In her interview with LDaily, Emma Turos, the Managing Director of the Canada – Ukraine Chamber of Commerce, analyzed the situation in various economic sectors caused by the spread of COVID-19, focusing on the relations between Ukrainian and Canadian entrepreneurs. She noted that the transformation of global consumer habits and demands has freed up many industry niches that can be successfully mastered by the Ukrainian entrepreneurs that are well-known in the Canadian business circles and have proven to be reliable partners.
LDaily: How did the coronavirus affected activities of the Canadian companies in Ukraine? Which industries have suffered the most?
E. Turos: The COVID-19 pandemic will impact the HoReCa area the most. Unlike other economy sectors, the lost demand in hospitality industry is irreversible. For example, manufactured goods can be inventoried for further trading, while the empty hotel rooms and unserved food cannot be reused. The situation in Ukraine does not differ much. Yuriy Kryvosheya, the President and Managing Partner of the Ukrainian-Canadian Joint Stock Company Toronto-Kyiv, Member of the Board of Directors of the Canada-Ukraine Chamber of Commerce, indicated: “As of now, the business environment remains really tough and the system is not balanced at all because while companies, especially in Tourism & Hospitality and Real Estate, have basically zero Revenues from one side of the Balance Sheet, most of obligations including financial ones have remained fully effective. In comparison to Canada and/or to other markets, such as the EU, where governments already significantly stepped up in order to help businesses in many aspects, including financially, in Ukraine, we are still looking forward for the implementation of proper assistance & to the balancing of the playing field. On the positive note, we observe a very strong & unique consolidation of efforts & honest collaboration from all the businesses and industries, which is fundamentally important for future recovery”.
Oil and service companies have also found themselves in the middle of an “ideal storm”. The demand and price for energy sources used to deteriorate before, as the result of tension between the OPEC and Russia, meanwhile the pandemic triggered a general price drop. It is technologically impossible for a company to simply close a well. It is a long and painful decision for the manufacturer, thus they excessively produce oil at a loss. Of course, investors in Ukraine face a similar issue, where they should not be expecting support or relief from the government.
While Canada is easing COVID – 19 restrictions, its borders remain closed. This also affected the exhibition field. Here is an example. About ten Ukrainian food producers, selected as part of the frameworks of the Canada-Ukraine Trade and Investment Support Project (CUTIS), were to participate in Salon International de I’alimentation 2020 (SIAL) in Montreal, one of the largest events in the food industry. It was postponed twice and finally scheduled for the end of this September. With the participation of the Chamber, our members and Canadian partners, significant funds and effort have been invested in this event as well as several other missions, the results of which still remain unclear.
During the quarantine, we conduct online missions with the Canadian companies that already familiar with us and trust Ukrainian manufacturers. There are also positive examples. Ukraine is no longer a potential supplier, but rather an honorary guest with a major opportunity for occupying the opened niches. One of the promising sectors are organic berries and fruits.
LDaily: What does a business do in this situation? How does it minimize losses?
E. Turos: We are constantly analyzing the situation with Ukrainian producers who export to Canada and their Canadian buyers. Each industry has its own peculiarities and finds solutions accordingly. Lobortas Classic Jewelry House, the member of the Canada-Ukraine Chamber of Commerce, that participated in a number of the Canadian exhibitions and has several well-known clients commented on the current state of jewelry industry that lost foreign clients. The Chairman and Founder of the company Igor Lobortas noted: “It is time to rethink our capabilities and prepare interesting projects for which we had not enough time earlier. For example, we can dedicate time to listeners — connoisseurs of modern jewelry. We are now focusing on the development of our media project and social networks.”
Consumer habits are transforming around the world. The market is being adapted to the consumer demand, and more similar platforms are appearing in the world. The online platforms that focus on high-quality product presentation are leading the market. Statistics show that the demand for online sales in Canada has increased hundreds of times for sectors such as home goods, building materials, sports equipment, clothing, and food. Canadians have already experienced the economic benefits of switching to virtual stores. It is cheaper to work from home and there is more free time for leisure. People no longer waste their time in traffic jams and they save money on gas. There is no need to wait in a line at grocery stores or constantly replenish wardrobe, and so on. The number of things for everyday life is reduced, costs are optimized. These are the world trends now.
There are more free online webinars from leading analysts on remote work adaptation, cybersecurity, and legal support. After all, the pandemic will end and COVID-19 will be defeated. It takes 21 days for a habit to root, most of the knowledge and experience gained during the quarantine will stay with us for a long time.
Not everyone was lucky. Many businesses make difficult decisions about downsizing, suspending, or even closing a business. Thus, the “new normal” of transferring businesses to online causes a devastating blow to the retail of industrial goods, sports and entertainment facilities — everything that used to make our lives more enjoyable and diverse. Large retail stores are filing for bankruptcy; the chefs of non-working restaurants are looking for a way out in small rooms.
LDaily: How does the state compensate losses and help business?
E. Turos: The Canadian government is constantly taking steps to support business so that entrepreneurs can pay their employees and sustain this pandemic. More than 3 million citizens have already lost their jobs due to COVID-19! The tax holiday, not abolition, has been announces in Canada from the beginning of the quarantine. The Prime Minister Justin Trudeau recently announced the release of aid for small businesses to cover commercial leases in April, May, and June 2020. This aid is provided in cooperation with the provinces and territories, since the lease policy is mostly the responsibility of provinces and municipalities.
The Federal Government’s Large Employer Emergency Financing Facility (LEEFF) will be launched in Canada. Ottawa’s long-promised support for airlines, oil and gas companies embodies a loan program for large corporations experiencing an economic downturn due to the coronavirus pandemic. LEEFF will provide short-term bridge financing to Canada’s largest employers. The program is designed for companies with annual revenues of $300 million and more that are seeking to finance at least $60 million but unable to secure loans from banks and other private lenders.
It is difficult to predict the future, and most governments will not oppose the general agenda, as it involves significant political and personal responsibility. However, the country that offers people freedom instead of restrictions and fear, culture and multifaceted development without the dictatorship of necessity will win. And the quality of life will become a priority. These values were shared by thousands of Ukrainians who began immigrating to distant Canada more than 130 years ago aiming to build one of the most harmonious countries in the world. Maybe it’s time for Ukraine to build a country that our children will be proud of, isn’t it?