COVID-19 causing ‘very different kind of downturn’ in Ontario

The City’s Director of the Office of Strategy, Innovation and Partnerships, Craig Desjardins, says the COVID-19 pandemic has presented the Ontario economy with “a very different kind of downturn.”

“In the past, governments usually went to infrastructure as a solution to restart the economy,” he said, as manufacturing and construction have traditionally taken the biggest hits.

Because COVID-19 has affected accommodation, food services, retail and culture the most, he said, governments need to develop different strategies.

“Does the construction industry need help? It certainly took a hit, but from all indications from the data and from talking to many in that sector, they’re starting to really heat up. Business is good. Manufacturing is not too bad,” Desjardins said.

Now, he said the City and all levels of government must use data to get a grip on “this different sort of economic shock.”

Statistics Canada’s released the Labour Force Survey results for May on Friday, Jun. 5, 2020, and, as a part of the Kingston’s Economic Recovery Team, Desjardins is reading it closely. 

“We’re starting to parse and dice up the data right now for the Kingston area, and pull that out of the bigger pieces of the data package,” he said. “We should have that exact number next week.” 

He said he is focusing on sector-specific trends for the region.

“How do we design programs that target the sectors that are actually being hurt, and how do we get those people back to work?” he said.

Consultation with Kingston Economics Development Corporation and local business owners has revealed that they are looking for grants rather than loans, he said. 

“How do we develop grant programs and target specific activities? Is it a retrofit of their business? Personal protective equipment and plexiglass shields? Supporting them with e-commerce, helping them move to online platforms for sales? Is it maybe some re-training for staff?”

He said the City is also working with a team at Queen’s University’s Smith School of Business to examine regional supply chains. They’re looking for opportunities to match local suppliers and retailers, who may be cut off from their usual markets. This has “huge potential” to benefit businesses across sectors, Desjardins said.

More Ontario job losses in May

Overall, Ontario performed the poorest as the only province where employment continues to decline in the wake of COVID-19, though at a much slower rate. Ontario posted 65,000 job losses for May 2020. All other provinces posted gains.

“Ontario was the one outlier in terms of more job losses. It was less than I think everybody had feared, which is good,” Desjardins said.

Canada’s overall unemployment rate also rose to a record high of 13.7 per cent, attributed widely to the number of students now hunting for summer jobs. The unemployment rate counts people actively looking for work, so as students head into the workforce, the number job-seekers nationwide rises. 

Desjardins said this will “absolutely” be a factor in Kingston’s job numbers as well, with our large population of families and post-secondary students.

“Normally the City hires 150 students for the summer. Those are high school, college and university students. That didn’t happen this summer,” he said.

“Those summer jobs that students would take bussing tables on patios, the patios have not been open. So those people are not working. Absolutely, I think that’s had an impact [on the unemployment rate], the student factor.”

Economic reopening continues Friday

Kingston enters phase two of the province’s economic recovery on Friday, Jun. 12, 2020, meaning those patios, as well as a host of other businesses will once again be open, and hiring. Desjardins said he, like many others, is excited for the development.

“It’s a great announcement yesterday [from the provincial government] to see more sectors of the economy opening up as we move into the next phase,” Desjardins said. 

“From an economic perspective the business community is hungry to get back to work, get revenue flowing again, to pay their bills and not incur any more debt,” he continued.

“I think the consumer is still maybe a little bit concerned about their safety, but they’re hungry, too, to get back to normal life.”