Small business confidence falls to record low amid pandemic …

‘Keep calm and ship on’

The Canadian Press
Mar 25, 2020 / 1:11 pm | Story:

Photo: The Canadian Press

A Purolator driver wears a mask as he makes deliveries in Toronto on March 24, 2020. Shippers are flying into uncharted territory as the COVID-19 pandemic upends delivery patterns, with surging consumer demand mitigating a slumping global economy exacerbated by border closures and travel controls. E-commerce is on the rise as non-essential businesses remain closed in Ontario and Quebec and the prime minister encourages Canadians to stay home. THE CANADIAN PRESS/Frank Gunn

Shippers are in uncharted territory as the COVID-19 pandemic upends delivery patterns, with surging consumer demand mitigating a drop in corporate orders amid border closures and travel controls.

Residential deliveries have gone up at an “equal if not greater pace” than the drop in business-to-business parcels as house-bound Canadians order items online, Purolator chief executive John Ferguson said.

Hoarding of household items has fuelled the uptick.

“One person ordered six boxes of cereal,” Ferguson said. “I thought, ‘Who orders six boxes of cereal?'”

“It also turned into people wanting to treat themselves, so they’re still buying fashion apparel, for example,” he said. “They want to maybe decorate a room now, since they’re sitting at home all day.”

Hospital shipments have also increased up to meet demand for additional medication and diagnostic equipment, “even COVID tests and disinfectants,” he said.

Amazon Inc., the country’s largest online retailer, said Tuesday it is hiring more than 1,000 workers in Ontario, British Columbia and Alberta to handle the spike in sales.

Business-to-business (B2B) deliveries are decreasing, however, despite exceptions such as grocery store suppliers, said Marc Wulfraat, president of Montreal-based logistics consulting firm MWPVL International Inc.

“The B2B business — which dominates FedEx and United Parcel Service Inc. in terms of their package volumes, that’s down,” Wulfraat said, noting bulk deliveries tend to yield higher margins than business-to-consumer (B2C) shipments.

“The B2C, that’s up,” he said. But in terms of business lines, “that’s not the lion’s share of what these companies are doing.”

Greater labour shortages — already an entrenched problem in trucking — are looming, adding to shippers’ woes.

“When you make the children stay home from school, a lot of people can’t go to work. Those are the same people that drive the trucks and go to warehouses and do all the things we take for granted,” Wulfraat said.

Supply chain disruptions have also tripped up the flow of goods.

“You’ve got ocean and air freight imbalances coming out of Asia,” where industrial hubs such as Wuhan in China are starting to ramp up again, Ferguson said.

Empty roads and highways across Canada clear a convenient path for drivers, “but countering that are businesses that are shuttering or shortening their hours,” the Purolator CEO added. “We have an internal mantra right now: Keep calm and ship on.”

Teamsters Canada, whose truckers work for Purolator and UPS, said long-haul deliveries continue in spite of the economic downdraft.

“Based on the information we have — and it’s changing every minute — the package delivery business is doing OK,” said Francois Laporte, president of Teamsters Canada.

Canada Post, which relies heavily on direct-to-consumer parcels, said volumes remain “steady.”

At Cargojet Inc., rising e-commerce sales have offset a downturn in international deliveries, said Laurentian Bank Securities analyst Mona Nazir. The Mississauga, Ont.-based cargo airline “may be a net beneficiary in the current environment.”

Nazir said Amazon’s surge in sales has impacted Cargojet, which provides charter aircraft services to move packages from Amazon warehouses to distribution centres for final delivery.

Meanwhile, Air Canada has started using its aircraft to operate cargo-only flights to Europe, with other flights planned for Latin America and South America.

The planes have no passengers, but instead carry time-sensitive shipments, including medical supplies, the airline said Wednesday.

The flights come as Air Canada slashes capacity in response to plunging travel demand due to government measures to stem the spread of the novel coronavirus.

The first cargo-only flights departed from Toronto for Frankfurt, London and Amsterdam this past week on Boeing 787 aircraft capable of carrying 35 tonnes of freight.

Air Canada said it is also exploring opportunities to offer the service domestically using smaller Air Canada Express regional aircraft.

While overall courier shipment volumes remain steady, “the general economic forecasts are something that are going to impact all of us in the end and something we’ll have to deal with,” said Ferguson.


More execs take pay cuts

The Canadian Press
Mar 25, 2020 / 11:50 am | Story:

Photo: The Canadian Press

Murray Mullen says he was focused on the bigger picture when he approached senior executives and directors at his trucking and logistics business about taking pay cuts in response to the COVID-19 crisis.

The chief executive of Mullen Group Ltd. projected how the virus could wreak havoc on the Alberta-based business, which was founded by his family and is now traded on the Toronto Stock Exchange. He said it was essential to start making plans for the company to sustain itself into the early summer.

“My primary objective is this: How do I make sure the business is strong so that I’m around when demand improves?” Mullen explained by phone from his home in Victoria.

“I can’t do anything about this (virus), nobody can do anything about this, but you’ve got to get people back employed. The most comforting thing I can do is say, ‘Look, the company’s strong. It’ll be around in three months.'”

The board committed to forgoing any pay for 90 days, while his senior teams have “taken somewhere up to a 50 per cent pay cut,” he said. Mullen himself gets a salary of $1 per year, with much of his pay made up of performance-based compensation, which he added won’t amount to much this year.

Several other Canadian companies have made similar financial commitments in recent days that put temporary restraints on executive salaries, an effort partly to show employees that belt tightening isn’t just happening in the lower ranks. But the move can also help companies slow the bleeding of cash that might happen as the bottom falls out of their revenues.

In the oil and gas industry, executives at Canadian Natural Resources and Ensign Energy Services Inc. were among the first Canadian operations to commit to lower salaries in the short term as part of broader reductions in capital spending. Others companies are expected to take similar steps in the coming weeks.

Cineplex Inc. has outlined changes to its leadership pay structure that will take place over a month, after it temporarily laid off part-time employees and closed all movie theatres through at least April 2. Its senior executive team will forgo their salaries for the first two weeks, and see a 40-per cent reduction in pay for the final two weeks. Other lower-ranking leadership would see salary reductions ranging from 55 per cent to more than 60 per cent, depending on their role.

The monetary challenges facing Cineplex are unique, however, as the movie exhibitor approaches a June 30 deadline for the $2.8-billion takeover of the company by Cineworld PLC. One of the conditions of the transaction is that Cineplex keeps its debt below $725 million, while it’s headed into a period some observers say could totally reshape the movie business.

Other companies are focused on a broader reduction in capital spending, which in the resources sector has included delaying major projects.

Energy giant Canadian Natural Resources Ltd. said last week its president would see a salary reduction of 20 per cent. Other members of its management committee will see pay reduced by 15 per cent while vice-presidents and board members would see a smaller reduction of 10 to 12 per cent.

Oilpatch company Ensign Energy Services Inc. announced a pay cut for its top executives on Monday, lowering the salary of its president and chief operating officer by 20 per cent and its chair by 40 per cent.

Recipe Unlimited Corp., which owns marquee brands such as Swiss Chalet, Harvey’s and St-Hubert, outlined a voluntary suspension of compensation for its CEO on Tuesday until its locations are “fully back open for business.” The food services company, which currently only offers pick-up and delivery options, said the board’s compensation was also frozen among other changes that include dividend payment suspension and a temporary halt to royalty fee collection.

COVID scare at oilsands

The Canadian Press
Mar 25, 2020 / 11:43 am | Story:

Photo: Contributed

A COVID-19 scare at an oilsands staff lodge north of Fort McMurray, Alta., last week tested the pandemic preparedness of one of the many businesses that house, feed and transport workers at resource extraction sites.

Civeo Corp., which runs the Borealis Lodge by Suncor Energy’s base mine, said Friday that a worker staying there was taken to hospital with novel-coronavirus-like symptoms. On Tuesday, it said the test was negative.

Ian Robb, Canadian director of the hospitality industry union Unite Here, said Civeo and other work-camp operators are taking the pandemic threat seriously.

“I have to commend the Civeo protocols. Yes, that individual came back negative. But nothing would have been handled different if he’d come back positive,” said Robb, also administrator of Unite Here Local 47, which represents Alberta work-camp cleaners and cooks.

“We did it right. We did it following those directives and the workers listened.”

Oilsands mines rely on thousands of workers from across the country who fly to sites and stay there for several days or weeks at a time.

Companies have sent non-essential staff home, but some are allowing workers who don’t want to risk travelling to hunker down in lodges on their days off, Robb said.

He said lodges these days generally have private rooms, but special care is being taken in common areas such as dining rooms, where staff are working 10-hour days wiping and sanitizing.

He said as soon as the worker at Borealis fell ill, the dining room was closed and resanitized. Dinner was served as takeout.

“Their protocols and their readiness was tested that day,” said Robb. “It was pretty much flawless.”

Diversified Transportation, which buses workers to oilsands sites, said it’s locking down washrooms, supplying more disinfectant wipes and hand sanitizer, boosting cleaning, and carrying fewer passengers so they can sit further apart.

Canadian North is continuing to fly workers to and from their jobs, but with extra precautions.

“We provide an operationally critical role for them,” said the airline’s communications manager, Kelly Lewis. “What we do can’t stop right now.”

Earlier this month, one of its oilsands-bound planes turned back to Edmonton because one of the crew got word that a family member had tested positive for COVID-19.

Lewis said Canadian North started tracking the emerging COVID-19 threat in January and formed a committee to prepare.

Blankets, pillows and in-flight magazines have been taken away. Frequently touched surfaces are being sprayed down with a bleach solution.

Workers travelling to or from sites are presenting paper boarding cards instead of reusable plastic ones. Passengers are being spaced as far apart as possible.

Scott Davis, director of emergency management for the Regional Municipality of Wood Buffalo, said the municipality has a mutual aid agreement with oilsands operators, but generally companies have the resources and ability to handle situations themselves.

“I feel they’re taking great steps,” said Davis, who noted that there’s enough space in accommodations to allow for isolation.

Davis said he’s had daily calls with Alberta Health Services and he’s comfortable the Northern Lights Regional Heath Centre in Fort McMurray is well prepared to treat any COVID-19 cases.


Goose to make med scrubs

The Canadian Press
Mar 25, 2020 / 10:41 am | Story:

Photo: The Canadian Press

Canada Goose is shifting its factories to start production of medical gear for health-care workers and patients across Canada in an effort to help deal with the COVID-19 pandemic.

The company, best known for its luxury winter parkas, says it will begin making scrubs and patient gowns and start distributing them to hospitals next week.

The gear will be donated locally at no cost.

Companies across the country have moved to shift focus and retool in an effort to produce the supplies needed by medical professionals dealing with the novel coronavirus.

Canada Goose says it will produce the clothing at two of its manufacturing facilities, starting with Toronto and Winnipeg.

Production is set to start early next week with approximately 50 employees per facility and an initial goal of 10,000 units.

“Now is the time to put our manufacturing resources and capabilities to work for the greater good,” Canada Goose chief executive Dani Reiss said in a statement.

“Our employees are ready, willing and able to help, and that’s what we’re doing. It’s the Canadian thing to do.”

Pot an essential service?

Albert Van Santvoort/Business in Vancouver
Mar 25, 2020 / 10:35 am | Story:

Photo: Nicholas Johansen

British Columbia cannabis retailers are hopeful that cannabis dispensaries will be deemed essential businesses and be able to keep their doors open in the event of a province-wide shutdown.

“If B.C. didn’t deem cannabis an essential business when other provinces have, I think it would be a total mess,” said Mike Babins, owner of Evergreen Cannabis Store. 

British Columbia has yet to experience the wide-scale shutdown of business currently being legislated in Ontario and Quebec, where only businesses deemed essential are allowed to stay open. Both provinces have deemed cannabis and liquor retail an essential business and allowed them to remain open. 

Cannabis retailers aren’t only hoping to be deemed essential for the sake of their own bottom lines, but also to help continue to cement the legal cannabis industry. Babins and Eleanor Lynch, president of operations at cannabis retailer Kiaro, are both concerned that if cannabis retailers are forced to close, it will create an opportunity for the black market to re-establish itself.  

“I think Ontario has really set the bar, they responded quickly and made sure consumers had access to things they need while limiting access to things that are non essential,” said Lynch. “I feel very confident that British Columbia will take the same approach.”

Ontario was not the first to deem cannabis an essential business. California and a number of other states have deemed either recreational or medicinal cannabis essential business. 

While the B.C. government has not yet had to determine if cannabis falls into the essential business category, they have made other moves to support the industry including allowing for online and phone cannabis orders that were not previously allowed. 

Despite this classification uncertainty, British Columbians haven’t started hoarding cannabis. While stores have reported an increase in sales, few have identified it as stockpiling behaviour, according to various retail owners in the industry.

Shopping hour for heroes

Glacier Media
Mar 25, 2020 / 10:06 am | Story:

Photo: London Drugs

With many stores dedicating shopping hours to those most vulnerable to the coronavirus, B.C.-based London Drugs is reserving one hour each day for workers on the frontlines of the pandemic.

Starting Wednesday, each of the pharmacy and retailer’s stores will be reserved for health-care workers and first responders from 8 p.m. to 9 p.m. Monday to Saturday, and 7 p.m. to 8 p.m. on Sundays. 

First responders include firefighters, police officers, ambulance paramedics and active military personnel, while healthcare workers include hospital staff, care home staff, medical centre employees and pharmacists.

Clint Mahlman, president and chief executive officer of London Drugs, said in a statement that the hours are offered in hopes that frontline workers can “get their shopping done as easy and as stress-free as possible.”

“They often work long shifts and many stores are closed by the time they are off their day shifts,” said Mahlman.

“We know it is a stressful time for those working on the frontline of this health crisis and it is imperative we do everything we can to help these individuals stay health and take care of them as best we can.”

To access the dedicated shopping hours, medical professionals and first responders must show an employer ID or workplace credentials.

Too close for comfort

Steven Chua / Squamish Chief
Mar 25, 2020 / 9:22 am | Story:

Photo: Pixabay

Try staying two metres away from your co-workers when you need their help on a construction site. It doesn’t work.

For many construction workers, the nature of their jobs makes it hard or even impossible to abide by guidelines set out by the province amid the COVID-19 pandemic.

As a result, some are saying it may be best to shut down sites while the province is in a state of emergency.

“The construction industry and worksites — we are not able to follow these guidelines that are set out from health officials. It’s just not possible, it’s not practical and to make all these exceptions —  I don’t see that that’s helping flattening the curve,” says one worker who asked to remain anonymous.

The worker said his employer has asked him to continue doing its job despite the fact it’s virtually impossible to follow the provincial health officer’s rules about social distancing.

Meanwhile, the BC Building Trades Council issued a statement saying workers are at risk on many occasions.

“Workers are pleading for help — this is urgent,”said BC Building Trades executive director Andrew Mercier in a statement. “The Building Trades are focused on the facts on the ground. I have been in direct contact with the top brass at WorkSafeBC about this. We need more hand-washing stations. We need better social distancing. Regulations on paper mean nothing if they are not being enforced on the ground.”

The council said that many workers have reported they do not have access to adequate washroom facilities, running water, soap or hand sanitizer. They often share tools and work together in small spaces that do not allow them to abide the recommendations for social-distancing from the provincial health officer.

There have also been reports of people working alongside others who are visibly sick.

The council called for WorkSafeBC to address the issues.

In answer to the concerns, WorkSafeBC issued a statement saying it is responding by launching an “inspectional initiative” for construction sites.

“This would include ensuring construction sites are following direction from the provincial health officer and are complying with occupational health and safety requirements.

“In terms of enforcement, WorkSafeBC expects construction employers to adhere to the provincial health officer’s directions. WorkSafeBC will consider issuing orders for non-compliance, and may issue stop-work orders if there is a high risk of serious illness; penalties may be imposed for flagrant violations.”

The statement added that employers in B.C. are required by regulation to provide a minimum standard around the provision of washrooms and hand-washing facilities.

It also noted that workers in B.C. also have the right to refuse unsafe work if they believe it presents an undue hazard.

Anxiously awaiting help

The Canadian Press
Mar 25, 2020 / 7:30 am | Story:

Photo: Pixabay

Canadians who have lost their jobs due to COVID-19 and are struggling to make ends meet anxiously awaited promised federal help with the Senate set to take up an emergency $82-billion financial package passed by the House of Commons on Wednesday.

An unprecedented number of people have seen layoffs and job losses over the past week, with close to one million new applications for employment insurance reported.

The brutal jobs reality was apparent in a new poll, which suggests close to half of those asked reported that they or someone in their house had lost work because of the outbreak. Another 18 per cent of Canadians polled by the Angus Reid Institute showed as many said they expected to lose work soon.

More than half who said they had lost work said their employers were not compensating them and as many said trying to get employment insurance had proven difficult.

The federal cash bill, passed in the early hours after wrangling between the government and Opposition, which complained the initial form of the legislation was a “power grab” and amounted to giving the Liberals a “blank cheque.”

The legislation allows for direct government supports for people and businesses hurt by the shutting down of much of normal life as well as tax deferrals.

With governments warning of even more restrictive measures aimed at slowing the spread of the disease to avoid crushing an already stressed health-care system, the coronavirus caseload continued its march upward. About 2,800 Canadians are known to have been infected. More than two dozen of those have died.

Experts say the virus causes mild flu-like symptoms in most people but can lead to life-threatening pneumonia in others: particularly the elderly and those with less optimal health. Besides frequent hand-washing, the best defence is “social distancing” — avoiding contact with others.

To ensure as little inter-personal contact as possible, provinces and local governments have taken increasingly urgent steps to force people to stay home. Quebec and Ontario, for example, have ordered all non-essential businesses shut down.

In Newfoundland, a woman arrested in Corner Brook for violating public health orders to self-isolate for 14 days was to appear in provincial court Wednesday. She faces a fine of up to $2,500 or jail sentence of up to six months.

The mass layoffs resulting from the restrictions have left numerous people without paycheques as April 1 looms. Residential tenants and landlords have called on the federal and provincial governments to offer some kind of relief before rent cheques are due. Manitoba has suspended any rent increases and joined several other provinces in effectively halting evictions due to non-payment of rent.

Global Affairs Canada said Wednesday 93 emergency loans of up to $5,000 are being made to Canadians stranded abroad and in need of financial help. Another 380 applications were being processed. 

Stock markets open higher

The Canadian Press
Mar 25, 2020 / 7:09 am | Story:

Photo: The Canadian Press

Foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea.

Stocks are peeking higher in early morning trading on Wall Street Wednesday, as indexes look to lock in their first back-to-back gain since the market’s brutal sell-off began last month on worries about the coronavirus outbreak.

The S&P 500 was up slighlty in the first few minutes of trading, a day after packing a year’s worth of gains into Tuesday on expectations that Washington was close to a $2 trillion deal to aid the economy. The Dow was up about 1%, largely because of a huge gain in one stock, Boeing. A day earlier, it surged 11.4%, its biggest gain since 1933.

Congress and the White House did indeed announce an agreement early Wednesday, with the Senate possibly voting on it in the afternoon. Investors were anxiously waiting for this kind of aid, which will help blunt the blow to the economy as businesses shut down to slow the spread of the coronavirus.

Even optimists say the package provides just the second leg of three that markets need to regain lasting confidence. The Federal Reserve and central banks are also offering tremendous support by cutting interest rates and supporting lending markets, but investors say they need to see the number of new infections peak before they can feel comfortable knowing how deep the looming economic downturn will be.

With widening swaths of the economy shutting down and layoffs mounting, economists are sure a steep drop-off is coming. What’s unsure is how long it will last.

That uncertainty has led to wild swings in the stock market over the last month.

The S&P 500 was up less than 1%, as of 9:55 a.m. Eastern time. The Dow Jones Industrial Average rose 211, or 1%.

Earlier on Wednesday, futures for the S&P 500 and other indexes were down, indicating losses could be on the way when trading opened.

Canada’s main stock index posted a triple-digit advance at the start of trading, adding to gains Tuesday that saw it advance more than 1,000 points or nearly 12 per cent.

The S&P/TSX composite index was up 206.47 points at 12,777.55.

The Canadian dollar traded for 69.88 cents US compared with an average of 69.01 cents US on Tuesday.

European markets initially jumped to strong gains, but they faded as the day progressed. Germany’s DAX was down 0.8%, and the French CAC 40 was up the same amount.

Even earlier on Wednesday, Asian markets surged to big gains following the big U.S. day. Asia, Japan’s Nikkei 225 jumped 8%, South Korea’s Kospi rose 5.9% and the Hang Seng in Hong Kong gained 3.8%.

Leon’s cuts half its staff

The Canadian Press
Mar 25, 2020 / 7:03 am | Story:

Photo: The Canadian Press

Leon’s Furniture Ltd. is laying off 3,900 employees or about half its total current workforce as it deals with the COVID-19 pandemic.

The company says it will temporarily close 72 of its 205 corporate-owned stores across Canada.

The move comes as businesses across the country cut staff to deal with the economic slowdown caused by steps taken to slow the spread of the novel coronavirus.

The company’s retail banners include Leon’s, the Brick, the Brick Mattress Store and the Brick Outlet as well as Appliance Canada and Midnorthern Appliance.

Leon’s says it will offer supplemental payments to its employees on top of any employment insurance benefits.

The company will also extend company-paid benefits to these individuals.

Business confidence sinks

The Canadian Press
Mar 25, 2020 / 6:03 am | Story:

Photo: The Canadian Press

Empty shelves of a shut-down food shop at North Vancouver’s Lonsdale Quay.

The Canadian Federation of Independent Business says small business confidence has fallen to a new low amid the COVID-19 pandemic.

The organization says its latest business barometer has fallen to a record low of 30.8 from a level of 60.5 in February.

It says one in five owners say their business is in a good state, compared with 38 per cent who say it’s doing poorly.

Half of business owners say they are planning layoffs in the next three months, while just five per cent say they will be looking to add full-time staff.

The report comes as non-essential businesses shut down in Ontario and Quebec in an effort to slow the spread of the novel coronavirus.

The moves have resulted in the layoff of workers across the country as businesses stop work.

The barometer is based on 1,378 responses, collected from a stratified random sample of CFIB members, to an online survey on March 17 and 18.

Shaw founder dead at 85

The Canadian Press
Mar 24, 2020 / 3:18 pm | Story:

Photo: NAIT

Shaw Communications Inc. founder JR Shaw has died at 85 years old.

The company says in a statement that its executive chair and former CEO “passed away peacefully” on Monday

Shaw stepped down as CEO in 1988 when his eldest son, Jim, took over the role.

The company said JR’s son and the Shaw’s current CEO, Brad Shaw, will take over JR’s executive chairman position.

The company plans to confirm the appointment at its April 9 board meeting.

Brad says he and his family are deeply saddened by the news, adding he spoke to JR daily about the business.

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