Cautious reopening not without risks; alternative catastrophic
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Hey there, time traveller!
This article was published 26/05/2020 (1110 days ago), so information in it may no longer be current.
Used car dealers, shoe stores and clothing outlets were among the retailers hardest hit by the COVID-19 outbreak in March, according to detailed data released by the Manitoba Bureau of Statistics. Some sectors saw sales plummet as much as 50 per cent. The numbers are expected to be even worse for April, which underscores the need to reopen the economy sooner rather than later.
Manitoba’s retail sector declined eight per cent in March (seasonally adjusted) compared with February. It was worse in other parts of Canada. Quebec saw retail sales plummet 15.7 per cent. Alberta’s fell 13 per cent. Nationally, retail sales declined 10 per cent. Manitoba ranked fourth among the provinces.
Some sectors were hit harder than others. Although non-essential businesses were not forced to shut down until April 1, the novel coronavirus started taking its toll in March as consumers began avoiding stores.
Used cars dealers took the biggest hit of any category, with sales falling in March by 51.7 per cent. New car dealers saw a decline of 18.4 per cent.
Shoe store sales dropped 44 per cent in March, while clothing outlets saw a decline of 37.9 per cent.
Not all retail sectors were affected. Building-material and garden-equipment stores saw a spike of 40.1 per cent, while grocery store sales grew 28.3 per cent.
Sales of beer, wine and liquor shot up 23 per cent.
April numbers will almost certainly be worse after the mandated April 1 closure. While some outlets were allowed to remain open — including electronics stores, office equipment outlets and hardware shops — many could sell only online or through curbside pickup.
The grim numbers represent some of the earliest detailed economic data published since the beginning of the pandemic. Employment figures released earlier this month also show Manitoba lost 64,200 jobs in April.
With many small and medium-sized companies and not-for-profit organizations still not getting much support from governments (either because they don’t qualify for federal support or because provincial aid has been sparse), bankruptcy numbers are also expected to soar.
Many companies still hanging on have said in surveys to business groups that without rent relief and other supports, they may have to close their doors for good. Some already have.
Fortunately, Manitoba is in a much better position than most to start reopening its economy. The province could announce as early as this week the start date for Phase 2 of the opening, which would allow the hospitality industry and others to more fully operate.
It won’t save every business. And the failure of government to provide more effective support to the small-business sector (after forcing many to close their doors) means some won’t make it. But reopening the economy now is critical to mitigating any further damage.
There will be costs to doing so — human costs. As we reopen the economy, there will likely be more infections. There will probably be more deaths. It’s unavoidable.
But there are ways of doing it to minimize that damage and to limit the spread of the virus. That will become the new normal in how people shop, go to work and eat in restaurants.
What’s critical for Manitoba as it moves into Phase 2 (and into further phases down the road, including opening schools) is that it maintains the controls it now has in place, including travel restrictions. The Canada-U.S. border must, for example, remain closed for many more months. Given the high number of infections in many states, including in neighbouring North Dakota, Manitoba could be swamped overnight with cases if the border were opened anytime soon.
Social-distancing rules, a ban on large gatherings, the promotion of hand hygiene, self-isolation where required and more COVID-19 testing are crucial to a successful reopening.
It can be done with limited damage if those measures are followed.
It’s normal to feel some level of trepidation as the province moves to the next phase. A recent poll shows Manitobans are split on it.
But the alternative isn’t just slightly worse economic numbers. Failure to reopen the economy now would result in a deep, prolonged depression, the likes of which we haven’t seen since the 1930s.
The early economic numbers are bad. But we still have a chance to turn them around.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.
Updated on Tuesday, May 26, 2020 7:16 PM CDT: Fixes incorrect publication date.