Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A lone person walks the empty streets in Kensington Market in Toronto on April 15, 2020.

Nathan Denette/The Canadian Press

Economy watchers during the COVID-19 lockdown might want to take a lesson from Wayne Gretzky. It’s not about where the puck is, but where it’s going.

The Great One is no economist (as far I know), but his hockey philosophy translates well in a time when it’s hard not to fixate on the shocking data spilling from the pandemic-induced shutdowns. More than 7.6 million unique applications for the Canadian Emergency Response Benefit. Unemployment rate headed for 20 per cent. Gross domestic product down by nearly 10 per cent in March alone.

On Friday, the focus will turn to Statistics Canada’s employment numbers for April. They will tell the tale of millions of Canadians whose livelihood and financial stability have been abruptly jolted by the pandemic. As my colleague Matt Lundy reported Wednesday, economists figure we could see employment plunge by five million from March’s level. The numbers are mind-boggling, upsetting, depressing.

Story continues below advertisement

But all they tell us is what a health-related shutdown of large swaths of the economy looks like. When you order businesses to close and workers to go home, you have by definition ordered huge numbers of people to not be working.

Frankly, we are in a situation so unusual, so surreal, that the standard economic data simply aren’t equipped for it. As indicators of economic trend, they are near-useless. They tell us, loudly and alarmingly, where the puck is; they tell us less about where it’s going than perhaps any time in the history of modern economic statistics.

What we need isn’t the evidence of jobs already lost, but indications of how many of them will come back. We need to know if the all-too-obvious damage before our eyes is entirely reversible, or in danger of becoming irreparable.

Independent research firm Modus Research has some new data that won’t garner anywhere near the attention of the Statscan job report, but may be more indicative of that. On Thursday, it plans to release the results of a survey of Canadian companies about probably the most fundamental economic question arising from this crisis: Will your business survive this shutdown?

Modus provided The Globe and Mail with an advance glimpse at the findings, which polled a representative sample of nearly 1,000 managers and executives between April 20 and April 30. The survey showed that 21 per cent of the companies polled said they won’t survive three months under the current restrictions; they don’t have sufficient revenues, cash reserves and/or available credit to remain viable, even with government assistance programs. Five per cent said they had already shut down.

And if the COVID restrictions were pushed out to six months? Nearly half (46 per cent) say they wouldn’t make it.

The good news is that most of the country is talking about easing the restrictions this month, allowing at least some businesses to return to operations – if not at full speed, at least with some meaningful recovery of revenues. But we will be roughly two months into the lockdowns before any significant reopening can take place – and certainly more than that for some sectors, such as full-service restaurants. The survey results suggest that we may have already lost a significant number of businesses for good – and we may lose many more before they can be restarted. Even once the doors can be reopened, it’s clear that we have pushed a lot of companies near the edge.

Story continues below advertisement

One of the biggest factors distinguishing a standard cyclical economic slowdown from a more serious, long-lasting recession is what’s known as capacity destruction. When a deep and/or prolonged downturn doesn’t just slow businesses but forces them to permanently shut down, the economy’s capacity to produce goods and services shrinks. Jobs are permanently lost, and the avenues to revive or replace them are reduced. This is the bigger threat from the shutdown than the immediate, headline-grabbing impact of the current deliberate halting of economic activity.

The Modus survey comes on the heels of a Statscan “crowdsourced” poll of 12,600 businesses released last week, which showed that one-third of companies had suffered a revenue drop of more than 40 per cent in the first quarter compared with a year earlier, and nearly as many had drawn from their lines of credit to cover shortfalls. Statscan launched the survey, in conjunction with the Canadian Chamber of Commerce, in order to deliver a more rapid response to what has become an urgent need: to understand how well businesses can withstand the pressures of the COVID crisis, and for how long.

These sorts of business sentiment indicators are not only informative for economic forecasters, but should provide critical guides to government policy. The findings suggest that the private sector may require additional and perhaps continuing help from the government, especially in harder-hit sectors, to survive what has been demanded of them in this health crisis – and to refill that shocking hole that is coming in the April job numbers.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies