East Coast provinces make list for leading, lagging recovery

Manitoba, British Columbia and New Brunswick will lead the recovery from the coronavirus pandemic in Canada, says a new study on the reopening of provincial economies.

By the end of the year these three provinces should have recovered 96 per cent, 95 per cent and 95 per cent of their pre-virus GDP respectively.

Newfoundland and Labrador, Alberta and Saskatchewan will be the weakest performers as these provinces struggle with the added burden of low oil prices, says the report by RBC senior economist Robert Hogue. At the end of 2020, they will have recovered 87 per cent, 92 per cent, and 93 per cent of GDP respectively.

Hogue says the recovery will be uneven across the country, as provinces lift lockdown restrictions at their own pace. Though RBC expects the economies of all provinces to contract severely this year, “we now believe contractions won’t be quite as massive as we thought previously.”

More than half of small businesses in New Brunswick and P.E.I. have opened up in the past few weeks and the Prairie provinces are at almost 50 per cent, said BMO senior economist Robert Kavcic, who drew from CFIB survey data. Ontario, at about 30 per cent, is well below average, he said, but this should increase soon as more restrictions have been lifted for businesses outside the Greater Toronto Area.

In just two and a half months, the pandemic cost Ontario $40 billion in lost GDP, which works out to $7,500 per household, says a group of Queen’s University economists who are helping policy makers build a recovery roadmap. Their policy analysis tool, developed with Limestone Analystics, estimates that Ontario GDP lost 9.4 per cent in March, 23 per cent in April and 26 per cent in May, compared to normal expectations.

“These are huge numbers, and that is just where we were after May,” said economist Huw Lloyd-ellis. “Losses will accumulate going forward. How big they end up being depends on how quickly the province can relax restrictions on various industries, and how the behaviour of firms and consumers change going forward.”

This week, new outbreaks of COVID-19 in states that have been reopened for weeks raised alarms about an extension of the virus run or a possible second wave.

Texas reported 2,504 new coronavirus cases on Wednesday, the highest one-day total since the pandemic began, Bloomberg reports. A month into its reopening, Florida this week reported 8,553 new cases, the highest seven-day total yet. Arizona new cases has spiked in the past two weeks, hitting an all-time high of 1,187 on June 2.

“There is a new wave coming in parts of the country,” said Eric Toner, a senior scholar at the Johns Hopkins Center for Health Security, told Bloomberg. “It’s small and it’s distant so far, but it’s coming.”