After losing nearly two million jobs in April, Canada’s economy is in need of a quick rebound.
The federal government has done its part to stem the bleeding, but the difficult part could be stimulating a recovery.
Herb Emery, Vaughan Chair of Economics at the University of New Brunswick, says with the economy facing unprecedented job loss and insolvency for a significant percentage of small businesses, the government acted as it was supposed to – as a form of disaster relief.
“I thought they responded appropriately and surprisingly fast,” Emery said.
The Liberal government’s Canada Emergency Response Benefit and Canada Emergency Wage Subsidy programs were created to help workers without jobs, and businesses struggling to pay their employees.
Though many Canadians continue to work with subsidized positions, Emery says those jobs act as an extension of employment insurance, allowing Canadian workers to stay at work, even as the federal government foots the payroll.
Emery says if the April jobs report considered these subsidized positions in addition to the lost jobs, the unemployment rate would be much higher.
“The true unemployment rate that we would measure if we were apples to apples, we’re probably up around 25 per cent,” he said.
Economically, Canada is able to look to other countries that experienced the first wave of the pandemic earlier as a roadmap for what recovery could look like, said Emery. Those countries are experiencing what economists call the 90 per cent economy.
“When you look at places like China, they’ve come most of the way but they haven’t recovered the final 10 per cent of the activity,” he said. “That’s a pretty substantial hit.”
For New Brunswick, a province that was struggling before the pandemic, the outbreak is exacerbating existing economic issues.
Emery believes if we don’t make quick, transformational changes, the province could be left behind.
“What we are going to see if we don’t act on this, we’ll start seeing business exits. We’ll start seeing declining population. That’s what we’ve been working so hard to avoid.”
