There are 300,000 fewer Canadians working than prior to the pandemic. Another 247,000 are working fewer hours. Canada’s GDP fell by more than 17 percent between February 2020 and April 2020. Overall, the economy is operating at below pre-pandemic levels, even with the injection of hundreds of billions of dollars in relief programs.
These are bleak numbers from a hard year. But once the worst of the pandemic’s emergencies are behind us and once we can vaccinate our way into something approximating normal life, merely returning to pre-pandemic economic levels is not enough.
For too long, Canada has been caught in a two-percent growth trap marked by poor productivity and general malaise, writes Nikita Perevalov, the director of economic forecasting at Scotiabank, and Sean Speer, PPF Scotiabank Fellow in strategic competitiveness (and The Hub’s editor at large), in their report for the Public Policy Forum, Beyond Two Percent: The Case for Economic Growth in the Post-Pandemic Age.
Canadian policymakers can’t afford to succumb to fatalism, they argue.
For instance, finding a way to boost business investment as a share of GDP by just one percentage point would increase Canadian output by as much as 1.5 percent over five years.
They argue that as the pandemic eventually recedes, we must not maintain our previous levels of stagnation but rather should plan for a recovery that sets our economic trajectory towards even greater heights.
