Col 159 - State of Emergency
Walking home last week was weird.
The first part is that walking in itself has become unusual. Because I used to have to drop the kids off at the college daycare, I’ve been stuck driving all winter. Now, with our new childcare arrangements, they’re at home, so I can actually walk to work again.
The second reason is that, for the most part, the weather was really nice. It was warm, and sunny, and generally, well, pleasant. There’s something about a ‘State of Emergency’ being declared that made me feel like the skies should be overcast, there’d be no traffic downtown, and I should pass by at least one barb-wired barricade. But that’s not how it was. Hollywood has set me up for disappointment.
For this blog I’m going to be focused on our current situation, and the government relief that is or may be coming. Across Canada provinces are declaring a State of Emergency. What does that even mean? With my next column after this, I think I’m ready to make a magic-crystal-ball prediction. I’ll even warn you now, that my guess is just as valid as anyone else’s. And I also reserve the right to change my mind at any time without notice. But at least it’ll give you some insights into what I’m thinking. Then the column after that, I’m going to just publish a letter I’ve been writing to my kids, to keep in their baby books. I hope they never have to deal with anything like this again in their lifetimes, so I’m looking to capture the experience for them as a bit of memorabilia. You’re welcome to borrow/flatter/plagiarize it as you see fit.
PART 1 - State of Emergency
Okay, so, starting with our now.
There is a lot of information out there, and it’s being updated by the minute. I want to start off addressing some of the more ominous sounding terms out there, and what they could mean for us.
The world health organization has chosen COVID-19 as a short form for coronavirus disease of 2019. They do this so that public knowledge and awareness is easier; it’s difficult to talk about something you can’t pronounce. The technical name is actually SARS-COV2, which stands for severe acute respiratory syndrome coronavirus 2002. The name corona itself comes from the crown-like spikes on the surface of the virus. I was going to include a zoomed-in picture of the virus here, but I find things like that really gross, so I opted not to.
The term pandemic basically means that an epidemic has gone global. An epidemic is a rapid spread of disease. The goal is to become an endemic, which is where the disease has become stable and predictable and isolated. We normally get about 3 to 4 pandemic-epidemics in a century.
Within the last month, a virus that started in the Wuhan province of China, has now spread to every continent except Antarctica, and, by the time this is published, will be close to 500,000 active cases, 100,000 recovered, and 20,000 deaths. This is thought to be severely under-reported. Therefore, based on rate of spread, COVID-19 is an epidemic.
It’s also affecting us globally. At this point, we’re talking about 193 countries and territories are confirming cases. Therefore, because of its global reach, COVID-19 is also a pandemic.
Currently, for Canada, only 0.004% (one in every 25,000) of our population has been confirmed diagnosed. Italy is at 0.1% of their population (one in every 1,000). One city in Italy, San Marino, is now confirming one in every 181 people are, or have been, infected.
For current statistics, there is a really good visual on this from https://www.worldometers.info/coronavirus/#countries.
State of Emergency
Provinces across Canada are declaring a State of Emergency. In Alberta, we’re specifically in a “Public Health Emergency”, as declared by Dr. Deena Hinshaw, our Chief Medical Officer of Health. At the time of this writing, there are 259 confirmed cases in Alberta. A State of Emergency is in effect for a 30-day period, but can be extended to 90 days if deemed necessary. As a comparison, the State of Emergency for the Fort Mac fires lasted 58 days.
By declaring a State of Emergency, a government can take temporary additional parental-style powers. People living in that jurisdiction are like kids living in a parent's home. We give up some of our rights in order to ensure our safety. A Public Health Emergency is more limited for the government then an Emergency declared under the Emergency Management Act.
PART 2 - Relief
So are these emergency measures enough? And what is the cost?
Governments have a tough call to make right now. Too many deaths too soon would overwhelm our health care system. But using emergency measures to prevent deaths is grinding the economy to a halt, and extending these measures for as long as may be needed could overwhelm our economy’s chance of recovery. At this point, the strategy is to reduce the rate of spread as much as possible, until a vaccine is proven effective, and mass reproduced. There are currently two vaccines teams recruiting for human clinical trial (Wuhan and Massachusetts), and 11 who are getting set up for clinical trials. The University of Saskatchewan is currently in preclinical trials. Follow them here: https://www.vido.org/
Until then, the government has announced a huge number of emergency support measures.
Alberta Emergency Isolation Support
If working Albertans must self-isolate because either they, or a dependent that they are the caregiver for, are showing signs of a dry cough, fever, fatigue, or difficulty breathing. This is a payment of $1,146, one time, until EI kicks in on April 1st.
A special benefit for anyone in quarantine, or with a dependent in quarantine, begins April 2020, and pays up to $900 bi-weekly, for up to 15 weeks. Normal EI for those laid off during this time (like our daycare providers) is staying at 52 weeks, but the reduced-hour EI to cover those who are attempting a job-share in order to prevent layoffs is extended to 76 weeks.
Temporary Business Wage Subsidy
A small employer wage subsidy for the next three months will be equal to 10% of wages, to a maximum of $1,375 per employee, and $25,000 per employer over the three-month period. The way to take advantage of this is to reduce the amount of taxes you’re remitting through payroll. This includes small business corporations, as well as not for profits and charities.
Anyone unable to pay their utility bills in the province for the next 90 days can choose to defer those bills. That doesn’t mean you don’t have to pay them eventually. It just means if you can’t pay them, at least you won’t have your power and natural gas shut off until it’s warmer.
Student loan deferral
Student loan balances will be interest-free from March 30 to September 30th. This is an automatic program – you don’t have to apply for it.
On a case-by-case basis, Canada’s large banks have confirmed that they’ll consider up to a six-month payment deferral on mortgages.
Personal income taxes
The filing deadline is postponed to June 1, 2020. Although if your accountant has an online portal (so no risk of viral contact), there’s no reason really to hold off. Even if you owe money, you can still file now, and then choose to defer your payment until September 2020 without interest or penalty. The CRA is also now recognizing electronic signatures in an effort to reduce in-person contact. I want this so badly for our industry.
Corporate income taxes
Filing dates have not been deferred, however installment payments and amounts due can be postponed to September 2020 without interest or penalty.
RRIF minimum withdrawals
This one I guess I kind of get, but I’m disappointed it’s come to this. The minimum amount that anyone drawing from their registered retirement accounts that must take in the 2020 calendar year is decreasing by 25% to assist “seniors that are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements”. Please. Everybody. As soon as the markets recover again, make sure you have at least 3 years, or preferably 5 years, of anticipated income needs from your portfolio secured in GICs or daily interest. EVERYONE with a RRIF account with us is confirmed to hold at least three years’ income on the sidelines annually.
PART 3 - Doing our part
Humans unite under a common enemy. This global pandemic will reveal who we are as a society. Let’s come out of this better for the experience.
There are two types of people that could potentially derail progress. The first is asymptomatic carriers. Using the Diamond Princess cruise ship as their test subjects, Japanese researchers found that 17.9% of those who tested positive were asymptomatic, and Dutch researchers found that a further 48% to 62% were pre-symptomatic transmitters.
The second type of person that will make controlling the virus difficult is the ones that don’t think this is a big deal, or too inconvenient to bother with.
Both these types of people are walking among us. So please, please, PLEASE, just play along. Follow the rules, socially isolate, sanitize everything, and don’t wash your hands like you’re going to GET the virus, but wash them like you’re going to SPREAD it.
Your Mitigation Plan
Back when the Walking Dead was good (like season 5? Before they got out of the prison, anyways), our family developed a Zombie Apocalypse Survival Plan. What we didn’t plan for at all, is the in-between phase. With the walking dead, Rick just wakes up in the hospital once the deterioration of society has mostly already happened. 28 Days Later starts basically the same way. And so did our plan.
Again, Hollywood has left me completely unprepared for reality.
What do we need to do during this interim phase? I think it just boils down to whatever will keep us OUT of the hospitals at all costs.
Physical Health & Safety
- Complete this templated emergency plan https://www.getprepared.gc.ca/cnt/plns/mk-pln-en.aspx
- Have a fire drill with everyone in your household.
- The biggest concern coming out of the hospitals right now is the lack of available ventilators. So take this opportunity to work on your respiratory strength. Many people know I’m a fan of the book Younger Next Year. Wouldn’t it be cool to come out of this healthier than we were before?
- Have a month worth of non-perishable food (that’s a lot of KD…) and 72 hours’ worth of water at home. We also have two life-straws, from our zombie planning days.
- Disinfect a quarantine room at home. Discuss planning for washroom use, food provisions, and entertainment.
- Develop a cash-flow plan. Sit down and go through all of your expenses, without judgement, and see what can be slimmed down. This would also be a great skillset to carry forward.
- Many long-term care centers are on lockdown right now. If you know someone in a care home, consider buying them an ipad so that you can share some face-to-face time with them.
- Vitamin D is good for your immune system, and being outside is good for your mental health. So plan creative outings that aren’t near any other people.
- If you are healthy, consider dropping a card off at your neighbors’ houses to introduce yourself, and to offer assistance. I especially like the part about picking up the mail.
- Organize a no-touch neighborhood activity. There is a really cute compilation video online which includes apartment-balcony aerobics. (not in English. Still worth the watch.) https://www.youtube.com/watch?time_continue=8&v=up53FltNpsY&feature=emb_logo
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Meagan S. Balaneski, CFP, R.F.P, CLU, CIM
Manulife Securities Incorporated
The opinions expressed are those of Meagan S. Balaneski, and may not necessarily reflect the views of Manulife Securities Incorporated
Meagan S. Balaneski can be reached at email@example.com