Ottawa receives 500,000 new applications for Employment Insurance as coronavirus-related layoffs increase

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A half-million Canadian workers filed for Employment Insurance benefits in the past four days alone, as evidence of the deep job losses related to COVID-19 quickly piled up and companies from a wide range of industries announced even more layoffs.

Employment and Social Development Canada said on Friday the department received about 500,000 applications for EI over the past four days, compared with just 27,000 in the same week a year ago.

“Service Canada and many government agencies have received a historic number of calls from concerned Canadians,” Prime Minister Justin Trudeau said at a news conference. “I know people are anxious to get the help they deserve, and our government is working as fast as possible to support them.”

University of Calgary economist Trevor Tombe noted that 500,000 jobs represents 2.6 per cent of total Canadian employment, in line with the percentage of job losses in July, 1932, the worst month for employment during the Great Depression. “It seems clear to me that this is the sharpest negative shock we’ve ever seen,” he said on Twitter.

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Economists at major banks slashed their economic forecasts even further. Scotiabank said the economy will contract at an annualized pace of nearly 11 per cent in the second quarter, and a “recession is now unavoidable.” It forecast the economy will shrink by 2.2 per cent this year, although it projected that growth will rebound by the fourth quarter. Bank of Montreal also lowered its second-quarter call to a 10 per cent contraction.

On Friday, companies in industries ranging from aviation to forestry to the arts laid off workers to stay viable amid the economic turmoil caused by COVID-19.

Just under 2,000 flight attendants at leisure airline Air Transat received layoff notices, said Julie Roberts, a union leader at the Canadian Union of Public Employees, which represents the workers.

Employees are not being paid during the layoffs, which start on April 5, and the notice gives no back-to-work date, Ms. Roberts said. The union is trying to obtain some kind of assistance for workers to help soften the impact, but has not had confirmation that will be offered, she said.

“It’s been a crazy, crazy, past two weeks,” said Ms. Roberts, who is also a flight attendant and is losing her job. “I’m really scared about making ends meet.”

The union is concerned about its members who don’t have enough hours to qualify for unemployment assistance, Ms. Roberts said. Some have been on leaves of absence and maternity leave.

Conversations about financial assistance are underway between airline companies and all levels of government, said a source familiar with the situation. The Globe and Mail is not identifying the person because he was not authorized to speak to the media.

Political leaders are receptive, but other sectors are also asking for help, and there is no clarity on the timing or size of any aid package, the person said. National Airlines Council of Canada is involved and airlines are making their own individual cases, the person said.

Air Canada is laying off more than 5,100 flight attendants, including 3,600 from its mainline carrier and 1,549 from Air Canada Rouge. “This has been the most challenging time any of us will likely ever experience as flight attendants,” said Wesley Lesosky, who heads the Air Canada component of CUPE. The layoffs, effective Friday, are expected to last until at least April 30, CUPE said.

Aviation manufacturers are scaling back as demand dries up. Longview Aviation Capital Corp. is suspending new production of Dash 8-400 and Series 400 Twin Otter aircraft at facilities in Ontario, Alberta and British Columbia. Nearly 1,000 employees will be affected, the company said, adding that it hopes to restart manufacturing when conditions improve.

The Big Three automakers announced production suspensions across North America this week, and Canadian auto parts suppliers are grappling with the implications. “It’s never good to see the lights go out,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.

Magna International Inc. is starting to suspend production at facilities around the world, with the exception of China, the company said on Thursday. Linamar Corp. is also assessing operations. “Clearly, the news of customer shutdowns this week globally will have an impact,” chief executive Linda Hasenfratz in a statement. “Each facility is developing plans with their customers and communicating to their employees what this means to them, including potential layoffs.”

The economic devastation of the pandemic is hitting large swaths of the economy, including the arts. The Banff Centre for Arts and Creativity temporarily laid off 400 employees, about 75 per cent of its staff. “This was a difficult choice, but Banff Centre’s viability is our priority,” a statement from the centre said.

West Fraser Timber Co. Ltd. is cutting lumber production in Western Canada and the United States, and suspending plywood production at a facility in B.C. As a result, the company is temporarily laying off employees at six sites, but does not have an exact number yet.

BRP Inc., the Canadian maker of Sea-Doo watercraft and Ski-Doo snowmobiles, suspended its dividend and said it drew down fully a $700-million credit line to prepare for a downturn. The company said it anticipates having to slow production lines or temporarily close facilities as demand slows.

Canadian Imperial Bank of Commerce chief economist Avery Shenfeld, who is preparing to cut his own forecasts early next week, said the prospects for the economy to bounce back depend on when the COVID-19 outbreak can be contained. “How the second half [of 2020] shapes up is really about epidemiology, not economics," he said.

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