March 2021 Canada’s Pandemic & Post Pandemic

Transcript:March 2021 Canada’s Pandemic & Post Pandemic:
March 2021 Canada’s Pandemic & Post Pandemic Challenges & Opportunities Craig Alexander Chief Economist and Executive Advisor Canada’s Economic Recovery set to Slow in the Near Term Sources: Deloitte, Statistics Canada Real GDP, quarter-over-quarter annualized growth Real GDP, annual growth Provincial Performance varied, but all to Return to Growth in 2021 Decline in real GDP in 2020 GDP growth in 2021 Sources: Statistics Canada, forecasts by Deloitte Varied Industry Performance leads to talk of a ‘K’ Shaped Recovery with Implications for Cities Sources: Deloitte, Statistics Canada Real GDP: peak decline in output (bottom point) and change from February to November 2020 (top point) Percent Change Small Businesses most Impacted Sources: Deloitte, Statistics Canada Employment decline in April compared to February and October Compared to February by establishment size Index Large increase in Savings sets stage for Strong Rebound Sources: Statistics Canada, forecasts by Deloitte. Household savings $C billions at quarterly rates Government support has come with a Massive Price Tag Sources: Haver Analytics; Statistics Canada; Department of Finance COVID-19 has created massive disruption, while structural forces are still in play EMERGING TRENDS ACCELERATING TRENDS STRUCTURAL TRENDS Resilience to COVID The pandemic has varying impacts on industries’ recovery depending on the degree of exposure to economic closures, and the ability and speed of adaptation Post-COVID growth potential Professional Scientific and Technical Services Health Education Financial services Utilities Wholesale Arts, Entertainment, and Recreation Manufacturing Acc. and food svcs. Culture and Publishing Retail Extractive Construction Agriculture and Forestry Transportation and warehousing Government and Public admin Very Resilient Severely impacted Low potential High potential Motion pictures and sound recording Broadcasting Telecom and Data Weaker labour force growth, abysmal investment and subdued productivity gains mean Canada’s baseline trajectory is one of soft economic growth Given slowing labour force growth, weak business investment, and slow productivity growth, gains in potential output will remain well below 2 per cent. Weak potential growth means slower growth in living standards as income per capita increases at a slower pace. This can lead to broader, societal risks including rising populism, nationalism and protectionism which goes against the diversity that Canada has fought to build. While GDP growth slows, aging demographics and rising health care costs will add fiscal strain $C Percent Pandemic is a Perfect Storm for Municipalities Greatest health crisis and deepest recession in modern history Large cities more impacted than smaller cities and rural areas The greater urban