Retailers and other services companies face a tough period as the global economy struggles to recover from the pandemic-induced plunge. One counterintuitive approach that will increase the odds of surviving is replacing their “bad jobs” that include low pay and inadequate training with a “good jobs” system that consists of investing in workers and changing operations (e.g., reducing product variety). A number of companies — including Costco, Mercadona, QuikTrip, and H-E-B — have successfully adopted this approach. Sam’s Club is one of the most recent retailers to jump onboard.
In countries hit by the Covid-19 pandemic, customer-facing service businesses don’t just face a tough two to three months; they face a tough two to three years. Because people will still be nervous about catching the disease until a vaccine is widely available, demand is likely to be depressed, while costs — due to measures needed to keep employees and customers safe — will be higher.
Making the challenge even tougher, many of these businesses rely on a “bad jobs” model for frontline workers whose hallmarks are low wages, low productivity, high turnover, and difficulty adapting to changing customer needs and technologies. Now more than ever, they need a new labor approach. They need a “good jobs” system that combines investment in people with operational choices in order to maximize employee motivation, contributions, and productivity.
Bad Jobs = Bad Performance
As the tussle over federal pandemic assistance in the United States has made clear, many service companies, even those whose financials looked fine, were already in trouble. A big part of that trouble was a focus on labor-cost minimization, which led to low wages and benefits, inadequate staffing, and as few full-time positions as possible. In this “bad jobs” system, frontline employees are inadequately trained, often underequipped, and disrespected. They can’t focus on the job when they constantly worry about paying medical bills or putting food on the table. They leave when there’s another job that pays $1 more an hour. Unit managers are busy fighting fires due to high turnover and operational problems, with too little time to develop staff and really manage the business. This bad jobs system keeps customers underserved (and, in some contexts puts them at risk), deprives the company of a compelling value proposition and prevents it from adapting to changing customer needs. Combined with a weak balance sheet these reasons drove many bankruptcies, including Borders, Toys “R” Us, Sears, and most recently Neiman Marcus, J. Crew, and J.C. Penney.
For retailers, there is an extra layer of post-pandemic danger. Lockdowns have forced a massive shift to online shopping. Some customers will go back to store shopping once they can, but many will have established new shopping habits. When stores reopen, retailers will need to adapt quickly to a new intensity of e-commerce, which comes with many operational challenges.
Further, the in-store experience will need to provide clear value that the customer cannot get online. That value requires capable and motivated workers whose work design enables them to serve customers well. The more their company invests in them through a good jobs system — with higher wages and benefits, more training, more hours and a regular schedule, a work design that maximizes employee productivity and contributions, and sufficient staffing — the more they will repay that investment through higher in-store sales and customer loyalty and improvements in products, services, and work processes. A bad jobs system that was muddling through before the pandemic may well fail under these new stresses.
A Moment for Change
The widespread use of the bad jobs system has long been a costly (and sometimes fatal) problem, but the pandemic offers a unique chance to do something about it. Why?
For a little while, there is a spotlight on frontline workers because so many have kept working — even at risk of their own infection — and kept so many useful parts of the economy running. At the same time, news coverage of strikes at meatpacking plants, Whole Foods, and Amazon has made customers aware of widespread bad working conditions. Customers may now find it unacceptable to buy from companies that treat their workers poorly — especially if there are competitors that offer just as low prices but also good jobs.
The bad jobs system is now going to prove fatal to many hard-hit companies if they don’t change. They’ll need their front lines fighting for them, working hard to serve every customer as well as possible, to improve every product, service, and process as much as possible, and to identify new ways to attract customers. They’ll need to be adaptable because so many things are going to be different in ways we can’t begin to predict.
One thing we can predict: Customers who are struggling economically will be looking more than ever for good value. This will give the companies that start building a good jobs system a competitive advantage over those that don’t. After the financial crisis of 2008, Mercadona — Spain’s largest grocery chain and a model good jobs company — reduced prices for its hard-pressed customers by 10% while remaining profitable and gaining significant market share. Hard work and input from empowered front lines had a lot to do with it.
The pandemic is likely to accelerate the ongoing shakeup of U.S. retailing. The United States has 24.5 square feet of retail space per person versus 16.4 square feet in Canada and 4.5 square feet in Europe. This is almost certainly too much and the mediocre — the ones that don’t make their customers want to keep coming back — will not survive.
The pandemic is likely to speed up the adoption of new technologies. Although typically seen as a way to reduce headcount, adopting, scaling, and leveraging new technologies require a capable and motivated (even if smaller) workforce.
There is an alternative: A good jobs system that has already proven successful. Long before the pandemic, there were successful companies — including Costco and QuikTrip — that knew their frontline workers were essential personnel and treated and paid them as such. Even in very competitive, low-cost retail sectors, these companies adopted a good jobs system and used it to win.
There’s a strong financial case for good jobs. Offering good jobs lowers costs by reducing employee turnover, operational mistakes, and wasted time. It improves service, which increases sales both in the short term and — through customer loyalty — in the long term. All these improvements can more than make up for the large investments in better wages, benefits, training, and scheduling. Indeed, in a recent paper, Hazhir Rahmanidad and I show that above-average wages can be a profit-maximizing approach even in low-cost service businesses. In addition, a good jobs system makes a company more resilient and more adaptive, as companies like Costco, Mercadona, QuikTrip, and H-E-B demonstrate. These qualities will be much called upon during and after the pandemic.
It Can Be Done
But is it possible to offer good jobs — to seriously increase labor spending and improve work — when companies are already in a financially precarious situation and when demand won’t snap back to normal for a while? Yes, it is.
An extended period of low demand will actually make it easier to make and then tinker with operational changes with less risk. A period of low demand will also be a period of low performance pressure; Amazon, for example, just announced that it will likely make no money next quarter. These may be just the circumstances in which CEOs and boards can undertake a transition that will not boost earnings in the next quarter or two and explain why.
Granted, like most change efforts, it takes time to implement a good jobs system and to reap the benefits. But as the recent good jobs journey at Sam’s Club shows, smart sequencing of the changes can allow a company to make significant wage investments without raising prices or lowering profits. Sam’s Club raised the wages of thousands of employees from around $15 an hour to as high as $22 an hour. At the same time, they simplified operations by reducing their product variety by as much as 25% and redesigning work processes to make employees more productive and customers more satisfied. This is what made the higher wage investments possible for a retailer that already has tight profit margins. Mud Bay, a regional pet retailer, raised employee wages by 30% and significantly improved employee benefits while operating with less than 2% profit margins.
At a moment when trust in businesses and institutions is particularly low and when many criticize the gap between executive pay and workers’ pay, this is the time for more leaders to have the courage and commitment to rebuild their businesses with good jobs. We know now that they already have great people working for them.
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Restarting The American Economy: The Most Essential Factors – Forbes
When governors and the federal government made the decision to close “non-essential” businesses and issue shelter-at-home orders to slow the spread of COVID-19, they did so without the benefit of a historical precedent. We are only now beginning to understand some of the ramifications of this drastic action. As the U.S. moves to unshackle its economy, millions of workers sit nervously waiting for a call from their employer. Though some workers have returned or hired on with companies that have thrived during this pandemic, others may never get ‘the call’ as companies restructure. You see, a crisis provides an opportunity (and motivation) for companies to reevaluate their business model in search of ways to cut expenses and increase profits. This is because success depends on how well a company can meet the needs of its consumers (revenue) and how well it manages its expenses. The difference between revenue and expenses is profit, which is the driving force behind the private sector. Profit is the lifeblood of every business and it is this lifeblood that is under attack.
How quickly will the U.S. economy return to normal? The answer is ‘it depends.’ It depends on how fast the unemployment rate falls. It depends on how quickly the consumer returns to their pre-COVID level of spending. It depends on the path of the virus. In essence, it depends on a myriad of variables. Let’s begin with unemployment as this will determine the level of economic growth over the next 12 to 18 months.
The official number of unemployed workers is now slightly over 41 million. This is substantially higher than the 5.75 million unemployed at the end of 2019. The current number of unemployed workers represents approximately 26% of the ‘pre-COVID-19’ work force. The unemployment rate hit 14.7% in April, the highest figure since the 24.9% rate during the Great Depression. According to some sources, unemployment is expected to reach 25.2% by the end of this year. Unlike the depression, however, the cause of this downturn is known, and the policy response has been more on point. Even so, can the U.S. economy return to normal with so many workers on the sidelines?
Slower Return to Normal?
Roughly 70% of the U.S. economic engine comes from consumer spending. Thus, when the consumer is actively engaged, the economy tends to prosper. Remove an additional 35 million consumers from the work force and, well, the economy suffers. More importantly, debt plays a vital role in economic growth. When consumers borrow, they spend more, which leads to growth. When you look at the level of total credit issued from all commercial banks since 1973, the average increase from one month to the next was 0.6%. In March and April of this year, the increase was 2.8% and 3.3% respectively. However, this was due to a 25% rise in commercial and industrial lending, much of which is attributable to the Paycheck Protection Program.
What about the largest driver of economic growth? Loans to consumers, which averaged a 0.5% increase from month to month since 1973, fell 3.5% in April. This is the largest monthly decline on record. This reduction in consumer lending has led to weaker consumer spending and slower economic growth. In fact, from March 1 to the end of April, consumer spending – as measured by personal consumption expenditures, fell nearly 20%. If you reduce the volume of loans to consumers – again, the largest contributor to GDP consumer spending falls and the economy slows. Therefore, we must find a way to help the consumer regain what they lost from the shutdown.
What else will affect the return to normal? It starts with demand, which, due to the shutdown, has plummeted. This is why the federal government, the Treasury, and the Fed embarked on a massive stimulus program to put money into the hands of Americans. However, since a one-time payment of $1,200 per individual and $500 per dependent won’t go very far, the federal government added a $600 per month bump in unemployment benefits.
The segment that benefits most from this are workers at the lower end of the income scale. Assuming these unemployed workers are receiving a total benefit of $800 per week ($200 state; $600 fed), this equates to over $41,000 per year. Working for $15 per hour, 40 hours a week, 52 weeks per year, yields $31,200 in gross income. Therefore, where is the incentive to return to a lower paying job? Unless extended, the $600 federal stipend will end July 30. This could lead to a flood of workers seeking reemployment. But how many of these jobs will be filled by then?
Safety concerns are key to consumer demand, which is key to the reemployment of the unemployed. How fast will the consumer reengage? Will there be a second wave of the virus? Will the virus mutate, hindering efforts to develop a vaccine? Regardless, some businesses will permanently close, others will reopen more slowly than expected, and many will look vastly different. Technology will assist those who continue working from home and replace jobs in some industries.
The ‘return to normal’ boils down to how well businesses adapt to this rapidly changing environment and become profitable again. A prosperous business community is necessary for a plentiful job market, which is critical for a thriving economy. If businesses fail to thrive, workers will have fewer employment options and unemployment could remain elevated for longer than necessary. Thus, saving our businesses may be the most important task of all, outside of the virus that is.
Province considering a regional approach to reopening economy – Tbnewswatch.com
TORONTO, Ont. – With the province reaching what the Ontario government is calling the post-peak phase of the fight against COVID-19, Premier Doug Ford said he is considering taking a regional approach to reopening the economy.
“I am now comfortable with asking our officials to look at a regional approach for a staged reopening,” Ford said during his daily media briefing on Friday.
“This will be one option we consider as we move into stage two. This is one option we are putting on the table. We are only able to do this now because we are able to get our testing to where we need it so the health officials are looking right now at what a regional model could look like.”
Previously, Ford had been adamant that reopening the economy would be a province-wide approach, but as testing continues to increase throughout Ontario, with daily tests approaching more than 18,000, Ford said there is a much clearer understanding of where outbreaks are taking place.
“The reality on the ground is very different across any parts of the province,” he said. “We are now getting a much better picture of what each region is dealing with. With more testing that picture becomes more and more clear.”
The province entered stage one of its three-stage framework for reopening last week, allowing certain businesses to open their doors with strict workplace guidelines in place.
“Let me be very clear, I am not prepared to take unnecessary risk when it comes to our health and safety,” Ford said. “We will continue to take a measured and cautious approach.”
What the approach will look like in terms of a regional reopening is to be determined by the province’s chief medical officer of health and the COVID-19 command table.
“We are looking at our table of how we would do regional opening,” said Dr. David Williams, the province’s chief medical officer of health. “What we’ve seen in the data lately, we are getting a picture of what is happening live time. A lot of our cases are focusing around the GTA. Some of our health units are not seeing any cases for two or three weeks in a row and that is very encouraging.”
But Williams added there still needs to be considerations taken to protect vulnerable remote communities, such as First Nations communities in Northern Ontario.
“We have to look at that and see where the cases are occurring,” Williams said. “One of the aspects we have to be careful of in our regionalization is we want to make sure that if cases are introduced or came back again and are further out, we are very concerned about the north, especially remote First Nation communities that we are very attentive to.”
“It’s not just some numbers at some time, it’s the wider picture we have to consider.”
In terms of when the province will enter stage two of reopening, whether it’s regional or province-wide, will depend on testing and the number of cases.
“We developed a plan very early on for three stages of opening,” said Minister of Health Christine Elliott. “That is very important from a public health perspective. We are just now starting to see cases from the gradual reopening of our economy as part of stage one.”
“That will be thoroughly examined and we will decide when we should open up to stage two. The regionalization is a separate issue. The timing of the stages won’t be. That will be based on the number of new cases, the hospital capacity, the contact tracing. All of those things have to come together for the command table to feel that it is safe and make that recommendation.”
Ford considering 'regional approach' to reopening economy; Ontario hits testing target for second straight day – Toronto Star
The latest novel coronavirus news from Canada and around the world Friday (this file will be updated throughout the day). Web links to longer stories if available.
2 p.m.: A new testing strategy for COVID-19 will see “targeted campaigns” to check workers in Ontario communities with hot spots and key sectors where the virus spreads easily, including auto manufacturing, food suppliers and major retailers.
Officials unveiled the new blueprint Friday, with elements echoing what Premier Doug Ford has been saying for more than a week — and what epidemiologists have been pushing for much longer — to get a better picture of the illness as the economy reopens.
1:48 p.m.: The Shaw Festival in Niagara-on-the-Lake, Ont., is extending its cancellation of performances and public events until Aug. 1.
In a statement, the theatre festival said it was following a municipal order limiting organized mass gatherings in town due to the COVID-19 pandemic.
“We can’t have a human, connected theatre without healthy humans, so we will do whatever it takes to keep everyone safe, whether they work here or are itching to come and watch us play,” artistic director Tim Carroll said in the statement.
The Shaw is taking a more incremental approach to cancellations than Ontario’s other major theatre festival. The Stratford Festival in Stratford, Ont., announced in April that it was putting its entire 2020 season on hold indefinitely, saying it would not be able to put on plays even if physical distancing rules were eased this summer.
1:24 p.m. (updated): Ontario is implementing an expanded COVID-19 testing strategy, including targeting specific sectors and using mobile teams, and the increased data that will follow is prompting the premier to consider a regional approach to reopening.
Premier Doug Ford had been asked on multiple occasions about the idea and said it wasn’t on the table, but now he is asking health officials to show him what a regional model would look like.
“The reality on the ground is different in every part of the province,” Ford said Friday.
“With more testing, that testing becomes more and more clear and knowing that information will help us be more precise. It will help us be more targeted.”
Two-thirds of the province’s cases are in the Greater Toronto Area, while some public health units are reporting few, if any, active COVID-19 cases. Sudbury, for example, currently has none.
Ontario has at times struggled to meet its daily testing goals, and is now expanding the list of those who can get tested. The new testing strategy includes targeting specific workers and sometimes bringing mobile testing units to them.
12:45 p.m.: Quebec’s education department says a total of 41 students and teachers have tested positive for COVID-19 since elementary schools outside the Montreal area opened on May 11.
A survey of school boards conducted May 25 found that 19 students and 22 staff members were found to be infected in the first two weeks following the reopening.
The highest numbers of cases were in school boards in the Laurentians and Monteregie regions north and southeast of Montreal, with 10 cases each.
The survey is lacking numbers from 12 of the province’s 72 school boards, which did not provide data to the province.
12 p.m.: With Ontario reopening, the conversation surrounding social distancing is heating up.
Professor Chris Bauch, a professor and university research chair in the department of applied mathematics at the University of Waterloo, will answer your questions about physical distancing, social bubbling and the risks of community spread during the COVID-19 pandemic.
11:45 a.m.: Nova Scotia is reporting no new cases of COVID-19 as the recent trend of a dwindling number of new infections continues.
The total number of confirmed cases remains at 1,055 with 978 people having recovered from the virus, while eight people are currently in hospital and three of them are in intensive care.
11:03 a.m.: The chief executive of the Vitalite health network in northern New Brunswick says the ongoing COVID-19 outbreak is a worst-case scenario in a region with underlying health issues and an older population.
Gilles Lanteigne says a male professional health-care provider has been suspended from work after coming into contact with more than 100 people. The province has said the man recently travelled to Quebec and returned to work without self-isolating.
Lanteigne declined to confirm the man’s professional title, citing privacy concerns in the small community.
The health authority has ramped up testing for people who came into contact with the worker and is providing tests to any community members who ask.
More than 200 people were tested Thursday evening and Lanteigne says elective surgeries have been suspended.
The cluster that grew to six confirmed cases Thursday has led to the adjournment of the provincial legislature and the rollback of reopening measures in the northern region known as Zone 5.
11 a.m.: For the second day in a row, Ontario says its testing labs have hit the provincial target of completing more than 16,000 tests a day.
According to the province’s morning update, the labs completed 18,525 tests Thursday. Before Wednesday, Ontario had missed its target on 10 consecutive days.
Meanwhile, as of 11 a.m. Friday, Ontario’s regional health units are reported a total of 28,544 confirmed and probable cases, including 2,272 deaths.
The total of 391 new confirmed and probable cases reported since the same time Thursday morning was up from the previous day, but still below a rising trend that saw the health unit totals above 400 per day most of last week.
The growth in new infections across Ontario has not been felt equally in the province. The daily count of new cases has been falling outside of the GTA over the last two weeks. Meanwhile, numbers inside the city have rebounded after falling some from the peak rates seen last month.
The Thursday morning tally includes the 201 new cases Toronto and 92 more in Peel Region reported Thursday afternoon; together, the two health units accounted for more nearly three-quarters of the province’s new infections.
The 24 fatal cases reported in the province since Wednesday evening were in line with a recent flat trend. Still, the rate of deaths is down considerably since peaking at more than 90 deaths in a day earlier this month, about two weeks after the daily case totals hit a first peak in mid-April.
Because many health units publish tallies to their websites before reporting to Public Health Ontario, the Star’s count is more current than the data the province puts out each morning.
Earlier Friday, the province reported 826 patients are now hospitalized with COVID-19, including 129 in intensive care, of whom 100 are on a ventilator — numbers that have fallen about 20-30 per cent this month. The province also says nearly 21,000 patients who have tested positive for the coronavirus have now recovered from the disease — more than three-quarters of the total infected.
The province says its data is accurate to 4 p.m. the previous day. The province also cautions its latest count of total deaths — 2,189 — may be incomplete or out of date due to delays in the reporting system, saying that in the event of a discrepancy, “data reported by (the health units) should be considered the most up to date.”
The Star’s count includes some patients reported as “probable” COVID-19 cases, meaning they have symptoms and contacts or travel history that indicate they very likely have the disease, but have not yet received a positive lab test.
The provincial data also revealed another day with high demand for testing at the province’s assessment centres. About 20,000 newly collected samples were added to provincial testing queues, the second day in a row well above the target. The rate of test completion in the labs has tended to lag a day or two behind demand at the centres.
The province says it has the capacity to complete about 20,000 tests each day.
10:15 a.m.: Prime Minister Justin Trudeau is expected to address reporters at 10:30 a.m. in his daily briefing. A livestream of his news conference is available at thestar.com
10:10 a.m.: Ontario will reveal a new phase in its COVID-19 testing strategy today, as it tries to perform more tests to gauge the province’s phased reopening.
Officials including the president and CEO of Ontario Health, the head of Ontario’s testing approach, and the chief of medical microbiology at the Public Health Ontario lab are set to hold a briefing on the new strategy.
Ontario has struggled on several occasions to meet its daily testing goals.
Most recently, the province had said it would do 16,000 tests per day in May, but has met that goal less than half of the time.
Levels dropped sharply once a blitz of nearly all long-term care residents and staff was completed over the long weekend, but they have picked up again in recent days after Ontario relaxed criteria for members of the public to be tested.
Anyone concerned they may have been exposed to COVID-19 can now get tested, whether or not they have symptoms.
Premier Doug Ford has spoken about testing asymptomatic front-line health-care workers, large workplaces such as food manufacturing facilities, groups such as truck or taxi drivers, and doing a second round of testing in long-term care.
He said mass testing is the province’s best defence against the virus.
Ontario reported completing 17,615 tests Thursday. The province currently has a daily capacity of nearly 20,000.
9:39 a.m.: Federal Indigenous Services Minister Marc Miller says the federal government will spend another $650 million to help Indigenous communities cope with the COVID-19 pandemic.
That’s in addition to $305 million previously promised to help First Nations reserves, and Inuit and Metis communities with supplies, medical care and facilities that allow for physical distancing.
Miller says that although the first wave of COVID-19 appears to be receding, the threat of a second wave is very real and Indigenous communities will be just as vulnerable to it as they were to the first.
9:20 a.m.: Going to Trinity Bellwoods this weekend? To avoid unsafe crowding at the park as the weather heats up, the city has spray painted circles on the east field to ensure physical distancing following the model of parks in other major cities like New York City and San Francisco.
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8:45 a.m. Statistics Canada says the economy in the first quarter had its worst showing since 2009 as steps taken to slow the spread of COVID-19 forced businesses across the country to close their doors and lay off workers.
Statistics Canada says gross domestic product fell at an annualized rate of 8.2 per cent in the first three months of 2020.
The collapse came as gross domestic product for March fell 7.2 per cent as restrictions by public health officials and school closures began rolling out during the month.
The average economist estimate is for a nine per cent drop in gross domestic product for March, while the average estimate for the first quarter as a whole is for a GDP pullback at a annualized pace of 10 per cent, according to financial markets data firm Refinitiv.
7:45 a.m.: Worshippers in Turkey have held their first communal Friday prayers in 74 days after the government reopened some mosques as part of its plans to relax measures in place to fight the coronavirus outbreak.
Prayers were held in the courtyards of selected mosques, to minimize the risk of infection.
Authorities distributed masks at the entrance to the mosques, sprayed hand sanitizers, and checked temperatures.
Worshippers were asked to bring their own prayer rugs, but some mosques offered disposable paper rugs which were placed 1.5 metres apart.
The partial opening of the mosques follows a slowdown in the confirmed COVID-19 infections and deaths in the country.
7:29 a.m.: The Swiss soccer league will restart on June 20 in empty stadiums.
The league says the 20 clubs in the top two divisions have voted 17-2 in favour of resuming. There was one abstention.
The league has been shut down since February because of the coronavirus pandemic. There are 13 rounds left in the top division and the league wants to complete the season on Aug. 2.
St. Gallen leads defending champion Young Boys on goal difference. Third-place Basel trails by five points.
Basel is also still in the Europa League. UEFA hopes to complete that competition in August after domestic seasons end.
The league says a separate vote to increase the top division from 10 teams to 12 failed to pass.
5:55 a.m.: The federal government is pumping millions more into helping remote and rural Indigenous communities cope with the COVID-19 crisis.
Prime Minister Justin Trudeau is expected to announce today significant new funding for First Nations, Inuit and Métis communities, part of which is intended to help them bolster their public health response to the pandemic.
That could include measures such as hiring more health care workers, building isolation facilities or purchasing medical supplies and equipment.
Another part of the funding is to go to financial support for residents living in these remote communities to help cover the pandemic-induced increase in their cost of living.
And a third part is to be dedicated to helping the communities build women’s shelters, amid reports that domestic violence has spiked as families have been forced to isolate themselves to curb the spread of the deadly virus that causes COVID-19.
The new funding is on top of the $305-million Indigenous Community Support Fund, which the federal government created in March to help First Nations, Inuit and Métis communities prepare for and cope with the pandemic.
5:40 a.m.: Canada’s top health official says proposals are being reviewed from sports leagues looking to resume play — including the NHL.
But Dr. Theresa Tam says the mandatory 14-day quarantine for people entering the country remains in place for now.
Tam says that protecting Canadians remains the key objective when considering a resumption of activities that were suspended due to the COVID-19 pandemic, including professional sports.
Tam’s comments came two days after the NHL announced its plans to resume its 2019-20 season, which calls for games to be played out of two hub cities.
Edmonton, Vancouver and Toronto are among the 10 cities shortlisted by the NHL as potential locations.
But deputy commissioner Bill Daly has said those markets would be out of the running if the mandatory quarantine at Canada’s international border remains in place.
Alberta Premier Jason Kenney has sent a letter to Prime Minister Justin Trudeau for assistance in coming up with a solution.
5:35 a.m.: If trade deals were football players, Canada’s agreement with the United States and Mexico would have been considered a second-stringer a year ago compared to President Donald Trump’s original Hail Mary effort to secure a new pact with China.
But now that COVID-19 has rendered China an international pariah and touched off a global movement to “reshore” manufacturing capacity, the U.S.-Mexico-Canada Agreement suddenly finds itself in the spotlight — and under pressure to bring home a win.
“Serendipitous is the right word,” said Pedro Antunes, chief economist of the Conference Board of Canada, of the political and economic conditions that will greet the USMCA when it comes into force July 1.
“There’s a lot of talk of shortening supply chains, bringing supply chains domestically, and I see that as playing out in favour of Canada’s relationship with the U.S. — perhaps strengthening that relationship and those trade ties within North America, within Canada and with the U.S. economy.”
The agreement — known in official Canadian circles as CUSMA or ACEUM, T-MEC in Mexico and “the new NAFTA” pretty much everywhere else — was forged during an arduous 13 months in 2017 and 2018, long before “pandemic” would become a household word across North America. This summer, it will make its debut in a world dramatically different than that of its predecessor.
In the U.S., where Trump is shrugging off a COVID-19 death toll that surpassed 100,000 on Wednesday and aggressively cheerleading a rapid return to business as usual, the White House is now clearly counting on the USMCA, as well as its signatories, to help lead the North American recovery.
4 a.m.: Statistics Canada is expected to report today that economic growth swung negative in March and the first quarter as a whole due to the COVID-19 pandemic.
The average economist estimate is for a nine-per-cent drop in gross domestic product for March, while the average estimate for the first quarter as a whole is for a GDP pullback at an annualized pace of 10 per cent, according to financial markets data firm Refinitiv.
The agency said real gross domestic product was essentially unchanged in February as it was hit by teacher strikes in Ontario and rail blockades across many parts of the country.
Declines in educational services and disruptions in the transportation and warehousing sector offset growth in other areas.
In a preliminary estimate for March released last month, Statistics Canada said the economy posted a nine per cent decline as business came to a standstill due to measures taken to slow the spread of the pandemic.
Thursday 7:21 p.m.: India is the latest country whose coronavirus death toll has topped the number of lives lost in China, where the pandemic started, as hot spots shift to developing countries ill-equipped to contain its spread.
The South Asian nation’s death toll hit 4,695 on Thursday, climbing past the 4,638 fatalities from COVID-19 in China. The nation of 1.3 billion people now has the highest number of fatalities in Asia, excluding Iran, despite the largest lockdown in the world.
The country’s death toll quadrupled in less than a month, accelerating by more than 1,000 over the past week, while infections have been soaring at a similar pace. Government experts have begun to acknowledge the outbreak won’t peak until June or July.
Thursday 5 p.m. Ontario’s regional health units are reporting another 382 new COVID-19 infections, according to the Star’s latest count.
As of 5 p.m. Thursday, Ontario’s regional health units are reported a total of 28,512 confirmed and probable cases, including 2,275 deaths.
The total of 382 new confirmed and probable cases reported since the same time Wednesday evening was up about 60 from the previous day, but still below a string of days last week that saw more than 400 new cases reported.
The recent case growth not been felt equally in the province; the daily count of new cases has been falling outside of the GTA over the last two weeks. Meanwhile, numbers inside the region have rebounded after falling some from the peak rates seen last month.
Thursday’s tally includes 201 new cases in Toronto and 92 more in Peel Region; together, the two health units accounted for more than three-quarters of the province’s new infections.
Meanwhile, the 29 fatal cases reported in the province since Wednesday evening were in line with a recent flat trend. Still, the rate of deaths is down considerably since peaking at more than 90 deaths in a day earlier this month, about two weeks after the daily case totals hit a first peak in mid-April.
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