COVID-19 Recovery Plan – Draft For Discussion
Finance Canada
August 2020
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Restart & Rebound
- Rapid gains as restrictions are lifted
- Policy focuses on supporting safe reopening – e.g., Safe Restart Agreement
Recuperation
- Gains slow as the lingering effects and distancing measures holds back economic activity
- Policy pivots to address hardest-hit sectors, and investment in initiatives that strengthen Canada's economic potential.
Encouragingly, easing of lockdowns has led to strong initial rebound in economic activity and consumer and business confidence
per cent change relative to pre-COVID-19 baseline
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Notes: For the Google mobility tracker, 7-day moving average change from baseline (median value of same weekday during Jan. 3 - Feb. 6, 2020 period). Last data points are July 17, 2020 for mobility, and August 5, 2020 for credit card spending. Sources: Google Community Mobility Reports; Visa, Bloomberg, Conference Board of Canada.
Initial labour market recovery stronger-than-expected – however, 2.3 million workers still affected, especially in lower-wage service sector jobs
millions, SA
Employment Level by Weekly Earnings (2020)
February = 100, NSA
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Key elements to a safe restart and building confidence for the resumption of economic activity through the fall
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The road to full recovery will vary across sectors - * Part of title redacted *
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| Sector | Share of GDP, 2019Q4 | Share of Employment, 2019Q4 | GDP Decline, Maximum Impact (Feb to April) | * Portion of table redacted* |
|---|---|---|---|---|
| Accommodation and food services | 2.3 | 6.3 | -66 | |
| Arts, entertainment and recreation | 0.8 | 2.0 | -56 | |
| Transportation and Warehousing | 4.5 | 5.5 | -32 | |
| Manufacturing | 10.0 | 9.2 | -29 | |
| Retail | 5.1 | 10.7 | -28 | |
| Construction | 7.2 | 7.7 | -27 | |
| Wholesale | 5.2 | 4.3 | -22 | |
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Note: The sub-industries include: Amusement and Recreation Industries; Performing Arts and
Spectator Sports and Related Industries; Transit, Ground Passenger, Scenic and Sightseeing, Air
Transportation; and Food Services and Drinking Places. |
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What kind of support is most needed to help businesses pull through the recovery?
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Annex
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However, virus risks are the biggest brake on local economic activity – with activities that require close contact still depressed
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Many consumers are hesitant to resume old habits and spending patterns in the face of continued health risks (“FOGO”, fear of going out)
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Affected businesses are worried about the strength of demand and will be cautious before rehiring and reinvesting.
Potential for the release of significant pent-up consumer demand over the next few months
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