News: Lagging vaccination rate puts Canadian factories at competitive disadvantage.
(Reuters) – Canadian automation company Promation had bet on a weaker currency to win a new US contract, but a slower rate of vaccination in Canada could destroy that competitive advantage, said President Darryl Spector.
Pandemic travel restrictions make it difficult for Promation technicians to drive across the border to service and repair equipment. This is a disadvantage when competing with an increasingly vaccinated US workforce.
“With a fully vaccinated US supply base, why buy from Canada when you can’t access the workforce to support them?” Said Spector.
To prevent the spread of the coronavirus, the U.S.-Canadian border has been closed to border crossings by all but key workers and a handful of other exceptions for almost a year. In Canada, manufacturers fear that the slower introduction of vaccines could delay the easing of these restrictions.
U.S. President Joe Biden announced Thursday that all adults should be eligible for a coronavirus vaccine by May 1. Canadian Prime Minister Justin Trudeau set a goal in September to vaccinate all Canadian adults.
In the United States, some manufacturing workers are already receiving vaccinations, for example at car factories in the Detroit area. In contrast, general manufacturing workers like those at the Ontario-based Spector in Canada are not yet eligible.
The delay is hindering Canadian businesses and could jeopardize Canada’s economic recovery in the coming months.
While the recovery has accelerated, the Bank of Canada warned Wednesday that the virus will continue to pose a risk to the economy until the population is largely vaccinated.
U.S. health officials have issued guidelines exempting asymptomatically vaccinated workers from strict COVID-19 protocols in the event of exposure. However, Canada has not yet considered similar measures.
This puts Canadian companies at greater risk of lost work or COVID-19 testing shutdowns and contact tracing if an employee tests positive.
“People cannot easily work together looking over their shoulder in case someone has COVID,” said Spector, who recently sent eight workers home and paid for their test results when one employee’s wife tested positive.
Matt Poirier, director of trade policy for Canadian manufacturers and exporters, said his association has asked provincial governments to give vaccination priority to factory workers to help curb the effects of outbreaks on crops.
By March 10, Canada had administered 7.20 COVID-19 vaccine doses per 100 people, compared with 29.67 in the US, according to Oxford University.
Canada’s vaccination campaign has been hampered by its reliance on imports, but deliveries are expected to rise in the second quarter.
Uncertainty is holding back Canadian companies from investing. According to Statistics Canada, capital intent in 2021 is still 12% below pre-pandemic levels.
For comparison, according to Refinitiv’s IBES data, investments for S&P 500 companies are expected to grow 11.8% in 2021, after falling 13.7% in 2020.
“Companies … could choose to put their capital where they can get a faster return on investment,” said Trevin Stratton, chief economist with the Canadian Chamber of Commerce. “The vaccination schedule certainly affects that.”
In Quebec and Ontario, the COVID-19 hardest hit provinces and home to much of Canada’s manufacturing sector, lost work days rose 13.9% and 12.0%, respectively, in 2020. Companies there hope that higher vaccination rates could help reverse this trend.
($ 1 = 1.2548 Canadian dollars)
Reporting by Allison Lampert in Montreal and Julie Gordon in Ottawa; additional coverage from Caroline Valetkevitch in New York; Adaptation by Denny Thomas and Cynthia Osterman
Original Source © Reuters