Governments around the world have spent more than $14 trillion to try to offset the economic damage of the pandemic, says Bryan Yu, in the latest episode of the CUES Podcast.
“In Canada, I think we moved pretty quick,” says Yu, director and chief economist with Central 1 in Vancouver, British Columbia, which leverages its scale, strength and expertise to power progress for more than 250 credit unions and other financial institutions. “We had seen the implementation of the Canadian Emergency Response Benefit, which was largely providing funds for households who were negatively impacted by the pandemic and lost jobs, about $500 per week. So, a significant amount.
“We also, of course, see the wage subsidy programs in Canada as well,” he adds in the show. “So employers who lost substantial amounts of business were able to tap the subsidy in order to keep individuals employed.”
He estimates that the Canadian government will now have to deal with a $380 billion deficit after the outlay. “But we're also, of course, recognizing that without these measures, we could be in a much worse state at this point,” he says. “We'd have the pandemic plus we'd have a lot of individuals without income, and that would have led to more foreclosures, bankruptcies, etc.”
Yu also thinks the rollout of the COVID-19 vaccine in Canada will have a significant impact on the economic recovery.
“The vaccine will in fact, provide a huge boost for Canada. One of the big differences I think, between the US and Canada right now is that rate of deployment,” he explains. In Canada, “only about 3% of our population has been vaccinated .. and that's really a reflection partly of the countries which are making the vaccines. The US and the UK, of course, are producers. So they are able to deploy much quicker.
“But as those vaccines do roll out, I do expect to see that that will finally be able to reopen some of our borders more towards tourism. People will be more willing to go into into more restaurants, really moving back that service-oriented economy back to full capacity.
“So that's my hope at this point,” he says. “I think that's going to be driving our move back to a pre-pandemic type of levels within the next two years. I would think there is still going to be a lot of challenges … going forward.”
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