This suggests the economy’s productive capacity will take a hit that will persist even after the containment measures are lifted. On the demand side, consider the millions of Canadians who have either lost their jobs or seen their hours scaled back. This represents a very large drop in spending power across the economy.
Fortunately, the government’s fiscal measures have been scaled to replace the labour income lost throughout the economy, laying the foundation for recovery. But spending has fallen sharply since the pandemic hit.