Canada’s economy is in recession due to Covid-19 impact: Report

A Canadian think tank has calculated that the country’s economy is now in recession due to the economic impact of the Covid-19 pandemic.

The Toronto-based C D Howe Institute’s Business Cycle Council did this official even as it stated that the first part of 2020 was important in the sense that the country recorded its highest-ever fall in GDP, at a 2.6 per cent drop. Statistics Canada has determined that Canada’s GDP took a nine per cent hit in March alone, as the economic impact of the coronavirus crisis disturbed the economy with several sectors being shut down. March also saw a 5.3 per cent drop in employment in the nation.

The Council’s decision to declare a recession was based on preceding data available on April 30 and it stated that while changes to GDP figures will occur, they are “extremely unlikely to be important enough to change the recession call.”

This sobering declaration came as the country reported over 55,000 Covid-19 cases with 3,391 deaths.

Already, approximately seven million Canadians, almost a fifth of the country’s population, have availed of an emergency fund set by the Government to counter the unfavourable economic impact of the Covid-19 pandemic. A note issued by the Parliamentary Budget Office estimated that total could increase by 20 per cent, to about 8.5 million using the Canada Emergency Response Benefit, which was declared by Prime Minister Justin Trudeau and is scheduled to last four months, beginning with March.

With a grant programme also being introduced to support businesses in retaining employees, the budget deficit will go over CA$ 252 billion. Decisions on how the Government will deal with the economic crisis have yet to be made, and Trudeau made it clear that facing the current challenges caused by Covid-19 will remain the priority for the short-term. Right now, he said during a media briefing after a session of Parliament, the “focus is on getting through this together as a country.”

“There will be time after this is all done as we figure out how precisely this unfolds, where we will have to make next decisions on how that recovery looks,” he stated.