Bonavista mayor forecasts 'doubling and tripling' of regional unemployment rate

The unemployment rate in the Bonavista region could double or triple in the coming months, according to the mayor of the town, as the COVID-19 fallout makes its way through the economy.

Mayor John Norman is predicting layoffs, business closures and significant pain in the region — and says the response needed will rival the response needed to the cod moratorium in 1992.

It's all because fears and precautions related to the COVID-19 pandemic appear to be freezing both the tourism sector and the fishery, two major industries in the region.

"I really am concerned about how long some of the businesses can survive this, because this is hitting at the worst possible time for both people involved in the fishery and the tourism industry," said Norman.

"This is late winter, early spring, just before the start of both of those industries, so this is when everybody involved in those industries has the fewest dollars in the pocket." 

About 360 workers at the Ocean Choice International crab-processing plant in Bonavista are now facing uncertainty, as the Department of Fisheries and Oceans is expected to soon announce that the snow crab season will not open April 20.

Norman said the tourism sector is also facing its own wave of cancellations and delays, with travellers looking to push their bookings back or for refunds.

"This is not a 2020 issue. This [is] definitely going to go into a 2021 issue," he said. "This is going to have rollover, and again we don't know the end of it right now." 

Unemployment spike coming: Norman

Norman, who is also on the boards of the regional chamber of commerce, a horticultural society, a wellness group, and the Geopark group — among other things — runs three connected businesses in the community: Bonavista Living, Bonavista Creative and Bonavista Creative Workshop.

The companies flip, rent and help restore heritage buildings in the community. Norman said he's had to lay off "dozens and dozens" of employees from the businesses this season.

"We've laid off everyone that was working, and those that were going to be returning to work in some of our more seasonal aspects of business have now been told, 'I'm sorry, but you're not coming back in a matter of weeks. It may be a matter of months, if at all this year.'"

He says that same conversation is going to repeat across the region.

"We're not talking about, you know, a five, 10 per cent increase in unemployment," he said. "I mean, we're talking about doubling and tripling unemployment over the next so many weeks and months. It's a dire situation."

He also predicts some businesses will not make it through the summer without a reliable income, and some won't be able to wait until the relief money arrives.

"It's just, it's not happening. The virus is moving much faster than the support," he said. "You can't really blame anyone for that; it's just a matter of circumstance."

Tough times for tourism business

Norman said he knows some businesses that were planning to expand this year have already hit pause on those plans.

One of those businesses is the Quintal Café — the new part of Bonnie Stagg's family tourism business. She and her husband also offer walking and boat tours in the Bonavista area.

"Half of our building is renovated and we were hoping to start the rest of the renovations, and we were hoping to put the upstairs of the building as a rental accommodations," she said. "That's kind of put on hold as of right now." 

One of the season's first icebergs was spotted Sunday near Bonavista — which would usually be a signal for a gold rush to come. This year, Stagg said it's a kind of "disappointing" sight.

As current provincial government orders mean her café's dining room must be closed, and any traveller arriving in Newfoundland and Labrador must self-isolate for two weeks, Stagg said it's not clear what kind of tourism season will exist this year — if one exists at all.

"As of right now, I never had no cancellations," she said. "But this is the time when we start getting a lot of our bookings come in. So, as of two weeks ago, we had no bookings whatsoever."

"We do still get some local tourists travelling so maybe in the summer, but then it's hard to say what's going to happen to the economy because a lot of people are getting laid off so the money might not just be there to travel."

This year would be the second year of operation for the Quintal Café, and Stagg said the couple will do whatever it takes to keep the operation alive — but she said she's also heard from several other business owners who are unwilling to take on more loans.

"I think everybody's going to be in a tight spot," she said. "We kind of depend on that income. My husband, he also works, he has another job. But again, we want to be able to make money over the summer to help build that business. That's kind of what we're in the process of doing, we're building the business, so it is quite hard if we're going to have to pay double the bills."

Big response needed

Stagg said she's fighting against her go-to personality — she's usually the type who wants to control everything, she said — and trying to wait and see what programs and funding will be available to her.

"You have to let go and you gotta realize that everybody in the world is experiencing this right now, and it's out of our control," she said. "If we can't open up, we can't open up. Again, it's out of our hands. So hopefully, next season will be even better."

As mayor, Norman said he's been working the phones from his house — calling up the Atlantic Canada Opportunities Agency and other federal departments, alongside other community leaders — to try to plan a response.

He believes it needs to be big.

"I reflected on growing up in the moratorium period — I was a child in the '90s, and remembering what that was like, and remembering the amount of stimulus that was required in our region in the '90s and early 2000s to jump-start the economy," he said.

"It didn't take months, it didn't take years, it took a decade. I think that's the levels of investment that we're going to require if this goes on for any length of time. It's going to be big projects, it's going to be small projects, it's going to be projects in many different communities across our region."

Norman said ACOA and other departments have invested heavily in the region, and they aren't going to want to see all those businesses fail.

He said the Town of Bonavista is going to be understanding with businesses, and is unlikely to take much action against businesses that are unable to pay their taxes and fees. He said the town has a bit of a "financial pillow" to rest on, and at this point is not facing cash-flow problems.

But looking into the future, even that is unsure. If the COVID-19 pandemic lasts a long time, he said, municipalities might start to need help too.

"Where all this money is going to come from? I can't say. Good luck to the federal government." 

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