Canadian Outlook

Updated: October 26, 2020 | Français

COVID-19 and uncertainty to flatten the curve of economic recovery.

Canada’s economy bounced back in recent months following the economic plunge sparked by the COVID-19-related shutdown in March and April. At its trough in April, real GDP was at 82 per cent of February’s (pre-COVID) level, 3 million Canadians were out of work (a 15.6 per cent decline in employment), and total hours worked had plummeted a staggering 28 per cent. Still a gaping chasm remains to be closed before Canada’s economy is back to normal.

Contents of the Autumn 2020 edition:

World economy slowly starting to recover
Trade recovery hits some speed bumps
Labour market recovery will slow
Housing markets strengthen … for now
Government to rescue … but taps will close quickly

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Key findings

Canada’s economy is on the mend, but the effects of the COVID-19 pandemic are far from over. We expect localized closures and a retrenchment in some segments of household spending and business activity to hold back the pace of recovery into mid-2021.

Massive stimulus measures implemented by federal and provincial governments will help support households and businesses, but firms and workers in the most affected sectors will suffer continued hardship.

South of the border, the recovery also depends crucially on Congress and the president agreeing to additional stimulus measures to keep the economy on track over the next few months. Canadian exports to the U.S. have rebounded, but continued progress is tied to U.S. household spending.