(Reuters) – Canadian automation company Promation had been betting on a weaker currency to help it win a new contract in the United States, but a slower rate of vaccinations in Canada could erase that competitive advantage, said President Darryl Spector .
Pandemic travel restrictions make it more difficult for Promation technicians to cross the border to maintain and repair factory equipment, a disadvantage when competing with an increasingly vaccinated American workforce.
“With a fully vaccinated US supply base, why buy from Canada if you can’t access the labor to support it?” Said Spector.
To prevent the spread of the coronavirus, the US-Canada border was closed for almost a year to crossings by everyone except essential workers and a handful of other exceptions. In Canada, manufacturers fear that the slower implementation of vaccination may delay the easing of these restrictions.
US President Joe Biden told states on Thursday to make all adults eligible for a coronavirus vaccine by May 1. Canadian Prime Minister Justin Trudeau has set a target for September to vaccinate all adult Canadians.
In the United States, some industry workers are already receiving vaccines, such as in auto factories in the Detroit area. In contrast, manufacturing workers in general, like those at Spector’s company in Ontario, are not yet eligible in Canada.
The lag hurts Canadian companies, they said, and could threaten Canada’s economic recovery in the coming months.
Although the recovery has accelerated, the Bank of Canada warned on Wednesday that the virus will continue to pose a risk to the economy until the population is widely vaccinated.
US health officials have issued guidelines exempting asymptomatic vaccinated workers from the strict COVID-19 protocols in the event of exposure, but Canada has not yet considered a similar action.
This leaves Canadian companies at greater risk of missing work hours or stopping for COVID-19 tests and contact tracking if an employee’s test is positive.
“People cannot work so easily together if they are looking over their shoulder in case someone has COVID,” said Spector, who recently sent eight workers home and covered the cost of the test results when an employee’s wife gave positive.
Matt Poirier, director of trade policy for Canadian manufacturers and exporters, said his association asked provincial governments to prioritize factory workers for vaccinations to contain the impact of outbreaks at factories.
On March 10, Canada administered 7.20 doses of the COVID-19 vaccine per 100 people, compared with 29.67 in the United States, according to data from the University of Oxford.
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 is preventing Canadian companies from investing, with capital intentions for 2021 still 12% below pre-pandemic levels, according to Statistics Canada.
In comparison, capital expenditures for S&P 500 companies are expected to increase 11.8% in 2021, after falling 13.7% in 2020, according to Refinitiv’s IBES data.
“Companies … can choose to put their capital where they will have the fastest return on investment,” said Trevin Stratton, chief economist at the Canadian Chamber of Commerce. “The vaccination schedule certainly impacts that.”
In Quebec and Ontario, the provinces hardest hit by COVID-19 and home to much of Canada’s manufacturing sector, lost workdays increased by 13.9% and 12.0%, respectively, in 2020. Businesses expect higher vaccination rates help to reverse this trend.
($ 1 = 1.2548 Canadian dollars)
Reporting by Allison Lampert in Montreal and Julie Gordon in Ottawa; additional reporting by Caroline Valetkevitch in New York; Editing by Denny Thomas and Cynthia Osterman