There are signs that Canada is beginning to flatten the COVID-19 curve. Five provinces representing close to two-thirds of Canadian nominal GDP announced reopening plans in recent days, hoping to find a new normal. Other provinces maintain restrictions that have contributed to limit the virus spread. Let us summarize the situation from coast to coast.
Saskatchewan: With only 350 known cases, Saskatchewan was the first province to present a reopening plan in 5 phases last week. Specific professional services such as dentists and therapists will resume work on May 4. The litmus test will begin on May 19 with the reopening of retail stores. There is no date for the implementation of Phase 3, including the reopening of restaurants and coffee shops. Social distancing efforts will fade further if the province gets to Phase 4, including summer camps, theatres and museums. No date was announced for the reopening of schools, which has a strong multiplier economic effect according to several international studies.
Quebec: Quebec makes up more than half of Canada’s COVID-19 cases. The human crisis is particularly severe in seniors’ homes in the Montreal Census Metropolitan Area (CMA). Thus, the timing of restrictions easing varies between the Montreal CMA and the rest of the province. Primary schools and daycares outside the Montreal CMA will reopen on May 11 (about half of the province’s economy), followed by Montreal one week later. School attendance is optional, making it difficult to predict the availability of the labour force in the coming weeks. High schools, CEGEPs and universities will only resume regular activities next fall. Mining and residential construction sectors have resumed activities mid-April. Three other sectors where individuals are able to respect social distancing will reopen soon, according to the gradual resumption plan presented by the Quebec government on April 28. Manufacturers and companies involved in non-residential construction will resume activities on May 11. Retail stores will reopen on May 4 except in the Montreal CMA (May 11). Stores in shopping malls will remain close unless consumers have access to an external door to maintain social distancing. The construction, manufacturing and retail trade sectors represent respectively 6%, 13% and 6% of the province’s real GDP. Reopening these sectors will ease supply chain bottlenecks within the province. Close to 500,000 of the currently 1.2 million unemployed could gradually go back to work according to the Quebec government.
Ontario: The number of confirmed cases per capita is lower in Ontario than Quebec, but Ontario has a lower testing rate (1,646 per 100,000) than its neighbour (2,378 per 100,000). The Ontario government plans to shut down schools until May 31 at least. There are no hard dates attached to the framework for reopening presented on April 27. To begin each of the 3 stages proposed, the number of new cases must decline for a period of 2-to-4 weeks. The number of new cases increased at a faster rate on April 28 relative to the previous three days, meaning the implementation of Stage 1 could start in mid-May at the earliest. Stage 1 includes the opening of selected workplaces and allowing small gatherings. The second stage appears more significant, including “opening more workplaces with significant mitigation plans.”
P.E.I.: The easing in restrictions will begin on May 1. Testing at the Confederation Bridge and Charlottetown airport has notably mitigated health impacts: 26 confirmed cases only, no death. Activity in the key lobster fishery sector will begin mid-May. Schools are closed until May 11.
New Brunswick: The province reported no new confirmed cases for 10 straight days. The total number of cases is low and stable at 118. The speed of implementation of the reopening plan will be guided by a simple health alert code: red, orange, yellow and green. As of April 24, the province transits between red and orange. Outdoor activities and family gatherings are allowed. The next loosening in restrictions could occur in 2-to-4 weeks.
British Columbia: The epidemic has been relatively mild with only 39 cases per 100,000. The curve has flattened before other provinces. No reopening plan has been announced but the province appears to be moving closer to easing restrictions according to the provincial health officer’s most recent comments. The construction of the large LNG and hydroelectric Site-C projects has been continuing. The U.S. State of Washington plans to begin a gradual reopening next week. California, B.C.’s other U.S. key trading partner, has reopened some businesses last weekend.
Alberta: The elevated testing rate has contributed to flatten the curve. The province has restricted gatherings of more than 15 people until Aug. 31. The key oil and agriculture sectors have remained open. No reopening plan has been announced. Students may not return to school until the next academic year.
Newfoundland and Labrador: The new number of cases has been slowing considerably since mid-April. No cases found in nine of the last 11 days. The government is working on a reopening roadmap for closures related to services requiring close contact. All non-retail businesses were able to remain open with proper physical distancing guidelines.
Nova Scotia: Schools are closed until at least May 1. The number of COVID-19 cases has been increasing steadily but slowly. At 92 per 100,000 people, the coronavirus prevalence rate in N.S. is higher than other Atlantic Provinces but lower than Quebec (293), Ontario (108) and Alberta (106). Activity on construction sites has never stopped.
Manitoba: The number of active cases has been diminishing rapidly. The very low number of cases of 20 per 100,000, is similar to its neighbour Saskatchewan (31). The government announced on April 28 an expansion of testing to individuals with mild symptoms, which will facilitate the eventual economic recovery. The Province will likely announce a plan to reopen non-essential businesses this week.
Bottom Line: Some Canadian Provinces propose the reopening of certain segments of the economy and the resumption of a few social activities under strict conditions. Additional capacity in the health-care system, particularly more testing and reliable contact tracing, will facilitate the recovery and prevent a large second wave of infections. Provinces are taking different risk management approaches, reflecting divergence in COVID-19 curves, the high degree of uncertainty relative to social immunity, quarantine fatigue, disparity in urban densification and potential economic/health benefits. Based on these reopening plans, we expect a slower economic recovery than assumed just a month ago, even without a subsequent coronavirus wave. If provinces are able to eventually reach the last phase of their plans, several activities involving large gatherings will not resume for a long time. Altogether, the return to the Canadian real GDP level observed pre-virus appears a long way, not before 2021 Q1 at least.
Finally, reopening parts of the supply side of the economy does not automatically imply the demand side will follow quickly, as retailers in Germany have found so far due to depressed consumer confidence.