1/4 of P.E.I.'s jobs could disappear by May

The P.E.I. government is preparing for a peak of 20,000 COVID-19-related job losses in the province in May, then projecting for the impact on employment to diminish throughout summer, with an estimated 2,000 jobs lost to the pandemic by August.

The projections are included in a 2020 economic outlook issued by the province.

The document notes 2020 began with significant financial unrest related to low oil prices, rail blockades and rising geopolitical tensions, which had already dragged down fiscal projections. But all of those factors have now been dwarfed by COVID-19.

"Due to the social distancing requirements put in place to attempt to halt the progression of the virus, there has been a staggering decline in employment, as businesses are forced to shutter, and in wealth, as stock markets dip lower," the document states, speaking of the global situation.

On P.E.I., the employment sectors expected to bear the brunt of the job losses are tourism, retail and construction.

(Source: P.E.I. government)

"As businesses and employees respond to the restrictions and additional tightening of social distancing, the impact on employment could reach 17,500 people in April and peak at 20,200 people in May," the document states.

"These figures include people facing reduced hours, layoff, or temporary furlough. The ultimate severity and duration of the closures and social distancing restrictions are unknown and will depend on evidence of community transmission of the virus."

Based on figures from May 2019, when 80,300 Islanders were employed according to Statistics Canada, the losses the province is considering could represent up to one quarter of all employment on P.E.I.

What's not clear is whether the forecastanticipates the potential impact from programs like the federal government's revised wage subsidy program, which will pay 75 per cent of a worker's salary for businesses that qualify, encouraging them to bring laid-off workers back on the payroll.

On Thursday, Statistics Canada will release its job numbers for March, providing the first official figures to show how employment in the country has been affected by the pandemic.

Core industries 'hit hard,' says premier

At a media briefing Tuesday, Premier Dennis King explained, not for the first time, that P.E.I.'s "three core industries"of agriculture, fishing and tourism, all seasonal industries which would normally be gearing up this time of year, "have been hit hard by the COVID-19 crisis."

"As we've come to know these past few weeks, this is anything but a normal year."

Cavendish Farms, the province's biggest private employer, is facing reduced demand for french fries as a result of the pandemic, while there are questions as to whether P.E.I. lobster fishermen will take to the water this spring, and what a depressed market would mean for the value of catches if they do.

On Tuesday, King said if the lucrative spring lobster fishery doesn't go ahead, "we would need a very significant package from the federal government to compensate those who would be, I would have to say would be devastated by not having that ability to fish here, but I don't think that we're there yet."

Banks forecasting P.E.I.'s economy will shrink

Banks have begun revising their economic forecasts, and some are predicting the P.E.I. economy will shrink in 2020.

That comes after years where P.E.I. had one of the fastest-growing economies in the country, largely buoyed by immigration through the province's provincial nominee program, also put on hold by the pandemic.

(Source: P.E.I. government)

The province says "the longer social distancing measures are in place, the greater the negative effect will be on the economy."

Meanwhile, cabinet has authorized new borrowing for the province, including a provision allowing up to $900 million in treasury notes to be issued, the first time those have been authorized by the province since 2012.

That's a short-term financing measure meant to help the government bridge anticipated shortfalls between revenues and expenditures.

"During these uncertain times with government deferring payments and providing many short-term funding programs, the Department of Finance deemed it prudent to raise the limit for short-term borrowings to ensure that there was sufficient cash available," a spokesperson from the departmentexplained.

On March 21, cabinet authorized a further $250 million in borrowing, which government said was to re-finance existing debt coming due this fall at favourable rates, and secure financing for capital projects over the next two construction seasons.

On Friday, the province provided a revised estimate for the 2019-20 fiscal year, which closed March 31, projecting an operating deficit of $3.8 million. The province's budget, passed in the legislature last July, had predicted a surplus of $1.8 million.

Taking a hit, but could be worse

As UPEI economics Prof. Jim Sentance explained the situation for P.E.I., it isn't good but could be worse.

"Like everybody, we're taking a hit economically because a lot of things are shut down. I think in some ways P.E.I. is maybe a little better off than some provinces," he said.

One plus Sentance sees for the Island: the preponderance of government jobs, where workers are largely still being paid, even if they're not always able to actually do their work.

He said provincial revenues from things like income tax and HST will suffer, but said the province comes into this from a strong fiscal situation, posting recent budget surpluses in the tens of millions and with a favourable debt-to-GDP ratio.

"We can run up a fair deficit, and really I don't see any issue with that. Things will recover in the longer term [if we] behave ourselves."

COVID-19: What you need to know

What are the symptoms of COVID-19?

Common symptoms include:

• Fever.
• Cough.
• Tiredness.

But more serious symptoms can develop, including difficulty breathing and pneumonia, which can lead to death.

Health Canada has built aself-assessment tool.

What should I do if I feel sick?

Isolate yourself and call 811. Do not visit an emergency room or urgent care centre to get tested. A health professional at 811 will give you advice and instructions.

How can I protect myself?

• Wash your hands frequently and thoroughly.
• Avoid touching your eyes, nose and mouth.
• Clean regularly touched surfaces regularly.
• Practisephysical distancing.

More detailed information on the outbreak is available on thefederal government's website.

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