Yukonomist: A sudden squall on Lake Bennett

COVID-19 has hit the Yukon economy like a sudden late-afternoon squall on Lake Bennett.

One moment, it’s calm, sunny and good paddling. Then suddenly, the waves are turning into breakers and the wind is blowing the spray off the top of the waves so hard it hurts your face.

Some paddlers happened to be already on the beach cooking smokies. Some kayakers are turning into the wind and checking their spray skirts before heading for shore. And others are in the middle of the lake in an overloaded canoe as the waves start to slop over the gunwales.

COVID-19 is an economic storm. During the global financial crisis, new unemployment claims peaked at 330,000 in February 2009. Government sources told the media that 929,000 claims were received in just the week from March 16 to 22 this month. That’s almost three times more claims in a week than were submitted in the worst month of the global financial crisis.

The COVID-19 storm is hitting different parts of the economy very differently.

People with government jobs, paid sick leave and healthcare plans are most protected, economically speaking. Indeed, as the Bank of Canada lowers interest rates, government workers with mortgages or consumer debt will benefit from lower interest payments. Of the Yukon’s 20,700 workers in February 2020, 8,400 of them work for government.

Next come the Yukon’s 8,600 private-sector employees. These range from relatively sheltered to extremely exposed.

Employees of big, blue chip companies can take some comfort in the fact that their employers’ have big balance sheets and can weather a big storm. Even here, however, we already see big companies closing factories and laying off customer service staff.

Then there are the Yukoners working in industries that don’t require face-to-face interaction with customers or colleagues. A team can keep coding a website, for example, while working at home. As long as the end customer doesn’t go bankrupt or cancel the project, work and paycheques can continue.

The next category is private-sector jobs where employees have to work together in large numbers. Take construction as an example. Even if you are working on a government building project with an iron-clad budget behind it, you might not be able to work as social distancing requires non-essential work sites to be shut down. But there is some consolation in the fact that, when the social distancing restrictions are lifted, the project is on sound financial footing.

However, a large percentage of private-sector workers face extreme hardship. About 20 percent of Canada’s workers are in entertainment, tourism, food or consumer-facing retail businesses. Not only are these industries most likely to be locked down for longest, but the average wage in these industries was low before the crisis and many workers had precarious hourly or “gig economy” situations with no workplace healthcare plans. These hours can dry up suddenly with no severance.

The most vulnerable workers in our economy are the most exposed.

We shouldn’t forget the self-employed, who are often left out of media coverage of job losses. Around 3,700 Yukoners are self-employed. In some industries, the shut down has seen their revenue plummet to zero. Think of a caterer or musician who can’t play gigs. Meanwhile, the rent, utility and bank loan bills keep coming in. If they have employees, either they must still meet payroll or come up with large sums of cash for severance payments. Many have had to use their houses as collateral for business loans, so the family home is at risk if things get worse.

The federal government has announced new economic support programs for individuals and businesses that are unprecedented in size and scope. They dwarf the stimulus package of the financial crisis. Some of the big banks have also sent messages to their clients about how to apply for financial relief for mortgages and small business loans.

These programs are good, but given the scale of the storm they still won’t be enough for many businesses and workers.

Especially those who participated in the big borrowing binge Canadians have been indulging for the last decade.

I have heard some arguments against such big taxpayer-funded support programs. Some say the self-employed and small-business owners knew they were taking a risk when they opened their business. Others who scrimped in the good times to put away a rainy day fund ask why should their tax money go to support people who borrowed too much during the good times.

Storm rescues are not the time for recriminations. That can happen later. Maybe the paddlers in that overloaded canoe should have stayed closer to shore and not filled their canoe to the brim with beer, coolers and cast-iron frying pans. We should rescue them anyway.

If you are one of the Yukoners fortunate enough to still be getting a full paycheque, you can make a big difference. Spending your money with local businesses could be critical to keeping fellow Yukoners in work.

The Yukon News ran a full page with 36 local restaurants you can support with a take-out order. Air North is keeping employees at its flight kitchen employed by offering frozen home meals for delivery, with chef Michael Bock planning new meals to add variety to their menu. Firebean Coffee Roasters is offering free delivery within city limits, with a portion of revenue going to the food bank. Icycle Sports is offering a pick up and delivery service so you can get your fat bike or skis repaired and stay active during the storm (or buy some if you’re taking advantage of the crisis to fulfil those New Year’s fitness resolutions).

I suggest you check out Look Inside Whitehorse on Facebook for posts on the new products and services local businesses are offering Yukoners.

And don’t forget that the food bank is going to be serving more clients than ever and, like most other frontline social support organizations in the Yukon, it accepts donations online.

The good weather will return eventually. In the meantime, Yukoners who are relatively sheltered from the economic wind should do what they can to help those who are not.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist and received the bronze for Outstanding Columnist in the 2019 Canadian Community Newspaper Awards.