Mar 03 2020
This article was accurate at the time of its writing. Please click here for the most up-to-date IBISWorld information concerning COVID-19 (coronavirus)
Canadian authorities have been on high alert following the initial emergence and subsequent spread of the coronavirus, officially titled COVID-19 by the World Health Organization. The virus, which originated in the city of Wuhan, China, has since spread to at least 60 countries.
Currently, over 90,000 cases have been confirmed globally, with China, Iran, South Korea, Japan and Italy all representing epicentres of the outbreak. As of the time of this writing, the number of COVID-19 cases in Canada has now reached 27, prompting concerns over the country’s readiness to respond to a potential epidemic should COVID-19 begin spreading more quickly throughout communities in Canada.
Some of these concerns are more economic in nature. For example, many are speculating upon how oil and gas prices in Canada will continue fluctuating in response to the world’s mounting fear over the coronavirus. In addition, uncertainty remains over whether Canada’s central bank will cut interest rates should the virus negatively affect the economy in the short-term. This article, however, seeks to shed some light on the likely effects of a COVID-19 outbreak on Canadian industries that fall under the umbrella of the country’s healthcare sector.
Hospitals in Canada
Hospital overcrowding constitutes the single greatest challenge that operators in the $74.9 billion Hospitals industry in Canada (IBISWorld report 62211CA) must contend with should cases of COVID-19 in Canada continue to increase. The “safe occupancy rate” for any one hospital hovers at or around 85.0% according to Global News. Generally, this figure already accounts for built-in “surge capacity” should any unforeseen outbreaks of disease, natural disasters or accidents occur that would require increased demand for healthcare services.
Yet for the past 20 years, Canadian hospitals have been functioning at 100.0% capacity or more on a daily basis. In the province of Ontario, numerous hospitals operate at 120.0% capacity. This ultimately presents Canadian healthcare providers with a significant challenge, as an outbreak of COVID-19 indicates that the country’s hospitals would have to bear the brunt of treating the infected individuals. Moreover, hospital overcrowding typically leads to patient and ambulance backlogs, cancelled surgeries, the premature discharge of all “non-essential” patients and the transfer of older patients to smaller hospitals with less intensive care options. In essence, overcrowded hospitals would come with a wide variety of inherent challenges beyond just the handling of a potential COVID-19 outbreak.
Supply chain disruptions
Canadian supply chains are more vulnerable to COVID-19 in 2020 than they were to the SARS outbreak of 2003, principally because China’s position in the global supply chain is much higher now than it was back then. 10.0% of unfinished products that are used in the production of final goods in Canada are sourced from China according to The Financial Post, with Canada’s yearly imports from China quintupling following the SARS epidemic. Additionally, trade data indicates that Canada sources another 4.0% of intermediate goods from South Korea, Italy and Japan, all of which are struggling to contain COVID-19 within their respective borders.
To this end, the possibility of intermediate goods shortages in Canada as a result of the coronavirus’s spread worldwide remains very real. It is also possible that these shortages could affect the $4.4 billion Medical Instrument & Supply Manufacturing in Canada industry (33911aCA) critical to healthcare providers.