ASI Acquires PRINTING United Alliance's Promo-Focused Events and Media Portfolio   Learn More

Canadian News

Omicron Threatens Canadian Economic Recovery

The COVID-19 variant is now widespread throughout Canada, setting off a travel advisory and renewed business restrictions that are set to affect the economy, including the promo industry.

As cases of the highly transmissible omicron variant of COVID-19 rise across Canada, the government is once again advising against nonessential travel outside the country ahead of the holidays, regardless of vaccination status, and implementing a new round of restrictions.

“To those who were planning to travel, I say very clearly, now is not the time to travel,” said Health Minister Jean-Yves Duclos in a press conference on Dec. 15. “The rapid spread of the omicron variant on a global scale makes us fear the worst for Canadians that may think of traveling. Traveling Canadians could contract the virus or get stranded abroad.”

Officials in Ontario quickly reduced indoor capacity limits to 50% for most settings, including restaurants, bars, salons, retailers and malls. Indoor gathering restrictions have been cut from 25 people to 10 and outdoors to 25, ahead of holiday parties. Premier Doug Ford wouldn’t commit to reopening schools as normal after the New Year break.

On Thursday, Dec. 16, Quebec announced another round of shutdowns to address rising cases. Health Minister Christian Dubé said bars, movie theaters, concert halls, gyms and spas would be closed starting Monday, Dec. 20, and students won’t be returning to the classroom before Jan. 10. Restaurants must close at 10 p.m., and sports matches, whether professional or amateur, will be held without spectators.

With restrictions being implemented quickly, Promotional Products Professionals of Canada (PPPC) announced the cancellation of its cross-country TOPS+ tour, slated for January and February. “The rapidly rising case count, which is not expected to fall for several weeks, signifies that now is not the time for us to host in person events,” said PPPC President and CEO Jonathan Strauss, in a statement. “Like all of you, I want nothing more than a return to normal and I am disappointed that I won’t be seeing you next month during our TOPS+ tour.”

Strauss said the organization’s sights have shifted to planning for the Women’s Empowerment Event (WEE) in May in Niagara-on-the-Lake, as well as a series of golf tournaments in June and September’s Natcon in Toronto, hopefully all in-person.

This comes just over six months after the country’s heaviest lockdowns were lifted; Ontario, the most populous province, had one of the world’s longest at more than a year. Canada also has one of the world’s highest full vaccination rates, at nearly 80%. Now, health officials are working to make boosters more widely available as people rush to pharmacies to buy at-home rapid tests, where they’re faced with empty shelves.

With restrictions being put in place, the government has postponed its single-use plastic ban, including checkout bags, utensils and straws, until sometime next year.

It’s been a tough couple of years for Canada, with lockdowns and massive government spending on economic aid, and now supply chain disruption, staff shortages in virtually every industry, significant inflation and lockdowns looming once again, despite a nearly 80% vaccination rate in people 5 years old and up.

And now, analysts are concerned for Canada’s economic performance in the coming years. Despite a piping hot real estate market, a recent report by the Organisation for Economic Co-operation and Development (OECD) found that Canada’s annual rate of per capita real GDP growth is expected to stay at just 0.7% from now through 2030, compared to an OECD average of 1.24% among the G20 countries. That puts the country last among the world’s advanced economies. Productivity growth will also stay dampened for the next nine years.

Stuck in the middle of all the uncertainty are small businesses in Canada, including promo firms. Kate Plummer, vice president of sales and marketing at Clearmount (asi/45440) in Toronto, says it feels like “whiplash.” She and the team have done their best to keep the momentum moving forward despite the uncertainty (it’ll be “a strong close” to 2021 for them, she says), but the talk of more lockdowns is disheartening.

Kate Plummer

“It’s really frustrating for this to happen when things were finally looking optimistic.” Kate Plummer, Clearmount

“It hasn’t really sunk in yet,” says Plummer. “We’re still planning on traveling to shows in 2022, but we’re worried about the extra precautions and what it can mean for travel. It’s really frustrating for this to happen when things were finally looking optimistic.” Plummer says their whole team is vaccinated and working on getting third boosters, but the restrictions currently put in place apply to everyone regardless of vaccination status.

“I think the real consumer sentiment will show the first week of January when additional precautions will be in place,” says Plummer. “I have several projects that were geared toward everyone returning to the office, so it’ll be interesting to see what happens. It’s just a bummer that we’re back at it again when we were finally seeing people return to normal in some form. All these companies are afraid to invest in future plans, and that sets us back even further.”

It’s a slightly different situation in less-populated Saskatchewan, where Mike Yager is the president of Spotlight Sport & Corporate Wear (asi/332753) in Humboldt, SK. He says it’s still “status quo” and that people there don’t seem overly concerned about the variant, though some are postponing travel plans. Provincial officials continue to work to make boosters more widely available.

Unfortunately, many once-regular clients, including those in the hospitality and automotive markets, haven’t bought products in nearly two years. Agriculture, which helped Spotlight Sport stay afloat in Q4 of 2020, had a difficult year because of summer droughts.

“We landed a couple large orders in late Q4, so that will be helpful for keeping bills paid in Q1,” says Yager. “Without those, we would’ve been down significantly. Thankfully, we have a diversified client base, which has helped us through the hills and valleys of uncontrollable events.” Now, Yager is looking forward to supply chain issues and resultant stock shortages being resolved in Q1 2022, traditionally a “soft” quarter for his company.

“Early reports show the variants aren’t draining hospital resources here like we saw in 2020 and early 2021,” says Yager. “I’m optimistic that officials will start to see COVID as a new way of life, like the flu and colds, and relax restrictions again.”