It was the worst year since comparable data was recorded.
The full toll of the Wuhan Virus crisis on Canada’s economy in 2020 is now known.
According to Statistics Canada, our GDP fell by 5.4% last year, the largest drop ever recorded with comparable data was tallied beginning in 1961.
Of course, it is widely believed Canada had worse GDP drops during the Great Depression.
While the economy has recovered somewhat – with growth of 40.6% annualized in Q3 of 2020 and 9.6% annualized in Q4 – the economy is still down from before the crisis hit.
The re-imposition of restrictions in recent weeks and months in some parts of the country also slowed the momentum of economic recovery.
One BMO chief economist predicts growth of roughly 6% in 2021, though since that is from a lower base it would not quite make up for all lost output.
Notably, Canada’s increase in the money supply, debt, and deficits has been proportionally the largest among G7 countries, with our unemployment rate exceeding most of our peer nations, raising questions about how sustainable such policies are when based so heavily on government spending and debt accumulation.