Pandemic-related restaurant closures take an emotional and financial toll

Pandemic-related restaurant closures take an emotional and financial toll

Michael Raviele agonized for hours over how to break the news to his loyal customers before finally announcing at 4:30 a.m. ET on May 15 that he was closing Il Gatto Nero, the Toronto Italian restaurant his father first opened some six decades earlier.

“I did that road for 18 years — up and down, every single day,” said the man with a tattoo of the restaurant’s logo on his arm. “I worked there every single day.”

Restaurants across Canada — from local institutions to newer spots hustling to establish themselves — have closed permanently in recent weeks as the COVID-19 pandemic ravaged an industry already plagued by razor-thin margins. Their owners face not only the emotional loss of their business, but also often large debt, little savings and an uncertain future.

Il Gatto Nero started as an Italian social club featuring pool tables and espresso more than 60 years ago. Raviele joined the business in the early 90s and slowly added to the club’s repertoire with a pizza oven, sandwiches and other tweaks.

Attempted shift

The club moved to Toronto’s College Street about 18 years ago. At the new location, they saw a lot of success — like when Italy won the FIFA World Cup in 2006 — as well as some down times — like the 2008 recession — that prompted Raviele and his father to dip into personal savings to keep the restaurant afloat. Raviele invested more money in the business in 2014 for a renovation and expanded to a second location, a small cafe in Etobicoke, in October 2019.

When COVID-19 hit and government ordered dining rooms to close, Raviele attempted to shift to take away, but eventually stopped. Bills piled up from utility companies.

“I obviously incurred some debt …,” he said.

But uncertainty over the future of dining was the final nail in Il Gatto Nero’s coffin.

‘Don’t see a future’

Raviele speculated he might be required to remove the restaurant’s 10 bar seats and slash his 65-seat capacity in half to comply with pending physical distancing rules, which would cripple his business.

“I don’t see a future for my business or for my family,” he said. “The model for opening any restaurant is based on feeding capacity versus space, and how many people can you do over the course of a night… I mean, if you have one bad weekend, it could be disastrous for many small businesses.”

He plans to focus on the small espresso bar, add a pizza oven and hustle to keep that business going, which he said he invested his second life into.

“I’m angry, because I wanted to do something good, and now the possibility of losing both is always there.”

Mohammed Bin Yahya, co-founder and chief executive at Plentea, found the coronavirus to be “just like the knockout punch” for his Toronto tea bar.

Shifting consumer habits may change retail forever

Dreams of growing

Before the pandemic, the company was struggling to pay some $5,000 in rent. When they shifted to takeaway to abide by health regulations amid the pandemic, foot traffic dropped dramatically.

The tea shop, which Bin Yahya opened in 2015 with dreams of growing to multiple locations, will close at the end of the month.

“The numbers. Straight up, the numbers don’t lie,” he said.

The company had to pay penalties when closing some of their accounts with cleaning companies, internet and phone providers, and others, he said.

“We are in debt,” he said, estimating they’ll owe some $40,000 in the end.

For now, he’s trying to minimize his expenses, and said he may have to find a side job and move in with family to help pay back the loans.


But he’s keeping the dream alive. Plentea will continue selling tea online, he said, and — for now — he’ll keep the equipment in storage with the hopes of opening again.

With nearly four decades in the food industry, 77-year-old Frances Wood’s retirement plan relied heavily on the Cajun-and-Creole food restaurant she co-owns, Southern Accent in Toronto.

After 34 years in one location, Wood dipped into her nest egg to help cover a move to a new spot about three years ago. It took some time to build up a new customer base and Wood noticed in recent years, lucky restaurants made 10 per cent in profit.

Still, at the start of this year, she started seeing “the light at the end of the tunnel” in making the new location work.

She debated selling the restaurant after her five-year lease ended. But with about 1½ years to go, COVID-19 hit.

Southern Accent also attempted takeaway and delivery, but found with high delivery app fees, it was losing money each day it stayed open.

‘A miracle’

Wood and her co-owner decided to close permanently in April and have about $60,000 in loans and bills to pay back between them.

In what Wood called “a miracle,” their landlord released them from their roughly $10,000 monthly lease early, Wood said.

“I don’t know what we would have done. We would have to go personally bankrupt, I guess” had that not happened, she said.

The next phase of the septuagenarian’s life “doesn’t look very good.” Wood didn’t draw a salary for the past several years, but the restaurant did pay some of her expenses. She collects Old Age Security, the Canada Pension Plan and has some personal savings, but that hardly covers her monthly expenses.

“My livelihood, what I was expecting to have at the end of 37 years in the restaurant business was some money from the restaurant when I sold it to help with my senior years.”

She planned to sell the name and recipes, and help set the buyer up for success. She even kept the restaurant’s 1940s bar in case a buyer emerges. It’s tucked away in the garage.

Still, she considers herself lucky all things considered.

“I think, ‘OK, I’m lucky. I have my health.”‘

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Ottawa pledges millions to promote tourism within Canada amid COVID-19 pandemic

Ottawa pledges millions to promote tourism within Canada amid COVID-19 pandemic

Ottawa is earmarking millions of dollars to promote holiday travel inside Canada as it seeks to help the tourism industry weather the COVID-19 pandemic.

The funds announced by Economic Development Minister Melanie Joly on Sunday include $30 million originally intended to attract foreign visitors through the federal tourism marketing agency, Destination Canada.

Instead, the money will be used to help provinces and territories encourage Canadians to discover their “own backyard” as the country’s international borders remain largely closed due to COVID-19.

The government is also setting aside around $40 million so tourism agencies in southern and northern Ontario, as well as western Canada, can adapt their operations to the pandemic, particularly as what would normally be the busy summer season approaches.

“A lot of people who have lost their jobs are in the tourism sector right now and the entire idea right now is to save the summer, but to save the summer differently,” Joly told The Canadian Press.

“There’s an entire movement across the country to shop locally. We see that people want to discover or support even more their local businesses. … Well I would add to that a new movement: visit local. And rediscover your beautiful city and your region.”

Talks around supporting the tourism industries in Quebec and Atlantic Canada are underway, she added.

‘This can’t be it,’ NDP says

While describing Sunday’s announcement as a “step in the right direction,” Charlotte Bell, president and CEO of the Tourism Industry Association of Canada, called for more talks between government and industry around long-term action.

“The survival of this industry, which pre-COVID contributed more than $100 billion to the Canadian economy and supported 1.8 million jobs, depends on a co-ordinated plan for recovery and reopening that includes input from the tourism industry,” she said.

NDP tourism critic Gord Johns, meanwhile, criticized the funding announcement as inadequate.

“This can’t be it,” he said. “Considering the sacrifices the industry has made, an announcement that includes redirecting previously announced funding initially intended for foreign investment — while welcome — is the least the government could have done.”

The tourism industry, which employs about one in 11 Canadians, has been hit hard by the pandemic as international travel bans and border restrictions have choked off the flow of visitors to Canada.

A report by Destination Canada in April suggested the sector could see total tourism spending decline by about a third from 2019 levels and result in the loss of about 263,000 jobs, many of them associated with small- and medium-sized companies.

Joly pointed to the federal government’s wage subsidy, rent assistance and other emergency COVID-19 measures as having helped the tourism sector, but said additional efforts are needed as the summer approaches and provinces start to reopen.

Travel versus controlling virus spread

Yet the new funds come as Canadians are still being told to stay at home as much as possible to prevent the spread of COVID-19. Some provinces are starting to ease back on restrictions around movement, but fears of a second wave are ever present.

“Obviously people are trying to find the right balance between having a tourism sector that can survive and at the same time making sure that we don’t continue the spread of the virus,” Joly said when asked about promoting travel during a pandemic.

“And to do that we need to abide by the public-health authorities’ advice and at the same time support the tourism sector and find new ways for them to be able to have revenue. So that’s what we’re doing.”

WATCH | Ban on large cruise ships extended through October:

It’s another blow to the tourism industry, which is already struggling because of COVID-19 cancellations, closures, and travel bans. 1:58

Leaders from across Canada’s tourism industry announced the creation of a new roundtable last week while calling for talks with the government around the easing of travel restrictions and mandatory quarantines to prevent long-term damage to the sector.

In a letter to Prime Minister Justin Trudeau, the roundtable members noted the European Union and Australia had already started taking steps to prepare for the critical summer tourism season.

“We propose to work closely with the federal government to responsibly take the necessary steps, including additional bio-security measures if appropriate, to ensure that the upcoming summer travel season is not entirely lost,” the letter reads.

“The highly restrictive measures in place today are not sustainable. Like the government, we want to avoid a second wave of the virus and are certain reasonable measures can be taken to help mitigate risk.”

Joly was more circumspect when asked about easing travel restrictions, saying the timing would depend on when adequate mass testing and contact tracing can be established as well as the provision of personal protective equipment.

“I had a conversation with the ministers of tourism of the G20 a month ago,” she said.

“We all agreed that for a while we will be supporting local tourism and eventually regional tourism, and then eventually national tourism and then eventually international tourism.

“So that’s not only happening here in Canada, it’s happening in all of the world.”

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Canadian Transportation Agency overwhelmed by 2-year backlog of air passenger complaints

Canadian Transportation Agency overwhelmed by 2-year backlog of air passenger complaints

The Canadian Transportation Agency is wrestling with a backlog of nearly 14,000 air passenger complaints accumulated over the past two years, at the same time as thousands of Canadians are demanding the agency help get their money back from flights cancelled due to the COVID-19 pandemic.

More than half of the 26,000 complaints submitted to the CTA from July 2018 to April 2020 are unresolved, according to a response to an order paper question by the NDP tabled in Parliament last week on the number, nature and resolution of passenger complaints.

The bulk of the complaints — which are meant to be addressed within 30 to 120 days — are for disruptions to flights including cancellations, tarmac delays and people being denied boarding. 

The backlog doesn’t come as a surprise to Mahesh Krishnamurthy, a Canadian living in the U.S. who flies often and has launched four complaints with the agency over the past 15 years.

“Four complaints, zero resolutions,” Krishnamurthy said. “You know it’s frustrating, but you realize at the end, sometimes that’s what government is.”

Krishnamurthy recently submitted a complaint about an Air Canada flight from New York to Australia, which was meant to depart in April but was cancelled because of travel restrictions. His other complaints have included delays or problems with ticket prices. 

Complaints surged after new passenger protections implemented

The CTA told CBC News the vast majority of untouched cases are not tied to the global public health crisis, which largely grounded air travel around the world.  

The number of complaints more than doubled after the second wave of air passenger protection regulations came into effect in December 2019, the agency said.

The regulations, first enacted in July 2019, are intended to ensure that both airlines and passengers know what their rights are when it comes to travel setbacks like delays and cancellations. The CTA is an independent, quasi-judicial tribunal and regulator tasked with settling disputes between the customers and airlines. 

It simply reflects the challenges of handling a 23-fold leap in demand– Canadian Transportation Agency

“The massive increase in complaint volumes has made it increasingly challenging to meet these standards, despite the mobilization of effort across the organization,” the agency wrote in a statement to CBC News. 

“This isn’t for lack of effort or commitment; it simply reflects the challenges of handling a 23-fold leap in demand.”

The agency said it has attempted to tackle the influx of cases by resolving complaints through more informal methods including mediation, launching inquiries to simultaneously clear up common complaints about the same issue and reallocating resources internally.

NDP transport critic Niki Ashton said the backlog shows the agency isn’t doing its job to protect passengers.

“The Canadian government should be stepping up … to make sure that Canadians’ complaints are being heard, are being resolved,” Ashton said.

Thousands of complaints since onset of pandemic

The COVID-19 pandemic has only added to the mounting pile of complaints. 

The CTA says it logged about 5,500 complaints from March 11 to May 28, though it did not disclose what they were about.

The number was revealed as Canadians across the country are calling on the federal government to compel airlines to refund costs for flights they were never able to board. Most Canadian airlines have offered passengers travel vouchers redeemable within two years — something the CTA has said could be reasonable during these extraordinary circumstances. 

Ashton, however, believes Ottawa should look harder at compensating those who cancelled their trips.

“That’s something that we know is a huge issue right now,” she said.

Transport Minister Marc Garneau said Friday that forcing airlines to refund passengers would have a “devastating effect” on an already battered industry.

Minister of Transport Marc Garneau said Canadian airlines could go bankrupt if they were forced to refund passengers billions of dollars for flights cancelled due to the pandemic. (Adrian Wyld/The Canadian Press)

Meanwhile, the CTA says that while none of its services were suspended because of the pandemic, it did suspend its interactions with airlines about outstanding disputes. 

That decision was made to allow carriers “to focus on immediate demands, such as repatriating Canadians stranded abroad, and to adjust their operations in light of plummeting passenger and flight volumes,” the agency said.

The CTA added conversations will resume with airlines starting in July. 

CAA: ‘The system is simply clogged up’

The Canadian Automobile Association (CAA) — a travel agency and consumer group that originally pushed for the passenger protections and took part in the consultation process — said the CTA can’t support passengers if it doesn’t have the staffing or resources to do so. 

“We’ve been saying since the start of this process that no matter how good the rules are, if we don’t have good enforcement, it’s simply not going to work,” said CAA spokesperson Ian Jack.

“The system is simply clogged up and not working. If we don’t have a system that people can trust because it’s going to deal with a complaint in a timely fashion, then the system just falls apart and we’re no better off than we were before we pushed to get this airline passenger bill of rights.”

Canadian Automobile Association spokesperson Ian Jack says that the CTA needs more staffing and resources to do its job, but that the agency also needs to be more transparent about its caseload. (Jean-Francois Benoit/CBC)

The CTA received temporary funding from the federal government over the past two fiscal years to address the rise in complaints, but the agency was not able to immediately confirm the amount to CBC News. The agency did say it nearly doubled the number of complaints it processed during that time period.

Jack said the next step is to go beyond opposition parties asking questions in Parliament: he wants to see data about complaints and the CTA’s response times made publicly available so consumers can see for themselves if it’s working.

“If people lose trust in the system, they’re never going to come back to it and we’re not going to have an effective air passenger rights regime in this country,” he said.

Krishnamurthy agrees.

“By the third or fourth time, you don’t really have any expectations of them actually resolving the complaint,” he said. “You know you’ve got to do it on your own.”

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COVID-19 has Canada’s banks worried about sickly loans, but they’re still raking in the cash

Scotiabank walks away from consumer dispute watchdog OBSI

If Canada’s big banks are the canary in the coal mine for the economy as a whole, then there was some good news this week, and some less good news.

While the COVID-19 pandemic wreaked havoc on Canadian society, Canada’s five biggest lenders — Royal Bank, Bank of Montreal, Scotiabank, CIBC and TD — remained profitable even as they set aside billions of dollars to offset possible losses from loans that might go bad in the coming months.

It was expected that measures to contain the pandemic, such as school and business closures, border shutdowns and travel restrictions, would grind economic activity to a halt, but the banks’ quarterly financial results for the three-month period up to April 30 were hotly anticipated because they are a deep dive into just how bad the economy was really doing.

If businesses like manufacturers, oil and gas companies, retailers and tech startups are having trouble paying their bills, that tends to show up at the big banks, which lend them money.

Analysts say one of the best ways of gauging how companies are doing is by paying attention to a banking metric known as loan loss provisions. That’s a complicated-sounding term for a fundamentally simple concept: how much banks set aside to pay for loans on their books they think might not get paid back.

Not all those loans will turn into losses. But paying attention to how much the banks are setting aside just in case is an excellent proxy for how worried they are.

Combined, Canada’s big five lenders set aside almost $11 billion last quarter to cover loans that aren’t currently being paid off as planned. That’s almost five times as much as they had set aside for bad loans in the same three-month period last year.


That’s the bad news. The good news? “They were bad, but not as bad as feared,” said Jim Shanahan, an analyst with investment firm Edward Jones who covers Canada’s big banks.

Considering the massive number of layoffs, business closures and the glacial pace of trade flows across the Canada-U.S. border due to COVID-19, there were fears that loan losses could have been “at levels that we would never have contemplated,” Shanahan said.

But that didn’t happen.

It’s equally important to note that even in all this, the banks are still making money. Collectively, the banks raked in nearly $5 billion in profits over the three months. That’s well below their usual pace, but Shanahan said there was “almost a collective sigh of relief” that the banks were still profitable.

Art Johnson, the founder of Calgary-based SmartBe Wealth, is one of the few money managers in Canada who doesn’t think shares in Canadian bank stocks are always worth buying, but even he admits their week went a lot better than it could have gone.

Canada’s big banks are proxies for the economy: when the people and businesses they lend to have financial problems, that tends to show up on the banks’ books. (David Donnelly/CBC)

“When I look at the numbers, they’re bad,” he said in an interview. “There’s no two ways around it, these numbers are bad, [but] markets don’t look at bad or good, they look at better or worse.”

That explains what the banks’ stock prices did this week. Typically lower profits would have sent bank shares tumbling, but shares in all five were sharply up as investors breathed that sigh of relief that Shanahan was talking about.

“People were expecting a lot worse, and they were better than worse in all facets,” Johnson said.

Not out of the woods yet

While he understands why the bank stocks rallied with relief, Johnson thinks that exhale may be premature as the real pain in the economy may not show up on the banks’ books for another few months, once mortgage payment deferrals run out, and massive government progams supplementing income to laid-off workers expire.

“We’ll start to see the real impact of this three [or] four months down the road, and that’ll be where … it’ll be interesting for markets,” he said.

One of the best ways of gauging how optimistic the banks are about their future is to look at their dividend payments.

Canada’s big banks are known as reliable dividend-paying machines, slowly and methodically nudging up their payments to shareholders every few quarters for more than a century. Those big bank dividends are so rock-solid that TD and Scotiabank somehow managed to hike theirs even in the middle of the financial crisis in 2009.

The banks love to hike their dividends because investors love that extra income. But banks won’t do it unless they are confident they’ll be able to sustain the higher level in perpetuity  — a harsh lesson that Quebec-focused bank Laurentian learned this week when it cut its payout, the first dividend slash by a Canadian lender that big in almost 30 years.

If dividend payouts are the best barometer of the financial health of Canada’s big banks — and, by extension, the economy — then the fact that none of them saw the need to cut this time around is an encouraging sign.

Those quarterly payouts look as rock-solid as ever, but even the banks admit the future still looks uncertain.

The CEO of National Bank, a distant sixth in the five-horse race atop Canadian banking, phrased it in a, well, enterprising fashion.

“This is Star Trek finance,” Louis Vachon said on a conference call with analysts to discuss the bank’s quarter, in which it booked one-third less profit and set aside five times more money for bad loans

“We would describe the current environment as going where no one has gone before.”

Canada’s economy has managed to live long and prosper for decades on the backs of its biggest lenders, but Vachon makes it clear that those same banks are still keeping their shields up for now.

“We’re still watching for the Klingons [because] we’re not out of this crisis yet.”

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What we can learn from China and Sweden about post-lockdown traffic and travel

What we can learn from China and Sweden about post-lockdown traffic and travel

Predicting future behaviour is often fraught with risk and doubly so when the world is turned upside down by a pandemic.

Trying to forecast what life will be like a few years, months or even weeks from now isn’t straightforward, even when examining some simple human behaviours — like how many people will be dining at restaurants or using public transit again.

But some early data is emerging available from two noteworthy countries — China and Sweden.

China has the most post-lockdown experience because it’s believed that’s where the novel coronavirus originated. Sweden, meanwhile, decided not to shut down its economy like most developed countries and can offer a glimpse of how people could act when the economy in Canada and other countries is fully open again even though the threat of COVID-19 still exists.

Travel data from the two countries provides some insight into what to expect in terms of how many people will continue to work from home, traffic patterns on city streets, the eagerness of shoppers to return to stores and how long until travellers will have the confidence to catch a flight, among many other observations.

Peoples’ new travel habits will have broad implications for the economy, especially the oil sector, which saw demand plummet for fuel during the pandemic. 

Highways and city streets are beginning to fill up again as restrictions are eased, but trends in China and Sweden suggest we won’t return to pre-COVID traffic for a while. (ambrozinio/Shutterstock )

Will rush hour traffic return?

City drivers have no doubt already noticed streets beginning to slowly fill up again as lockdown restrictions are eased, but data suggests it will take a while before rush hour becomes as painful as it was pre-COVID.

In China, a similar number of vehicles are already back on the road, but figures analysed by Sproule, an energy consultancy, show how people in that country are still choosing not to drive as much as in the past. Trips are still mainly for essentials, such as going to work and getting groceries.

A similar pattern is seen in Sweden. Looking at mobility data from Google COVID-19 community mobility reports for all types of transportation, people are visiting retail shops and attractions like movie theatres 21 per cent less, going to subway, bus and transit stations 42 per cent less and commuting to work 72 per cent less.

“What stands out the most is, if given the choice, people are electing to adjust their habits,” said Liam O’Brien, a Calgary-based analyst with Sproule, which recently published a report looking at the early data from China and Sweden related to post-lockdown activity.

“It’s probably reasonable to assume that we’re going to see similar behaviour in most major centres globally with increased work-from-home solutions and less willingness to travel for unnecessary purposes,” O’Brien said.

When will air travel take off?

The rebound in air travel at Chinese airports indicates there are better times ahead for airlines, but likely several years of turbulence ahead.

Just like at airports around the world, the runways in China saw a sharp drop in activity as COVID-19 struck. However, figures show airports across the Asian country are seeing passenger volumes begin to rebound. The total daily number of flight departures has climbed back to roughly 50 per cent of pre-virus levels, according to Sproule’s report.

Virtually all the flights are domestic and experts say that market will return much more quickly than international flights.

Still, the air travel recovery will likely be slow.

In a report by DBRS Morningstar this week, the ratings agency forecasts it could take up to four years to recover in its worst-case scenario.

“We think it is likely that the initial recovery in air passenger traffic will be led by domestic travel (similar to China) as international travel is subject to the effectiveness of each country’s containment measures and fiscal and monetary policies,” DBRS stated.

The domestic air travel sector is expected to recover more quickly than the international market. (Steve Silva/CBC)

There are several reasons for the long recovery for air travel, including a change in some people’s willingness to fly and apprehension about airports, the expected hike in ticket prices as the number of available seats is reduced and ongoing border restrictions that will continue to curtail travel.

“it’s going to take some time, probably the 2023-2025 timeframe, before we get back to pre-virus air travel levels,” said O’Brien, with Sproule.

International air travel has fallen sharply and could take four or five years to recover. (Sproule Market Report)

How eager are people to travel?

The reduced appetite to fly likely extends to driving, too.

Overall travel intentions by Canadians have declined this summer, according to a recent survey of 2,000 adults by the Conference Board of Canada.

About 47 per cent of respondents still plan to take a trip by any mode of transportation, but many are still trying to figure out what they’ll do.

“The vast majority of what we would call tourist activity is actually people going and doing things in their own cities, going out to restaurants or events at home or close by,” said Robyn Gibbard, a senior economist in charge of tourism research at the Conference Board of Canada.

“We saw a big uptick in the share of people who were saying they’re planning to do activities that kind of jive with social distancing,” he said, such as camping or hiking.

Conversely, there was a drop in interest in the share of people planning to see concerts or sporting events.

Responses by Canadians surveyed about which stage best describes where they are with arranging their longest trip this summer, in percentage. (The Conference Board of Canada)

What’s the impact on fuel use?

Refineries around the globe are beginning to ramp up activity and produce more gasoline and diesel as countries loosen up lockdown measures. Still, fuel demand will take a while to rebound to pre-COVID levels, based on the data from China and Sweden.

Gasoline consumption is still down 15 per cent in China, while diesel use is 10 per cent lower in Sweden, according to Sproule, compared to normal levels.

Assuming similar behaviour around the globe in the months ahead, an impact on global oil demand is expected.

Even calculating a seven per cent drop in gasoline and five per cent decrease in diesel use, that equates to a three million barrel per day hit to global oil demand, according to O’Brien, the Sproule analyst.

“For an industry that rides very much on the margin, that’s material.”

Further, the aviation sector’s struggles are causing about a 3.5 million barrel-a-day disruption, said O’Brien. An average decrease of about two million barrels a day from pre-COVID levels is expected over the next few years as the sector slowly recovers.

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First-time ‘RV curious’ travellers driving up domestic demand for recreational vehicles

First-time 'RV curious' travellers driving up domestic demand for recreational vehicles

Ramsey Sayah isn’t the camping type.

“I’m usually the kind of guy who books a flight and goes to vacation down south or to the U.S. or Europe,” said the 46-year-old owner of Texture Hair Salon in Ottawa. “I like hotels. I like fine dining.”

But this weekend, Sayah will pick up a 32-foot Sunseeker recreational vehicle (RV) he’s rented and head to the Laurentians in Quebec to fish, cycle and “throw a ball around” with three friends.

His choice of an RV getaway is inspired not just by necessity because of the current limitations on international travel. Sayah said the coronavirus pandemic has also reconnected him to his childhood love of nature and “less complicated” pleasures.

A picture from Ramsey Sayah’s Instagram account taken during his 2018 holiday in Los Angeles. Sayah had no interest in camping or RVing prior to the pandemic. (@ramseyfit/Instagram)

“It opened my eyes to where I wanted to go back to enjoying the simple things, looking at the lake, watching a fire, having a barbecue, drinking a beer,” he said.

Sayah is one of a growing number of Canadians who have decided that the best option for a holiday this summer is to explore Canada with an RV.

RVing a physically distanced way to travel

Newcomers to RVing are eager to holiday safely and are less than enthusiastic about staying in hotels or motels.

It’s like having your own isolation unit.– John Krohnert of Platinum RV

“It’s like having your own isolation unit,” said John Krohnert of Platinum RV, a dealership in Erin, Ont. “Our rental division is going crazy. It’s very, very busy.”

Krohnert sells RVs and also rents them from $450 to $1,000 a week, depending on the size and features of the vehicle.

“I think what we’re seeing is people are starting to say, ‘We’ve got so many beautiful places in Canada. We don’t need to cross the border or rent hotels,'” he said.

John Krohnert of Platinum RV at his dealership in Erin, Ont. ‘Our rental division is going crazy. It’s very, very busy,’ he said. (Submitted by John Krohnert)

Fear of flying

Ottawa-based RVezy is an Airbnb type of business that allows travellers to rent recreational vehicles from people who are looking to make some money by lending out their RVs.

Founded by former Ottawa policeman Mike McNaught, along with partner Will Thompson in 2016, RVezy recently commissioned a survey of 2,000 Canadians to learn about their attitudes toward travel this summer. It found that 81 per cent of participants believe flying to be “somewhat” or “too” risky.

RVs are perfectly suited for vacation travel this summer. In an RV, you are in full control of your environment. You have full access to cooking facilities, washrooms, showers and air conditioning.”​​​​​​– Mike McNaught, co-founder of RVezy

“RVs are perfectly suited for vacation travel this summer,” McNaught said. “In an RV, you are in full control of your environment. You have full access to cooking facilities, washrooms, showers and air conditioning.”

He said the company has provided all RV owners with disinfecting recommendations from Health Canada and that both the owner and renter need to sign off on a cleanliness checklist.

As well, one in three of the survey’s participants said they “never before thought RVing was right for them but are now open to it.” The survey labels them as “RV curious.”

One of the more unusual campervans on the RVezy website. Ottawa-based RVezy is an Airbnb type of business that allows travellers to rent recreational vehicles from people who are looking to make some money by lending out their RVs. (RVezy)

McNaught said demand for the 7,000 vehicles on RVezy’s website is close to exceeding what the company saw in mid-summer of 2019 when 3,000 of its vehicles were rented. “Normally, we don’t see the demand this strong at this time of year.”

The platform takes a 15 per cent cut of what the RV owner charges and also charges the renter an additional 10 per cent of the overall rental cost. But McNaught said it’s a way to support the local economy.

“Millions of Canadian have been impacted by this pandemic,” he said. “When you’re renting an RV from us, you’re renting from someone local in the neighbourhood, and the money goes right back to people who may have lost their jobs.”

WATCH | Are you safer from COVID-19 indoors or outdoors?

Andrew Chang asks an infectious disease doctor whether it’s safer to be indoors or outdoors during the coronavirus pandemic. 1:02

International visitors not renting RVs

According to the Recreational Vehicle Dealers Association of Canada, the RV industry generated an estimated 66,000 jobs and $4.7 billion in 2017 — the most recent figures available.

But it’s not sunshine and rainbows for everyone in the business.

Calgary-based CanaDream rents RVs primarily to international travellers, with seven locations across Canada. Company vice-president of sales and marketing Kathryn Munro is based in Glasgow.

“We were heading for an absolute whopper of a year,” Munro said. “We definitely would have been looking at 13,000 rentals for the year ahead. And we’re now looking at perhaps 20 per cent of that this year.”

CanaDream had been adding to its fleet year by year, but its orders for 2020 are stuck with U.S. manufacturers because of the border closure. Even so, given the lack of demand from its usual clientele, the inventory on hand is more than sufficient, she said.

In fact, the company intends to sell some of its RVs; typically, about a third of the fleet is sold every two years in order to rent only relatively new vehicles.

“We will be offering a lot more RVs for sale,” Munro said. “Our fleet will be much smaller this coming year.” 

A promotional photo from CanaDream showing European visitors in Cape Breton, N.S. Calgary-based CanaDream rents RVs primarily to international travellers, but it appears its Canadian segment may grow this year. (CanaDream)

Domestic Canadian travellers make up just 10 per cent of CanaDream’s business, but it appears that niche may grow this year.

“We’re getting so many new guests. Our call centre operators are spending a lot of time explaining how RVing works,” Munro said. “I’ve had to write a document for them to use so that they can explain efficiently about the appeal.”

I think this is a great way to see Canada without having to hop on a plane.– Ramsey Sayah, newcomer to RVing 

Sayah said he’s looking forward to cooking some great meals in the large, high-end RV that he’s rented.

“We’re bringing good food, not just whatever,” he said, “because we have this beautiful kitchen in there.”

He also said that despite his previous penchant for being served in fancy restaurants, he’s actually looking forward to learning a new way to make a fire or tie a rope.

“I don’t have a cottage, and I think this is a great way to see Canada without having to hop on a plane.”

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Canada’s economy shrank at 8% pace in the first three months of 2020, worst since 2009

Canada's economy shrank at 8% pace in the first three months of 2020, worst since 2009

Canada’s economy shrank at an 8.2 per cent annual pace in the first three months of 2020, as an already weak economy in January and February was walloped by COVID-19 in March.

Statistics Canada reported Friday that the slowdown was the sharpest quarterly drop since the financial crisis of 2009, as measures to contain the pandemic such as school and business closures, border shutdowns and travel restrictions brought economic activity grinding to a halt. 

While bleak, the eight per cent decline was better than the ten per cent contraction that economists had been expecting for the period. For comparison purposes, the U.S. economy shrank by five per cent over the same time frame.

While the vast majority of the contraction came in March when the pandemic hit, January and February’s numbers weren’t overly strong to begin with due to pre-existing drags such as rail blockades across the country, and a teacher strike in Ontario in February. 

In absolute terms, Canada’s gross domestic product was 2.1 per cent smaller over the three months than it was at the end of 2019. But much of that came in March alone, as GDP declined by 7.2 per cent during the month. That makes March 2020 the worst month for Canada’s economy since record-keeping began in 1961.

Just about everything got walloped, as 19 out of the 20 sectors the data agency monitors got smaller. The one exception was utilities, which eked out a gain of 0.4 per cent.

While March shattered the previous monthly record for slowdowns, early data suggests April’s numbers will be even worse, showing an 11 per cent contraction from March’s already depressed level.

By sector, the slowdown in March was striking, including:

  • Accommodation and food services, down 39.5 per cent.
  • Transportation and warehousing, down 12.2 per cent.
  • Air transportation, down 40.9 per cent.
  • Manufacturing, down 6.5 per cent.
  • Retail trade, down 9.6 per cent.
  • Educational services, down 13.5 per cent.
  • Arts, entertainment and recreation, down 41.3 per cent.
  • Construction, down 4.4 per cent.
  • Mining, quarrying, and oil and gas extraction, down five per cent.

Economist Doug Porter at Bank of Montreal found some reasons for optimism amid the gloomy numbers, noting that many parts of the economy did better than initially feared.

“The new news here is that the figures were a little less dire than feared,” he said. “Consumer spending fell only nine per cent in the quarter, while business investment was down a mild 2.7 per cent (less bad than Q4 in fact), and housing dipped just 0.4 per cent.”

Overall, Porter said the 8.2 per cent pace of contraction puts Canada right in the middle of its G7 peers. Canada’s economy did worse than Japan’s, which shrank at a 3.4 per cent pace, over the period. But Canada is faring much better than Italy and France, which saw their economies shrink at paces of 17.7  and  21.4 per cent in the same period.

Alicia Macdonald with the Conference Board of Canada said “the numbers this morning leave no question that Canada is in the midst of its deepest recession in decades. However, with restrictions easing across the country, the economy should have hit bottom in April and we should see positive growth in the months ahead.”

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Laurentian Bank cuts dividend by 40%

Laurentian Bank cuts dividend by 40%

Laurentian Bank slashed its dividend by 40 per cent on Friday, the first such move by a major Canadian lender in almost three decades.

The Montreal-based lender said Friday its profit fell by 79 per cent to $8.9 million, and its provisions for credit losses — the amount of money the bank is setting aside to cover loans that may go bad — soared to $54.9 million. That’s up from $9 million in the same period a year ago.

COVID-19 is throwing uncertainty to the bank’s outlook, so it cut its dividend to 40 cents a share as a precaution. Previously it was 67 cents a share.

“We have a strong capital and liquidity position, and disciplined risk management, but it is a time for prudence,” CEO François Desjardins said. “Although we believe that current earnings are not reflective of the future earnings power of the organisation, we have reduced the dividend to $0.40 per share which improves operational flexibility until we reap the anticipated benefits of our strategic plan.”

The last time a major Canadian bank slashed its dividend was 1992, when National Bank cut the payout to its shareholders.

More to come

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Length of average work week fell to record low in March as COVID-19 hit

Length of average work week fell to record low in March as COVID-19 hit

The length of the average work week for employees paid by the hour sank to its lowest level on record in March, as COVID-19 drastically reduced the amount of paid work available for anyone fortunate enough to still have a job.

Statistics Canada reported Thursday in its Survey on Payroll Employment and Hours that the average number of weekly hours for hourly paid employees declined by 1.1 hours to 29.5 in March, the lowest level on record.

In a bizarre twist, the data agency reported that the average weekly paycheque actually increased, to $1,053. But that’s only because the massive job losses experienced during the month disproportionately hit lower-paid workers, so the average pay packet of those still employed looked comparatively bigger.

Almost 1 million jobs lost

Thursday’s numbers are the second of two monthly reports compiled by Statistics Canada on the job market, and they reinforce just how record-setting March’s job losses were.

The latest report says 914,500 Canadians lost their job in March. Statistics Canada had previously reported that more than one million Canadians had lost a job during the month, but that claim was based on an online and telephone survey the agency compiles.

The new data is based on tax remittances from the Canada Revenue Agency and other administrative data from government sources.

Every province lost jobs, and just about every sector of the economy did, too.

About one quarter of the job losses came in accommodation and food services, which lost 256,609 positions. Next was retail at 103,712 jobs. Combined, those two sectors made up 41 per cent of all the jobs lost.

But not all sectors were as hard-hit.

Jobs and salaries were virtually unchanged in the relatively higher-paying public administration and finance and insurance sectors.

“Workers in these sectors may not usually have duties requiring close physical contact with others, are more likely to have the option to telework, and, as such, may have been less impacted by the economic shutdown,” the report says.

Average weekly earnings in the finance and insurance sector actually rose by 4.7 per cent during the month.

Overtime way up in health care

Surprisingly, 62,000 fewer people had paid work in the health-care sector, but most of those were in non-essential health-care services such as dentist offices, many of which shut down for all but urgent matters.

The number of people employed in hospitals was basically unchanged, but overtime for those workers increased by about 25 per cent “as COVID-19 was spreading and the workload at hospitals had increased,” Statistics Canada said.

Similarly, employment in community care facilities for the elderly was basically unchanged, but overtime pay increased by 19.3 per cent.

Employment in child-care facilities declined by 16,000 people as most daycares across the country were closed.

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Number of Americans on jobless benefits inches down for 1st time since pandemic began

Number of Americans on jobless benefits inches down for 1st time since pandemic began

The number of Americans continuing to receive government jobless benefits declined in the week ending May 16 for the first time since COVID-19 struck, even as millions of people continue to join the unemployment rolls.

The U.S. Department of Labour said 21.052 million people continued to receive benefits that week. That’s down from the record 24.912 million seen the previous week.

“The number of Americans who remain on UI is still uncomfortably high,” Bank of Montreal economist Jennifer Lee said, “but it is not at a record anymore and that is a start.”

The initial claims figure — which represents the number of people filling out applications for jobless benefits for the first time — held above two million last week for a 10th straight week amid second-wave layoffs in the private sector, such as the 12,000 announced this week by plane manufacturer Boeing.

Initial claims for state unemployment benefits totalled a seasonally adjusted 2.123 million for the week ended May 23, from a revised 2.446 million in the prior week. Economists polled by Reuters had forecast initial claims falling to 2.1 million in the latest week from the previously reported 2.438 million.

Though claims have declined steadily since hitting a record 6.867 million in late March, they have not registered below two million since mid-March. The astonishingly high level of claims has persisted even as non-essential businesses are starting to reopen after shuttering in mid-March to control the spread of COVID-19, an indication it could take a while for the economy to dig out of the coronavirus-induced slump.

“I am concerned that we are seeing a second round of private sector layoffs that, coupled with a rising number of public sector cutbacks, is driving up the number of people unemployed,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

“If that is the case, given the pace of reopening, we could be in for an extended period of extraordinary high unemployment. And that means the recovery will be slower and will take a lot longer.”

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