that could come at any time.

The NDP leader also cited an earlier promise to impose what he describes as an "excess profit tax" on companies that have benefited during the pandemic; the NDP has yet to provide details on how that would work. The NDP's small business plan will not be followed up with legislation. A spokesperson for the NDP told CBC News that the party would be pressuring the Liberal government to adopt its elements.

Singh promised to extend the federal government's existing wage subsidy and rent assistance. He also said he wants business loan programs extended until the end of the pandemic and called on the government to make it easier for businesses to access relief programs.

Singh also said he wants the federal government to provide universal dental care and affordable housing because both measures would help employees working in small businesses.

The NDP's plan to help small businesses also calls on the federal government to cap credit card fees charged to small businesses at one per cent. The plan calls for the Canada Summer Jobs program to be expanded. 

The federal NDP has unveiled campaign promises on a number of different fronts over the past few weeks as parties prepare for a possible election.

B.C. to extend residential rent freeze to end of 2021

The British Columbia government says it will introduce legislative changes to extend a rent freeze through to the end of this year to stop illegal "renovictions" and improve the dispute resolution process for tenants and landlords. The province has already introduced and extended a rent freeze during the COVID-19 pandemic, and it says in a news release Monday that new legislative changes will keep it in place through Dec. 31. It says tenants can disregard any notice of a rent increase they've received that would have taken effect before Jan. 1, 2022, and starting next year rent hikes will be capped at the rate of inflation. The release says before the NDP government took power in 2017, the maximum allowable rent increase was as high as 4.3 per cent, well above inflation.

BC Chamber of Commerce Appoints New President & CEO

The BC Chamber of Commerce announced that its new President and CEO is Fiona Famulak. She previously served as the CEO of the Whistler Chamber of Commerce earlier in her career. She is also the former president of the Vancouver Regional Construction Association. 

Forecasters predict slight rebound and moderate growth for B.C. economy over next 2 years

Economic Forecast Council estimates B.C. is on track for real GDP growth of 4.7% in 2021, 4.3% in 2022. Finance Minister Selina Robinson said she's encouraged by predictions that British Columbia's economy will rebound this year and next. Robinson heard Friday from economists on the province's Economic Forecast Council who estimate B.C. is on track for real GDP growth of 4.7 per cent this year and 4.3 per cent next year, before growth slows.

The same measurement for the provincial economy in 2020 shows a 5.1 per cent decline, the worst contraction since 1980.

The council of economists from major financial institutions and business associations warned that the strength of recovery depends heavily on the rollout of COVID-19 vaccines. Recovery is expected to escalate as the province reaches herd immunity and consumer activity increases, while work ramps up in areas like construction on resource projects. All signs point to a strong recovery in the United States, which will also help boost B.C.'s rebound, several economists said during the session.

Manitoba: Household bubbles allowed, most businesses can reopen on Friday

Manitobans can now choose to designate one other household to form a pandemic bubble, and businesses — except indoor theatres, concert halls, casinos and bingo halls — can reopen when new public health orders come into effect Friday.

Restaurants can operate at 50 per cent capacity, but the rule limiting seating to household members only remains in place.

Indoor recreation facilities such as gyms, pools and fitness centres will be able to operate at 25 per cent capacity with physical distancing measures in place for spectators, locker rooms and common areas. The province had considered eliminating rules requiring masks for people in recreation facilities while exercising, but decided to keep it in place for this round of the health orders, said Chief Provincial Public Health Officer Dr. Brent Roussin.

The new orders, which Roussin unveiled during a news conference on Tuesday, will remain in effect until March 25. The government has posted the rules on its website. 

PEI Green MLA, labour group want government to require paid sick days

A Green MLA wants to know if government is considering legislation for guaranteed paid sick leave as part of its COVID-19 response. Lynne Lund raised the issue during question period Tuesday. Lund told CBC News she'd like to see legislation requiring employers to provide seven paid sick days to their employees, and for government to support businesses that need help to do that. Lund said for many Islanders, missing work to get a COVID-19 test and wait for results or to stay home with symptoms can lead to serious financial challenges. 

A look at the mixed messages and confusion surrounding the Oxford-AstraZeneca vaccine: Canadian Press

https://www.ctvnews.ca/health/coronavirus/a-look-at-the-mixed-messages-and-confusion-surrounding-the-oxford-astrazeneca-vaccine-1.5330719

US Update: House to Vote on PRO Act Next Week; US Franchise Community Mobilizes

Recently, the Protecting the Right to Organize (PRO) Act was reintroduced in both the House of Representatives and Senate. The U.S House is expected to hold a vote on the legislation next week.

Plainly stated, the PRO Act would eradicate the franchise business model, impacting all franchise owners and brands in the country by creating a harmful and expansive joint employer standard that effectively turns franchise owners into middle managers and increases legal liability for franchise brands. Under this bill, franchisors could be considered the direct employer of the franchise owners in their system, as well as the employees of those owners. Such a change would take away the equity and independence of franchise small business owners and would put their success and livelihoods in jeopardy.

IFA has been on the front lines expressing opposition to the legislation. IFA led a business coalition letter to the Problem Solvers Caucus outlining the franchise industry's concerns noting that Congress should avoid major legislative changes like the PRO Act that would severely disrupt the franchise business model and impede new business formation and job growth. 

IFA launched a campaign in the US to have your voices heard in Congress as well. IFA encourages you to take action and tell Congress that the PRO Act only serves to hurt hard-working Americans and hinder our national recovery in the wake of the coronavirus pandemic. Contact your US elected officials here and urge them to protect franchising!

IFA is also hosting a webinar on the PRO Act, and what it means for your business. Join IFA and experts on the issue to learn more about how this legislation could affect you and your business.

WHAT: The PRO Act Vote and What it Could Mean for your Business

WHEN: Thursday, March 4th at 1:30 pm ET

RSVP here

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