Question

Canada is a trading nation, how will Canada adapt to post-Covid world in terms of value chain? What role does government have? What is the new normal?

Answer 1

China has also established greater ties with the rest of the world through global supply chains. As such, the threat to Chinese markets and development would have broader effects on the global economy — through lower international partner revenues, tourism investment, and imports, as well as threat to global supply chains. Canada's economy will inevitably take a blow, too. The influence of multilayered global supply chains on Canadian manufacturing has yet to emerge — many companies don't even know how far their supply chains run — but if demand delays in China continue, Canadian businesses will certainly feel the consequences, too. Through studying profound changes in mindset and actions, and by constructing branching trees with possible implications, we can imagine the area with possibilities. Fundamental market changes may include more time at home, greater focus on grooming and fitness, or greater emphasis on family welfare. Shifts in consumers may include supporting remote jobs, streamlining processes, decentralizing supply chains, and stressing disaster preparedness and durability of structures. Every of these paradigm changes has potentially several implications.

During a traditional contraction, the economy's infrastructure stays unchanged, and productivity returns as demand recovers. Yet confidence in small businesses is at an all-time low, according to a report by the Independent Business Federation of Canada. There's not a lot of those businesses going in. Global companies are also expected to experience dramatic shifts when they seek to overcome the supply chain disruption that keeps the world economy in its grasp. Kevin Lynch, former Privy Council clerk who is now BMO's vice-chair, and Paul Deegan, a former deputy executive director of the White House National Economic Council, spoke in a new report in The Globe and Mail about a "economic decoupling" that would see supply chains become less concentrated across hubs such as China.

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