The Bank of Canada played a key supporting role by reducing its policy interest rate to near zero and unblocking a financial system that was clogging up. The recession caused by the pandemic was unprecedented. Canada lost over 3 million jobs, and the unemployment rate rose to 14% in May 2020. And, as many here likely recall, oil prices even briefly turned negative.
Fortunately, though, when the economy reopened after the mass closures, the rebound was also unprecedented. By the end of 2021, Canadian employment was 250,000 jobs above its pre-pandemic level, and the unemployment rate had fallen to 6%. But a storm was brewing. Supply chain bottlenecks, higher energy prices and a massive shift in global consumption patterns came together to spur inflationary pressures.