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Why reopening the economy is just the start of even more headaches for already struggling businesses – TheChronicleHerald.ca

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Saskatchewan

was the first

to pull the trigger on lifting the pandemic-induced economic shutdown, a move a week ago that brought equal degrees of hope and anxiety to individuals and businesses both within the province and around the country.

Its reopening is gradual, starting with medical services such as dentists being allowed to see patients, then golf courses will open, followed by provincial parks in June.

Quebec followed suit

, in much bolder fashion despite having the highest death toll in the country and a stubbornly high rate of new COVID-19 cases.

Quebec Premier Francois Legault spent much of Thursday defending his decision to reopen the province’s economy in phases starting May 4, fielding tough questions about the risks of reopening daycares, elementary schools, factories and retail stores amidst a curve that had barely flattened.

“Nothing is perfect, nothing in life is 100 per cent, but we calculate, with the help of public health, that it’s better for children to return to school,” he said.

The open protests to reopen fully continue nevertheless, with protestors ignoring social distancing protocols, even though many experts believe that until a COVID-19 vaccine is found and widely distributed — a process that might take 18 months or more — normalcy will not resume even if governments throw their economies wide open.

Until then, there will be a tug of war between the public’s health and the long-term damage to the economy of staying partly closed, with tricky questions surrounding when and how to open, and who is allowed outside and in what circumstances, without increasing the risk of over-running public health facilities with a surge of COVID-19 cases.

But it doesn’t get any easier for business owners once those decisions have been made since they are the ones who will have to figure out how to bring their employees back without jeopardizing their health and safety. That process will include redesigning workplaces, interacting with customers in different ways, increasing sanitation efforts and perhaps even paying people in different ways, all of which come with myriad headaches and extra costs at a time when many businesses are already on life-support benefits.

For example, retailers and restaurants, for the sake of their own survival, will have to somehow entice people to come out to shop and eat, despite the ever-present risk of contracting the virus. There are or will be provincial and maybe municipal guidelines to follow, but no amount of cleaning or spacing people out will convince everyone that it’s safe.

“To the degree that we have to weigh up moral, economic and health concerns … that is something we all have to collectively do. There are no single set of experts here,” said Steven Pearlstein, Robinson Professor of Public Affairs at George Mason University in Virginia.

“Governments will put out guidelines on reopening, saying here’s what you can do, here’s what you can’t do. That does not necessarily mean every company or consumer or business will follow. We all get to decide as consumers and workers and company executives how much and when and how we are going to do things. And we’ll only know if we struck the right balance in hindsight.”

Even in jurisdictions where government guidelines on reopening remain vague, major companies have started brainstorming new ways of working that incorporate physical distancing into their floor plans.

Darryl Wright, a human resources consultant at Ernst & Young LLP, said he has started seeing a number of companies bring in experts to redesign offices and configure them according to the requirements of landlords mandating physical distancing in indoor spaces.

“Some of the things that are being considered are one-way passages in office spaces so people don’t brush past each other, the number of people that should be allowed in a boardroom or how many people should even be in an office space at a given time,” Wright said. “We are basically trying to agree on what a base model of working might look like when we are allowed to reopen.”

That’s at least partly because employees will be “emboldened to push back on returning to work” until they feel it is safe to do so, according to a recent survey conducted by international architectural and design company Ware Malcomb.

It suggests companies take the temperature of individual employees or use fever scanning systems and introduce staggered work times and four-day work weeks, tactics that have already been adopted at some large banks in Hong Kong, a city-state that from the get-go employed effective methods of contract tracing and isolation to curb community spread of the virus.

For example, employees at the Hong Kong headquarters of French banking giant BNP Paribas can not enter the building without a mask. Everybody’s temperature is checked when walking into an office building or restaurant on the island.

Cynthia Milota, Ware Malcomb’s director of workplace strategy, suggests that office lunch and break times be scheduled or lengthened to “minimize occupant loads,” similar to how large high schools stagger their lunch periods.

The company has also produced modified workplace floor plans that vastly reduce the number of people in a given space or on a specific floor.

“Remove chairs or even monitors to discourage unoccupied workstation use,” Milota said. “Seating should remain assigned until the widespread threat of virus transmission has diminished.”

Some companies may figure that they need less space if their employees are going to stay at home for the long term, but Lowest Rates Inc., which runs a website that helps people find low insurance and mortgage rates and employs about 50 people, is accelerating a planned move to a larger physical office space.

“We’re going to have to move offices, because we’re taking this very seriously,” chief executive Justin Thouin said. “We never want to put the team in a position where they feel unsafe and uncomfortable, so we will be actively looking to move into a larger office where desks are wider apart and ventilation is better.”

He said his company has had a remarkably positive experience throughout the pandemic, which has enabled the company to afford a larger office space. Business is improving and he is looking to hire even more staff.

“We are actually using this opportunity to pick up talent that has been let go by other organizations,” Thouin said.

Even if governments and companies allow workers to return to their desks, working remotely might become the new normal, said Kareen Emery, director of innovation and consulting at The Foundry by Monster, an employer branding agency.

“I can’t name specific clients, but there are companies that are now saying as long as employees are productive, and work at the same efficiency level, they are going to keep them at home,” she said. “The thing is, even if you practice physical distancing at work, employees have to take public transit to commute in, and that’s going to be a problem. It’s a benefit to employees and to companies to continue keeping them at home.”

One such example is OpenText Corp., the Waterloo, Ont.-based software developer giant. In a recent earnings call, chief executive Mark Barrenechea said that half of the company’s headquarters will not open up even when allowed, implying that a greater number of employees will now work from home permanently.

“More than 95 per cent of OpenText employees have moved to remote work and have maintained productivity throughout,” he said.

EY’s Wright believes that companies in the post-virus, pre-vaccine world will oscillate between letting white-collar workers continue to work remotely and encouraging them to come back to reconstituted, open-plan workspaces with built-in physical distancing.

We cannot risk another outbreak that shuts us down all over again

Kevin Dove, KPMG Canada

“Remote working isn’t for everyone,” he said. “I know that some people want to come back to the office, but they need to be given the reassurance that it is safe to come back.”

Canadian Imperial Bank of Commerce’s back-to-work strategy will include alternate work-from-home days, though final plans for the two-thirds of its employees currently working remotely have yet to be fully confirmed.

“Our pace will be measured as appropriate,” a CIBC spokesperson said.

At KPMG Canada, allowing employees to return to their regular workplaces will to some extent hinge on the health-care system ramping up testing and instituting proper contact tracing, methods that Canada has largely lagged on, especially compared to some East Asian countries such as Singapore and South Korea.

“We have engaged with our KPMG partners in Asia and Europe who are sharing their experiences on returning post-COVID-19 … we cannot risk another outbreak that shuts us down all over again,” spokesperson Kevin Dove said.

Of course, working from home isn’t an option for many blue-collar workers and those who directly interact with customers, so redesigning workplaces, if possible, is only the start of their employers’ headaches.

“The financial struggle is going to be real,” said Leesa Berry, owner of Klute Hair Salon in Toronto. “We are not going to take in as many clients every day, because the space is too small. We are going to have to purchase a lot of disposable things. For instance, capes would have to be thrown out after each client uses it. We need tons of disposable masks, because we have to provide them to clients.”

Berry hasn’t had any revenue since her salon closed down in mid-March, and is operating on savings and a federal loan for small businesses, so she will not be able to renovate her salon to space out workstations.

“Our workstations will have to be six feet apart from each other, so we can’t use all of them obviously, and only one of our shampoo stations can be in operation at any given time,” she said.

But those issues become moot if customers won’t venture outside as long as the threat of infection remains.

Cafes and retail stores reopened in Germany last week, but foot traffic was so low that some shops began shutting down again, leading the head of the Berlin-Brandenburg Trade Association, Nils Busch-Petersen, to characterize this interim period until things become fully normal again as one that will be even worse than the shutdown.

“At least when shops were shut they were entitled to government aid,” he

told the Financial Times

. “Now they’re on their own.”

A similar scenario could very easily happen in Canada. An Angus Reid poll conducted in the third week of April showed that 43 per cent of Canadians said they wouldn’t return to regular routines until no new cases were reported in their region for two weeks in a row. Only one in 10 said they would resume their former lives immediately.

“We just don’t know where the psychology of customers is going to be as we are reopening,” said Janet De Silva, chief executive of the Toronto Board of Trade. “The business owners we talk to want to be back in business, but the public needs to be confident with the guidelines on recovery that are to come.”

Caution is the watchword. Take Starbucks Canada. It announced this week that it would resume operations at as many stores as possible by the end of May, but will only choose select stores for walk-in services, based on the health situation in those communities. Certain stores that remained open for delivery, curbside pick-up and drive-thru services will act as test cases for the remaining stores.

All employees and store owners, according to a statement issued by Starbucks, will be required to wear facial coverings and take their temperatures at the start of each shift.

There will also be provincial guidelines to follow. The Ontario government is recommending retailers control how many customers are in a store at one time, install barriers between cashiers and customers, introduce floor markings to show where people should stand and not accept paper money or coins — tactics many grocers are already doing.

Social distancing becomes even more difficult at factories, where workers toil side by side. Volkswagen AG provided an inkling of what manufacturers might have to do when it reopened the world’s biggest car factory In Germany on Monday.

Volkswagen made 100 changes to the way its plant operates, including spacing vehicles further apart to reduce employee interaction. Workers will have to wear masks where it’s not possible to keep them 1.5 metres apart and they are expected to avail themselves of hundreds of new hand-washing stations.

But that’s just the start. Employees are expected to check their own temperature before each shift, change into their work clothes at home rather than on site, and use their elbows to open doors. The tools they use will be disinfected after each shift and cannot be passed from one person to another.

Air conditioners are even set on high to circulate as much fresh air as possible. The company did not release a cost estimate of all these changes, but production is starting slowly to ramp up so the costs will be borne while revenues are reduced.

“Now it is up to line managers to make sure that all employees are fully informed about the prescribed measures before they start work,” Bernd Osterloh, chairman of the General and Group Works Councils of Volkswagen, said in a release. “All colleagues must know what to do to best protect themselves and others.”

Simultaneously considering economic and health concerns is why Toronto’s Recovery and Rebuild Strategy is being led by Saad Rafi, former CEO of the Pan Am Games, and Dr. David Mowat, Ontario’s former chief medical officer.

“What we have got right now is a recovery framework that will look at expected stages of recovery, how each sector has been impacted and how to support them through the fiscal challenge of opening up,” said De Silva who is working closely with the new office of recovery.

That recovery will likely be slow. More than 55 per cent of economists polled by Reuters this week concluded that the pandemic would result in a U-shaped recovery, rather than an immediate V-shaped one, which should dampen anyone’s enthusiasm about the kind of economy we will have once most industries and sectors reopen.

“While the ‘restart playbook’ should be the immediate priority, governments must also identify and address sources of ‘systemic risk’ to the economy and potential ‘scarring’ that could impair economic recovery,” said a recent communique released by a C.D. Howe Institute working group on the post-COVID-19 environment.

The group suggested that prolonging the Canada Emergency Response Benefit program, for example, could have the adverse effect of discouraging workers to seek new work or return to the workforce, potentially deepening the economic crisis.

“I did have clients express these concerns about employees not wanting to return to work,” said Lai-King Hum, a labour and employment lawyer in Toronto representing both employers and employees. “But it was because they did not feel it was safe to do so.”

Hum said that from a legal standpoint, if an employer has adequately taken the right health and safety measures to protect employees, they have to return to work.

“But the issue under the current circumstances, I don’t think the employer will actually take action and fire the employee if he or she chooses not to,” she said. “It very well could be an anxiety issue that could be justified in these times.”

Companies will also have to consider reviewing and updating their employee agreements and HR policies, as well as navigate possibly tricky privacy concerns related to testing employees and collecting data.

“Proper policies and procedures, particularly with regard to employee consent and notifications, the types of data that will be collected, how the data is collected, and the purposes for which it will be used, etc., will need to be in place and communicated to employees in order to respect privacy rights and minimize associated risks,” warns a recent report by Borden Ladner Gervais LLP.

Pearlstein, the public affairs professor at George Mason, said mitigating a prolonged recession should start with measures to address the heart of this economic crisis: a cash squeeze.

“We have a liquidity problem,” he said. “Individuals have a limited amount of cash, and businesses have a limited amount of cash.”

We have a liquidity problem

Steven Pearlstein, public affairs professor, George Mason

Pearlstein suggests that one method large companies could adopt is to make sure lower-wage employees get paid most of what they would normally would, but defer part of higher-wage employees’ compensation.

“If you have an employee that makes $250,000, for example, there’s no need right now to provide that employee with that entire amount of cash,” he said. “You could say, ‘Hey I’m going to pay you now at an annual rate of $100,000,’ and give the employee an IOU in some form at a later date, in order to preserve jobs of low-wage employees.”

Pearlstein said his argument is not rooted in a sense of fairness and justice as much as it is just good business sense.

“If you start having a large number of companies or a large number of households go bankrupt, or if businesses start defaulting on their debt, which triggers all kinds of legal stuff, then you make the recession worse,” he said.

The issue, though, is which company is willing to take the plunge first and adopt such a radical compensation strategy.

“Again, this is a collective action issue. It would be good if everyone does it, but it is in no one person’s interest to do it himself or herself,” Pearlstein said.

“That’s the thing about how we’re going to navigate the coming years of reopening the economy. Government guidelines will be issued, but we will interpret them in ways that make sense to us as individuals, companies and regions. If you’re looking for a one-size fits all solution here, that would be the wrong way to go.”


Financial Post


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Economy

Seniors having big impact on local economy – Quinte News

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With June being Seniors’ Month, Quinte News is looking at the impact that those 65 and over have on our community and more specifically, on local businesses.

Close to 20% of the Quinte Region’s population falls into the senior category, with the area’s cost of living, natural amenities and sometimes slower pace to life, being attractive qualities for the area to have.

But it’s not just seniors relocating here that’s making a difference for the local economy.

Bay of Quinte Regional Marketing Board Executive Director Dug Stevenson says, there are plenty of older people who find our area attractive as a place to visit and spend some cash.

“One of the things that’s interesting is when you consider seniors’ spending”, he says.

“Of course they’re on a fixed income, but they have fewer things they need to pay for as well. They probably don’t have a mortgage anymore, the kids are probably gone and they’re not worried about paying for things like education, so they’ve probably got a bit more set aside for that leisure spending”.

Stevenson says from a travel and tourism perspective, the seniors group is actually more comparable to Millennials, who range between the ages of 22 and 38.

“A lot of them have no strings attached. They have a fixed income, but have money set aside and they know what they want to do and go do it.”, he says.

Quinte West Chamber of Commerce CEO Suzanne Andrews says seniors who live in the area have a strong impact on the economy, but not just as consumers of goods.

“They access a lot of services” she says. “Things like health services, some of which are privately owned businesses, or they go to hairdressers and restaurants. So definitely they are a huge economic factor when looking at the local economy and consumer spending in our region”.

Andrews also noted that while many seniors do move to our area to retire, not all of them want to get out of work completely, which adds to the local workforce.

“We are finding here in the Quinte Region especially, seniors are choosing to continue to work, maybe not at a full time level, but are available to work and look for positions that fit their experience and knowledge”, she says. “That’s definitely something for employers to think about”.

Morgan Foran of Meta Employment services backed that up saying they’re seeing a jump in the number of seniors looking for work as well.
“We’ve seen an increase in the last couple of years in indivuduals who either don’t want to retire, or have been in a long term position and the company is closed, but there are a lot of seasoned workers for sure that are still actively looking.
She says the modern job market can be challenging to navigate and there are some things they need to help more mature workers with.
“I think it’s just the ever changing technology” she says. “When it comes to the actual job, I think they have the expertise to do the job themselves, but it’s more the way things have changed with applying for positions and things being done online and the ways you have to apply”.
“How to look for work is how we’re helping right now”.
Meta’s Sandra Leslie added those senior workers are actually making a big difference in improving the local workforce.
“There are benefits to having seniors in the workforce”, she says, “They bring such a wealth of knowledge and experience to the position and often they act as a mentor to the younger or newer staff. That’s really important. To have those multiple generations in the workforce and the workplace, so that you have that diversity to support all of your customers and to share that knowledge”.
Meanwhile Cassandra Bonn,  a marketing Specialist with 25 years experience at ad agencies, large and small, and now employed with Quinte Broadcasting, says business owners would be wrong to ignore marketing to today’s seniors.
“Most seniors are no longer frail and dependent but instead are very active with many living in their own homes into their 90’s and continuing to work and play golf, ski, garden, and travel.   Many have more disposable income then they ever had.  Seniors are active and consistent contributors to our economy.”
When asked which media are best to reach seniors Bonn admitted a bias working at Quinte Broadcasting but says her experience shows that a combination of radio and digital marketing works best for business.
“Locally there are many great radio options, including the area’s first radio station, CJBQ-800-am, who’s programming is geared to the 55 + cohort and dominates the demographic.  Social media, such as Facebook, is also vital to a marketing strategy because more and more seniors are very active online.

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Economy

Unemployment rate hits new record even as economy adds jobs – CP24 Toronto's Breaking News

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Jordan Press, The Canadian Press


Published Friday, June 5, 2020 5:18AM EDT


Last Updated Friday, June 5, 2020 3:25PM EDT

OTTAWA – Canada’s employment minister says the federal government is rethinking a key COVID-19 benefit so workers have more incentive to get back on the job, in an effort to maintain a surprising boost in job numbers from May.

Statistics Canada reported that the country got back 289,600 jobs in May – which mirrored a similar bump in the U.S. – after three million jobs were lost over March and April and about 2.5 million more people had their hours slashed.

Provincially, Quebec led the way, gaining 231,000 jobs as it became one of the first provinces to ease restrictions, doing so just before Statistics Canada collected data the week of May 10. Ontario was the only province with losses, albeit at a slower pace than in March and April.

Combined with more people reporting getting regular hours, the agency said Canada had recovered only 10.6 per cent of employment losses and absences related to the COVID-19 pandemic.

Friday’s jobs report showed the unemployment rate in May rose to 13.7 per cent, the highest level in more than four decades of comparable data. But that’s because more people started looking for work – meaning the rate shouldn’t be taken as a sign of underlying weakness, said CIBC senior economist Royce Mendes.

The unemployment rate is a measure of the people looking for work who can’t find it, meaning it can actually decline if job-seekers give up, or increase as formerly discouraged seekers see new signs of hope.

Still, the monthly labour force survey showed that men gained back more jobs than women, resulting in a wider gender gap in employment losses as a result of COVID-19, and that the pandemic continued to disproportionately affect lower-wage workers.

To keep gains going, business and labour groups called for a revamp of the Canada Emergency Response Benefit and the employment insurance system.

The first cohort of recipients of the $500-a-week payment will max out their 16 weeks of benefits in early July. Some may qualify for employment insurance, while others may not have any work available, meaning significant drops in income that could hamper the path to recovery, said TD senior economist Brian DePratto.

The Canadian Labour Congress and Canadian Chamber of Commerce separately called for reforms to the decades-old EI system, which the Liberals determined early on in the crisis couldn’t handle the influx of jobless claims.

Employment Minister Carla Qualtrough suggested all ideas are on the table when it comes to EI, and the future of the CERB.

“As we look into the months coming … we’ve got a different goal in mind: People need to get back to work safely,” she said at a midday press conference.

“So our thinking moving forward is how do we balance a need to continue to support workers, while not disincentivizing work?”

The most recent federal figures show 8.37 million people applied for the CERB, with $43.18 billion in payments as of June 2. Qualtrough said 1.2 million recipients no longer require it, although it wasn’t immediately clear why.

The Canada Revenue Agency also said this week that almost 190,000 payments of wrongfully received benefits had been made as of June 3.

Economists had been watching the CERB numbers as a proxy for Friday’s jobs report, which set up expectations for another round of job losses.

CERB figures will continued to be watched to track possible job losses and compare it to areas where there are signs of progress, said Brendon Bernard, an economist at the Indeed Hiring Lab.

“The strength of this rebound is going to depend to a significant degree on what happens with layoffs,” he said in an interview. “We could see some areas of the economy bounce-back as shuttered sectors reopen, but if layoffs continue, then it’s going to be tough for net job gains to be particularly strong.”

The total number of unemployed Canadians doubled from February to April, a surge driven by temporary layoffs that the vast majority of workers expected to last less than six months.

At the same time, there was a spike in the number of people who wanted to work but weren’t actively looking for jobs, likely because the economic shutdown has limited job opportunities. People not actively seeking work aren’t counted in unemployment figures.

The unemployment rate for May would have been 19.6 per cent had the report counted among the unemployed those who stopped looking for work – largely unchanged since April.

Statistics Canada said lower-wage workers recovered just over one-10th of the losses they experienced in March and April. But they continued to be a higher share of people working less than half of their usual hours.

Lower-wage workers were among the first- and hardest-hit during the shutdown, largely because they worked in industries like retail, restaurants and hotels that closed early in the pandemic.

Besides seeing less improvement generally compared with men, women with children under age six saw slower job gains than those with older children.

Rebounds were also weak for students and recent immigrants.

This report by The Canadian Press was first published June 5, 2020.

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Saskatchewan says economy is rebounding despite 12.5% unemployment rate – Globalnews.ca

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The Saskatchewan government is feeling confident its economy is on the rebound.

This comes despite the unemployment rate being 12.5 per cent at the end of May, according to Statistics Canada’s latest Labour Force Survey released Friday.

By the end of April, the unemployment rate in the province was 11.3 per cent. Saskatchewan’s unemployment rate is, however, the second-lowest among provinces and below the national average of 13.7 per cent.


READ MORE:
Saskatchewan loses nearly 53K jobs from March to April: Statistics Canada

“The Saskatchewan workforce is still being seriously affected by the COVID-19 pandemic but there are a number of signs that show Saskatchewan’s economy is both recovering faster, and was less impacted, than other provinces,” said Jeremy Harrison, immigration and career training minister, in a statement.

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“We have the second-lowest unemployment rate in Canada and the number of people working rose in May, which is a strong, positive sign in the COVID-19 era.  The Saskatchewan economy is positioned to strongly improve as we move forward with the Re-Open Saskatchewan plan.”

In Saskatchewan, there were 600 more jobs in May than April, while 87 per cent of those working in February were working in May.


READ MORE:
Nearly 21K jobs lost in Saskatchewan in March due to COVID-19: Statistics Canada

Since February, the number of hours worked in the province has dropped by 9.1 per cent. It’s the second-lowest decline in provinces. Nationally, the average decline in the number of hours worked over that same period is 19.3 per cent.






8:17
Coronavirus outbreak: All options on the table for benefits to help those impacted by COVID-19


Coronavirus outbreak: All options on the table for benefits to help those impacted by COVID-19

“Looking forward, we are seeing positive economic news in Saskatchewan, including announcements about helium and lithium recently,” Harrison said.

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“These new investments will bring jobs and investment to communities across the province and will help lift our economy out of the current challenges facing markets globally.”


READ MORE:
Coronavirus: Canada lost 1 million jobs in March

The province said businesses in Saskatchewan are faring better than other jurisdictions, claiming to have closed fewer than other provinces did.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

“This speaks to the strength of Saskatchewan’s economy and a strong reopening plan aiding in economic recovery,” the province said in a release issued on Friday.

Despite the optimism from the provincial government, the Saskatchewan NDP has laid out three actions it believes the province should take right now to strengthen the economy going forward.

First, to put Saskatchewan businesses and workers first through a Sask-first procurement plan that helps keep jobs in the province. Secondly, make the Saskatchewan Small Business Emergency program more accessible.






1:43
Saskatchewan tops up economic stimulus package by $2 billion


Saskatchewan tops up economic stimulus package by $2 billion

Finally, to end the six-month lockout between Regina’s Co-op Refinery and its workers, which would put 800 Saskatchewan people back to work.

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“New Democrats have urged Premier Moe and this Sask. Party government to protect jobs and small businesses, but clearly not enough has been done,” Opposition Leader Ryan Meili said.

“We know that Saskatchewan’s economy was already shrinking before COVID – and now the Premier’s lack of action to put Saskatchewan workers and businesses first is making things worse.”

Saskatchewan continues its reopen plan with Phase 3 beginning on June 8.

© 2020 Global News, a division of Corus Entertainment Inc.

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