Quebec's seemingly aggressive plan to reopen the economy next week seen as a risk worth taking – Financial Post

When thousands of Bombardier employees return to work at private jet assembly plants over the next few weeks, they will be standing six feet apart, washing their hands frequently and getting their temperatures checked daily at facilities with increased cleaning, modified shifts and extra personal protective equipment.

The Quebec transportation giant furloughed 12,400 employees due to the coronavirus pandemic that left 1.2 million Quebecers and millions of Canadians out of work. But Bombardier will send back 11,000 employees to work, 9,000 in Quebec, as its home province prepares to reopen its economy.

Such health and safety measures will become common in Quebec as nearly 500,000 people return to jobs in retail, manufacturing and construction sectors over the next two weeks. Shops with exterior entrances will open outside Montreal on May 4 and in the city a week later, with construction and manufacturing resuming May 11.

Quebec isn’t the only province preparing to jumpstart business — Saskatchewan, Manitoba and New Brunswick also plan to reopen soon — but the province’s plan is seen as aggressive given it has the highest number of COVID-19 cases and deaths in Canada.

Yet economists, business associations and unions alike view the gradual reopening as a risk worth taking given the trajectory of the disease, which is predominantly killing seniors, particularly those living in long-term care facilities.

Quebec’s reopening plan may seem aggressive, but it was also the first province to close in a more severe way than others, National Bank of Canada chief economist Stéfane Marion said in an interview. It completely shut down its construction industry on March 24, for instance, a sector Ontario didn’t limit until April 4.

“Every month you extend the shutdown, you lose a full year of potential growth,” Marion said. “The longer you shut down, the more permanent the destruction of capacity.”

The coronavirus has proven most deadly to seniors that aren’t part of the labour force, Marion said, noting that’s the opposite of the 1918 Spanish Flu that killed young people and children. Yet that pandemic had a lesser hit on the agricultural-heavy economy, unlike the current economy where 79 per cent of people work in the service sector.

Every month you extend the shutdown, you lose a full year of potential growth

Stéfane Marion, National Bank of Canada chief economist

“Social distancing is easier to do when 33 per cent of the population works in agriculture,” Marion said.

Industries heaviest hit by the current pandemic — transportation, arts and entertainment, retail, food and accommodation — make up 22 per cent of the labour force but only 7 per cent of the gross domestic product, Marion said. The longer the shutdown, the less likely these people will have jobs to return to, he said, adding it will have a big effect on both inequality and the labour market.

Unions are also onboard with the reopening plan, based on successful resumption of activity in the mining and residential construction industry. Fédération des travailleurs du Quebec (FTQ) president Daniel Boyer said his union, which represents 600,000 workers, has worked closely with the government and employers to create a plan to safely reopen. So far, a majority of the employers have been following safety protocols, he said.

“Some people said it’s too soon, but I think the majority agree with the plan,” Boyer said. “You know we will have to live with the virus for many months, probably a year, and we cannot stay home longer than that.”

We will have to live with the virus for many months, probably a year, and we cannot stay home longer than that

Daniel Boyer, Fédération des travailleurs du Quebec (FTQ) president

Desjardins economist Hélène Bégin said Quebec seems to have found a balance between health and safety concerns and resuming business, in part by starting to reopen in smaller communities less affected than the urban hotspot of Montreal.

“We all know it’s a big risk, but we have to take it one step at a time,” Bégin said. “The priority is health, but at the same time we have to restart gradually to contain the damage that is hurting the economy.”

Even with the gradual reopening, Desjardins doesn’t expect the economy to return to pre-crisis levels for gross domestic product and employment until 2022, Bégin said.

Retailers are anxious to get back to work although they expect traffic volumes to be 30 to 50 per cent less than usual based on other countries emerging from the pandemic, Quebec Retail Council director Stephane Drouin said. Although the start of a new season is good timing to attract consumers, retailers expect them to be tight on cash flow despite government efforts to help pay rent.

Another challenge will be convincing consumers that it’s safe to shop, Drouin said. Clothing stores will need to introduce protocols for trying on clothes, he said, which could include disinfecting items in steam and not returning product to the shelves for 24 to 48 hours.

Customer safety will be critical for retailers trying to avoid a second lockdown.

“We want to reopen for good,” Drouin said, adding many are accelerating plans to digitize shopping. “The responsibility of retailers right now is to make customers feel secure and welcome in their stores.”

The construction industry is another that will take safety protocols seriously to avoid another shutdown. The $52-billion industry employs about 265,000 people in the province, 190,000 directly on job sites, according to the Association de la construction du Quebec senior economist Jean-Philippe Cliche.

“When we look at the construction industry, Quebec is the only one that completely closed its activity to zero except for New York State,” Cliche said. “We are losing more or less a billion dollars of production a week when we have it closed.”

Quebec is at risk of an “infrastructure deficit” if it misses a construction season, particularly in Montreal where numerous road and tunnelling projects are waiting crews. That’s enough incentive to follow the rules to avoid a second closure, especially since health officials expect the disease to stick around for up to two years as scientists create a vaccine, Cliche said.

“We need to learn to slowly but surely live with this disease,” he said. “If it goes out of control again, we might have to close again. Nobody wants that so we’ll try to apply the rules as much as we can and make sure it doesn’t happen.”

Financial Post

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