Canadian Long-Term Outlook Summary: COVID-19 Hurts Badly Now, But Will Not Last Forever

The Conference Board of Canada, 23 pages, July 21, 2020
Impact Paper
(You must be signed in and entitled to rate this report)
This report presents a mid-year update of our long-term national economic outlook.

Document Highlights

  • Fallout from COVID-19 will produce a 4.3 per cent GDP decline in 2020, but we expect a bounce-back to 6.1 per cent growth next year. GDP will advance by an annual average of 1.7 per cent between 2022 and 2040.
  • Employment will drop 2.7 per cent this year but rebound by 3.1 per cent in 2021. Annual job gains will average less than 1 per cent over the long term.
  • Consumption will fall 4.1 per cent this year but rise 5.9 per cent in 2021. Due to high levels of household debt, only tepid growth is in the cards over the long run.
  • Trade is another casualty of the pandemic. Exports will fall sharply this year and not regain pre-COVID-19 levels until 2023 due to soft global growth and ongoing trade tensions.
  • Business investment has been weak and will erode further after a post-COVID-19 rebound in 2021 and 2022.
  • Economic malaise has prompted the Bank of Canada to cut interest rates to near zero. We expect muted inflation to keep rates low through the long term.

Table of Contents

Key findings

Canada faces both short- and long-term challenges

Could immigration offset Canada’s aging population?

Potential output growth looks set to slow

Monetary policy to the rescue?

Pandemic challenges fiscal policy

Aggregate demand growth slows in long run

World outlook bleak now, mixed later

Appendix A—Methodology

COVID-19: Get all the insights

Access document

(you will be asked to sign-in)

To see if you are entitled to get this research for free, take a minute and create a free e-Library account. This will let us determine if someone else at your organization has already purchased access to this material.

Browse by...
Need Help?