Question

2020 has been a very unusual year with the worldwide pandemic. Economies around the world have been greatly affected by it. What has been the impact on the Canadian economy? The objective of this assignment is to find an answer this question.

You will research and find answers to the following questions.

1. How has the pandemic affected the Canadian GDP, Unemployment, Inflation and Government deficit? Compare the February numbers with the latest numbers for August.
2. In your opinion, is the economy recovering as expected? Are you optimistic about the future months? Have programs like CERB, wage subsidies helped Canada recover faster than other economies? Explain the reason for your answers.
3. Which sectors have been relatively less affected and which ones were hit the hardest? Why?

Answer 1

Q1. Brief Outline:

Discuss the effects of the pandemic with respect to the economic indicators. We know that the pandemic has had adverse effects on most economies, Canada is no exception.

Canadian GDP must have fallen since economic activity has been at halt since the pandemic. Countries have stopped their export and increased imports of medicines and other sanitation and hygiene products. Note that GDP is C + I + G + (X-M), where C is consumption, I is investment, G is government expenditure and (X-M) is net exports. Net exports have fallen in pandemic, so we can consider the GDP to fall.
Unemployment has definitely risen, we know this because many companies had to cut their costs due to lack of production. Many companies had to also layoff many employees to maintain their cost of production.
Government Deficit has increased since government has increased its expenditure in Canada by providing people with lumpsum transfers and funds to assist people to receive a minimum income, incase they have been laid off. Also, government expenditure has increased due to the increase in health expenditure.
Q2. Brief Outline:

Programs introduced by the Canadian government has assisted people during the pandemic to maintain their consumption and have some stable income in their hands. To answer this question you should see what the goals of the programs are, and how well they have been achieved. For instance check how many people has the program catered to and compare with the the recovery rate. Has it impacted the recovery rate? Has the GDP improved since the started of the pandemic?