April 29, 2020

McLennan Ross Update for Wednesday

By McLennan Ross Labour & Employment Team

What we are seeing
  • Statistics Canada released data through its Canadian Survey on Business Conditions regarding the impact of COVID-19 on businesses in Canada in March, 2020, link here. According to this survey:
    • Nearly one-third (32.3%) of businesses who responded to the survey reported that their revenues from the first quarter of 2020 were down by 40% or more from the same quarter a year earlier. Another 21.2% of businesses reported their revenues had decreased by 20% to 40% over the same period.
    • Just under two-thirds (64.8%) of businesses reported being highly affected by lower demand for their products or services, while nearly half (48.5%) of businesses reported being highly affected by the need to cancel services they offered.
    • Almost two-fifths (38.1%) of businesses reduced staff hours or shifts, while two-fifths (40.5%) of businesses reported that they laid off staff. Nearly one-fifth (18.3%) of all businesses laid off 80% or more of their workforce.
    • The percentage by sector of businesses which laid off 80% or more of their workforce was stated as follows:
      • Agriculture, forestry, fishing and hunting - 23.6%
      • Mining, quarrying, and oil and gas extraction - 26.9%
      • Utilities - 26.7%
      • Construction - 41.6%
      • Manufacturing - 29.4%
      • Wholesale trade - 24.6%
      • Retail trade - 51.2%
      • Transportation and warehousing - 19.3%
      • Information and cultural industries - 19.2%
      • Finance and insurance - 12.4%
      • Real estate and rental and leasing - 19.3%
      • Professional, scientific and technical services - 24.6%
      • Management of companies and enterprises - 21.9%
      • Administrative and support, waste management and remediation services - 18.6%
      • Educational services - 46.4%
      • Health care and social assistance - 64.2%
      • Arts, entertainment and recreation - 61.7%
      • Accommodation and food services - 69%
      • Other services (except public administration) - 46.3%
      • Public administration - 16.6%
  • With the focus on the economic impact of COVID-19 and the resulting work from home, the resources available to support mental health have not received significant attention.
  • The Mental Health Commission of Canada has published various resources from the Government of Canada to provide support for Canadians suffering from mental health concerns. A link to resources is here
  • One resource is the Wellness Together Canada portal, which provides tools and resources to help Canadians concerned about their mental well-being. These tools include modules for addressing low mood, worry, substance use, social isolation and relationship issues.

What we are hearing
  • The Provincial Government confirmed our previous advice that it was set to introduce a plan later this week to re-open the Alberta economy in stages starting in May. Although still in draft format, Premier Kenney confirmed that work was ongoing and that the plan once introduced would be closely coordinated with the plans already announced by Saskatchewan and the one to be announced by British Columbia in the near future due to inter-provincial commerce, trade, and travel.
  • Ontario and Quebec also announced the framework for the gradual reopening of their economies.
    • The plan for Ontario is to reopen Ontario businesses and public spaces gradually. This will be based on the advice of the Chief Medical Officer of Health. Each stage will last for approximately two-to-four-week periods to allow for close monitoring of any impacts or potential resurgence of COVID-19 cases.
    • Quebec’s plan includes set dates for phased reopening, starting on May 4, 2020 and then continuing on May 11 and May 25. The Quebec plan has been described as aggressive in light of the fact that Quebec is still experiencing the largest number of new COVID-19 cases per day in Canada.
  • According to the Government of Canada statistics, Ontario and Quebec represent more than 80% of all confirmed cases across the country, with British Columbia and Alberta accounting for 14% of confirmed cases. 
  • From reviews of the Alberta economy, it has been suggested that less of the economy has been shut down than anticipated. That is good news, though many businesses have been shut down (e.g., retail; personal services; transportation; hospitality) and most businesses have experienced reductions in revenue (as confirmed by the Canadian business data reported above).

What we are saying
  • Don McGarvey of McLennan Ross LLP was interviewed by Postmedia about the impact of the current court closures on the conduct of litigation once the state of emergency is lifted.
  • Don highlighted what we have noted in the past, specifically that Alberta’s judicial resources were already stretched thin prior to the pandemic and that demand is going to be exponentially worse once the courts reopen, as the court will be faced with the pre-existing caseload which has sat largely dormant for many weeks, plus an expected avalanche of new cases arising from events caused by COVID-19.
  • Don also predicts that there will be a new cottage industry of COVID-related class action lawsuits brought by firms on behalf of a large number of claimants, which claimants could be employees who were either terminated or laid off as a group or who attended at work during the state of emergency and contracted or were exposed to COVID-19 despite the best efforts of the employer.  

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