Executive Search in Canada – 2021 Outlook
Canada Expects to Recoup 2020 Losses
Canada experienced an economic contraction of an estimated 5.5% of GDP – the largest since 1945 — due to the pandemic and a range of lockdowns coast to coast.
The Business Development Bank of Canada (BDC) expects the economy to expand enough in 2021 to offset the losses.. The Canadian government launched several relief programs during these emergency conditions which has helped to stabilize the economy and is helping the labour market to recover
A successful vaccine rollout is seen as critical to overall recovery pace in 2021.
Travel and tourism remains the hardest hit sectors and will be slower to recover than other sectors. Oil and Gas in Alberta has also taken a substantial hit in particular with the cancellation of the Keystone XL project by the new administration in the USA.
British Columbia, the most western province, is expected to lead the recovery with GDP year over year growth forecast at 5.5% slightly above the national outlook. Unemployment in the west is expected to be lowest.
Economic growth is expected to bounce back nationally to 8% in the second quarter subject to success in controlling the recurrence of virus variants, which forced a second lockdown in the UK late in the first quarter. Canada suspended some international flights in response to concerns over the variant that appears to be far more contagious.
Although some hard-hit service industries will struggle until most of the population is inoculated (especially the cruise ship industry and tourism ), the goods-producing sector will continue to expand. Record home sales are bound to simmer down, but residential construction should stay aloft given record-low resale availability
The Bank of Montreal anticipates the loonie strengthening to $1.25 (US$0.80) vs. the greenback by late 2021.
This is near purchasing power parity, limiting the impact on the economic recovery though keeping the trade deficit large. The loonie should benefit from firmer resource prices … as global demand improves.
Contact the author Laurie O’Donnell at laurie-odonnell@cornerstone-group.com