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The Chamber of Commerce of Metropolitan Montreal

Restarting the Economy

Piece signed by Michel Leblanc, President and CEO of the Chamber of Commerce of Metropolitan Montreal.

 

 A mere six weeks ago, our GDP was growing. The average remuneration in Quebec was increasing more than anywhere else in Canada, and our unemployment rate was reaching historic lows. Public and private investment was on the rise, and the government was readying to make massive investments in the energy transition and rebuilding schools.

Then COVID-19 hit. It has been a brutal shock.

The first case was confirmed barely 50 days ago. After schools were ordered to close, all non-essential activities were shut down 25 days ago. As we know, this was necessary to avoid a health catastrophe.

The public and businesses responded in exemplary fashion. We have shown a great deal of discipline. We can see the evidence of that today: catastrophe was averted, but, inevitably, the decision has had devastating economic consequences.

Businesses moved into emergency mode in under 48 hours. Those that were able shifted to remote working and e-commerce.

But a large number of businesses saw their revenues evaporate, putting unsustainable pressure on their cash flow.

There have been massive layoffs. From virtually full employment, we now have an estimated unemployment rate of 15%. More than six million Canadians filed an application for emergency benefits in just a few days.

Governments were swift to respond to the economic emergency. They introduced a wide range of fiscal and financial measures to help citizens and businesses. They listened to what was needed.

Granting massive wage subsidies, loan guarantees and assistance for paying commercial rents are part of a new arsenal that will help businesses keep their heads above water.

Despite these measures, the economic impact has been brutal. Estimates are that Quebec’s gross domestic product could contract by $42 billion in the second quarter. There is also pressure on public finances, and significant deficits are anticipated, both in Ottawa and in Québec City.

Despite all of this, what is reassuring is that our governments have sufficient leeway to continue to take action and contribute to the upcoming recovery.

Prepare now for the recovery

Information coming from health authorities is encouraging.

As a result, behind the scenes, thinking has begun about restarting the economy. The consensus is that while the shutdown was sudden, resuming activities will have to be gradual.

Proper planning will be required for a successful restart of activities. Certain sectors will resume as a priority, as we have already seen in the past few days.

We want to give businesses sufficient notice to get organized. They have to be able to count on functional supply chains to avoid the false start that would result if companies were to have to shut down a few days after getting back to work.

Working in the time of COVID-19

We need to be smart about how we get around. We want to avoid peak periods on public transit. This will mean keeping as many people as possible working remotely, as well as adopting staggered working hours.

We need to clarify what is considered a safe distance – the two metres we have all become so familiar with. Of course, we need to have work stations that respect health requirements. But can we be closer to each other for a short time, with everyone wearing a mask, for example, to take an elevator?

Businesses, and in particular small businesses, which tend to have limited resources, need clear protocols to allow them to resume their activities and to know how to respond if they learn that one of their employees is contagious and may have contaminated a work space.

Adapt our business models

This crisis has forced us to review how we do business. All businesses, particularly those that were experiencing difficulties before the crisis, need to take some time to rethink their business models. In the past few days, we have asked banks to prepare to support business leaders who need to shift to new approaches.

There are a number of opportunities for change available to SMEs. How can they succeed in their digital transition, adopt strategies to develop e-commerce, and harness the growing enthusiasm for buying local? Once the crisis is over, how can we be part of a low-carbon economy?

Governments obviously have a role to play. But with the proper approach, we will have a more competitive, more robust ecosystem.

Support Quebec’s economic driver

Some sectors need particular attention.

Hotels and restaurants have lost their clients. Cultural venues have lost their audiences. The borders will remain closed for a few months yet. Tourists who flocked here in record numbers year after year will not be coming this summer. Governments will need to offer targeted aid.

In the next few months, we want to resume our major structuring projects. For the city, these include public transit projects, the expansion of Montréal-Trudeau Airport, the Contrecoeur terminal at the Port Montreal and the Palais des congrès.

We have the utmost confidence in the resilience of our entrepreneurs. What is important is that we properly prepare so we can succeed when we resume activities and restart our economy.

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