Canadian Outlook

Normalcy Out the Window.

Updated: April 14, 2022  |  Français

The Omicron wave of the COVID-19 pandemic had largely worked its way through the population this winter, and Canadians had been looking forward to life returning to normal. Russia’s invasion of Ukraine, however, threw that hope out the window. While the human tragedies inside Ukraine’s borders make the impacts on Canada and Canadians seem tiny in comparison, the invasion does add plenty of future risks and unknowns to our outlook.

Russia, it appears, had banked on a lightning strike leading to the quick submission of the Zelensky government in Ukraine. Now that Russia’s army has bogged down and international sanctions are starting to bite down hard on its economy, risks of escalation have only multiplied.

Canada is not a significant trading partner with Russia, so the interruption of direct imports or exports between the two countries will not have a large effect. The commodity price surge that followed the invasion, however, will have significant impacts—both positive and negative.

  • Global and U.S. Outlooks
  • Canada’s Business Sector
  • Household Sector

Key findings

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Russia’s invasion of Ukraine destabilizes a world that had been hoping for an improvement in the COVID-19 story. There is considerable risk on both fronts.

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Sharply higher commodity prices and trade flow disruptions will benefit producers in Canada’s primary sector but add to inflation pressures and supply chain challenges for the rest.

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Real GDP growth will stay on its pandemic-recovery track this year and next, but slower performances will follow as elevated consumer savings start to dry up.

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The labour force has returned to pre-pandemic levels, with high participation rates and low unemployment. We expect labour vacancies to be a continuing problem for employers.

Canada’s two-year outlooks

Forthcoming

Challenges to Ease Gradually

Issue briefing  |  11-min read
April 14, 2022
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Forthcoming

New Highs From Geopolitical Lows

Issue briefing  |  11-min read
April 12, 2022
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Forthcoming

Governments Act Quickly and Dramatically

Issue briefing  |  11-min read
April 12, 2022
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Forthcoming

War and Receipts

Issue briefing  |  12-min read
April 14, 2022
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Forthcoming

Correction at Hand?

Issue briefing  |  12-min read
April 12, 2022
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Forthcoming

Trade on the Comeback Trail

Issue briefing  |  11-min read
April 12, 2022
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Forthcoming

Most Industries Regaining Their Footing

Issue briefing    |  12-min read
April 12, 2022
Purchase issue briefing ($225)

Previous releases

Holiday-Party Crasher Sours Mood: Canada’s Two-Year Outlook

The full effects of Omicron will weigh heavily on Canada’s economy during the first months of 2022. So far, policy-makers are relying on accelerated vaccination efforts and reduced capacity limits, and less so on lockdowns and full closures, to contain this latest threat. But that could change if conditions worsen.

Impact paper  |  24-min read
January 19, 2022

Business investment

Uncertainty and Hesitancy

12-min read  |  Feb 25, 2022

Energy

Virus Remains a Driving, Uncertain Force in Oil and Gas

11-min read  |  Feb 15, 2022

Financial markets

Bank to Hike Interest Rates Three Times in 2022

13-min read  |  Feb 8, 2022

Government

A Shift to Targeted Support

11-min read  |  March 11, 2022

Household consumption

Rolling With the Waves

11-min read  |  Feb 23, 2022

Household income and employment

New Restrictions Set Back Recovery Once Again

12-min read  |  March 23, 2022

Housing

Market Heat Can’t Continue

13-min read  |  Feb 7, 2022

International trade

A Restrained Recovery

11-min read  |  Feb 8, 2022

Industry trends

Despite Challenges, a Mostly Encouraging Forecast

13-min read  |  Feb 4, 2022

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