THE CONFERENCE BOARD OF CANADA EXPECTS THE ECONOMY TO CONTRACT BY 4.3 PER CENT FOLLOWING COVID-19 SHUTDOWNS ACROSS THE NATION, BUT CANADIANS CAN LOOK FORWARD TO A STRONG BOUNCE BACK NEXT YEAR.

But Conference Board predicts strong bounce back in 2021

The Conference Board of Canada expects the country’s economy to contract by 4.3 per cent this year in the wake of COVID-19 shutdowns, but Canadians can look forward to a strong bounce back next year.

Canada’s economic contraction during the second quarter of 2020 is estimated to be a staggering 25 per cent, with even the first quarter pulled into negative territory despite the lockdowns only starting in the final two weeks of March.

A strong rebound in the final two quarters of 2020, though, is expected to continue into the next year, with the Conference Board projecting economic growth of six per cent for 2021.

The projections for 2020 are devastating across Canada. Every province except Prince Edward Island will see its economy squeezed by more than three per cent this year, but all provinces are projected to see economic growth above four per cent next year.

The Conference Board projections assume that firms gradually restarted hiring in May and that emergency government program kept workers and businesses on life support while most of the country was shut down. In this scenario, Canada’s economy should be growing again by the third quarter of 2020.

Growth will accelerate by the fourth quarter, pushing past six per cent by the time 2021 rolls around.

It won’t be a shock to Albertans that their province is projected to take the biggest wallop this year, with a 6.8 per cent drop in GDP. The province’s second quarter unemployment rate is expected to average more than 17 per cent after the pandemic sent oil prices plunging into negative territory last month and the government shuttered all non-essential activities.

The timing was cruel for Alberta, which appeared to be emerging from a years-long economic downturn.

“Just three months ago, we were projecting 2020 to be the first year of a long awaited economic recovery in Alberta. Now, the province is eyeing its worst recession on record,” the report by the Conference Board reads.

Some small solace for Albertans lies in the projections for 2021, which show the province with more than six per cent growth, the second best performance in the country behind British Columbia.

In the wake of stay-at-home orders issued in mid-march, Ontario is battling its worst economic contraction since 2009, with the Conference Board expecting the province’s economy to shrink by 3.6 per cent this year, slightly outperforming the rest of Canada. People in Ontario can expect the economy to grow by nearly six per cent next year.

Quebec’s economy is expected to contract by four per cent this year and grow by nearly six per cent next year, although the province remains

JUST THREE MONTHS AGO, WE WERE PROJECTING ... ECONOMIC RECOVERY IN ALBERTA.

at the mercy of the virus, with cases still much higher than the rest of the country, and suffers from more uncertainty than the other provinces. The Conference Board expects that Quebec’s economy won’t fully recover until 2022.

With stores reopening and some public health measures being relaxed, the Conference Board already sees consumer confidence climbing again after hitting record lows last month.

With a small boost from April to May, the Conference Board’s consumer confidence index reached the bleak milestone of being a few points higher than the lowest point of the 2008 financial crisis.