B2| REPORTONBUSINESS O THEGLOBEANDMAIL| FRIDAY, MARCH 13, 2020
E
very time Joanna Ressi
shops for groceries these
days, she wipes her cart
with Lysol, sanitizes her phone,
slathers on Purell and avoids
opening doors with her hands. If
she needs something from a su-
permarket bulk bin, she’ll use a
plastic bag rather than touching
the tongs.
Ms. Ressi always uses the self-
checkouts now, too. “I’m really
not interested in going to the
cashier,” she said. “I’m trying to
limit the amount of contact I
have.”
Her precautions stem from
the spread of the novel coronavi-
rus. Ms. Ressi, who lives in Bur-
lington, Ont., works as a shopper
for grocery delivery service Insta-
cart, and she completes about 10
orders each day. When a custom-
er recently wanted to shake her
hand, she politely declined.
COVID-19 presents a special
risk to gig workers in Canada,
many of whom don’t have the
option of working from home.
Complaints are mounting about
the lack of support offered to
drivers and couriers by their os-
tensible employers. Gig workers
are considered independent con-
tractors and do not receive the
same benefits as employees, in-
cluding sick pay.
Uber Technologies Inc. and
Lyft Inc. have said they will pro-
vide 14 days of sick pay to drivers
who are diagnosed with CO-
VID-19 or quarantined if required
by public health officials. Uber
said the policy has already begun
in some markets and that it will
be implemented worldwide, al-
though the company has yet to
say when.
Instacart, based in San Fran-
cisco, announced similar mea-
sures on Monday and said the as-
sistance will be available for 30
days, including to shoppers in
Canada. The company has about
200,000 shoppers in the United
States and Canada.
The news comes as some re-lief to Ms. Ressi. “It allows me to
go out and still work in an envi-
ronment where I could very eas-
ily become sick,” she said.
Other gig economy companies
in Canada, such as the Skip the
Dishes food delivery service,
have not announced any such
support. Owned by Britain-based
Just Eat PLC, Skip the Dishes said
it has shared health resources
with drivers and that it’s mon-
itoring the situation.
Foodora, a rival service with
5,000 couriers in Canada, said on
Wednesday it will offer compen-
sation for up to 14 days to those
who are diagnosed or quarantin-
ed. “As the situation progresses,
we’ll provide more details on
this program,” a spokespersonfor the company said.
But those details are crucial,
said Brice Sopher, a Foodora cou-
rier in Toronto. “If this assistance
ends up not being enough, many
will still choose to work and it
will thus defeat the purpose,” he
said. Foodora couriers are push-
ing to unionize, and cleared a
major hurdle last month when
the Ontario Labour Relations
Board ruled couriers are depend-
ent contractors.
The federalgovernment an-
nounced economic measures on
Wednesday in response to the vi-
rus, including waiving the man-
datory one-week waiting period
to access Employment Insur-
ance. But gig workers would not
be eligible for EI unless they’ve
registered as self-employed at
least 12 months prior and paid
contributions.
Participation has been low, ac-
cording to Angella MacEwen, se-
nior economist at the Canadian
Union of Public Employees.
“Since we’re counting on work-
ers to self-identify at this point,
they need to be completely con-
fident that they’ll still have their
jobs and be financially secure
while away from work,” Ms. Ma-
cEwen said.
But looking to companies like
Uber for support is unfair, said
Linda Nazareth, a senior fellow
at the Macdonald-Laurier Insti-
tute, adding that such work is of-
ten a side gig to a full-time job.
“The problem is that many are
looking to gig work to be the
equivalent of full-time work, and
it really is not,” she said.
Companies that are not offer-ing sick pay in the wake of the
virus may be trying to avoid set-
ting a precedent of treating
workers as employees, which
could open a “legal minefield,”
Ms. Nazareth added.
Some gig workers are taking
extra precautions to prevent the
spread of the virus. Earla Phillips,
an Uber driver in Toronto, said
she keeps masks for passengers
who are coughing or sneezing, in
addition to sanitizing her car
twice a day with Lysol wipes.
Jesse Keanu, who drives full-
time for Uber and Lyft in Mis-
sissauga, spritzes the passenger
door handle and seat belt with
an alcohol spray after each drop-
off, then lets his car air out. Mr.
Keanu noticed business has
slowed as fears of COVID-19 have
grown.
“My income has been signif-
icantly cut due to lack of de-
mand, and I’ve had to contact
close friends to see if I can get a
job where they work,” he said.
Instacart, meanwhile, said last
week that its sales growth in
North America was 10 times
greater than the week before.
That surge can be a worry. Josh
Molot, an Instacart shopper in
Ottawa, said he and his fellow
shoppers are more at-risk than
other gig workers because of all
of the surfaces they touch while
at grocery stores.
Earlier this week, Mr. Molot
delivered groceries to a long-
term care facility, where illnesses
can spread rapidly. “If one of us
walks in there with coronavirus,”
he said, “that’s concerning to
me.”Virusrenewspushforgigeconomybenefits
COVID-19aspecialrisk
tothoseinlessstable
roles,manyofwhom
can’tworkfromhome
JOE CASTALDO
Joanna Ressi, who works for grocery delivery service Instacart, wipes
down a shopping cart in a grocery store parking lot in Burlington, Ont.,
on Wednesday.TIJANA MARTIN/THE GLOBE AND MAILThe global new coronavirus pan-
demic has thrown event organiz-
ers into crisis mode, prompting
some to cancel at the last pos-
sible minute, leaving attendees
in the lurch with untold financial
costs.
In the span of 18 hours on
Wednesday and Thursday, the
NBA suspended its basketball
season and sent Toronto Raptors
players who played against an
infected Utah Jazz player into
self-isolation; the NHL and MLB
followed suit; the Juno Awards
week in Saskatoon was can-
celled, stranding musicians and
industry staff who flew in early;
and Quebec Premier François Le-
gault banned indoor events for
more than 250 people in the
province.
Montreal’s National Home
Show, which in past years has
seen as many as 85,000 people
attend, was scheduled to open at
noon Thursday.
General manager Jean Saad
told The Globe and Mail at 11:15
that morning that the four-day
show would go on for the sake of
its nearly 400 exhibitors and
planned attendees because it
was a local show with no expect-
ed international visitors. “When
we are asked to stop the show by
the expert authorities, we will do
so,” he said.
Less than an hour later, Mr.
Legault’s decree forced the
National Home Show to close its
doors minutes after they opened.
The consequences of the
spread of COVID-19 will be far-
reaching, putting immense pres-
sure on organizers. Events and
conferences that do continue
may risk transmission of the dis-
ease by unwitting carriers, which
happened earlier this month at a
massive Toronto mining confer-
ence.
Those that cancel could risk
enormous financial loss: The or-
ganizers of the Toronto tech con-
ference Collision, who an-
nounced last week that the con-
ference would go digital only for
2020, expect to lose as much as
$10-million.
Collision chief executive Pad-
dy Cosgrave told The Globe that
large organizations such as his,
which hold multiple events and
have a healthy cash pile, can sur-
vive last-minute cancellations –
but smaller organizers can be
put out of business.
“Every penny matters,” said
Mr. Cosgrave, whose organiza-
tion runs multiple major tech
conferences across the world,
but started small.
The combination of refunds
and sunk costs can be precari-
ous.
“This would have been the
case in earlier years. ... You need
to take in a lot of money to sur-
vive,” he said.
For some organizers, cancella-tions are context specific. The
lobby group Canadian Manufac-
turers & Exporters has already
cancelled a hundred-person
meeting in British Columbia
over coronavirus fears, but as of
Wednesday, was still planning on
holding an awards gala in Winni-
peg for 400 people in two weeks,
where all attendees would be lo-
cal.
“We will take our lead from
Public Health,” said Dennis Dar-
by, the lobby group’s CEO, in an
interview.
The situation changed quickly.
Twenty-four hours after the in-
terview, CM&E said they would
make a final call on Monday to
either cancel or proceed with the
Manitoba event. An hour after
that, the organization said it ex-
pected to cancel the gala.
Despite increased emphasis
from public-health officials to
minimize close contact with oth-
ers, many event organizers are
holding out until instructed by a
government or health authority
to cancel.
The result is an inconsistent
patchwork of cancellations in
any given city. E-commerce pro-
vider Shopify Inc. cancelled its
annual Unite conference in To-
ronto, for instance, but other To-
ronto gatherings still planned to
go forward as of mid-week.
Toronto Comicon organizers
said Wednesday that they were
doing everything they could for
guests’ safety, but planned to
open their doors later this
month.
The One of a Kind craft show,
also scheduled for late March,
said the same on Wednesday –
then, on Thursday, said in a
statement that: “We are current-
ly exploring other options in
terms of timing.”
The decision to cancel can be
an emotional one. The organiz-
ers of the 100th-annual Vancouv-
er International Auto Show had
conveyed in recent weeks that
the show was going ahead, but
behind the scenes were carefully
deliberating the impact of can-
celling it, with millions of dollars
and a centennial anniversary at
stake.
“There were lots of conversa-
tions, and they accelerated in the
last few days,” said Blair Qualey,
CEO of the New Car Dealers As-
sociation of British Columbia,
which runs the auto show. As
Wednesday turned to Thursday
this week, and other events
worldwide pulled the plug, his
board decided that “we don’t see
a path forward that doesn’t put
people in jeopardy.”
With 115,000 people visiting
the auto show in a good year,
that meant “millions and mil-
lions” of losses among his associ-
ation, exhibitors, attendees and
the local economy.
“Everybody was excited about
the 100th-anniversary show,” Mr.
Qualey said. “It’s a painful expe-
rience.”Organizersfacepressureto
canceleventsamidpandemic
JOSH O’KANECanada’s banking regulator could free up cash
for the country’s large banks to lend out by
reducing requirements for capital reserves as
the falling price of oil and worsening business
climate increase the risk of a credit crunch,
analysts say.
Governments and central banks around the
world are looking to stimulate demand for
credit by cutting interest rates, and to shore up
banks’ lending capacity through an injection
of cash into the financial system. The Bank of
Canada, the U.S. Federal Reserve and Europe-
an Central Bank all announced liquidity pro-
grams on Thursday, with the Fed promising
$1.5-trillion worth “to address highly unusual
disruptions in Treasury financing markets.”
The Bank of Canada said on Thursday after-
noon that it would “support the continuous
functioning of financial markets through the
provision of liquidity,” by ex-
panding its bond buyback pro-
gram and introducing new “repo
operations,” in which it buys se-
curities from Canada’s large
banks on a short-term basis to
increase cash in the financial
system.
Bank of Nova Scotia analyst
Sumit Malhotra suggested on
Thursday that Canadian bank
regulators could also help bol-
ster credit supply by trimming
capital requirements known as
the “domestic security buffer.”
The Office of the Superintend-
ent of Financial Institutions re-
quires large Canadian banks to
hold additional capital “to cover
a range of systemic vulnerabil-
ities.” Introduced in 2018, the
idea is to encourage banks to build up reserves
during periods of economic strength that can
be reduced in a downturn to encourage the
banks to keep lending.
The current buffer is 2.25 per cent of a
bank’s risk-weighted assets, which is on top of
other regulatory capital requirements.
“With both earnings power and capital for
the banking sector being threatened by the
combination of direct (interest rates, oil pric-
es, market conditions) and uncertain (aggre-
gate economic fallout from COVID-19) factors,
a measure of relief on the [domestic security
buffer] would clearly provide the industry
with some capital ‘breathing room,’” Mr. Mal-
hotra wrote in a note to clients.
Britain’s Financial Policy Committee took
this step on Wednesday, cutting its buffer from
1 per cent to zero, as part of suite of fiscal and
monetary policy measures aimed at shoring
up the country’s economy.
“The release of the countercyclical capital
buffer will support up to £190-billion [about
$332-million] of bank lending to businesses.
That is equivalent to 13 times banks’ net lend-
ing to businesses in 2019,” the Bank of England
said in a news release.
OSFI did not respond to questions about
whether it was considering reducing the secu-
rity buffer or taking other measures to free up
capital. Royal Bank of Canada, Bank of Nova
Scotia, National Bank and the Canadian Impe-
rial Bank of Commerce declined to comment
on whether they are seeking changes. Bank of
Montreal and Toronto Dominion Bank did not
respond to requests for comment.
The Canadian Bankers Association also de-
clined to comment.
Mr. Malhotra said he expects banks to re-
cord “a sharp uptick” in provi-
sions for credit losses in the com-
ing quarters as businesses in
hard-hit sectors such as energy
and travel struggle with loan pay-
ments. That could affect their
willingness and ability to keep
lending to troubled sectors.
“I could see OSFI potentially
looking to lower [the security
buffer], and having discussions
with the banks to say they need
to keep the lending taps open,”
said Rob Colangelo, senior vice-
president of the global financial
institution group at ratings agen-
cy DBRS Morningstar.
“But that’s the supply side; the
demand side needs to be there as
well. ... We’ve seen oil companies
say they’re slashing their capital
spending budgets, so I think a lot of business-
es might take that wait-and-see approach [to
borrowing],” Mr. Colangelo said.
OSFI usually meets twice a year to assess
the security buffer, with the next meeting
planned in June. It can cut the buffer at other
times, but Mr. Colangelo expects it to wait un-
til June.
Bank of America Merrill Lynch analyst Ebra-
him Poonawala was skeptical that short-term
moves by OSFI would affect the broader Cana-
dian economy.
“This is not really a liquidity crisis for the
banks, or the banks having a capital adequacy
shortage, even in the U.S.,” Mr. Poonawala
said, adding that changing the buffer would
mainly be symbolic.BankingwatchdogOSFIcouldease
capitalreserverequirements
toweathervolatility,analystssay
MARK RENDELLCAPITALMARKETSREPORTER
The Bank of Canada
said on Thursday
afternoon that it
would ‘support the
continuous
functioning of
financial markets
through the
provision of
liquidity,’ by
expanding its bond
buyback program
and introducing new
‘repo operations.’Cineworldcould fail to meet its debt commit-
ments in a worst-case coronavirus scenario, it
warned on Thursday, although it plans to
press ahead with its US$1.65-billion takeover
of Canadian rivalCineplex Inc.
The London-listed company operates
about 9,500 screens globally, with more than
7,000 in the United States, where it generates
three quarters of its revenue. The Cineplex
deal announced three months ago will make
Cineworld the biggest cinema operator in
North America.
But Cineworld, the biggest shareholder of
which sold part of its stake on Monday to
refinance debt, is also grappling with worries
over the impact of the coronavirus pandemic
and investor short-selling on concerns over
the company’s debt position.
Shares in the company plunged nearly 49
per cent on Thursday to their lowest in more
than 10 years at 45.59 pence.
Cineworld said that in a worst-case scena-
rio it might have to close all cinemas for up to
three months.
Jefferies analysts previously estimated that
the company was burning about $115-million
a month.
REUTERSCINEWORLD WARNS IT COULD FAIL TO MEET DEBT COMMITMENTS
IF THEATRES ARE SHUTTERED IN WORST-CASE CORONAVIRUS SCENARIO