War and COVID-19 Could Affect Long-Term Outlook: Canada’s Outlook to 2024
The Conference Board of Canada, 17 pages,
June 21, 2022
This report presents a mid-year update of our long-term national economic outlook.
- Our long-term outlook hasn’t changed significantly since the autumn update. However, we acknowledge that, while difficult to quantify, the effects from COVID-19 and the war in Ukraine could affect Canada’s economy through 2045.
- The long-term outlook envisions modest economic growth, with immigration and better productivity gains helping to counter the impact of the last wave of retiring baby boomers on labour force growth.
- Inflation has surged due to a combination of the war, pandemic, and stimulus measures. But we expect inflation to decline to about 2 per cent over the long term—although upside risks remain.
- Fiscal deficits will persist over the long term, as the federal government will find it challenging to contain spending due to rising healthcare spending and demands from the provinces and cities for funding.
- World oil prices will be slightly higher through 2045 than we forecast in the autumn update, mainly because of lingering effects from the war in Ukraine.
- The pandemic has added to the trend toward deglobalization—a trend that could persist over the long term to the detriment of Canada’s consumers and exporters.
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