The Best Stimulus For Canada is Shots in the Arm.
By Momal Khan
The cottage country rush, summer rentals, exotic vacations, and backyard pools- all signs the economy could bounce back soon. But with the current state of vaccination rounds, a COVID-free summer may be too much to hope for.
While many stand to believe that Canada has botched the vaccine rollout (at least in the short term), this blip can soon be in the past if delays are shortened and properly managed in the near future.
The good news, though, is that Canada is set to receive 5 million doses of the Pfizer BioNTech vaccines ahead of schedule in June- another step towards Trudeau’s goal of vaccinating everyone who wants to be vaccinated by September. This brings Canada’s total expected doses from 4.6 million up to an impressive 9.6 million in the coming months.
With what were previously promising declines in COVID-19 cases coupled with the reopening of the province last month, there was actually some hope for economic recovery- with the assumption that we’d be able to keep a lid on cases. That sort of optimism is just what we needed in these trying times- a glimmer of hope that we would soon be able to see the promised post-pandemic economic boom. However, with the recent “shutdown” in Ontario, recovery has yet again been delayed.
In February, the IMF said it had raised its GDP growth forecast for Canada to 3.6% this year; up from a 7.1% decline in 2020. While this is also good news, it is far more likely for the US to see its post-pandemic boom well before Canada does. This is largely in part due to the widespread vaccine rollout in the States that has allowed millions of Americans to return to regular commercial and social interaction. According to the Bloomberg Vaccine Tracker that ranks the US first in doses administered compared to Canada’s staggering 20, it is clear that Canadian recovery will be delayed by new waves and strains of the virus.
In theory, the country is set up for success. Canadians have managed to hoard massive cash piles during the pandemic. So much so, that TD’s CEO is pushing for policies to spur cash-flush customers to spend their dollars to release some of that pent-up demand ahead of the summer.
With these as the facts, swift vaccination needs to remain a short-term policy priority. The upcoming summer will see increases in consumer card spending, growth in the retail and e-commerce sectors, and recovery in oil prices that all point to at least a mini-boom in economic activity. It is crucial that Canada gets a grip on the virus, and especially on vaccine rollout, so it can take full advantage of all the ripe conditions for a growth spurt in the coming months.