Canadian Outlook

Updated: January 12, 2021  |  Français

Recovery rests on vaccine rollout.

The news that safe and effective vaccines against COVID-19 have begun to be distributed has provided optimism that the pandemic could soon be beaten, lifting battered economies all around the world out of the deepest recession in modern times. This aligns with the assumption in our prior forecast, along with the expectation that still rising COVID-19 cases would lead to additional health-related restrictions and flatten the economic recovery over the first half of 2021.

Contents of the Winter 2021 edition:

  • Global and U.S. outlooks
  • Business sector
  • Housing sector
  • Housing markets shrug off pandemic
  • Fall fiscal update makes big promises
  • Steady rates will help guide the recovery

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Non-subscribers

Key findings

Canada’s economy rebounded through the summer, but rising COVID-19 cases—both at home and south of the border—will slow the pace of recovery. Many businesses in Canada face dim prospects over the first half of 2021.

A successful rollout of vaccines will encourage households to spend some of what they’ve amassed in savings. Household balance sheets are in great shape thanks to government support and travel bans that have cut spending on foreign travel to almost nothing.

The federal and provincial governments are pledging continued support to businesses and households. The pandemic will drive up public debt to record levels, putting a strain on government finances and public spending once the crisis is past.

Real GDP is forecast to post growth of 5.3 per cent in 2021 and 3.5 per cent in 2022. This follows the deepest recession in modern times. We estimate that economic activity dropped by 5.3 per cent in 2020.

Issue briefings

Canada’s two-year outlooks

Business investment

Forthcoming

Energy

Forthcoming

Financial markets

Forthcoming

Government

Forthcoming

Household consumption

Forthcoming

Household income and employment

Forthcoming

Housing

Forthcoming

International trade

Forthcoming

Industry trends

Forthcoming


Previous release

Previous two-year Canadian outlooks

Business investment

Investment Recovery Fraught With Risks

14-min read  |  Oct 20, 2020

Energy

Resilience to Be Tested on Long Road to Recovery

11-min read  |  Oct 20, 2020

Financial markets

Rock-Bottom Rates Are Here to Stay

13-min read  |  Oct 21, 2020

Government

Governments Act Quickly and Dramatically

12-min read  |  Nov 3, 2020

Household consumption

Goods Spending Driving Consumption Recovery

12-min read  |  Oct 26, 2020

Household income and employment

After Hot Start, Jobs Recovery Has Slowed

12-min read  |  Nov 3, 2020

Housing

Housing Markets Shake Off COVID … for Now

12-min read  |  Nov 2, 2020

International trade

Trade Recovery Hits Some Speed Bumps

15-min read  |  Oct 21, 2020

Industry trends

Uneven Recovery Ahead for Industries

12-min read  |  Oct 26, 2020