Creating the New Normal

By Angus Gillespie

After more than two months of being socially distanced in a dreary lockdown society the dust is beginning to settle and as such Canadians are managing a glimpse of the prodigious damage tendered by the COVID-19 pandemic from both a humanistic-medical point of view as well as an economic standpoint.

It remains uncertain as to when an effective vaccine to combat the virus will be established. As of now there are countless tests being conducted in countries throughout the world including laboratory facilities here in Canada.

One positive that seems to have emerged is that many hospitals in the healthcare systems are now in a position where they are no longer being overwhelmed with waves of new serious cases like they had been at the front end of the crisis. While the number of new confirmed cases fluctuates from day to day, it is reassuring to know that hospitals are now in a much stronger position to treat those with severe symptoms. In the U.S. thousands of ventilators have since been sent to other countries in need of the medical devices.

Nursing Home Nightmares

Without doubt the number one concern that has been brought to light throughout this pandemic is the welfare of seniors. Long-term care nursing homes have been very badly hit with sickness and deaths, with Ontario taking a large brunt of misery. A new report issued by the Canadian military confirms just how bad daily conditions have been at some of them.

COVID-19 has exposed the deadly shortcomings at long-term care homes and by extension reveals what is clearly a system that is undeniably broken. It’s been shattered for years but only came to light in the public eye due to the pandemic and the fact that members of the Canadian Forces had to be called in to deal with the crisis due to staffing shortages to care for the residents. That is when the military first witnessed the horrors of what was transpiring in some of these facilities.

After the initial shock of witnessing the abhorrent conditions the military analyzed five facilities in Ontario and the impacts of the COVID-19 pandemic. The conclusions of the official report confirm there has been severe staffing shortages and a lack of personal protective equipment for staff and residents. If that wasn’t bad enough, the report also indicated bed bug infestations and incidences of old moldy food trays stacked inside residents’ rooms. Cockroaches were found in some rooms along with soiled sheets and soiled articles of clothing. There have also been reports of alleged physical abuse towards some residents by staff workers.

The five long-term care facilities that were scrutinized are all located within the Greater Toronto Area: Orchard Villa in Pickering, Altamount Care Community in Scarborough, Eatonville Care Centre in Etobicoke, Hawthorne Place in North York and Holland Christian Homes’ Grace Manor in Brampton. It’s not a stretch to believe many other long-term care facilities throughout the province are likely in no better condition than the five that were the primary focus of the military report.

Ontario Premier Doug Ford appeared visibly shaken when he spoke at a media conference and promised justice for all residents and families who have had to endure such horrific circumstances. Ford also confirmed that the provincial government has launched a full investigation into the allegations, including an investigation by Ontario’s Chief Coroner, the results of which could lead to possible criminal charges being laid.

In 1983, the provinces and the federal government began drafting what would become the Canada Health Act, but strangely enough long-term care was not a meaningful portion of what was incorporated into the Act. But the widespread neglect of long-term care goes all the way back to the time when Canada first introduced medical healthcare plans. Yet here we are in 2020 dealing with systemic failures of the magnitude we’ve never dealt with before.

Rich Get Richer

The immediate economic catastrophe has hit every corner of the world. Business enterprises with decades of service have gone bankrupt with many more teetering on the precipice. Making it all that much harder to stomach is realizing that 25 of the richest men in the world have managed to cumulatively add an estimated $255 billion to their fortunes throughout the pandemic. The old credo ‘the rich get richer’ has never been so apropos.

Facebook CEO Mark Zuckerberg has been the largest financial benefactor as Facebook shares surged nearly 60% over the past two months. The 36-year-old Zuckerberg, now worth $86.5 billion, has become the fourth-richest person in the world, up from the No. 7 richest on Forbes’ 2020 list of the World’s Billionaires, published in early April.

The second-biggest gain in personal wealth over the past two months comes from Amazon founder Jeff Bezos, who was already the richest person in the world. Shares of the ecommerce giant have continued on an upward trajectory since the COVID-19 pandemic shuttered retailers with physical bricks & mortar locations. Amazon stock has been driven upward by 30% since late March. Of course stocks fluctuate from day to day but Bezos currently has a net worth of $148 billion, up more than $30 billion over a 60-day period beginning in late March.

Real Estate

Canada Mortgage and Housing Corporation expects real estate prices won’t return to pre-recession levels until late 2022 at the earliest and perhaps well into 2023. The impact of the COVID-19 pandemic is still ongoing and the timeline could get pushed even further down the road. Much of the rebound will be determined by whether or not there is a back-slide and there is a Phase Two, as some have predicted.

CMHC has provided lenders the flexibility to extend mortgage deferrals by a further six months, but deferrals will mean that missed payments will be added to the total mortgage amount owing on terms determined by contractual agreement between lender and borrower.

On the commercial front, properties are also expected to be hit hard. Many companies have already gone out of business and others are grappling with an inability to pay rent. Landlords cannot simply allow tenants to miss payments because in many cases those landlords owe monthly mortgage payments to their banks.

A big concern is that some commercial property owners are saying they are having a very difficult time in signing up for the rental assistance whereby the federal government has promised to cover 50% of the tenant’s rent. The tenant would have to come up with another 25%, which would leave the landlord having to cover the costs of the remaining 25%. However, that’s been viewed as a better option than likely getting no money at all. However, complaints have been piling up from property owners that say the federal government’s application website returns numerous error messages. One building owner says he waited for a password to be able to register, but the password never came.

The New Norm

Disruption in the normal course of business evolution has been rocked like no other time in modern history. The rapidly changing face of workplaces is bringing with it significant opportunities and challenges, while the evolving nature and expectations of the workforce are creating new classes of work and new standards of operation. Although it’s widely accepted there will be a new world order the truth is that nobody yet knows what it’s going to be and to what extent life will be divergent.

“Many of us are seeing first-hand the challenges of a changing workplace, but instead of tackling them alone, we are best-served as a community of innovators to come together and learn from each other,” says Alberta Innovation CEO Laura Kilcrease. “I’m particularly pleased that despite the global disruptions, we are able to come together across boundaries, virtually through live stream capabilities.”

A four-day work week is being touted by some financial analysts as possibly the best way to move out of the COVID-19 pandemic. New Zealand’s progressive thinking Prime Minister Jacinda Ardern and her government have floated the idea. Such a notion for Canada would have seemed quite far-fetched just 60 days ago. But now, after the virtual shutdown of the national economy along with most other countries in the world, the idea now seems far more plausible.

The work week as we’ve come to know it has been a staple of commercial existence since the early 1900s when people would work Monday to Friday, 9am to 5pm – give or take an hour or so each way.

There has been a consistent argument that in a compressed work week more would actually get done, with employees refreshed having the extra day off every week. It’s not a totally foreign concept. It’s common in some countries to work four days a week for 10 hours per day. Working an extra two hours per day would certainly seem worth it for a sizable portion of the working population, knowing that it would mean three days off.

Microsoft Japan tested the idea in August 2019 and saw productivity rise by 40% while hydro and paper products costs also declined.

Long commutes have been replaced with Zoom videoconferencing, and workers in big cities are in no hurry to get back on crowded subways, street cars and buses during morning and evening rush hour.

“One of the unintended impacts of this lockdown is more people, having tried remote working for the first time, will realize they really don’t need to spend hours a day commuting to an office,” says Chris Bovaird, an associate professor, teaching stream, in the department of management at U of T Scarborough.

Physical distancing from work could also lead to a psychological distancing from employers as well as clients. Employees will see themselves as more independent than ever before but will they be happier in the long run with no colleagues to communicate with in the flesh.

“For a range of demographic, cultural, economic and technological reasons, our perception of the traditional full-time, white-collar office job has been in decline over the past 30 years,” Bovaird says.

Investment professionals expect consumers to save more, having spent the last two months spending very little. The problem for the economy is that many may have realized they can get by with spending less. Lower overhead is definitely a more palatable option than trying to pay off credit card balances with high interest rates each month.

The best case outcome from this global pandemic would be to have an equally sharp recovery. That is unlikely to happen. It’s always much quicker and easier to tear down a building than to put it up. The April-June GDP contraction will be on a scale not seen since the Great Depression. Expecting that a three-month period can recapture all that has been lost will be virtually impossible because many of those existing enterprises have vanished.

The more likely recovery time-frame is going to be much longer than two or three quarters in a fiscal year. Twenty years of economic growth was destroyed in a matter of two months. Signs of recovery are now underway, but it’s going to be a long, painstaking process in creating the new normal.

Recommended
internetWhite Gold Corp. Announces Closing of Fully Subscribed C$6 Million Private Placement Led by Eric Sprott; Agnico Eagle and Kinross Maintain 17