How the Covid-19 Pandemic is Taking a Toll on the Financial Markets and the Economy
By Lidiane Cunha
The strong impact of a global crisis on financial markets is not historically new. Climate catastrophes, pandemics, political turmoil, and military conflicts can compromise our safety, health, infrastructure, and international relations with other countries. As these drastic changes also affect businesses and the global economy, they fuel considerable uncertainty, a major threat to investments in financial markets.
The Covid-19 pandemic, unfortunately, fits into this profile, damaging leading economies and threatening stock markets around the world. In Canada and the United States, the stock market quickly went down more than 30% and erased most of the gains achieved over the past few years. As both countries have not yet experienced the peak of the Covid-19 outbreak, it’s unclear what is likely to happen in the next weeks. Five finance researchers from the University of Ottawa’s Telfer School of Management explain why the Covid-19 pandemic has turned the financial markets into a roller coaster, what’s unique about this crisis, and how corporate leaders and government officials can support the economy during these challenging times.
Why does a pandemic affect the market?
“Threats associated with the new coronavirus have severely affected the fundamental operations of firms across the world, their market access and supply chain networks, resulting in a sharp decrease in stock prices. In addition, investors, financial analysts, and investment banks have become too nervous due to the uncertain future of the business world. This ‘fear of the unknown’ has led to an increased stock market volatility. This can explain why many world leaders are trying to give assurances to investors and other market participants. However, negative news on COVID-19 seems to overpower the ‘fragile hope’ for the time being.”
Shantanu Dutta
What is unique about this financial crisis?
“There are two distinctive features of this market turmoil that distinguish it from past ones. The first is the speed at which the stock prices went down. From February 20th to March 23rd the S&P/TSX Composite index went from 17,944 to 11,228; this is a 37% drop and it erases all the gains since October 2011. The second distinctive feature is that the steep decline in asset prices affected not only the stock markets but also other asset classes such as commodities. Even gold (considering an investment in the SPDR Gold Shares), which is typically considered a safe-haven asset, has experienced a 4% decline during the same period. By contrast, during the 2007-2008 stock market crash, gold provided a hedge, delivering positive returns for investors. Thus, it appears that diversification across asset classes is not as effective as many would believe in the context of the current market uncertainty and turmoil. In my research, I would like to better explore the reasons behind these phenomena.”
Fabio Moneta
Why is corporate transparency about the development of the crisis so important?
“In uncertain times, updates by public officials could ease the anxiety that one might have about the future. In the wake of the COVID-19 pandemic, corporate disclosure is similarly important. Corporate leaders can provide their shareholders and investors with regular updates about how the pandemic is affecting their business operations. It’s also advisable that companies devise an effective disclosure strategy. They could start by being transparent about the challenges that they are facing in the short-term. For example, many companies are currently facing disruptions to their business operations due to physical distancing, travel restrictions, or problems related to broken supply chains. They should clearly communicate what they know and don’t know, how the pandemic is affecting them, and how these issues are being addressed. Firms should also consider issuing more regular press releases or using other communication tools such the social media. These communication efforts could help investors, analysts, and other key players in the market to better understand the depth and breadth of the pandemic’s effect on firms’ operations, hence lessening the concerns and uncertainty that investors may have about the viability and prospects of their investments.”
Ali Akyol
What’s the role of government?
“The nature of this event provides better justification of why the government needs to step in to bail out, if necessary, whoever may be in financial trouble. This was not the case in 2008, when many people would have to take the loss because of poor investment decisions. In today's markets, there is a better reason why governments should interfere with the markets. The unique challenge that government officials face today is how to weigh people's lives against the potential recession created by physical distancing and lockdown. Without robust data on death rate and the virus behaviour, most world leaders must plan around the worst-case scenario and its impact on the society. This explains the increasing pressure on government officials to enforce nation-wide lockdowns. Once the spread is controlled and we have better estimates, the governments’ next step is to ensure that their regulations are backed-up by new data.”
Jonathan Yumeng Li
How can the government support small- and medium-sized firms?
“Currently our economy is receiving a drastic negative shock, and, of course, small businesses are no exception. We have already seen a significant increase in demand for credit. Firms that were viable until recently now seek financing in order to survive the current crisis. More than ever, government finance programs that facilitate credit and loans are essential, particularly for young small businesses that have shown a healthy growth before the crisis. These interventions can support these businesses to get back on the path of growth and regain profitability once the world has recovered.”
Miwako Nitani
Ali Akyol is an Associate Professor in finance. His research mainly focuses on the effect of governance related regulations, the board of directors, firm disclosure and financial misconduct on shareholder value.
Shantanu Dutta is a Full Professor and a Telfer Fellow in Global Finance. His research focuses on mergers and acquisitions, media coverage and financial decisions, corporate governance, market efficiency, dividend policy and technology management.
Jonathan Yumeng Li is an Associate Professor in business analytics. His research interests focus on business analytics, operations research, and financial engineering. At the centre of his work are risk management problems that involve quantifying and modelling risk.
Fabio Moneta is an Associate Professor and a Royal Bank of Canada Fellow of Finance. His research interests concentrate on investments, institutional investors, trading behavior, mutual fund performance, and empirical asset pricing.
Miwako Nitani is an Assistant Professor in finance. Her research focuses on the roles of banks, public policy, entrepreneurial finance, and behavioural finance.
Connection, Support, and Information: How Employers Can Promote Employee Mental Health during the COVID-19 Crisis
By Lidiane Cunha
The government of Canada has taken unprecedented measures to contain the COVID-19 outbreak and keep Canadians safe. Physical distancing is undoubtedly an important mitigating strategy, but it also creates challenges for Canadians.
Many employees are suddenly navigating through uncharted waters from having to work from home and cope with new job tasks or the lack of childcare support. Others face financial uncertainty as the COVID-19 crisis hits the economy. How does this new work-life reality impact employees’ mental health and how can organizations support their employees during these uncertain times?
To answer some of these questions, we interviewed Dr. Jennifer Dimoff, an Assistant Professor at the University of Ottawa’s Telfer School of Management. Her research focuses on the role managers play to foster mental health in the workplace. Professor Dimoff is also part of a research team that has received a Novel Coronavirus Rapid Research Funding Opportunity by the Canadian Institute of Health Research. The team of researchers from Saint Mary’s University, the University of Ottawa, Cape Breton University, and Mount Allison University will examine how organizations respond to the COVID-19 outbreak and how their practices, policies and communications encourage or discourage health-promoting behaviors among their employees. The researchers suggest that employers also have a public health role to play.
1. How do you think the new reality Canadians are facing during the COVID-19 crisis will impact employees' mental health? What are the main challenges they face?
All employees are, and will be, facing unique challenges due to the COVID-19 outbreak, and these challenges are, undoubtedly, exacerbated for employees who have school-aged children or take care of other family members who no longer have access to care. Yet, for many people, work requirements continue. This situation resonates highly for me as the mother of a young toddler. All of this creates a perfect storm for work-life conflict and ensuing stress, which can contribute to strain, burnout, and potentially poor mental health.
Many people are also dealing with job uncertainty. Job loss and unemployment are certainly related to increased risk of mental health issues. However, the Federal Government of Canada is responding in an extraordinary way to support people by issuing Support Benefits to help employees who lose their job or who are unable to work due to the loss of childcare. Still, when people are experiencing high levels of stress, they are sometimes unable to recognize and seek out the resources that are available to them. The biggest message here is for employees who need these resources to use them–this is what they are here for.
2. Physical distancing can take a toll on employee mental health. How can employers and managers help employees navigate these challenges?
Extraordinary circumstances call for extraordinary responses, but they also call for human responses. Employers and managers can strive to treat their employees as people first. Managers can encourage safe, virtual forms of socialization among employees in order to help maintain morale and mental health. Social isolation can be very problematic for mental health, so reminding employees to connect with family and friends virtually or by hosting virtual meetings that involve social activities (above and beyond "business as usual") can help bring humour and positivity to a time that can feel very daunting and uncertain. Connectedness is so very critical right now. Fostering connectedness will help protect employee mental health and wellbeing.
3. How can organizations promote mental health in their workforce right now?
- Employers can recognize that “business as usual” may not be possible in all situations – that some concessions may need to be made in the short-term to ensure the long-term survival and success of the organization and its employees.
- They can make sure that front-line managers are well-equipped to communicate with employees and offer flexibility. This flexibility may come in the form of reduced work hours, different work hours, or other accommodations.
- Employers can actively promote psychological health by reminding employees to maintain physical health too – exercise, get outside (if possible), eat nutritious foods, and do activities that are relaxing and restoring.
4. What’s your advice for front-line managers to continue supporting their team during the COVD-19 crisis?
- Supportive managers regularly contact their team, ask how they are doing, communicate gratitude to their employees, and make sure that their employees know they are cared about and valued. Expressing appreciation at times like this can go a very long way.
- Managers can make sure to provide employees with the appropriate resources and tools needed to do their job safely and effectively, such as telework software or VPN access if employees are working at home, or self-protection equipment and training on hygiene and self-care for employees who must continue working on site.
- Training will also be critical to easing the learning curve for employees whose jobs are shifting to include new or different duties. For instance, one call center in Canada has moved their workers to a work-from-home scenario, but in order to be effective, call center employees must have landlines—something many employees do not have. As a result, the employer ordered and shipped landline telephones and paid for associated services so that employees can safely work from home.
- Pandemic or no pandemic – managers can be a huge lifeline of support and information for employees.
Jennifer Dimoff is an Assistant Professor at the University of Ottawa’s Telfer School of Management. Her primary area of research focuses on the intersections between leadership, occupational health and safety, and employee training and development.
Addressing the Impact of the COVID-19 Crisis on Our Healthcare System
By Lidiane Cunha
What’s the challenge?
Empty shelves in supermarkets like Costco or Loblaws provide a very good analogy for a challenge our healthcare system is likely to face as the situation evolves. These shelves are empty because of a sudden surge of uncontrolled demands that supermarkets and their suppliers do not have capacity to meet. Although most supermarket supply chains are optimized to deal with moderate spikes in demand, it is impossible to have shelves restocked fast enough under the current circumstances. Our healthcare system is similarly designed but less prepared for day-to-day operations. Any significant spike in demand of services will significantly disturb the system and result in shortages.
This is why everyone is talking about “flattening the curve,” a term popularized by Anthony Fauci, head of the U.S. National Institute of Allergies and Infectious Disease. Put simply, by flattening the curve, countries are trying to slow down COVID-19 spread so there aren’t more cases than their healthcare systems can handle. Unfortunately many countries were not able to do slow down the virus progression, hence their health officials are forced to rationing services.
“Many might say that our healthcare system is not prepared for a coronavirus outbreak, but let’s be clear. No healthcare system in the world is really designed to deal with such events,” explains Wojtek Michalowski, Vice-Dean Research and Professor of Health Informatics at the University of Ottawa’s Telfer School of Management. “As such outbreaks are extremely rare, building extra capacity into the healthcare system would require significant new investments and lead to a significant amount of resources being wasted or underutilized in normal conditions,” he adds.
How is the COVID-19 outbreak likely to impact Canada’s healthcare system?
Professor Michalowski believes that it is important to remember that our healthcare system cannot suddenly concentrate only on services put in place to deal with the COVID-19 outbreak as what deemed urgent at the moment will not be urgent in the long-run:
“People will continue getting other types of illnesses like the flu, surgeries will need to be performed, and cancer patients will need to be treated. In the short term, the biggest impact will be on patients who do not need urgent care. This means that wait times for these services will grow as resources will be redirected towards managing the COVID-19 outbreak.”
The COVID-19 outbreak may also impose major challenges on tertiary care, or in-hospital units that offer highly specialized medical services, such as heart surgeries and hemodialysis. The outbreak may aggravate the shortage of beds, specialized equipment, and medical professionals available in the hospitals.
The crisis will also impact how health organizations manage capacity issues in acute care. Currently, health organizations already face challenges to rapidly transfer patients who no longer need acute treatment to more appropriate community care, such as the patient’s home, an independent living arrangement, or a long-term care facility. In the context of an outbreak, keeping these patients in the hospital much longer than needed will put a greater strain on the system and, ultimately, compromise the quality of care for those who really require acute treatment.
How can health organizations deal with the crisis?
“There is not a single best approach to address the issue, but Ottawa Public Health’s response is appropriate. They are working on ‘flattening the curve’ by vigilantly following up new cases that emerge. On the operational front, the key issue is to lower the demands of services in emergency rooms. This is why health official opened the new COVID-19 Assessment Centre at Brewer Park Arena,” explains Professor Michalowski.
How can the Telfer School contribute to supporting the healthcare system?
For example, it is currently not clear if one assessment centre alone has the capacity to deal with the issue once the demand for COVID-19 assessment grows. It is here where the Telfer research in healthcare capacity planning and emergency response operations could support health organizations in identifying the number and location of the assessment centres the city will need.
The crisis is also likely to push the healthcare system into rapidly tackling delays in the discharge of patients who no longer need acute care. Researchers at the Telfer School of Management are working on the development of advanced analytics models that can support health organization in better planning and managing their capacity when transferring patients from acute care to more appropriate community care. Such models may also inform health policy officials, so they design policies that reflect both the allocation of resources and the demands for long-term care from hospitals and the community.
“The recovery phase will impose new challenges on health care organizations in areas where further research will be needed,” concludes Professor Sauré.
Policy Support to Increase Women Entrepreneurs’ Access to Finance
By Lidiane Cunha
Gender Gap in Access to Financial Capital
To launch and grow a small business, entrepreneurs need financial capital. Globally, gender gaps in access to capital impede many women-owned firms. As governments seek to achieve the United Nations Sustainable Development Goals, some have introduced policies and programs to increase women entrepreneurs’ access to capital. In 2018, for example, the Government of Canada allocated $20 million to the Women Entrepreneurship Fund. In 2019, the Canadian government launched the Women Entrepreneurs Strategy with an additional $10 million in women-focused financing.
“Despite an increase in the number of government women-focused policies and programs, we know little about how such policies translate into practice,” explains Barbara Orser, Full Professor at the University of Ottawa’s Telfer School of Management. “Small business and innovation programs are also rarely examined from a gender-inclusive perspective,” she adds.
To understand the links between government policies and practices, Professor Orser, Susan Coleman of the University of Hartford, Collette Henry of Dundalk University, and their co-authors reviewed policies and practices designed to increase women entrepreneurs’ access to capital in Canada, Germany, Ireland, Norway and the United States. The authors shared their findings in the article “Policy Support for Women Entrepreneurs’ Access to Financial Capital: Evidence from Canada, Germany, Ireland, Norway, and the United States.” The article was published in the Journal of Small Business Management.
Overview of the study findings
- Most women-focused policies have only been instituted within the past few years,
- These policies advance recommendations focusing on educating and training women entrepreneurs.
- Few women-focused policies unfortunately reflect the outcomes of gender equality, equity, or women’s economic empowerment.
- There remain disconnects between women’s entrepreneurship policies and funding allocated to small business programming.
- Across the countries studied, policies without programs and similarly, programs without underpinning policies, face a number of risks, such as changes in government and the elimination of funding.
“Our study shows that most policies to increase women’s access to capital are at an early stage of evolution, so is policy research focusing on women’s enterprise. If we don’t understand the shortcomings and impacts of policy, we miss opportunities to effectively direct investments to support women’s enterprise growth. Lack of evidence also increases the likelihood of political opportunism at the expense of increasing access to financial capital for diverse women entrepreneurs.”
Professor Barbara Orser
Learn more about this collaborative study:
Coleman, C., Henry, C., Orser, B.J., Foss, L. and Welter, F. 2018. “Policy support for women entrepreneurs’ access to financial capital: A comparative analysis of Canada, Germany, Ireland, Norway and the U.S.” Journal of Small Business Management.
About the Global Women's Entrepreneurship Policy Research Group
The study is part of the Global Women’s Entrepreneurship Policy Research Group, a collaborative international network of senior researchers from over 30 countries who are examining women’s enterprise policies and programs. Launched in 2014, the research group seeks to identify evidence-based policies or practices that support women’s entrepreneurial activities. By exchanging policy knowledge and sharing policy data for collective publications, the project adds value to extant policy scholarship and informs policy development.
From Research to Policy Impact
Professor Orser is a member of policy groups that advise the G20, an international forum for governments and central bank governors from 19 countries and the European Union. On March 11, 2020, Professor Orser shared her research findings with federal minister The Honourable Anita Anand in briefing sessions organized by Startup Canada.
Barbara Orser is a Full Professor and the Deloitte Professor in the Management of Growth Enterprises at the Telfer School of Management. Her research, teaching and advocacy focus on entrepreneurship and women’s economic empowerment. Learn more about her work.
Accessibility: How Will It Impact the Development Process of Information Technology?
By Lidiane Cunha
The Canadian Accessibility Act (S.C. 2019) states that technology must be accessible to all Canadians. Today, this is (very) relatively the case for people who experience physical disabilities because some interfaces provide or allow for optional adaptations. This is not the case for people with cognitive or sensory disabilities, particularly because it is not just the interface that needs to be adapted, but the logic of the application itself that needs to be addressed.
IT professionals are now called upon to quickly remove any element that would prevent people with a physical, intellectual or cognitive disability from fully and equally participating in society. These obstacles can become a barrier for fostering what is referred to as Equity, Diversity, and Inclusion (EDI).
How does this impact the development process of IT? What are the main recommendations in terms of standards and best practices? These are some of the questions that Muriel Mignerat, Associate Professor at the Telfer School of Management, will address in her new research project to better understand the unique features of the IT development process in the context of EDI. For her new project, she has been awarded a Telfer School of Management Research Grant (SMRG).
Who will benefit from this research?
-Muriel Mignerat

