What does a post-pandemic economy look like? Health researchers are indicating that managing this virus will be a long-term game. That means COVID-19 will impact the economy for months, maybe years, but reopening businesses cannot wait until the virus is completely eradicated.
Estimated lost wages from the locked-down Canadian economy range between $3 billion to $6 billion per month. Many Canadians are worrying about more than infection; concerns about affording rent and everyday necessities are pervasive. Restarting businesses is not only important for the social well-being of Canadians but also for restoring investor confidence in the market and generating much-needed tax revenue.
Germany has just started to make small steps by reopening small shops. Understanding when and how to reopen businesses may be the most challenging task of this pandemic. Reopening too soon risks a second wave of infections and a far greater negative economic impact.
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However, not allowing companies to promptly reopen will lead to a deep recession and is already fuelling societal unrest. Successfully re-establishing businesses in a COVID-19 economy requires government, health-care and business leaders working together to implement a phased return to employment.
Phase 1: Our current situation — working from home or remaining unemployed
The first phase is the one in which we now find ourselves: working from home or unemployed. Many professional and business-to-business companies have learned to facilitate working from home using web-based technology over the past few weeks.
This has been critical in reducing COVID-19 transmission, but it’s not sustainable in the long term. So what’s next?
Phase 2: Resuming small-scale operations
The next phase is a suppression approach involving reopening and supporting businesses where virus transmission can be easily controlled.
Workplaces that have adequate space for physical distancing, easy access to soap and water and the ability for continuous cleaning of all public areas should be encouraged to reopen. These businesses can learn from those that remained open during the lockdown.
People leave a grocery store in Ottawa where carts and signs have been placed to facilitate physical distancing in response to the COVID-19 pandemic on April 4, 2020. THE CANADIAN PRESS/Justin Tang
This might require that businesses operate with reduced hours until they can assure regular and thorough cleaning of their workplaces.
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In a pandemic, short-term age discrimination may also be justified. Employers should be encouraged to rehire younger people after they’ve been tested, while governments continue to provide financial support to older workers and those with chronic health conditions, since younger people are less likely to be hospitalized due to COVID-19 infection.
Success in this early phase is dependent on rapid testing of employees displaying symptoms, including a potential self-testing kit and the quick return of results. Employers must keep reminding employees to stay home if they are not feeling well, while governments must continue to provide easy and quick access to insurance for lost wages.
In the meantime, employees have a responsibility to limit their social exposure when they’re not at work. The goal must be to keep the transmission rate a low as possible.
1:35 Premier Scott Moe on the need to re-open Saskatchewan’s economy
Premier Scott Moe on the need to re-open Saskatchewan’s economy
Phase 3: Expanding to social events
The next phase should begin within a month of lowering the infection rate to acceptable levels, a number that still hasn’t been established. There is ongoing development of models of transmission in different-sized and types of groups, and as more is learned on how to ensure low infection rates, businesses and organizations can expand operations carefully.
This could mean allowing more customers into stores and restaurants at one time, allowing small social gatherings and reopening some education and recreation facilities. Professional sports leagues could resume, either with relatively few or no spectators. Whatever the expansion looks like, maintenance of new cleaning and social and physical distancing practices needs to be ensured.
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0:42 Coronavirus outbreak: Doug Ford says Ontario economy to reopen ‘with a trickle’
Coronavirus outbreak: Doug Ford says Ontario economy to reopen ‘with a trickle’
Phase 4: Domestic tourism
The final phase should focus on rebuilding domestic tourism and Canada’s reputation as a safe country for its citizens to explore.
Airlines and hotels should have appropriate cleaning and hygiene practices ready to go. Reopening the border could be considered for those countries that have also controlled transmission of the virus.
A tourist looks out over Stuckless Pond in Gros Morne National Park, Newfoundland and Labrador, in August 2016. THE CANADIAN PRESS/Darren Calabrese
During this phased-in approach, governments need to go beyond providing financial stimulus packages. Businesses also need to be supported in training workers on safety and sanitation precautions, and must facilitate the development of technologies that monitor workplace social distancing and tracking of interactions that could lead to virus transmission.
Governments and health-care experts must also continually monitor and provide updates on transmission rates. Success is dependent on everyone being informed.
Public trust in business is critical. Canadians have effectively responded to this pandemic. To ensure ongoing co-operation, they need to know there’s plan for getting people back to work.
COVID-19 will not be the last health threat to the Canadian economy. Our focus needs to shift from controlling risks through economic shutdowns to managing health-related threats in the workplace. Otherwise disastrous economic downturns will continue.
The response to COVID-19, in fact, should become a learning opportunity on how to develop more illness-proof economies.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
