Economist warns virus recovery years away
Greater Niagara Chamber of Commerce’s annual Niagara Economic Summit continues online
As the COVID-19 pandemic continues “almost out of control” south of the border, the Business Development Bank of Canada’s chief economist, Pierre Cleroux, is warning it will take at least until early 2022 before this country’s economy starts a rebound to pre-pandemic levels.
And that’s if an effective vaccine becomes available next year.
“If we cannot control the second wave and for some reason the vaccine is delayed, this is going to delay the recovery,” Cleroux said while delivering the keynote address during Tuesday’s Niagara Economic Summit — the first of three online discussions Greater Niagara Chamber of Commerce has organized.
“It’s going to take some time before we get back to the precrisis level. There’s a lot of uncertainty.”
Without a vaccine, he said it will likely take until the end of 2023 before the economy fully recovers to pre-pandemic levels.
“We’re still optimistic. We still believe that we are going to have a vaccine and we are going to be able to control the second wave,” Cleroux said. “I’m quite optimistic that were going to have a vaccine in 2021, and we need that. We will not have a full recovery until we have a vaccine.”
Cleroux said many Canadian industries are recovering from the crisis faster than those in other countries. For instance, there are now more people working in manufacturing industry jobs than before the pandemic began.
But industries that rely on face-to-face interactions with customers such as Niagara’s tourism businesses, restaurants and accommodation providers are continuing to struggle as a result of the closed U.S. border. And the border won’t reopen until the U.S. can reduce its rate of infections.
“In the U.S., the situation is almost out of control,” Cleroux said. “This has the potential to really postpone the recovery that we are seeing.”
In a panel discussion following Cleroux’s keynote address,
Ontario Chamber of Commerce chief executive officer Rocco Rossi said despite the resiliency some industries have shown there are still “massive holes with tremendous pain in tourism, in the greater Niagara region, of course.”
Added Niagara Region Chair Jim Bradley, “When tourism is booming, we’re quite delighted here in Niagara.”
But tourism “has been impacted immensely” by the U.S. border closure, he said.
Nevertheless, Bradley said there is a consensus among Niagara’s municipalities to keep the border closed until it is safe to open it.
Canadian Chamber of Commerce president and chief executive officer Perrin Beatty said the tourism and travel industry was first hit by the pandemic and will be the last to come out of the recession that resulted from it.
Until the U.S. gets the pandemic under control, “there will be no appetite to reopen the border.”
Beatty said tourism operators are not the only industry types continuing to struggle.
While there’s no doubt that companies like Amazon are doing very well, Beatty said he’s “not sure that retailers in Niagara are going to feel the same way” when an increasing number of people are opting to purchase goods online rather than visiting local shops.
He said the pandemic has had an uneven impact on people across the country, having a greater impact on women as well as younger workers and new Canadians.
Although panellists attributed Canada’s resiliency to uppertier government funding that was provided, Beatty said strategies need to be developed “for putting our fiscal house back in order” after accumulating $1.2 trillion in federal debt, while also transitioning from “an economy of subsidy” to private-sector economic growth.
“We can’t borrow our way back to prosperity,” he said.
The Niagara Economic Summit Series will continue online on Nov. 17, with a discussion focusing on Niagara’s opportunities for smart and sustainable regrowth, and on Nov. 24 focusing on sectors hit hardest by the pandemic and strategies to speed up recovery.
More information is available on the chamber’s website gncc.ca.