How Will the Canadian Economy Rebound After COVID-19?
The outbreak of COVID-19 has taken its toll all over the world. Here in Canada, we are hearing about our friends and neighbours being laid off temporarily while stock and oil prices plummet. As we walk down the street, we are seeing shuttered stores and restaurants with their dining areas packed up and cordoned off.
The few people we do encounter on the sidewalk are in a hurry and have been careful to put a face mask on before leaving the house. It’s a different world right now, but this reality isn’t forever.
While the deserted streets of Toronto and other Canadian cities are a strange sight, especially as warmer weather approaches, the outlook for the Canadian economy is not as dim as you might think. An immense effort is taking place during the present lockdown on behalf of the Canadian government to protect not only our lives but also our livelihoods.
Viral Pandemics Don’t Tend to Stick Around
Over the past couple of weeks, the number of COVID-19 cases in Canada has risen, tracing the exponential curve often characteristic of a highly contagious virus.
The response from our government was swift. Drastic measures have been taken to slow the spread of the virus and have prevented Canadian hospitals from being overwhelmed. While a number of forecasts are optimistic — with some predicting a rebound in economic activity over the second half of 2020 — these rely on social distancing and other protective measures currently in place.
With the onset of any worldwide pandemic, it goes without saying that things aren’t going to be business-as-usual for a least a little while. But viral pandemics tend to strike quickly and then dissipate with containment, giving way to an equally fast-paced economic recovery as consumer spending skyrockets and businesses tend to the gaps in their supply chains.
While it may seem like a fatal blow, experts have recognized the present pandemic as nothing but a short-term shock.
How the Government Is Supporting Canadians and Businesses
While global efforts toward the effective detection, management, and treatment of COVID-19 continue to dominate the research scene, the Canadian government is doing everything possible to mitigate the business side of things. The focus has always been to determine what supports are needed to support Canadian businesses and workers.
Among the protective measures that have already been announced is a $10-billion dollar fund set up to improve access to financing and make up for lost cash flows on behalf of small- and medium-sized businesses. This program, called the Business Credit Availability Program (BCAP), was implemented with the intent of helping viable Canadian businesses remain resilient during this unexpected period of economic stress.
The Bank of Canada has also taken action to support the economy during these very uncertain times by cutting the interest rate to 0.75%. This makes it cheaper for businesses and consumers to borrow loans. As a result, spending and investment are predicted to rise, lifting the economy from its present slump by what some experts predict may be the end of the summer.
The situation in China offers evidence for such hope, where areas far more densely populated than regions in Canada have managed to halt the spread of the virus. What’s more, Chinese economic activity is slowly snapping back. Here in Canada, if we can continue to work together in containing the spread of the virus with the same protective distancing measures we have now, our economy is likely to see a similar turnaround.
While predictions are obviously difficult at this stage because of how much we’ve yet to understand about COVID-19, there is hope on the horizon on both the medical and economic fronts. The best research labs around the world are working tirelessly to develop a vaccine — the Canadian government itself has invested tens of millions into researching medical countermeasures. The same government continues to take strong action in supporting Canadian businesses, employees, and their families.
Unexpected Upsides to COVID-19
The outbreak of COVID-19 has turned millions of lives upside down. While the tragedy of this historical event has not been lost on anyone, there are a few unexpected upsides to the pandemic that you might not have heard of. Among these is a rapid decline in pollution and greenhouse gas emissions. Normally a rare sight, fish have begun to reappear in the canals of Venice, which are growing clearer by the day.
COVID-19 has tested public health systems worldwide, challenging the ability of governments to make quick and competent decisions in the wake of a public health emergency. The effective implementation of travel bans and mass testing procedures — or the failure to plan ahead and take the necessary precautions — has exposed organizational flaws across the globe.
On an individual level, the heightened emphasis on taking care of yourself, your family, and your neighbors will undoubtedly persist once this crisis has blown over. Increased public awareness regarding the nature of infectious viruses and how to defend yourself and your loved ones against becoming infected is likely to remain imprinted even when cases subside. Elevated standards for cleanliness and hygiene are more than likely to carry on, leaving us in a cleaner, more mindful world.
This Too Shall Pass
Certain industries, such as the airlines, have been hard-hit and are likely to suffer an even steeper decline in the coming months. Likewise, the oil industry will feel the full effects of the current pandemic until global economic activity and air travel has recovered.
While fears surrounding economic downturn are entirely valid given the recent market crash, it’s important not to lose sight of what’s just over the hill. These are extraordinary times in which Canadian households and businesses are faced with frightening uncertainty. But if we concentrate our efforts on effectively containing the virus and protecting our loved ones, an economic turnaround will come.
With the prolonging of the protective measures already in place, Canada’s economy is on track to recover in as little as a few months. Our government continues to take decisive action to help Canadians facing hardship as a consequence of the outbreak. A secure future is ahead of us.
CHI Real Estate Group is committed to supporting local small businesses. Our team has been working with Restaurants Canada to provide timely, valuable resources to help Tenants and Landlords. At the same time, we are also working with the Toronto Regional Real Estate Broad to lobby governments to address the real estate needs of the hospitality industry in our city’s plans for economic recovery. Don’t hesitate to contact us by calling 647-347-9723 if you have any questions at all.