Canadian Pensions' Call to Action on COVID-19

CPPIB and other large Canadian pensions joined some major organizations to make a call to action to corporate Canada urging every leader in the country to help slow the pace of transmission of COVID-19:
The organizations and employers we represent compete fiercely every day. Today we stand united in a shared battle against COVID-19.

We urge every leader in the country to immediately shift focus to the singular objective of slowing the pace of transmission of this coronavirus.

International experience demonstrates that social distancing is the only effective method, and is in the best interests of our employees, their families and our communities.

While this will have significant economic impact on our businesses in the short term, it is critical to weathering this storm and will hasten the recovery.

Governments across the country have acted yet these measures will only be effective if all employers step up and do their part to protect the nation’s health and welfare.

The undersigned have taken important steps and urge your organizations to join us:
  • Urge your employees to stop all non-essential travel, whether for personal or business reasons. Travel exposes people to infection, increasing risk for their personal and professional contacts.
  • Enable your employees to practice social distancing. Facilitate work-from-home for all non-critical business functions. Work with government, if necessary, to ensure sick pay for workers. Cancel any in-person gatherings or events. Ensure that mental-health services are in place to support those in need during a period of social isolation.
  • Maintain essential services to Canadians. In co-ordination with government, develop clear guidelines to protect the health of employees who provide critical services to the public.
  • Understand that your employees are looking to you for leadership and trusted information in turbulent times. Share trusted advice from public health agencies and communicate consistently and clearly with your employees. Recap the latest guidance and show them what you’re doing to support it.
On behalf of all of us, including millions of colleagues and employees, thank you to all healthcare workers on the front lines on whom we are relying to help us through this emergency. We have enormous respect and gratitude for your efforts.

  • Wendy Andrushko, president, DuPont Canada
  • Charles Brindamour, chief executive officer, Intact Financial
  • Neil Chrystal, president and CEO, Polygon Homes
  • Dean Connor, president and CEO, Sun Life
  • Neil Cunningham, CEO and president of Public Sector Pension Investment Board (PSP)
  • Dennis Darby, president and CEO, Canadian Manufacturers and Exporters
  • Paul Desmarais III, senior vice-president, Power Corporation of Canada
  • Victor Dodig, president and CEO, CIBC
  • Charles Emond, president and CEO, Caisse de dépôt et placement du Québec (CDPQ)
  • Gordon J. Fyfe, CEO, British Columbia Investment Management Corporation
  • Russ Girling, president and CEO, TC Energy
  • Tim Gitzel, president and CEO, Cameco
  • Roy Gori, President and CEO, Manulife Financial
  • Blake Hutcheson, president, OMERS
  • Goldy Hyder, president and CEO, Business Council of Canada
  • Hassan Khosrowshahi, chairman, Persis Holdings
  • Michael Latimer, CEO of OMERS
  • Don Lindsay, president and CEO, Teck Resources
  • Chuck Magro, president and CEO, Nutrien
  • Dr. Mark Machin, president and CEO, CPP Investments
  • Bharat Masrani, group president and CEO, TD Bank Group
  • Michael McCain, president and CEO, Maple Leaf Foods
  • David McKay, president and CEO, Royal Bank of Canada
  • John Peller, chairman and CEO, Andrew Peller Ltd.
  • Brian Porter, president and CEO, Scotiabank
  • Alex Pourbaix, president and CEO, Cenovus Energy
  • Ian D. Smith, CEO, Clearwater Seafoods
  • Geoff Smith, President and CEO, Ellis Don
  • Louis Vachon, president and CEO, National Bank of Canada
  • Darryl White, CEO, BMO Financial Group
  • Mark Wiseman, founder, FCLTGlobal
Quite an impressive group of leaders and I'm certain others will join them in this call to action as we face one of the most challenging times in our country's history.

In Quebec, where I live, CDPQ was one of the first to come out with a declaration of measures in response to COVID-19 late last week:
As a contribution to the collective effort against the spread of COVID-19 and to protect its employees, CDPQ is taking several essential preventive measures in response to the current circumstances while ensuring that its activities are carried out normally.
  • All our employees will be working remotely starting Monday, with the exception of a few critical business functions for which we will ensure a safe working environment.
  • All public events on CDPQ’s Parquet are cancelled until May 31 at the earliest.
  • Taking part in professional public events (conferences, training, etc.) is prohibited until further notice.
  • All business travel, regardless of destination, is prohibited until further notice;
  • Our subsidiaries will communicate appropriate measures through their management teams.
All of these measures will remain in force until further notice and for as long as is deemed necessary.

Lastly, as an investor, we are closely monitoring the impacts this virus is having on the global economy and our portfolio assets.
On Saturday, PSP Investments also announced its response to coronavirus COVID-19 developments:
In the face of the new COVID-19 developments, the Public Sector Pension Investment Board (PSP Investments) accelerated the deployment of our global business continuity plan. We make the health and safety of our employees, their families, colleagues and local communities our first priority and concern.

The measures we have adopted over the past few weeks in preparation for a pandemic scenario include:
  • Implementing a restricted travel list and pre-clearing all business travel.
  • Activating our dedicated COVID-19 global business continuity task force.
  • Implementing protocols to pre-clear visitors prior to their arrival at any PSP office.
  • Increasing the frequency of our internal cleaning schedules.
  • Encouraging employees to take advantage of our remote working guidelines and to make use of our technology to conduct meetings virtually.
  • Keeping all communication channels open throughout the organization and issuing regular and timely internal updates, reminders and precautions.
The health and safety of our people and their families is of utmost importance to us. As the World Health Organization confirmed coronavirus COVID-19 as a pandemic, we renewed our commitments to provide a healthy and safe working environment and to act as a responsible corporate citizen. Consequently, on March 12, 2020 we took the decision to temporarily close and deep-clean our offices.

Starting next week, we will roll out the next phase of our business continuity plan that includes the implementation of our critical service/resources policy across PSP Investments’ offices.

All of our offices will be officially open to employees whose activities cannot be performed remotely. The balance of our global workforce will work remotely until further notice. These measures will allow us to maintain the social distancing necessary to protect each other and our local communities while continuing to conduct business. PSP Investments is a long-term investor and a financially stable player in the global financial system. We have AAA credit ratings, we are cash flow positive, and our leverage is low.

We acknowledge and thank our extended teams across all geographies for responding to an unprecedented situation with utmost professionalism and for doing the right thing. Due to their dedication and high work ethics, investment activities continue across the globe as we reaffirm our values and culture.
Now, I am sure other large Canadian pensions have announced or will be announcing similar measures (OTPP announced its measures today) but I am bringing up CDPQ and PSP Investments because in Quebec, the government has implemented very strict measures to address COVID-19 which scientists are praising.

Let me be frank, these are not normal times and I applaud Quebec Premier François Legault for taking this epidemic extremely seriously and implementing drastic measures. Quebec has one of the highest elderly populations in Canada, we simply cannot screw around here so I am happy to see CDPQ, PSP, National Bank, Desjardins and other large organizations do their part in minimizing the spread of the virus.

For Canada's large pensions with global operations, a pandemic poses serious challenges but let me assure you, they are all prepared for the worst case scenarios and have implemented measures which include separation of employees, disaster recovery plans, business continuity plans, and whatever else is needed to make sure they can keep operating during these difficult times.

And make no mistake, these are exceedingly difficult times, this coronavirus isn't going away any time soon and we have yet to feel the brunt of it on the health or economic front:

Having said this, I caution you not to get your medical advice from Goldman Sachs or any other broker when it comes to how bad COVID-19 will get in the US:

When it comes to COVID-19, I only listen to real medical experts like Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases (NIAID) at the National Institutes of Health (NIH).

Dr. Fauci was on ABC's This Week on Sunday morning stating this:

But he also stated plenty more and I went over the transcript very carefully and highlight these points:
KARL: And I know you don't have precise numbers. But can you try to help us understand, when will life get back to normal? When -- how long does this last?

FAUCI: You know, it's going to be a matter of, you know, several weeks to a few months, for sure.

If you look at the dynamics of how outbreak curves go, you just need to take a look at China and take a look at South Korea right now. With China, they went to their peak, and they are coming down right now.

There were, just a day or so ago, 11 new cases in China, which is minuscule compared to where it was.

Korea is starting to flatten and maybe come down a little. If you look at that bracket, all of that was a couple of months, a month-and-a-half for China, and about the same.

Although you can't predict accurately, the way you interfere with that, and not only diminish the peak of the curve, but even perhaps the duration depends on the effectiveness in which you do the kinds of controls that we've been talking about, the containment and the mitigation.

KARL: So do we think that Korea, do we think China are through this largely? Is it largely over?

FAUCI: You know, it's over for now and hopefully for good. But the one thing that we have to keep an eye on, Jon, is that China really dramatically did what we call social distancing. They just shut down the country. As they start getting back to normal personal interaction, I hope we don't see the second blip, but it's possible.

So we're looking, you know, favorably at the fact that China is coming down. But we also want to look carefully to see what happens when they resume normal life. And that's one of the things that we're interested in. Hopefully, it will stay down, but it possibly could come back up.

KARL: That flattened curve suggests that by flattening the curve, by doing all the mitigation, it actually lasts longer.

FAUCI: Right.

KARL: And it looks like roughly -- I mean, is it the same number of people ultimately get infected?

FAUCI: No, no, not at all, as a matter of fact. The way the curve is shown on the graph you showed, it might look like the area under the curve is the same. That would be misleading, Jon. It really is -- the peak is less and the numbers total would be less.

KARL: So you are probably the most trusted person on this. Do you -- are you confident that the federal government is doing everything that needs to be done right now to contain this?

FAUCI: You know, right now, Jon, yes, absolutely. And the fact is what I like to see is when people look at what we're doing and say, ‘you're overreacting.’ For me, the dynamics and the history of outbreaks is you are never where you think you are with the -- if you think you're in-line with the outbreak, you're already three weeks behind. So you've got to be almost overreacting a bit to keep up with it.

KARL: The New York Times had a story this weekend about the worst-case scenarios, and some projections that were, they said, presented at the CDC about a month ago. Let's take a look at these: 160 million to 214 million people infected in the United States; 2.4 million to 21 million people hospitalized, 200,000 deaths, perhaps as much as 1.7 million deaths.

First of all, what do you make of those?

FAUCI: So whenever people model, they take a model, which that's exactly what that is, a model, a model is only as good as the assumptions you put into the model.

KARL: Right.

FAUCI: So when you do a model, you say, "What happens if it's the lowest, it's here. And what happens if it's the highest?”

The worst-case scenario is either you do nothing or your mitigation and containments don't succeed. So although that's possible, it is unlikely if we do the kinds of things that we're -- we're essentially outlining right now.

KARL: So help me out, what is the range of possibility here? How many people do you think -- based on what we're doing, based on what you know and your expertise on this, what are we talking about?

FAUCI: I don't think it's going to be that worse because I think what we're doing is going to have an effect. And -- and, for example, the president's decision to essentially have a major blocking of travel from China, that already had an effect of not seeding the way, in Europe -- Italy didn't do that. And my -- I feel so bad because I have so many friends there. They're getting hit hard.

What we're doing now with the other travel restrictions -- so you block infections from coming in. And then within is when you have containment and mitigation. And that's the reason why the kinds of things we're doing that may seem like an overreaction will keep us away from that worst-case scenario.

KARL: So are we prepared for whatever you think the worst-case scenario would be? Is our health care system -- I mean, I saw Seema Verma this week say that there are about 13,000 respirators...

FAUCI: Right.

KARL: ... in stockpile. Thirteen thousand, when we're looking at possibly...

FAUCI: No, ventilators -- ventilators.

KARL: I'm sorry, ventilators.


KARL: That doesn't sound -- that doesn't sound like anywhere near enough. Are we prepared?

FAUCI: Yeah, that may not be enough if we have a situation where we really have a lot of cases. But -- but, Jon, let's make sure -- people need to understand that things will get worse before they get better. What we're trying to do is to make sure they don't get to the worst-case scenario. That's what we need to do.

KARL: And -- and look at the way life is starting to stop here. But we see different localities doing different things. Some cities are banning -- are banning gatherings over 250, some 500.

What -- what should be done? Should we be seeing restaurants shut down like we're seeing happening in Israel and Spain right now? Should -- should we basically be in a shutdown mode?

FAUCI: You know, what we should be doing is absolutely making it much, much different, not business as usual. You've got to just down chill down. Some areas of the country, particularly the areas where it's clear, you're having a lot of community spread, may be more vigorous in shutting things down.

Right now, people are taking things on their own, no matter how you -- you say 50 people is the limit, and then people say, "No, no, we don't want anybody. We're just going to shut down things."

KARL: And the number doesn't matter, does it? What matters is how densely packed people are.

FAUCI: Exactly. Exactly. So what we've really got to do is we've got to, as much as possible -- but we don't want to lose sight of the fact that, when you're doing that interpersonal interaction that you're trying to calm down -- and whatever word you want -- chill, slow down-- we've got to make sure that the vulnerable ones are the ones we protect, the vulnerable, the elderly and those with underlying conditions.

Those are the people that, if you say, "Should you, kind of, stay in your house, not go to a movie, not go to a restaurant," for the most part, maybe, most people shouldn't do that. But the ones who really shouldn't do that are the vulnerable ones.

KARL: Or those living with the vulnerable, right?

FAUCI: Well, yeah, exactly.

KARL: So what about travel restrictions? Are we going to see domestic travel restrictions?

I mean, we know we have hot spots. We have Washington State. We have parts of California in the north. Should there be travel restrictions?

FAUCI: You know, when we sit around with the task force, we talk about every possibility. Travel restrictions within the country have not been seriously discussed. I mean, they've been discussed, but not seriously discussed.

I don't see that right now or in the immediate future. But remember, we are very open-minded about whatever it takes to preserve the health of the American public.
I think it's really important to understand that even though the numbers in China and South Korea are much better now, they clearly aren't out of the woods by any stretch of the imagination.

Dr. Fauci said they're hopeful but want to wait to see what happens when the draconian lockdowns are lifted and life resumes there (a potential second wave can occur).

Another doctor I listen carefully to is White House coronavirus response coordinator Dr. Deborah Birx who over the weekend said that even if a person has a negative coronavirus test, “that means you’re negative that day” and they shouldn’t let up on taking precautions to prevent infection:

Dr. Birx also said millennials are the "core group" that will stop the coronavirus, because they intuitively know how to communicate without meeting in person:

It's also crucial to understand that asymptomatic transmission is far worse than initially believed.

Former FDA commissioner Dr. Scott Gottlieb tweeted this CNN article stating this: “It’s becoming clearer that spread of COVID-19 by people who are asymptomatic or mildly symptomatic may be responsible for more transmission than previously thought; making control of the virus more difficult.”

Got that? Just because people are asymptomatic or mildly symptomatic, doesn't mean they can't spread the virus to vulnerable citizens, which is the main reason why states, provinces, and countries are implementing drastic measures to promote social distancing and "flatten the curve" so hospitals don't become overwhelmed by COVID-19 patients.

Again, stop listening to ill-informed people on social media or even brokers on Wall Street, and start listening to real experts.

In late January, I wrote a comment on the unstoppable US stock market and brought up research which showed asymptomatic transmission is possible and stated "if this new coranavirus can easily spread from asymptomatic people who have it to infect others, that's quite disturbing and has huge implications for global health authorities rushing to contain a virus which increasingly appears to be next to impossible to contain."

Markets kept melting up, totally oblivious to the science on the virus until late February when pandemic fears finally struck Wall Street.

That's when I introduced my readers to another infectious disease expert, Dr. Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security who works on pandemic preparedness. Dr. Adalja rightly noted: “Right now, we've come to the conclusion that this virus is not going to be contained. So that means every country, every location really needs to prepare.”

There are other great infectious disease experts in the US and Canada, I follow them closely, and think it's silly and irresponsible not to listen to real experts.

I leave you on a sobering but hopeful note. Over the weekend, I saw a show where W5's Avery Haines met up with Dr. Bruce Aylward, the Canadian doctor at the forefront of the World Health Organization's fight against the coronavirus

I warn you, there are scary parts to his comments (like why some otherwise healthy young people inexplicably succumb to the virus and die), but he remains hopeful we can overcome COVID-19 even if it will disrupt our lives in unimaginable ways, and he even states he went to the epicenter of the virus and didn't get it (wash your hands often, don’t touch your face, disinfect your surfaces and practice social distancing).

Lastly, I know exactly what is going on in financial markets, I just don't feel like writing about markets today (see my last comment). We need to pay attention to much more pressing concerns and we need to all do our part to flatten the curve and be kind to one another, especially to our most vulnerable citizens (be civil and kind, especially when you see elderly and disabled people shopping for food and other essentials).

Update: Yaelle Gang of the Canadian Investment Review covered how Canadian pensions are responding to coronavirus here. It's important to note all pensions will be paid. OPTrust is encouraging members to switch to direct deposit, which I think is very sound advice.

On Tuesday morning, Ontario Premier Doug Ford declared a state of emergency across the province Tuesday, invoking a little-used statute to grant his government broad powers to cope with the spreading COVID-19 outbreak:
In a rare early morning press conference at Queen’s Park, Ford ordered recreation centres, public libraries, private schools, daycares, bars, restaurants, theatres, concert venues and cinemas to close immediately and remain closed until March 31 at the earliest.

“Right now we need to do everything we can to slow the spread of COVID-19,” an ashen-looking Ford said. “We must act decisively. We must not delay.”
In other news, the BBC reports the UK is changing course amid death toll fears:
The message came from researchers modelling how the disease will spread, how the NHS would be overwhelmed and how many would die.

The situation has shifted dramatically and as a result we are now facing the most profound changes to our daily lives in peacetime.

This realisation has happened only in the past few days.

However, it is long after other scientists and the World Health Organization had warned of the risks of not going all-out to stop the virus.
Read the entire article and download the research paper the article refers to here.