Canada’s vaccine rollout, combined with a rapid decline in new virus cases will help support a partial re-opening of the economy in the coming month, fuelling a summer economic recovery says BMO Financial Group chief economist, Doug Porter. He says growth likely stalled in the second quarter of the year as third-wave restrictions hit Canada hard, but Porter adds that a strong economic rebound is likely coming in the second half of the year if most Canadians are fully vaccinated by August.
BMO Economics’ most recent report, The Next Stage: Canada Comeback, the firm predicts that struggling industries, including bars, hotels, in-person entertainment, personal care services and travel will come roaring back once most of the population is vaccinated. “These industries will benefit from tremendous pent-up demand and substantial excess household savings accumulated during the pandemic,” Porter writes.
The report goes on to say that for activity to return to something closer to pre-pandemic levels, there will need to be progress on full vaccination rates – it assumes that 80 per cent of Canadians over the age of 12 are fully vaccinated by August. “For Canada’s economy – and critically, its job market – to recover fully requires the hardest hit sectors to recover. Ultimately that requires full vaccination of a majority of the adult population – both to support the confidence of individuals to engage more fully, and in policymakers to allow such.”