The COVID-19 pandemic had a deep impact on the Canadian economy, leading it into a recession. The governments’ social distancing rules had the effect of limiting economic activity in the country. Companies started considering mass-layoffs of workers, which was largely prevented by the Canada Emergency Wage Subsidy. But despite these efforts, Canada‘s unemployment rate was 13.5% in May 2020, the highest it has been since 1976.
The COVID-19 affected consumer behaviours. In the early stages of the pandemic, Canadian grocery stores were the site of large-scale panic buying which lead to many empty shelves. By the end of March, most stores were closed to walk-in customers with the exception of grocery stores and pharmacies, which implemented strong social distancing rules in their premises. These rules were also implemented in other Canadian businesses as they began to re-open in the following months.In May, many agricultural producers were worried about going bankrupt, this in spite of the announcement on May 5 of a $252 million federal ag subsidy programme.The Canadian Federation of Agriculture had called one week earlier for a $2.6 billion subsidy but were disappointed.
Air Canada announced on March 20 that it will lay off 5,000 of its staff. On March 20, the federal government announced a dramatic increase in applications to unemployment insurance, with over 500,000 Canadians applying in a single week (an 18-fold increase). By March 22, the figure was adjusted to nearly one million Canadians applying in a single week. And by April 2, jobless claims in Canada reached around 2.13 million, representing roughly 11 percent of the labour force. On April 6, the Canadian government said that 3.18 million Canadians applied for unemployment benefits, with around 795,000 applying on April 6 alone.
On April 13, the number of applications for emergency benefits due to the pandemic reached 6 million – this number “includes those who applied through the employment insurance (EI) process.” Air Canada cancelled all flights to Beijing, Shanghai, and Rome; and cut back on flights to Hong Kong, Tokyo, and Seoul. WestJet announced on March 16 that all international flights, including to the US, will be suspended by March 22.On March 18, Porter Airlines announced that it would suspend all flights until June.These measures are expected to last until at least April 30.
On May 14, Lufthansa said it would resume flights between Toronto and Frankfurt as of June 3. The airline plans three weekly flights between the cities, and may add Vancouver and Montreal to its post-lockdown rota later on this summer. Flights are banned on all international non-essential travel between Canada and the European Union since March 17, but citizens are allowed to return to either location. Prior to the pandemic, Lufthansa operated 64 weekly flights between the two countries. The airline’s recovery plans involve high-density cargo to replace paying customers.
The Toronto Stock Exchange (TSX) was affected strongly by the 2020 stock market crash, with an overall 12 percent decline on March 12 of the S&P/TSX Composite Index, its biggest single-day decline since 1940, twice triggering market circuit breakers. The fall, which capped two weeks of steady declines, was exacerbated by an oil output war between Russia and Saudi Arabia.The S&P/TSX Composite Index lost another 10 percent on March 16, causing trading to halt a 3rd time in a span of eight days.The index closed at 12,360.40 points on March 16, down 31 percent from before the crash at 17,944 recorded on February 20. By April 17, the index had recovered some of its losses, closing at 14,359.98, still down 20 percent from the February 20 close.
Many news websites have dropped their paywalls for material related to the pandemic, including The Globe and Mail and all Postmedia sites. Postmedia subsequently dropped its paywalls for all content for April 2020.Public broadcaster CBC temporarily replaced its local evening newscasts with a simulcast from CBC News Network combining content from local and national journalists from across the country, a decision that was criticized by the Premier of Prince Edward Island Dennis King, as CBC News: Compass is the province’s only local daily television news program.