Canadian Outlook

Updated: April 28, 2021  |  Français

Hope at last.

The surge in new COVID-19 cases last autumn continued in the early part of this year and led to a return of strict lockdowns in many parts of the country. This depressed economic activity, and we anticipate that real GDP growth will increase by only 0.7 per cent in the first quarter of this year. Although the worst of the second wave has subsided, new infections remain high, while more severe variants of the virus continue to increase.

Fortunately, the rollout of vaccines, which got off to a sluggish start, has ramped up recently, and most Canadians should be fully vaccinated by this autumn. This will lead to a reopening of the economy and, consequently, real GDP should accelerate at a rapid pace in the second half of this year.

Contents of the Spring 2021 edition:

  • Global and U.S. outlooks
  • Business sector
  • Housing sector
  • Deficits as far as the eye can see


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Key findings

Canada’s economy will expand by 5.8 per cent this year and 4.0 per cent in 2022, thanks to the rollout of vaccines, which has led to a gradual reopening of the economy and boosted confidence.

The federal fiscal deficit will improve from the $219 billion recorded in 2020 but will remain uncomfortably high.

The Bank of Canada will keep interest rate hikes on hold until the early part of 2023, as inflation, while spiking higher in the spring of this year, will remain in the Bank’s 2.0 per cent target range through the medium term.

The Canadian economy has already recovered close to 80 per cent of the jobs lost during the severe recession last year and the unemployment rate stood at 8.2 per cent in February, down from double-digits in the spring and summer of 2020.

Issue briefings

Canada’s two-year outlooks

Business investment

Businesses Ready to Invest Again

14-min read  |  April 15, 2021


A Better Year Ahead for Oil and Gas

13-min read  |  April 28, 2021

Financial markets

Bank of Canada Won’t React to Temporary Spike in Inflation

13-min read  |  April 12, 2021


Deficits as Far as the Eye Can See

13-min read  |  April 28, 2021

Household consumption

Consumers Ready to Spend Again as Long as Restrictions Are Lifted

13-min read  |  April 28, 2021

Household income and employment

Pandemic Restrictions Drive Uneven Job Recovery

13-min read  |  April 28, 2021


Residential Markets Hot … Maybe Too Hot

13-min read  |  April 13, 2021

International trade

Recovery Gains Momentum

13-min read  |  April 28, 2021

Industry trends

Industries Shift Into Recovery Mode in 2021

13-min read  |  April 19, 2021

Previous release

Recovery Rests on Vaccine Rollout: Canadian Outlook—January 2021

Impact paper  |  24-min read
January 12, 2021

Previous two-year Canadian outlooks

Business investment

Investment Recovery Won’t Happen Overnight

14-min read  |  Mar 1, 2021


Ray of Hope for a Battered Sector

13-min read  |  Feb 11, 2021

Financial markets

Steady Rates Will Help Guide Recovery

13-min read  |  Feb 9, 2021


Big Promises, Sketchy Details in Fall Fiscal Update

12-min read  |  Feb 10, 2021

Household consumption

Consumers on Better Footing

10-min read  |  Feb 16, 2021

Household income and employment

Inequality Deepens

9-min read  |  Feb 24, 2021


The Race for Living Space

16-min read  |  Feb 18, 2021

International trade

Waiting for the Global Recovery

13-min read  |  Feb 24, 2021

Industry trends

A Complicated Comeback

15-min read  |  Feb 22, 2021