Premier Stephen McNeil as the daily COVID-19 briefing, Tuesday, March 31, 2020. Photo: Communications Nova Scotia.
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Twenty more people in Nova Scotia have tested positive for COVID-19, bringing the total to 147. Four people remain in hospital, but 10 have fully recovered.
I’ve updated the daily charts tracking the progress of the disease and the response to it, here.
Today, Dr. Robert Strang, the chief medical officer of health in Nova Scotia, said 96% of the cases of COVID-19 can be tracked back to someone who has travelled or has had close contact with someone who has travelled. Just one case can definitively said to be a case of community spread, but investigations still haven’t been completed in a “handful” of cases.
Coparents: Leave your kid in one house
Strang was asked what people in coparenting arrangements should do. Should children who split their time between houses stay in one place? Strang’s response:
There may be legal requirements, so the first thing is people need to talk to their lawyers if necessary, but from a public health perspective, every time the child is moving back and forth, we’re increasing the chance of bringing the virus between two homes. So if at all possible, and I know this may be difficult for families and hard to hear, but if at all possible, from a public health physician, it makes sense that the child remain in one home, isolated and kept separate in that one home, rather than going back and forth between two different family units, each family unit probably has connections out in the community. You’re putting that child and both family units at increased risk of coming in contact with the virus.
Small business rent deferral
I asked Premier Stephen McNeil about the small business rent deferral (I wrote about that here).
My understand is that all government spending announcements, or any other decision that could affect the provincial budget, debt, or future financial risk, must be costed out at inception. And certainly, a government promise to guarantee landlords up to $5,000/month (for up to three months) in deferred lease payments from their tenants is a financial risk that will affect future provincial budgets.
So my question to the premier was if his government had projected how many small business owners and landlords would take advantage of the small business rent deferral, and if it had been costed out. He answered “yes,” but did not provide either figure; instead, he just went on about how great the program is.
Many small business owners are saying otherwise. As of this writing, 273 small business owners have signed onto a letter objecting to the plan. Some small business owners have said they would not participate (as have some landlords).
The gist of the objections is that it doesn’t really help the small business owner. Instead, it ladles more debt on the business, which is to be paid to the landlord. And while the landlord is given a provincial guarantee for the effective loan, the small business owner has no guarantee. Thanks to the guarantee to landlords, the deferral program is a loan scheme where the lender — the landlord — has no risk at all, and the borrower — the small business — carries all the risk.
But even if the deferral guarantee were worthwhile on its own terms, restrictions on the program as announced were so narrow that few would qualify. In the first iteration of the program, it only applied to small businesses that were closed by the health order:
• Gyms and fitness establishment,
• hair salon,
• barbershop,
• spa,
• nail salon,
• body art establishment,
• restaurants offering in-person dining service,
• drinking establishment,
• registered daycare,
• craft brewery or distillery with tasting room,
• personal service business serving only individuals,
• dentist,
• optometrists,
• chiropractors,
• massage therapists,
• naturopathic doctor,
• Chinese medicine practitioner,
• Acupuncturist
• Live, performing arts for audiences
Even then, only businesses that employ at least five people, one of whom cannot be related to the owner of the business, qualified.
On Monday, McNeil said the five-employee restriction was removed, but the program is still only open to those businesses closed by provincial order, and not those simply closed or losing revenue because no one much is out shopping.
And this afternoon, an update to the webpage outlining the rent deferral program shows that the guarantee will be paid through a newly created indemnity fund of $5 million. That means it can cover just 333 deferrals of $15,000 each. To be clear, that’s $5 million reserved for landlords, not for small businesses.
Surely, the expectation is that some (most?) businesses will not default on the deferred rent payments, but I can find no projection for the number or percentage of defaults. Whatever those figures are, the program as a whole seems very tiny. There are 30,000 small to medium sized businesses in Nova Scotia; I doubt seriously that this program even captures 1,000 of them.
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How does the support help the small businesses who had to lay employee’s off before the opportunity to offset 75% of an employee salary?