Canada confirmed its first case of COVID-19 on January 25, and registered its first official death on March 9. It was after this date that the pandemic began to significantly impact everyday life for Canadians as emergency measures and lockdown restrictions were rapidly introduced. Every province and territory declared states of emergency and issued orders for most non-essential businesses to close. These measures brought the Canadian economy to a grinding halt, as GDP fell by 7.5% in March and 11.6% in April. The manufacturing and tourism sectors were especially hard hit, with activity in these areas declining significantly.
This dramatic economic downturn has led to levels of government spending that have never been seen in peace time. In response to a surge of job losses that left more than three million unemployed by April, the Canadian government approved billions in financial assistance for individuals and businesses. According to a budget report delivered by the Minister of Finance Bill Morneau in July, direct aid to Canadians totalled more than $228 billion dollars, and was largely responsible for driving the Federal deficit up to $343.2 billion. This deficit is expected to increase as more financial aid is required to prop the economy up through continued periods of economic restriction.
While the initial measures to combat the pandemic have successfully flattened the curve and prevented the Canadian health care system from becoming overwhelmed, there is still a distinct threat of future surges of infection. Many observers have pointed out that the Spanish Flu pandemic of 1918-1919 came in several waves. The first occurred in Spring 1918, and while infection was widespread, mortality rates were relatively low. The pandemic then subsided over the summer months of 1918, during which time the virus mutated significantly. When infections began to rise again in the fall, it was much more deadly than before. This spread during the fall months was the second wave of the pandemic, and it was far more deadly than the first, killing roughly 100 million people worldwide. This pandemic also had a third wave in the winter/spring 1919, but this final resurgence proved to be less virulent and less deadly than the previous one.
Currently, the COVID-19 pandemic's first wave appears to have past in many nations, including Canada. However, signs of a second wave are already emerging as nations begin to reopen their economies. Canada is no different. While reopening efforts that began in May and June have not yet led to a significant increase in daily confirmed cases, there have been local outbreaks resulting from close contact in newly reopened businesses. These local outbreaks make it clear that the virus is still a threat and that Canadians cannot yet return to normal life. With this being the case, government relief spending is expected to continue.
The Canada Emergency Response Benefit (CERB) has delivered over $53 billion in assistance directly to Canadians as of July, and has been extended into October. As more people return to work, the ongoing cost of this program may decrease, but spending of this sort will likely continue until it is safe for Canadians to return to work. While some have held out hope for herd immunity to bring this safety, experiences in Sweden and Spain have made it clear that this approach is a failing one. Sweden set out to achieve herd immunity by avoiding strict lockdowns, which led to the country have the worst mortality rate in Scandinavia while still experiencing significant economic downturns. Spain had one of the worst outbreaks in Europe, and currently registers the fifth-worst death rate in the entire world. Despite this, a recent antibody study of sixty-thousand Spanish citizens found that only ~5% had developed COVID-19 antibodies, far short of the 70-90% rate that is needed to achieved herd immunity.
The improbability of any nation safely achieving herd immunity means that a return to normalcy is largely dependent on the development and distribution of a vaccine. As of July 2020, several vaccine candidates have entered clinical trials around the world. In Canada, researchers from biopharmaceutical company Medicago and Laval University have submitted a vaccine candidate for human trials, and are awaiting approval from Health Canada. If this trial is approved, it could begin before the end of July, which would place it on a best-case-scenario timeline of being ready for mass production by spring 2021.
While further reducing the spread of the virus and a viable vaccine may bring a return to normalcy, some effects of the pandemic could be here to stay. Remote work has become more widespread than ever before as businesses have adjusted to keep their operations going while employees are in lockdown. Many industries have found that their operations can be effectively transitioned to remote work, and a growing number of companies are now transitioning their operations to be work-from-home indefinitely. Significantly, the need for companies to embrace remote work during the pandemic has demonstrated the efficacy of working from home. Studies have for years pointed to the increased productivity that remote work can result in, but many companies have been hesitant to embrace it. With the pandemic forcing remote work to become a reality, both organizations and individuals are seeing the benefits, as evidenced by studies which show many workers want to continue working from home even after the pandemic. As the benefits of these practices become more apparent, it is expected that a growing number of companies will shift a greater portion of their operations to remote work indefinitely.
The COVID-19 pandemic is also adding weight to the ongoing discussion of Universal Basic Income (UBI) in many nations, including Canada. The concept of a UBI has already been tested in a small Ontario pilot project begun in 2017, which found that participants benefited from a UBI in several ways. With the pandemic requiring the distribution of funds directly to Canadians, there is once again a discussion about the benefits of UBI, which is similar in many ways to CERB payments. One of the arguments in favour of a UBI is that it would negate some of the need for emergency government spending in situations like the current pandemic, making the Canadian economy more resilient to such issues. The implementation of UBI is another possible change that could be hastened by the pandemic.
Until a vaccine does become available, Canadians can expect continued disruptions to their daily lives. Restrictions on economic activity will continue until this time, and the ongoing recession will likely deepen. If predictions of a second wave prove to be true, a new round of strict lockdown measures can be expected. Fresh restrictions would almost certainly lead to greater economic woes arising from both job losses and continued government aid programs. If public health measures like social distancing and mask-wearing are widely implemented, a second wave might be avoided entirely, leading to an earlier beginning of economic recovery.
