Forecasting forward through “present” health impositions of the pandemic, our economy will emerge, differently, but the economy will adjust and once again prosper.
Getting to this point will inflict lacerations to the economy, the residual impacts can be observed through scarring.
A term often used by economists is labour market scarring. This relates to a negative long-term effect that labour displacement (unemployment) has on future labour market possibilities. It can be in the form of displaced youth challenged to enter a changed employment market, or retail workers in our urban centres displaced when businesses close due to work-from-home policies. Economic scarring will be broader than just labour effects and, in our case, can have impacts that may take years to manifest.
Labour is relatively easy to measure. Professor Jonathan Portes of Kings College London in June estimated shutdowns impacted up to 30 per cent of the workforce. He also identified human capital, firm capital, education and business investment as all having declined through the pandemic as losses to the economy added impactful scars to GDP. The loss of these attributes will take years to replenish as each works through a phase of atrophy.
Another local complexity to our economic trajectory is air-link. The loss of reliable and robust air connectivity to key hubs will certainly impair economic recovery. This is an area not discussed, but certainly worthy of provincial policy support as we start planning for recovery and returning travel.
A more direct impact to individuals and their ability to resume operations is mental health. A chronic impact to the economy has expanded incredibly through the stresses of an uncertain pandemic. In December 2020, the Lancet stated, “People with depressive, anxiety or obsessive-compulsive disorders are experiencing a detrimental impact on their mental health from the COVID-19 pandemic.”
As no surprise, the Psychiatric Times indicated in October 2020, “Overall, the research demonstrates that COVID-19 is affecting the mental health of children and adolescents and that depression and anxiety are prevalent.”
These scars are now starting to manifest.
There are hundreds of studies affirming increases in anxiety, depression and mental health strains. The impacts are consistently documented, and as such our economy also needs to adapt, accommodate and repair this “scar”.
Over time injuries heal. Athletes use focus, physiotherapy and adaptation to resume activity post damage. However, in the fullness of time, the scars of these injuries often return later in life while some athletes never fully recover from the time of injury.
Governments and policy makers now need to focus on developing supports to rehabilitate the economy post impact. Business needs to shift focus from accommodating the injury to recovery. Rebuilding energy and enthusiasm to return to pace.
We have lost economic momentum in the majority of our sectors (construction, leisure activities, stay-at home are exempt), and we need to stimulate these sectors and reconnect a workforce. In physiotherapy terms, we need to TENS impacted sectors.
We are within sight of recovery and proper focus can accelerate our resumption, several quarters out. There will be scars evident for many years as our economy adapts and adjusts to new challenges, but now is the time to transform industries and empower our people.
Blake Doyle is The Guardian’s small business columnist.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
