SARS Leaves a Scar on Toronto


For a city already struggling to contain its worst public health crisis in decades, the move was bound to prompt a sigh of relief. Just one week after the World Health Organization cautioned travelers to stay away from Toronto because of the risk of contracting severe acute respiratory syndrome (SARS), it reversed its stance. Although the disease had infected up to 264 people in Canada and killed 21 -- with several still in critical condition -- the U.N. agency decided to lift its warning against nonessential travel to Toronto as of Apr. 30 because it now feels the disease is truly contained. It insists it wasn't swayed by the loud, angry protests from city officials.

Much of damage has been done, however. More than two dozen countries have advised their citizens to stay away. Conventions have been canceled, and executives from the likes of Alcan (AL) and Harvard University continue to restrict business travel there. Celebrities ranging from Elton John and Billy Joel to Lisa Marie Presley and American Idol winner Kelly Clarkson won't perform in the city right now.

As health officials worldwide nervously keep an eye on the spread of SARS, it has become clear that the perception of risk can be more devastating economically than the reality of illness. When the WHO advisory came down, hotels that normally boast occupancy rates of 80% or more suddenly found themselves struggling to keep even a fifth of their rooms filled, according to the Toronto Board of Trade.

WHO'S WHO? Marc Lévesque, senior economist at TD Bank Financial Group, estimates that the crisis could reduce Canadian economic growth by an annualized 1% to 1.5% in the second quarter, producing a net loss of up to $1.5 billion as foreigners curtail travel to Canada and companies redirect their business activities. Even local residents are changing where they go and what they spend. Restaurants in Toronto's Chinatown are empty, and Blue Jays baseball tickets went on sale for a Canadian dollar, the equivalent of 69? in the U.S. on Apr. 29, in an effort to show TV audiences a full house in a show of support.

Even so, few in Canada were prepared for the WHO's Apr. 23 slap. Coming at a time when health officials were about to declare victory over SARS, the move shocked citizens and politicians alike. "It's like we had three strikes called against us, and we didn't even know we were at bat," says government relations consultant John Duffy. Toronto Mayor Mel Lastman was apoplectic and even questioned the WHO's credibility. "I don't know who this group is," he told CNN. "I've never heard of them before."

The early spread of cases and the high death toll set off initial alarms at the Geneva-based health group, which had traced some global SARS cases back to the city. Indeed, while Canada has done a decent job of containing the disease in recent weeks, critics say it was slow to stop the spread from the initial victim -- a 78-year-old woman who contracted it in Hong Kong and died on Mar. 5 just outside Toronto, in Scarborough, Ontario. Among the breaches were a Hewlett-Packard (HPQ) employee who allegedly broke quarantine to go to work and a sick patient who was transferred to an uncontaminated hospital.

10-DAY BREAK. Even now, the fear of exporting the unknown virus has health officials nervous. As WHO spokesperson Maria Cheng puts it: "If you look at how one case spread in Toronto, you can imagine what it might do in a less developed area." Even the Centers for Disease Control & Prevention in Atlanta, which has taken a far milder stance, suggests caution in traveling to Toronto. Says CDC spokeswoman Rhonda Smith: "If travel isn't absolutely necessary, you might want to reconsider whether this is the right time."

Some companies are going with their guts. Montreal-based Alcan, with 48,000 employees worldwide, still instructs workers to steer clear of SARS-infected areas. "While the risk is minimal, the potential consequences to other Alcan employees is significant," says spokesman Joseph Singerman, noting that one incident of exposure could force a facility to shut down. Hewlett-Packard Canada had to send almost 200 people home for a 10-day quarantine when an infected employee showed up at work.

As the city prepares to move on from the worst of the health crisis -- no new cases have been reported in at least 20 days -- the next challenge is to repair the economic damage. On Apr. 29, Ontario Premier Ernie Eves announced a $82 million aid package to "rebuild global confidence in Toronto as a world-class vacation destination." The city has also launched entertainment deals that include theater tickets, baseball games, dinner, and a hotel stay for $87 per person. And some companies, including Wal-Mart Stores (WMT), said on Apr. 30 they would allow employees to resume travel to Toronto.

Mayor Lastman has called on New Yorkers to return the goodwill that Canadians showed in visiting the Big Apple after September 11. Yet, as with terrorism, conquering the fear of SARS could prove as difficult as combating the disease itself. By Diane Brady in New York


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