N.S. small businesses say rent deferral program places full burden on them

Across the province, small businesses are being forced to shut down to adhere to provincial regulations set out in the Public Health Act.

Many, like DeeDee’s Ice Cream, a small family run business with two locations, has been forced to lay off their employees in an attempt to weather the storm.

“Most of my employees have worked for me for between three and five years. So to lay them off was a super difficult decision,” said owner of DeeDee’s Ice Cream Ditta Kasdan.

But even without payroll, there are still many bills to pay, including rent, and utilities.

In an effort to help small businesses, on Friday the Nova Scotia Government introduced the rent deferral program, which encourages landlords to defer rent for three months for businesses forced to close under the public health order.

As part of the effort, the province guarantees up to 5,000 dollars a month for landlords if that business goes under.

But small businesses are raising concerns that it does little to help them.

“The rent deferral program that our Premier has put forward on Friday is going to put most businesses out of business,” said Lara Cusson, chairwomen of the Nova Scotia Small Business Affiliation.

“It’s putting all the burden on small businesses. So if we defer our rent by three months, even six months, we still have to pay back that rent, but we’ve never made that revenue.”

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Cusson has written a letter to the Premier calling for a more equitable solution.

“We need to share this burden with landlords, with the banks. We need some sort of collective collaborative effort to keep businesses alive and sustainable.”

Already over 200 businesses in the province have signed the letter, including Kasdan.

https://shawglobalnews.files.wordpress.com/2020/03/letter-9.pdf

“I totally disagree with the whole deferral idea,” said Kasdan, who would instead like to see some form of aid to help reduce debt.

During an update on the Province’s response to COVID-19 on Monday, Stephen McNeil said this program acts as a way to help businesses, and it doesn’t mean that businesses will be required to pay the rent immediately when they re-open.

“This is meant quite frankly to take pressure off them right now,” he said.

“They can work with their landlord to spread that over the life of their lease, that could be two years, if its shorter than that then the landlord could have the responsibility to extend it beyond that period of time.”

But Kasdan says it’s still not good enough. She says many businesses like her own can’t afford to take on any extra debt and she’d like to see the province do something to help alleviate their debt, not add to it.

“It’s like with big oil corporations, huge fisheries companies. We seem to always have money to give them to operate and somehow small businesses are always expected to be self-sufficient and resilient on their own,” said Kasdan.

Federal help needed

Meanwhile on the federal level, over the past few weeks, the government has been dolling out benefits aimed at helping Canadians and businesses get through this pandemic. For businesses, the federal government has introduced loans, and wage subsidies.

Many small businesses say neither will keep them from going bankrupt if they have to stay closed for months.

“Their fixed costs continue, so those are things like rent or other things like debt they made be paying on inventory or other things they are holding, and that is likely what will bankrupt them if this crisis is to continue for months on end,” said David MacDonald, an economist with the Canadian Centre for Policy Alternatives.

MacDonald says it’s important to note that things are changing almost daily, and it is possible the federal government will introduce more aid for businesses in coming days.

“What we may see over the coming days is some sort of basic support for small businesses, that’s going to cover the bare minimum of fixed costs,” said MacDonald.

“If they go bankrupt in the meantime that will mean the economic impacts will be more widespread, we wont just have a rapid restart of the economy we’ll have a much slower and damped down restart of the economy because these businesses go bankrupt.”

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Canadians who didn’t have a job even before coronavirus: what help can they get?

The coronavirus pandemic has attracted a historic response from the federal government, with Ottawa pledging around $200 billion to rescue the economy. But across the country, Canadians who already didn’t have a job when the pandemic struck are wondering what support, if any, they’ll be able to access.

The Trudeau government is rolling out a 75 per cent wage subsidy to help employers keep workers on payroll through the crisis. Those who’ve already lost their income can turn to the new Canada Emergency Response Benefit (CERB), which will provide $2,000 a month for up to four months.

Meanwhile, those who are already receiving employment insurance will continue to do so and be able to transition to the CERB if they’re unable to find work when their benefits run out due to the health emergency, according to the Department of Finance.

It remains unclear, however, whether some of those who were already unemployed before the onset of the crisis and students about to graduate will be able to access the emergency income support.

“It’s a huge oversight,” saays David MacDonald, senior economist at the Canadian Centre for Policy Alternatives.

While over a million Canadians have applied for jobless benefits since mid-March, another million workers were already unemployed at the end of February, he says. Of those, MacDonald estimates around 600,000 would not have qualified for EI. The question now is whether those Canadians will be able to access the CERB.

Some government sources have indicated some students would be able to apply for the CERB. In an update to her website on Friday, federal cabinet minister Maryam Monsef said students who’ve earned $5,000 in the past year would qualify for the aid.

The government’s Emergency Response Act, which introduced the CERB, says workers must have had income of at least $5,000 in 2019 or in the 12-month period preceding their application in order to qualify. The income must have come from employment, self-employment or EI or Quebec maternity and parental benefits.

That’s good news for students who’ve managed to hold on to part-time jobs while in school, MacDonald says. But, he adds, what about the new graduates who have a job offer lined up for May that may unravel amid the current economic cataclysm?

In general, young Canadians will be “particularly hard hit” by the crisis, MacDonald predicts.

Youth unemployment was at 10 per cent even while the economy was humming along, he notes. By May, when school is out, he predicts it will hit around 33 per cent.

And by the summer, amid a dearth of jobs in the restaurant and retail industries, “it will get even worse,” he says.

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FCA executives, salaried employees to take pay cuts during coronavirus pandemic

DETROIT (Reuters) – Fiat Chrysler Automobiles NV’s (FCHA.MI) (FCAU.N) top executives and salaried workers around the globe will take pay cuts in an act of “shared sacrifice” brought on by the coronavirus pandemic that has shuttered the automaker’s plants in Europe and North America, according to a company memo seen by Reuters.

Chief Executive Officer Mike Manley will take a 50 percent pay cut for three months starting April 1, while Chairman John Elkann and FCA’s board of directors will forego the remainder of their 2020 compensation. FCA said most global salaried employees will be asked to take a temporary 20 pct pay cut.

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Aston Martin furloughing some staff after coronavirus plant closures

LONDON (Reuters) – Britain’s Aston Martin said on Monday it is furloughing some employees as it handles the fallout from the coronavirus outbreak which has closed its car factories.

The pandemic has shut both the luxury brand’s plants, just as it starts production of its first sport utility vehicle, the DBX, crucial to a turnaround after disappointing sales last year contributed to a plunge in its share price.

Employers in Britain can claim for 80% of wage costs for staff whom they place on temporary leave, up to 2,500 pounds a month per employee, as part of a government scheme designed to help businesses whose operations have been hit by the fallout.

“(We are) utilizing all government aid available,” the company said in a statement.

Aston confirmed its capital-raising plans on Monday that will see a consortium led by Canadian billionaire Lawrence Stroll take a stake in the company.

It said it was also taking action to control operating costs and capital expenditure and is accessing additional funding facilities. Its directors said they remain confident that the firm has enough working capital for at least the next 12 months.

The firm’s production sites are currently not scheduled to reopen until April 20 and the central England-based firm said deliveries of its DBX were “still planned for summer 2020 dependent on production and supply chain returning as currently anticipated.”

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Denmark eyes gradual reopening after Easter if coronavirus numbers stabilize

COPENHAGEN (Reuters) – Denmark may gradually lift a lockdown after Easter if the numbers of coronavirus cases and deaths remain stable, Prime Minister Mette Frederiksen said on Monday.

The Nordic country, which has reported 77 coronavirus-related deaths, last week extended until after Easter a two-week lockdown to limit physical contact between its citizens that began on March 11.

“Over the past week the number of hospital admissions has risen slightly slower than the week before and without the explosion in the numbers that we have seen in other countries,” Frederiksen told a news conference.

Last week, the number of hospitalizations for coronavirus in Denmark roughly doubled from 254 to 533, whereas admissions in the week before that more than tripled from the previous week, according to data from the Danish Health Authority.

The number of daily deaths slowed to five on Sunday from eight and 11 on Saturday and Friday respectively. Denmark has reported a total of 2,577 coronavirus infections.

“If we over the next two weeks across Easter keep standing together by staying apart, and if the numbers remain stable for the next two weeks, then the government will begin a gradual, quiet and controlled opening of our society again, at the other side of Easter,” Frederiksen said.

Denmark has imposed less strict limits on daily life than in Italy or France where people are only free to leave their homes to buy groceries, go to work if essential or seek medical care.

But the Danish approach has been considerably tougher than that of neighboring fellow European Union country Sweden, which remains largely open for business.

Danish authorities have restricted public assembly to 10 or fewer people, ordered the closure of schools, universities, day cares, restaurants, cafes, libraries, gyms and hair salons, and shut all borders to most foreigners.

A reopening would probably include people attending schools and work in shifts to avoid rush-hour traffic and too many people gathering in public at the same time, Frederiksen said.

“We do see signs that we have succeeded in delaying the transmission of corona in Denmark. The transmission is spreading slower than feared,” she said.

Frederiksen said she hoped to be able to present a plan for the first phase of a reopening by the end of this week after consultation with the other parties in government.

More than 738,400 people have been infected by the coronavirus worldwide and 35,006 have died, according to a Reuters tally. The countries that have suffered the most deadly outbreaks are both in Europe – Italy and Spain.

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Some ultra-Orthodox Israelis chafe at coronavirus restrictions

JERUSALEM (Reuters) – Israeli police have used a drone, helicopter and stun grenades in recent days to prevent people gathering in an ultra-Orthodox Jewish neighborhood of Jerusalem in defiance of Health Ministry measures aimed at slowing the spread of the coronavirus.

On Monday, police, some in riot gear and surgical masks, encountered occasional resistance and verbal abuse while enforcing the measures in a part of the city whose residents have long chafed against the state.

“Nazis!” shouted a group of boys, as police pulled men off the narrow streets of Mea Shearim.

As well as broadcasting the message “Stay Home” from the helicopter and drone, police have issued offenders with fines.

Israeli officials describe the ultra-Orthodox as especially prone to contagion because their districts tend to be poor and congested, and in normal times they are accustomed to holding thrice-daily prayers with often large congregations.

Some of their rabbis have also cast doubt on the degree of coronavirus risk.

Many ultra-Orthodox reject the authority of the Israeli state, whose Jewish majority is mostly secular.

Israel’s 21 percent Arab minority are another sensitive community, where officials say testing for the virus has been lagging.

“There are three ‘Corona Countries’ – the ultra-Orthodox sector, the Arab sector and the rest of the State of Israel,” Defense Minister Naftali Bennett told reporters on Sunday.

The Mea Shearim patrols represented an escalation in security enforcement. On Saturday, a funeral was attended by hundreds of mourners in Bnai Brak, an ultra-Orthodox town.

Reprimanded by Internal Security Minister Gilad Erdan for allowing what he deemed a “threat to life” at the funeral, police issued a statement vowing to “draw lessons to prevent similar situations recurring”.

Public gatherings are currently limited to up to 10 people, people must keep two meters apart and the public has been urged to stay at home unless they need to buy food, get medical attention, or go to work deemed crucial by the state.

Yehuda Meshi-Zahav, ultra-Orthodox head of ZAKA, a volunteer emergency-medicine group, told Israel’s Army Radio that most ultra-Orthodox Jews did follow Health Ministry directives and only a small group defied them, possibly for political reasons.

“Everything they are doing has no value when they constitute a ‘ticking bomb’ because of whom people will get infected,” he said of those not following the government’s guidelines.

Israel has reported 4,347 coronavirus cases and 15 fatalities.

With the Health Ministry warning that the dead could eventually number in the thousands, Prime Minister Benjamin Netanyahu was due on Monday to convene officials to discuss a proposed lockdown of some of the country.

Bennett has proposed setting up a coronavirus surveillance system that would allow authorities to focus lockdowns on areas most prone to contagion.

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Italy expected to maintain lockdown as it awaits steady coronavirus decline

ROME (Reuters) – Italy looks certain to remain under lockdown for at least two more weeks, officials said on Monday, with the number of new coronavirus cases yet to show a decisive decline.

Nearly 11,000 people have died in Italy since Feb. 21, the highest death toll from the virus in the world, while some 97,689 people have been infected in a little over five weeks, more than anywhere except the United States.

Underscoring the dangers of the disease, the national doctors’ association announced the deaths of 11 more doctors on Monday, bringing the total to 61.

Not all of them had been tested for coronavirus before they died, it said, but it linked their deaths to the epidemic. Many were general practitioners in Lombardy, the worst-affected region in the north of Italy.

The governor of Lombardy, Attilio Fontana, said the government would have to extend the near total clampdown on movement and business activities which were introduced nationwide on March 9 and are due to end on Friday.

“We have to agree on this with other regions, but I think we are talking about (maintaining the block) until at least mid-April,” he told reporters. The governor of the southern region of Puglia said on Saturday the restrictions should stay until May.

Lombardy, which is centered on Italy’s financial capital Milan, accounts for almost 60% of the total deaths in Italy and 42% of the confirmed cases. However, Fontana said he was hopeful infections under control were thanks to the unprecedented curbs.

“We’re on the right track, we’re maintaining a line that’s not uphill, but it’s not downhill either,” he said.

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The number of confirmed new cases fell on Sunday after three relatively stable days, but experts said a long period of decline would be needed before Italy could think about rolling back the restrictions.

“The number of new cases has to fall significantly,” said Silvio Brusaferro, the head of Italy’s public health institute, who is advising the government on how to handle the crisis.

“For sure the re-opening will happen gradually … We are even considering the British idea of ‘stop and go’, which envisages opening things for a certain amount of time and then closing them again,” he told La Repubblica daily.

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Oil price plunges to 2002 lows amid global coronavirus shutdown

Oil took another stomach-churning 8 per cent dive on Monday and world shares buckled again as fears mounted that the global coronavirus shutdown could last for months.

There were some bright spots, with Australian equities posting a standout jump as the government launched a super-sized support program and Wall Street futures were fractionally positive, but that was about it.

Japan’s Nikkei had led the rest of Asia lower and Europe’s main markets skidded another 1 per cent, adding to what has already been the region’s worst quarter since 1987.

The rout in oil took crude to its lowest since 2002. Brent slumped to $22.5 a barrel leaving it down 65 per cent for the year and hammering petro currencies such as Russia’s rouble, Mexico’s peso and the Indonesian rupiah by as much as 2 per cent.

It didn’t help that the U.S. dollar was back on the climb. The euro was batted back by about 0.7 per cent, leaving it near $1.1 and sterling went as low as $1.2350 after Britain had become the first major economy to have its credit rating cut because of the coronavirus on Friday.

“I have been in this business almost 30 years and this is the fastest correction I have seen,” Lombard Odier’s Chief Investment Officer Stephane Monier said of this year’s plunge in global markets.

Total global deaths from the coronavirus are around 34,000 and the United States has emerged as the latest epicenter, with more than 143,000 confirmed cases and 2,500 deaths as of the morning of Monday, March 30.

U.S. President Donald Trump on Sunday, March 29 extended his stay-at-home guidelines until the end of April, dropping a hotly criticized plan to get the economy up and running by mid-April after a top medical adviser said more than 100,000 Americans could die from the outbreak.

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Wall Street futures had also back-pedaled, having been up as much as 1 per cent in Asia after a late flutter of optimism.

Australia’s benchmark ASX200 registered a late surge, closing 7 per cent up after Prime Minister Scott Morrison unveiled a $130 billion ($80 billion) package to help to save jobs.

Most other markets were down but trimmed earlier losses. Japan’s Nikkei dropped 1.6 per cent, Shanghai blue chips fell 1 per cent and there were sharper drops in Southeast Asia, with Singapore’ benchmark index down almost 3 per cent.

JPMorgan now predicts that global GDP could contract at a 10.5 per cent annualized rate in the first half of the year.

“We continue to mark down global GDP forecasts as our assessment of both the global pandemic’s reach and the damage related to necessary containment policies,” said JPMorgan economist Bruce Kasman.

As a result, central banks have mounted an all-out effort to bolster activity with rate cuts and massive asset-buying campaigns, which have at least eased liquidity strains in markets.

China on Monday became the latest to add stimulus, with a cut of 20 basis points to a key repo rate, the largest in nearly five years.

Singapore also eased as the city state’s bellwether economy braced for a deep recession while New Zealand’s central bank said it would take corporate debt as collateral for loans.

Rodrigo Catril, a senior FX strategist at NAB, said the main question for markets was whether all the stimulus would be enough to help the global economy withstand the shock.

“To answer this question, one needs to know the magnitude of the containment measures and for how long they will be implemented,” he added.

“This is the big unknown and it suggests markets are likely to remain volatile until this uncertainty is resolved.”

Bond investors looked to be bracing for a long haul, with European government bond yields dipping and those at the very short end of the U.S. Treasury curve turning negative. Those on 10-year notes dropped a steep 26 basis points last week and were last standing at 0.64 per cent.

That drop has combined with efforts by the Federal Reserve to pump more U.S. dollars into markets, dragging the currency off recent highs.

Against the yen, the dollar was pinned at 107.99, well off the recent high of 111.71, but its gains against the euro, pound and heavyweight emerging market currencies suggested it was regaining strength.

“Ultimately, we expect the USD will soon reassert itself as one of the strongest currencies,” argued analysts at CBA, noting the dollar’s role as the world’s reserve currency made it a countercyclical hedge for investors.

“This means the dollar can rise because of the deteriorating global economic outlook, irrespective of the high likelihood the U.S. is also in recession.”

The dollar’s retreat had provided a fillip for gold, but buying stalled as investors were forced to liquidate profitable positions to cover losses elsewhere. The metal was last at $1,613.6 an ounce.

Oil prices have also been hit by a fight for market share between Saudi Arabia and Russia, with neither showing signs of backing down even as global transport restrictions hammer demand.

Brent futures were down 8 per cent, or $2, at $22.50 a barrel – their lowest for 18 years. U.S. West Texas Intermediate (WTI) crude futures fell as far as $19.92, near a 2002 low hit this month.

“Central banks have been easing (monetary policy) and governments have been offering stimulus packages, but they are only supportive measures, not radical treatments,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

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Coronavirus could mean weather forecasts are less accurate

Weather forecasts could become less accurate as the number of flights across the world continues to decrease due to the coronavirus pandemic.

Since the beginning of flight, aeroplanes have provided important information about the current state of the atmosphere.

The more accurately the current weather is known, the more accurate the forecast will be.

Data reports from aircraft are combined with other information obtained from manned and automated weather stations, weather buoys, radar, radiosondes, wind profiles and satellites.

This gives a whole host of information about air pressure, temperature, wind, humidity, rainfall amounts and sunshine through the depth of the atmosphere.

The European Centre for Medium-Ranged Weather Forecasting (ECMWF) notes there has been a 65% reduction in the number of data reports, from about 50,400 per day on 3 March to under 18,000 on 23 March.

With EasyJet today announcing it will ground its entire fleet of planes for at least two months, this reduction is likely to continue over the coming months – potentially into the summer – and this could well have an impact on weather forecasts.

With less data reports being made, the accuracy of our weather forecasting could be affected.

In 2019, the ECMWF investigated the impact on forecasts if aircraft reports were not used, and they found a large impact at the typical cruising altitude of flights.

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Goldman Sachs sees S&P 500 dividends declining 25% in 2020

LONDON (Reuters) – Goldman Sachs said on Monday it expects S&P 500 dividends to fall by 25% in 2020 as certain large dividend-paying industries are particularly vulnerable to the economic shock of the coronavirus outbreak.

“The record high level of net leverage for the median S&P 500 stock coupled with the ongoing credit market stress means many firms are unlikely to borrow to fund their dividend,” Goldman said in a note.

The U.S. investment bank said it expects a wave of dividends to be suspended, cut, and scrapped over the rest of the year.

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