Ottawa orders 140 million rapid test kits as it prepares to live with Omicron

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Prime Minister Justin Trudeau said the federal government would procure 140 million rapid antigen tests, a big increase from an earlier order in December, suggesting authorities are preparing to live with Omicron rather than defeat it.

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“(It’s) a massive change from the public health point of view, that they’re really expecting people to manage their own risk,” said Joshua Gans, professor of strategic management at the University of Toronto’s Rotman School of Management and the author of a book about the pandemic.

“We’re moving to the endemic phase which is, so long as we’re not having massive outbreaks, you should manage it yourself,” Gans said. “And the only thing we’re really going to care about is if the hospitals are going to be overwhelmed.”

The massive order of test kits comes as provinces implement new health restrictions that echo the toughest phases of the pandemic and anecdotal evidence of severe shortages of test kits despite an order of 35 million units by the federal government in December. Trudeau urged Canadians to overcome their frustration and continue to distance and isolate until the latest wave of COVID-19 passes.

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“I understand people are frustrated but I also know that we know how to get through this,” Trudeau said at a press conference, flanked by Finance Minister Chrystia Freeland; Health Minister Jean-Yves Duclos; and Theresa Tam and Howard Njoo, the chief public officer of health and the deputy chief officer of health, respectively. 

“When waves have hit like this Omicron wave has hit, we have to hunker down, we have to pull together and it gets better,” Trudeau said.

The Omicron variant has spread viciously across Canada. Ontario recorded an unprecedented 18,400 cases on New Year’s Day, and the province is now in semi-lockdown. Alberta Premier Jason Kenney said the official case count of 34,000 on Tuesday is “actually much higher” since his province, along with Ontario and Quebec, have restricted access to the more reliable PCR tests. Companies are reporting increased absenteeism as workers call in sick.

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Hospitalization rates so far have been manageable, but recent data show a spike in the number of people requiring treatment. The number of people hospitalized because of COVID-19 in Ontario and Quebec on Jan. 5 jumped to 2,081 and 1,750, respectively, from 480 and 614, respectively, on Dec. 27.

Still, most economists think the economy will push through this latest headwind. Growth will inevitably slow in the first quarter, but probably not as much as it has during previous waves because vaccination rates are much higher and business and consumers have adjusted to life during a pandemic.

“We think that the impact will be somewhat less than what we saw last year when we were in a different version of a lockdown simply because not as many people were vaccinated,” said Dawn Desjardins, deputy chief economist at Royal Bank of Canada. “We’re not anticipating negative necessarily but a soft quarter for growth that’s going to be made up with stronger growth as we go through the middle quarters of this year.”

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That slower growth shouldn’t veer the Bank of Canada off its course to raise interest rates in the first half of 2022, Desjardins said. Royal Bank’s economists see the central bank raising interest rates for the first time since the start of the pandemic in April. A strong labour market, an impressive rebound in economic growth over the second half of 2021, and rising wages all should help the economy handle the Omicron wave, she said.

“I don’t necessarily think this is going to be sufficient enough to see (the Bank of Canada) pivot away from the idea that the economy no longer needs these extraordinarily low interest rates,” Desjardins said of the spread of COVID-19 and the bank’s response.

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At the press conference, Freeland reiterated COVID-19-related subsidies the federal government rolled out at the end of December as part of a temporary expansion to Bill C-2.

“I’d like today to reassure Canadians by reminding them that the federal government has made sure that economic support is available to you if you need it,” Freeland said.

The government will provide $300 a week in income support to eligible workers who are directly affected by a COVID-19-related public health lockdown or capacity restrictions, and lost 50 per cent or more of their income as a result. Businesses can qualify for wage and rent subsidies if they have lost 25 per cent of their revenue in the past month against 2019 numbers, compared to the previous threshold of 40 per cent. The federal government will subsidize up to 75 per cent of revenue declines.

Because the Omicron variant is less deadly, it’s not as big of a worry compared to past waves, Gans said. And because it’s more transmissible it would be impossible to test everyone effectively. The rapid tests acquired by the federal government should be deployed to the most vulnerable settings and workplaces, which could help prevent spread, he said.

“This is a very different set of circumstances than we faced in March of 2020,” he said.

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