The economy is projected to shrink by 6.8 per cent in 2020 before rebounding by 5.5 per cent in 2021.
This is predicted to be the worst economic contraction since the Great Depression and far worse than that experienced during the 2008-2009 global financial crisis.
Between February and April, 5.5 million Canadians either lost their jobs or saw their hours significantly reduced. Those losses pushed the unemployment rate to 13.7 per cent in May — the highest rise on record — from a pre-crisis low of 5.5 per cent in January.
The unemployment rate is expected to be 9.8 per cent by the end of 2020.
Morneau announced a boost to the Canada Emergency Wage Subsidy (“CEWS”) program, bringing its total budget to $82.3 billion, to account for its extension until the fall. Details on the expansion to the program will come soon for businesses that continue to require the CEWS to keep employees working.
As of June 29, the federal government approved over 538,000 CEWS applications from qualifying businesses.
As the Canada Emergency Response Benefit (“CERB”) program winds down, Morneau said the federal government plans to get the EI system up and running so that people will have confidence they'll be able to provide for themselves and their families. Government officials admit there will still need to be policy changes to the EI system to help some self-employed workers qualify, and capture EI-eligible workers who, due to the pandemic, haven't been able to work the necessary qualifying hours.
For a comprehensive breakdown of highlights from Canada’s COVID-19 Economic Response Plan, please click here to view Chart 1.6 in the Department of Finance’s complete Economic and Fiscal Snapshot 2020 report.
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