Weekly COVID-19 Economic Update – May 12, 2020
Prepared by Morris Interactive
Every week during the coronavirus crisis, CCDF will be providing its clients with an economic update to help them understand the wider economic implications and better plan their own recovery.
This week, we focus on procurement opportunities, new business supports, and Saskatchewan’s labour market.
The Saskatchewan government has announced major stimulus spending. How can my business compete for those new projects? Last week the provincial government announced a $7.5 billion stimulus spending plan, including $5.5 billion in planned capital projects and $2 billion in additional funding. The projects will largely involve spending on items such as school, highways, hospitals, utilities, and municipal infrastructure.
The federal government has mostly focused on fiscal stimulus to this point but will likely increase capital spending soon, in order to buoy the economy.
This presents an opportunity for Métis businesses, especially those that may be involved in construction, directly or indirectly. The federal government has a Procurement Strategy for Aboriginal Businesses that includes mandatory, voluntary and conditional set-asides for Indigenous businesses. They have also committed to increasing their Indigenous procurement to 5% of its purchases, up from less than 1% today.
The Saskatchewan government uses ‘best value’ procurement rather than lowest cost, which privileges local and Indigenous businesses. Similarly, some Crown Corporations have Indigenous procurement policies. All of these provide Métis businesses with a competitive advantage.
To ensure you are accessing government procurement opportunities, register at https://sasktenders.ca and at https://services.aadnc-aandc.gc.ca/IndigenousBusinessDirectory. Connect with purchasers and make sure your profile is attractive and competitive. Governments procure more than just construction services, so it’s worth registering even if you consider yourself to offer non-traditional goods and services for government spending.
It’s hard to keep up with all the government programs. What new supports for business have been announced recently? Two big announcements have come up in the past two weeks. The first is that the Canadian Emergency Wage Subsidy (CEWS), which covers up to 75% of employee’s salaries, will be extended past its original end date of June 6. However, the new expiry date has not yet been announced.
If you haven’t yet applied for the CEWS, you can find instructions here.
The second major announcement is for rent relief for small businesses, called the Canada Emergency Commercial Rent Assistance program. It provides forgivable loans to qualifying commercial property owners to cover 50% of the monthly rent payments from eligible small business tenants who are experiencing financial hardship during April, May, and June. The loans are forgiven if the owner reduce the tenants’ rent by 75%. Essentially, the government covers half and the tenant and owner each cover a quarter of regular rent.
The Canadian Mortgage and Housing Corporation is managing this program. Applications are not yet open but you can find out more about eligibility, and sign up to receive email updates on the program as they become available, here.
You can see a list of all federal and provincial business support programs here.
I heard that millions of jobs have been lost? How bad is it? It was not unexpected, but Statistics Canada April’s jobs report showed unprecedented losses for the Canadian economy. After already dropping a million jobs in March, another two million were added in April, for a total loss of 12.5% of full time workers and 29.6% in part time workers.
Many of these workers will return to the labour force as soon as public health restrictions are eased; Statistics Canada indicated that 97% of the newly unemployed in April were temporary layoffs. However, it could take years until employment rates return to their pre-COVID state.
There is one silver lining: Saskatchewan saw the lowest employment change of any other province (-12.7%), and the lowest decline in number of hours worked (-15.8%). It also has the second lowest unemployment rate of any province (after Prince Edward Island) at 11.8%. This is due to the provincial economy’s lower reliance on the service sector, and relatively low number of COVID cases.
What’s happening in northern Saskatchewan? While COVID cases have plateaued in southern Saskatchewan, Métis communities in northwest Saskatchewan, including La Loche and Beauval, have been hit hard.
As of writing, the number of cases in the Far North had dropped to the single digits (5 new cases on May 12), indicating the outbreak has subsided. However travel restrictions remain in place, and the ‘Re-Open Saskatchewan’ plans will be delayed in La Loche.
How can my business adjust to the new economic reality in Saskatchewan? CCDF is offering all of its clients up to $10,000 for professional assistance, through its Business Support Program, to navigate these difficult times, and has retained a number of consultants to help you with your specific needs. Areas of support include assisting clients with addressing HR issues, acquiring economic intelligence, obtaining financial management advice, and more. Call your CCDF Business Development Specialist to access this program right away, and better understand what supports and strategies will work best for your circumstances.
What are some good resources to learn more? Morris Interactive has compiled a list of free resources that will provide up to date economic information during the coronavirus crisis. You can view those resources here.
Document Prepared by Morris Interactive
www.morrisinteractive.ca • firstname.lastname@example.org • Ph. 1.866.955.3006
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