Scenes from a Shutdown: Canada Workers Face Covid-19 Slump

(Bloomberg) -- They’d just bet millions on a hotel makeover, were waiting tables while pursuing their dream, or toiling in an already tough oil market.

Canadians have seen their world upended in a matter of days as the coronavirus shuts down huge swaths of the economy. Now, they’re trying to figure out how to make ends meet and negotiate a maze of government websites to access billions of dollars in promised support.

“We know that for many of you the past few weeks have been heartbreaking” Prime Minister Justin Trudeau said on Friday, as he announced an increase in wage subsidies for small businesses. “We’re helping companies keep the people on the payroll so the workers are supported and the economy is positioned to recover from this.”

From Calgary to Montreal, here are their tales.

Regina: Layoffs and Brides in Tears

Four months ago, Ryan Urzada reopened the Atlas Hotel in Saskatchewan’s capital city after a C$10 million ($7.1 million) renovation that included a new indoor water park. Now he has laid off all but 20 of his 138 staff to keep the 200-room hotel afloat.

About C$1 million worth of bookings evaporated in a few days as virus restrictions began, including from three brides in “absolute tears,” said Urzada, 46, who took over the hotel from the Travelodge chain.

Scenes from a Shutdown: Canada Workers Face Covid-19 Slump

His biggest priority is helping his employees negotiate an employment insurance system that’s completely overloaded. With bill deferments, he figures he’ll be able to hang on for two or three months. But he worries longer term.

“The cash flow requirement this fall when all these bills come due for the whole economy is going to be overwhelming,” he said, suggesting that deferrals are going to have be turned into forgiveness. “You can defer all you want but everyone’s going to have their hands out in September.”

Montreal: Restaurant Workers in Need

Mandatory closures hit restaurants in Montreal, Quebec, a city known for its bustling food scene. A day after setting up a relief fund to help industry workers meet their most pressing needs, organizers had to close applications because there were too many to process. The group drew a line at 349 people and raised C$41,500 on its GoFundMe page over a few days, but emails keep coming in.

“We have some really heartbreaking pleas for help,” said Jessica Cytryn, one of the organizers. “One of our members word-searched our emails to find people who said that they hadn’t eaten in a few days and went out and bought food, and brought it to their homes.”

Applicants to the fund include Robin Wattie, a 36-year-old musician who saw her European tour canceled and lost her bar tending and waitressing jobs. She’s awaiting a response to her application for unemployment benefits but worries she should have filed for provincial assistance instead.

For now she makes do with a tiny cash stash and her credit card, and plans to ask for a new income replacement announced this week by Trudeau that gives $2,000 a month.

“It’s like this big stressful puzzle,” she said.

Calgary: A Blow for Sioux Nation

Paul Poscente has been getting calls every hour from his oil and gas clients, canceling projects.

His company, Backwoods Energy Services, provides a variety of services, including clearing timber and brush from work sites and building access roads and bridges. He’s now expecting a 30% to 50% decline in business as Alberta takes the hit from the Russian-Saudi oil price war. Backwoods is preparing a round of layoffs, wage rollbacks and expense cuts.

The prospect is wrenching for Poscente, the chief executive officer, because Backwoods is 70%-owned by the Alexis Nakota Sioux Nation near Edmonton, Alberta. It employs about 300 workers from the community, and its C$140 million in annual revenue provides its largest independent source of funds.

”It feels like I’m doing a disservice to my family,” Poscente said. “It’s materially devastating to the community, and it feels personal.”

Still, Poscente, 57, said the company has grown with an “ultra-conservative” balance sheet since he took over as CEO in 2015 and expects it to withstand the economic troubles better than most competitors.

Toronto: Air Attendant Grounded

Flight attendant Maxime Audet got notice a week ago he’d be laid off from Air Canada Rouge on April 3.

“The main thing on my mind is that I don’t know how long it’s going to be for,” said Audet, 28, who is also a rep for the Canadian Union of Public Employees, which represents flight attendants. “It really adds to the stress.”

Audet has immediately cut back. He’s reduced automatic savings to his retirement account for his final paychecks and is being careful what he buys at the grocery store. He worries about the wedding he’s planning next year but takes comfort from the fact that with five years under his belt, he’s senior to 62% of Air Canada staff, thanks to a big hiring spree at the airline in recent years.

“I’m definitely worried about the lasting impact it will have on airlines,” he said. “Will we see people doing less travel, which could definitely affect staffing levels over time?”

Toronto: Scared for the Homeless

Outside the Church of the Redeemer on Toronto’s Mink Mile, one of Canada’s ritziest shopping districts, the drop-in lunch program had plenty of customers.

On a normal day, The Common Table provides about 80 lunches to the city’s must vulnerable residents, but with similar programs closing, the number has spiked.

Scenes from a Shutdown: Canada Workers Face Covid-19 Slump

“There’s a good 20% increase in the last few days,” Justin Laflamme, a church custodian who helps out at the program, said. “I spent a couple of years on the street as well so I recognize the faces and they’re not regulars of our program.”

As the virus spreads, he expects things to get worse.

“It can happen overnight for some people,” Laflamme said of the slide into homelessness. “It depends on their circumstances, what level of nest egg they have and what their income is. Someone at the low end of the curve can find themselves at the Ontario Works office within a week if they’re living paycheck to paycheck.”

©2020 Bloomberg L.P.

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