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Coronavirus economic impact offers lesson for Canadian businesses: expert

Click to play video 'Parts of China are locked down as the coronavirus spreads. What does that mean for the global economy?' Parts of China are locked down as the coronavirus spreads. What does that mean for the global economy?
WATCH: Parts of China are locked down as the coronavirus spreads. What does that mean for the global economy? – Feb 7, 2020

The potential for economic disruptions posed by the coronavirus outbreak in China offers some lessons for Canadian businesses, says one expert.

In an interview with The West Block‘s Mercedes Stephenson, Canadian Chamber of Commerce president Perrin Beatty said while many of the larger businesses in Canada learned lessons from the SARS outbreak in 2003, similar lessons can be learned around the need to diversify supply chains for smaller businesses.

“We’re certainly urging particularly smaller businesses and medium-sized businesses to develop contingency plans,” said Beatty, pointing to situations such as if a supplier becomes unavailable, inventory runs low or employees on the ground in China might not be able to work.

“These are all lessons that larger businesses learned to deal with after SARS, but often smaller businesses don’t have those plans in place and to need to.”

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READ MORE: ‘Complete uncertainty’: Companies brace for losses from coronavirus outbreak

The outbreak was first identified at the end of December. Over the course of recent weeks, it has infected more than 30,000 and killed more than 600 people.

The overwhelming majority of those cases are in China, although two deaths have been reported in Hong Kong and the Philippines.

Four cases have been confirmed in Canada with no fatalities.

But roughly 50 million people are in the region under quarantine, with 11 million of those in Wuhan, the epicentre of the outbreak.

Click to play video 'What life is like for a Canadian living in Wuhan amid the coronavirus outbreak' What life is like for a Canadian living in Wuhan amid the coronavirus outbreak
What life is like for a Canadian living in Wuhan amid the coronavirus outbreak – Feb 6, 2020

Wuhan has been locked down, with all roads in or out of the city blocked by authorities as they grapple to contain the virus.

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And there are growing concerns that companies relying on imports from the industrial region could start to feel the pinch.

READ MORE: China’s stock index dives 8 per cent but other world markets stable

Wuhan, for example, is an automotive production hub, and its unprecedented quarantine could impact those factories along with others producing phones and crystal displays for things like televisions.

Beatty said it drives home the need for companies to have diverse supply chains.

However, he said he expects any economic impact to Canada to be minimal.

“It’s certainly manageable,” he said. “Yes, it does impact economic growth in Canada in a negative way, but it’s something that we can overcome and we can manage and we will still see positive growth through the year.”

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