(Reuters) – Canadian automation company Promation has invested in a weaker currency to help it win a new US contract, but a slower pace of vaccinations in Canada could erase that competitive advantage, said President Darryl Spector.
Pandemic travel restrictions make it difficult for Promation technicians to travel across borders to maintain and repair plant equipment, a disadvantage when competing against an increasingly vaccinated US workforce.
“With a fully vaccinated US supply base, why buy from Canada if you can’t access the labor force to support it?” Said Spector.
To prevent the spread of coronavirus, the US-Canada border has been closed for almost a year for crossings by all workers, except for essentials, and a handful of other exceptions. In Canada, producers fear that slower vaccination launches could delay the reduction of these restrictions.
US President Joe Biden told states on Thursday that all adults are eligible for the coronavirus vaccine by May 1. Canadian Prime Minister Justin Trudeau has set a September target for vaccinating all Canadian adults.
In the United States, some manufacturing workers are already receiving vaccinations, such as at car factories in the Detroit area. In contrast, general producer workers, such as those from Spector in Ontario, are not yet eligible in Canada.
The gap is hampering Canadian businesses, they said, and could threaten Canada’s economic recovery in the coming months.
As the recovery picked up, the Bank of Canada warned on Wednesday that the virus would continue to pose a risk to the economy until the population is widely vaccinated.
U.S. health authorities have issued guidelines that exempt vaccinated workers asymptomatically from strict COVID-19 protocols in case of exposure, but Canada has not yet considered similar actions.
This allows Canadian companies to have a higher risk of losing hours or stopping for COVID-19 tests and following up on contacts if an employee is positive.
“People can’t work together as easily if they look over their shoulder if someone has COVID,” said Spector, who recently sent eight workers home and covered the cost of test results when an employee’s wife gave up. positive results.
Matt Poirier, director of trade policy for Canadian producers and exporters, said his association called on provincial governments to prioritize factory workers for vaccination to reduce the impact of outbreaks on plants.
As of March 10, Canada had administered 7.20 doses of COVID-19 vaccine per 100 people, compared to 29.67 in the United States, according to Oxford University data.
Canada’s vaccination campaign has been hampered by its dependence on imports, but deliveries are expected to increase in the second quarter.
INVESTMENTS SUFFER
Uncertainty holds back the investments of Canadian companies, with capital intentions in 2021 still 12% below pre-pandemic levels, according to Statistics Canada.
By comparison, capital expenditures for S&P 500 companies are expected to increase by 11.8% in 2021 after declining by 13.7% in 2020, according to IBES data from Refinitiv.
“Businesses … could choose to place their capital where they will have a faster return on investment,” said Trevin Stratton, chief economist at the Canadian Chamber of Commerce. “The timing of vaccination certainly has an impact on this.”
In Quebec and Ontario, the provinces most affected by COVID-19 and hosting much of Canada’s manufacturing sector, lost workdays increased by 13.9% and 12.0% in 2020, respectively. higher vaccination rates could help reverse this trend.
($ 1 = $ 1.2548)
Reporting by Allison Lampert in Montreal and Julie Gordon in Ottawa; additional reporting by Carolina Valetkevitch in New York; Editing by Denny Thomas and Cynthia Osterman