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B.C. businesses ‘in need of life support’ due to coronavirus fallout

The economic impact of the COVID-19 pandemic continues to devastate businesses across B.C.

A recent poll found that in the last two weeks alone, approximately half of the 1,900 employers surveyed saw revenue decreases of 75 per cent or more, while two-thirds recorded declines of 50 per cent or more.

“There’s no doubt governments want to find the right solution for businesses, but our members are saying, ‘time is of the essence,’” said Val Litwin, CEO of the BC Chamber of Commerce, which, along with BC Business Council and the Greater Vancouver Board of Trade, commissioned what is to be a series of bi-weekly “pulse checks” on the business community.

Nearly one-third of businesses are planning to cancel contracts, or have had contracts or tenders cancelled, the survey found.

“Each passing day represents a critical juncture for many employers, as they are making difficult decisions and waiting for government support to arrive,” Greater Vancouver Board of Trade CEO Bridgitte Anderson said.

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“We need a bridge to the other side of this crisis that will help to hasten the economic recovery when the public health emergency subsides.”

More than 50 per cent of the survey respondents said they’re worried they won’t be able to pay off debts or that they won’t financially be able to restart once the pandemic ends.

About a quarter of respondents said they’re looking at shifting to online, digital, or e-commerce options, or have moved there already.

In releasing the survey results, the business advocacy groups listed their top recommendations to government, including providing direct payments to affected businesses; an immediate reduction in rates for employment insurance, company taxes, personal tax, GST, other government imposed levies or charges; and a further reduction of tax rates and defer payments for both B.C. businesses and homes.

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U.S. airlines apply for U.S. payroll help but terms still unclear

CHICAGO/WASHINGTON (Reuters) – Major U.S. airlines applied on Friday for payroll grants from the U.S. Treasury meant to keep workers employed during a sharp downturn resulting from the coronavirus outbreak, but while talks over the terms were expected to continue in coming days some warned the funds would not be enough to help them through their toughest crisis ever.

American Airlines Group Inc, United Airlines Holdings Inc, Delta Air Lines Inc, Southwest Airlines Co, JetBlue Airways Corp and Hawaiian Airlines each said they submitted grant applications, but did not disclose details or terms.

Treasury asked companies to propose financial instruments such as warrants or equity options as possible taxpayer compensation for up to $32 billion in payroll grants for airlines, cargo carriers and airport contractors under the CARES Act passed by Congress last week.

Treasury set a 5 p.m. EDT (2100 GMT) Friday deadline to expedite the grants. There is a second final deadline on April 27.

The airline industry and some lawmakers have pushed back on the possibility of the government taking an equity stake in exchange for the grants, which companies and unions argue are strictly to protect workers.

Southwest said on Friday that government support is just one possible source of capital it is evaluating as it discusses the terms of the grants.

In memos to employees, Delta and JetBlue executives warned that government funds would not be enough to help them weather an unprecedented crisis in which they are spending more cash every day than they are bringing in.

Companies were allowed to ask Treasury for the amount they paid in salaries and benefits in the second and third quarters of 2019, and must agree to keep their workforce until Sept. 30 and maintain a certain level of air service.

American Airlines, with the largest number of full-time employees among U.S. airlines, at 133,700 in 2019, had said it would seek up to $6 billion in grants and $6 billion in government loans under a separate $32 billion funding option for the sector.

American’s stock hit a record low on Friday. Warren Buffett’s Berkshire Hathaway Inc, which is among the largest shareholders of the top U.S. airlines, said it sold about 18% of its Delta stake and 4% of its Southwest holding.

Among cargo carriers, FedEx Corp said it could benefit from certain government relief options after outlining other steps it is taking to save cash and boost liquidity, including slashing its chief executive officer’s pay and drawing down $1.5 billion from a credit facility.

Cargo carriers are suffering from disruption to global supply chains and high-margin business-to-business demand, even as ground-package delivery services increase.

Airlines have also raised debt and taken a series of cost-cutting measures as they ground an unprecedented number of planes and implement new policies on ticket refunds and exchanges in an effort to encourage passengers to book flights.

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U.S. warns airlines to quickly refund tickets after canceled flights

Passenger airlines are eligible for $25 billion in cash grants, cargo carriers $4 billion, and airport contractors like caterers and airplane cleaners $3 billion, and an equal amount in loans.

Other airlines across the world are seeking government aid as they brace for a prolonged downturn, with Air France-KLM in talks with banks to receive up to 6 billion euros ($6.5 billion) in loans guaranteed by the French and Dutch governments, sources told Reuters.

Planemakers are also preparing for a slump in demand. Reuters reported on Friday that Airbus SE is studying a sharp cut in output of its top-selling A320 jet series.

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Belly dancers to florists: Six African coronavirus heroes

People in Africa are doing exceptional and surprising things to help others during the coronavirus pandemic.

Here are just six uplifting stories of everyday heroes.

1) From fashion frocks to medical gowns

A Libyan fashion label has switched from making chic garments to medical gowns.

Six women are sewing scrubs for doctors and nurses at Fashion House’s clothing factory in Libya’s capital, Tripoli.

They have all volunteered for the work and some are even sleeping in the factory.

They have made 50 medical outfits so far and they’re now working on a second batch.

Medical staff at a Tripoli hospital gave them a thumbs up when they modelled their efforts earlier this week.

“The idea started when a doctor at the al-Jalaa Hospital in Tripoli reached out to various businesses for help,” Fashion House co-founder Najwa Taher Shokriy, 26, told BBC North Africa correspondent Rana Jawad.

She started the clothing brand a year ago but has put her ambitions of expansion on hold to address the medical crisis.

She and her tailors want to produce more medical outfits, but face obstacles getting hold of more material and sewing machines in the conflict-hit city.

2) Florists flower-bomb care home

The pandemic has led to a lot of weddings being postponed and as a consequence a lot of flowers have been left to wilt.

But a group of florists in Paarl, a town in the heart of South Africa’s wine-growing region, got together to make the best of a bad situation.

With 600 flowers donated from Adene’s Farm Flowers, they decorated the outside of Huis Vergenoegd Old Age Home.

Residents at the home had been in lockdown since mid-March, but were allowed to come out on to the empty pavement to “smell the roses”, the farm’s official Facebook page said.

They also got a lot of appreciation from passers-by.

“We had cars hooting, many [with] necks turning, pedestrians and passers by stopping – these flowers bought so much joy,” the flower grower said.

3) ‘Dream’ landlord waives rents

A landlord in Kenya has told his 34 tenants that they do not need to pay their rent for March and April because he understands the coronavirus pandemic has put them in a difficult financial situation.

Michael Munene owns 28 apartments in the western county of Nyandarua for which he charges 3,000 Kenyan shillings ($30; £23) a month.

He also has six commercial units rented out for 5,000 Kenyan shillings a month. If none of his tenants pay, he will lose more than $2,000.

Mr Munene won plaudits since telling Kenya’s private NTV news channel that he would rather children were fed.

He was once a tenant and was locked out of his house for not paying, the landlord explained.

“They have been my tenants for a while and the rent they pay has helped me do a lot of things,” he said.

“So I decided this was the time to work with them and help each other.”

He has been hailed by one paper as the landlord “with a big heart”.

4) Belly dancer performs for people online

Tunisian belly dancer Nermine Sfar has been showing off her moves in order to keep people at home during the lockdown in the North African nation.

She has been live-streaming a dance from her home every night and millions of people have watched her videos on Facebook in the last week.

It started before the lockdown began – which was Sunday 29 March for Tunisians – though people at the time were already being encouraged to stay at home.

She dubbed her campaign on social media: “Stay at home and I’ll dance for you”.

It seems to have worked – typically hundreds of thousands tune in each evening but a video from last week has been viewed almost two million times.

5) Pop star donates house as quarantine centre

An Ethiopian pop star has donated a villa for use by people who have to go into quarantine.

Last month, Ethiopia’s government ordered everyone arriving in the country to be quarantined in a hotel at their own expense for 14 days.

Hamelmal Abate, who shot to fame in the 1990s with Amharic and Afaan Oromo songs, told BBC Ethiopia reporter Kalkidan Yibeltal that this was fine for foreigners who had the money.

“People needing to be quarantined are also our own,” she said.

“Some, who are coming from abroad, can afford to stay in hotels assigned for this purpose. But there are those who can’t afford that. They have to be treated in the same manner.”

6) Goalie pays for fans’ food

A footballer in Nigeria’s premier division has given four of his fans money to make sure they could eat during the coronavirus outbreak.

Plateau United goalkeeper Chinedu Anozie gave each of the four fans 5,000 naira ($14; £11).

It may not sound like much, but to put things into perspective, most players in Nigeria’s premier league probably earn about $88 a week (about $4,600 a year), says the BBC’s Nduka Orjinmo in Lagos.

As well as giving hand-outs, Nigerian newspaper Vanguard points out that Anozie has also been incredible at sticking out his hand to stop goals.

The goalkeeper hasn’t conceded in 10 games – and his team is top of the league, though it has now been suspended because of the pandemic.

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Explainer: Antitrust law won't get in the way of U.S. acting to raise oil prices

WASHINGTON (Reuters) – It is illegal for oil producers to meet to discuss pushing up oil prices under U.S. antitrust law, but perfectly legal if state regulators or the federal government set lower production levels for them, U.S. antitrust experts said on Friday.

That said, the decision by a Texas state official to talk with Saudi Arabia and Russia about supporting oil prices marks a sharp contrast with U.S. policy. A year ago President Donald Trump tweeted that OPEC needed to “increase the flow of oil. World Markets are fragile, price of Oil getting too high.”

A two-thirds drop in oil prices in the last three months has swiftly changed Washington’s thinking on whether or not it should meddle in the energy market.

Trump has called on top producers to stop a market rout caused by the coronavirus pandemic, as OPEC and its allies work on a deal for an unprecedented oil production cut equivalent to around 10% of global supply.

“Trump himself, other federal officials, and Congress cannot violate antitrust (law) by any official actions they take. It doesn’t apply to them,” said Chris Sagers, who teaches antitrust at the Cleveland-Marshall College of Law.

When oil prices are high, anti-OPEC bills, nicknamed NOPEC, gained traction in Congress. The bills would allow OPEC to be sued in U.S. courts for violating antitrust laws.

Such bills have been introduced in the U.S. Senate and House of Representatives for more than a decade, but have never succeeded. In February 2019, the latest version was approved by the House Judiciary Committee.

“From an antitrust perspective, businesses have been complaining about OPEC and complaining about these foreign systems for years,” said Barbara Sicalides, an antitrust expert at Pepper Hamilton LLP. “I don’t think it’s an antitrust violation. It’s certainly a change in policy.”

Oil prices have fallen to around $20 per barrel from nearly $65 at the start of the year as more than 3 billion people went into a lockdown, reducing global oil demand by as much as a third.

Texas regulator Ryan Sitton, one of three members of the Texas Railroad Commission, waded into oil diplomacy on Thursday, calling Russia’s energy minister to discuss possible oil production curbs and angling for talks with Saudi Arabia as many producers in the U.S. state’s biggest industry warned it was near collapse.

The Oklahoma Energy Producers Alliance has urged its state’s regulator to curtail crude oil production.

This kind of conduct in private industry would not be permitted, but under the state action doctrine it is allowed if it is done under the commission’s authority, said Sicalides.

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In Communist-run Cuba, the private sector helps the needy as coronavirus spreads

HAVANA (Reuters) – Upmarket restaurants are delivering free meals to the elderly, while a fashion firm donates face masks. A business consultancy calls on its clients to donate hygiene products and artisanal soap shops gift their wares to low income households.

In Communist-run Cuba, the fledging private sector is rushing to set up solidarity initiatives for those most vulnerable to the coronavirus outbreak, demonstrating the state no longer has a monopoly on helping the neediest.

Sometimes the two are even joining forces to combat the common invisible enemy.

Saverio Grisell, the Italian co-owner of restaurant Bella Ciao, which usually teems with expats, tourists and affluent Cubans, says he discussed how he could help with the local Committee for the Defense of the Revolution (CDR).

“The president of my CDR gave me a list of 29 elderly people and I decided to give them a meal for free every day,” he said.

Cuba, which has so far confirmed 269 cases of the new virus, has one of the oldest populations in Latin America. The virus appears to be particularly deadly for the elderly, who throughout are the world are seeking ways to stay safely at home rather than go outside and risk contagion.

The CDR now helps Bella Ciao deliver its pizzas and pastas directly to the homes of the elderly.

“It’s a small gesture of solidarity,” Grisell said, noting that it paled in comparison with the help Cuba sent to his home country of Italy last month in the form of medical staff.

Cuba has also long provided subsidized food at eateries for the elderly nationwide, and is now dishing out free meals for those on low incomes.

“It’s admirable,” said Ines Perez, 75, digging into a plate of donated Bella Ciao spaghetti. “Let’s hope everyone comes onboard and cooperates in the same way to overcome this difficult moment.”

SOLIDARITY: A CUBAN VALUE AND GOOD POLITICS

Private restaurants, bed-and-breakfasts, beauty salons, gyms and shops have flourished in Cuba since former President Raul Castro started inching open the economy with market style reforms a decade ago.

However, fears those reforms went too far and have fostered too much inequality have prompted a crackdown in recent years on the sector, which now employs around 600,000 people.

As such, Cuban private businesses likely demonstrate more solidarity than elsewhere not just because it is a value embedded in the culture but also “because it is good politics to exhibit a ‘socialist’ or ‘cooperative’ orientation,” according to Cuba expert Ted Henken at Baruch College in New York.

Whatever their motivation, the solidarity initiatives are going down well – state-run website Cubadebate even did an article on the Bella Ciao project – and show no sign of abating as the number of coronavirus cases slowly mounts.

These days, for example, fashion brand Dador is putting its sewing machines to an altogether different task than their usual one of conjuring up limited edition garments for the runway and its Old Havana store.

Now they are making face masks out of colorful and often patterned cloth.

Co-founder Lauren Fajardo said they had already collaborated with one group that provides assistance to the elderly, donating 160 masks.

“We’d like to focus on getting people masks who need them most,” she added. “Elderly people for example, people in neighborhoods that are very crowded and those who don’t have the option to just stay home because they have to work or find food.”

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Wall Street Week Ahead: Investors look to coronavirus data to support stabilizing markets

NEW YORK (Reuters) – Investors are parsing a broad range of signals, from infection counts to more traditional indicators, for clues on the trajectory markets may take in coming weeks as the pandemic caused by the novel coronavirus continues to spread.

Some point to signs that the worst of a vicious sell-off that took the S&P 500 .SPX down as much as 34% from its record closing high may be fading, though markets remain turbulent and far off their highs.

Volatility has eased from its March peaks. Fewer U.S. stocks are hitting new 52-week lows. Liquidity in fixed-income markets has improved, and credit spreads, while still wide, have come in from their March highs.

“Most of the damaging, indiscriminate selling was reached in mid-March,” said Keith Lerner, chief market strategist at Truist/SunTrust Advisory Services in Atlanta.

Economic indicators like employment data are only beginning to factor in the scale of economic damage wrought by the pandemic, leaving investors looking to various corners of the markets and information on the virus’ spread to gauge the direction asset prices are likely to take.

Investor sentiment, often seen as a contrarian indicator, is one signal pointing to an eventual turnaround in U.S. stocks. Bank of America Global Research’s Sell Side Indicator in March dropped to 54.9%. At that level or lower, U.S. stock returns over the following 12 months have been positive 94% of the time, the bank’s analysts wrote.

Contrarian indicator means bearish investors may presage a bullish market – and vice-versa.

Some investors have also noticed parallels between the spread of COVID-19, the disease caused by the novel coronavirus, and movements in the Cboe Volatility Index , known as Wall Street’s fear gauge.

The VIX, which climbed to its highest levels since 2008 amid the market sell-off, has closely tracked the number of countries where the daily growth of coronavirus cases exceeds 10%, according to Jason Hunter, head of global fixed income and U.S. equity technical strategy at J.P. Morgan.

The index has fallen as the number of countries with a sharp rise in cases has abated.

“Any improvements in that trajectory have the potential to limit the severity of an equity index retest this spring,” Hunter wrote in a research note. “More importantly, how the outbreak story evolves over the summer and into the fall will likely dictate the overall duration and magnitude of the bear market.”

Tracking the number of U.S. states with 10% or higher daily growth in confirmed cases reveals a similar pattern, Hunter found. The index on Friday stood at 48.43, below its all-time closing high of 82.69 on Mar. 16.

For now, the overall numbers look grim. Confirmed U.S. cases surpassed 256,000 on Friday. More than 6,500 Americans have died, according to a Reuters tally of official data, and more than a quarter of those deaths have been in New York City.

(For an interactive graphic tracking the spread of the novel coronavirus in the United, click here: here)

Economic data have been just as dour. On Friday, the Labor Department’s monthly payrolls report showed the U.S. economy shed 701,000 jobs in March, ending a record 113 straight months of job growth. The previous day, the Labor Department reported that weekly U.S. jobless claims hit a record 6.6. million.

That scale of market disruption has made some market participants more doubtful. Investors may be overly optimistic in their expectations for a sharp market rebound even if the number of U.S. coronavirus cases flatlines earlier than expected, said Nancy Perez, senior portfolio manager at Boston Private.

“The market has discounted a V-shaped recovery,” she said. “I don’t know if it’s discounted a U-shaped recovery. When people figure out it’s going to be more U-shaped, we may start giving some of (these gains) back.”

(This story removes extraneous word from headline.)

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Delta, other airlines apply for U.S. payroll grants for crisis help

CHICAGO/WASHINGTON (Reuters) – Delta Air Lines (DAL.N) and JetBlue Airways Corp JBLU.O> said on Friday they had applied for U.S. payroll grants meant to keep workers employed while airlines ride out their toughest crisis in history due to the coronavirus, but warned the funds are “not enough.”

The U.S. Treasury had asked passenger and cargo carriers to apply by 5 p.m. EDT (2100 GMT) on Friday to expedite up to $32 billion in payroll grants for the air industry within a $2.3 trillion coronavirus relief package approved last week. Airport contractors are also eligible for grants.

In a memo to employees, Delta Chief Executive Officer Ed Bastian said the company had applied for its share of worker-protection grants, but “those funds alone are not nearly enough.”

Delta expects a 90% decline in second-quarter revenue.

JetBlue also told employees it “may not get enough to cover pay and benefits at the level you see when we are flying at full capacity.”

Companies were allowed to request the amount they paid in salaries and benefits in the second and third quarters of 2019, and must agree to keep their workforce until Sept. 30, even as they drastically reduce flight schedules to match a dramatic drop in demand.

American Airlines, with the largest number of full-time employees among U.S. airlines at 133,700 in 2019, also submitted an application on Friday, a spokeswoman said, without disclosing the details.

American has said it would seek up to $6 billion in grants and $6 billion in government loans under a separate $32 billion funding option for the sector.

American stock hit a record low on Friday.

Treasury had asked companies to propose financial instruments such as warrants or equity options as possible taxpayer compensation, a condition many Democrats and airline labor unions had argued could dissuade airlines from taking money meant to protect workers.

United Airlines Holdings Inc (UAL.O) and Southwest Airlines Co (LUV.N) were also expected to apply, though they have also warned they may still shrink before year end.

Among cargo carriers, FedEx Corp (FDX.N) said it could benefit from certain government relief options after outlining other steps it is taking to save cash and boost liquidity, including slashing its chief executive officer’s pay and drawing down $1.5 billion from a credit facility.

Cargo carriers are suffering from disruption to global supply chains and high-margin business-to-business demand, even as ground-package delivery services increase.

Related Coverage

U.S. warns airlines to quickly refund tickets after canceled flights

Passenger airlines are eligible for $25 billion in cash grants, cargo carriers $4 billion and airport contractors like caterers and airplane cleaners $3 billion, and an equal amount in loans.

Other airlines across the world are also seeking government aid as they brace for a prolonged downturn, with Air France-KLM (AIRF.PA) in talks with banks to receive up to 6 billion euros ($6.5 billion) in loans guaranteed by the French and Dutch governments, sources told Reuters.

Planemakers are also preparing for a slump in demand, with Reuters reporting on Friday that Airbus SE (AIR.PA) is studying a sharp cut in output of its top-selling A320 jet series.

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Exxon plays on virus worries in Baytown contract talks: union official

HOUSTON (Reuters) – A union official said on Friday Exxon Mobil Corp is playing on economic uncertainty caused by the coronavirus pandemic in negotiations with workers at its Baytown, Texas, refinery.

The company has begun meeting with union-represented employees in small groups after rejecting two contract extension proposals from the union, said Ricky Brooks, president of United Steelworkers union local 13-2001, which represents hourly workers at Baytown.

“They’ve begun in-house scare and misinformation meetings, leveraging the uncertainty of COVID-19 to get all of their issues and force the union to forego all of its issues,” Brooks said. “They have held the pattern wages hostage if the union moves to go to the table.”

COVID-19 is the disease caused by the new coronavirus. Pattern wages refers to the national pattern agreement reached in January 2019 between the USW International and U.S. refiners that sets wage increases for all USW-represented workers.

Under the proposal rejected in January, pay was set to go up 3.5% in the first year and 4% in the second year. In the third year, the increase would match the pay hike in the new national agreement the USW will negotiate for oil industry workers with energy companies in January 2022.

Brooks said the company has suggested the pay proposals would be less if the two sides go back to the bargaining table.

Negotiations for a new contract to replace the current pact that expires on May 15 began in December with a company-proposed three-year extension that was rejected in January by workers in the 560,500 barrel-per-day refinery and the complex’s laboratory.

Chemical plant workers accepted the extension.

The sticking point for refinery and lab workers is Exxon’s proposal to lengthen by six months the time before a new workers’ wages reach the same level as veteran workers.

Exxon spokesman Jeremy Eikenberry declined to discuss the negotiations.

Even though the current contract expires on May 15, the refinery and lab workers could not walk off their jobs for 60 days nor could Exxon lock them out under an agreement between the company and the union.

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RCMP arrest man, seize cash, guns and meth in Dieppe, N.B.

RCMP have arrested a 30-year-old man from Dieppe, N.B., and seized cash, guns and crystal meth after an incident earlier this week.

Police say officers were called to a home on Copp Street Wednesday for a report of a man with a firearm threatening to harm himself.

RCMP say the man remains in hospital and their investigation is ongoing.

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Related Coverage

1) From fashion frocks to medical gowns

2) Florists flower-bomb care home

3) ‘Dream’ landlord waives rents

4) Belly dancer performs for people online

5) Pop star donates house as quarantine centre

More inspiring stories:

6) Goalie pays for fans’ food

SOLIDARITY: A CUBAN VALUE AND GOOD POLITICS

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