Canada's economy growing twice as fast as U.S. due to better COVID-19 response

Canadians have a lot to be proud of when it comes to our COVID-19 response.

Not only has Canada slowed its daily number of new cases to less than 500, but the economy is also on the mend. In fact, it is growing almost twice as fast as the U.S.'s economy.

According to forecasts by Canada's six largest banks, the country's economy is set to grow by 36 per cent this quarter compared to an estimated 20 per cent in the United States.

➡️ Canada's economic growth to outpace the US

➡️ Canada’s economy is set to grow at 36% in the third quarter, compared to 20% for the US

Sumit Chaturvedi (@joinsumit) tells you more pic.twitter.com/qgIeAh27es — WION (@WIONews) August 20, 2020

On top of that, in July, Canada's economic activity recovered to about 95 per cent of pre-pandemic levels thanks to a surge in employment, housing sales and credit card spending, BMO Capital Markets said.

"The phased reopening of the Canadian economy, combined with its lower starting point due to stricter public health measures, will mean a more vigorous bounce-back in Canada," Matthieu Arseneau, deputy chief economist at National Bank Financial, told Reuters.

Canada's provinces began slowly re-opening their economies in stages back in May. The federal government also announced over $300 billion in wage subsidies, income support and more.

"The extraordinary amount of fiscal support that has been put in place has laid the foundation for the recovery that we’re starting to see toward the end of (quarter two) and that we think is continuing in (quarter three),” Josh Nye, senior economist at Royal Bank of Canada, added.

While Canada's coronavirus cases have significantly decreased from a peak in May of about 1,800, our neighbours to the south have seen a huge spike that has caused many states to put the re-opening of their economies on hold.

To date, the U.S. has upwards of 5.5 million COVID-19 cases while Canada has about 123,000.

thinkB4WeSpeak on August 23rd, 2020 at 05:48 UTC »

See the US wanted to open early for short economic gains. Now we're seeing the long term effects, for example a bunch of pro and college sports cancelled. There goes tourism jobs and jobs at stadiums.

stochasis on August 23rd, 2020 at 05:34 UTC »

I read a local Toronto news article and a rebound of nearly 30% in retail sales in June is astonishing. According to the report, retail sales in June 2020 were actually 3% higher than they'd been in June 2019! Nobody expected this kind of V-shaped recovery for our retail.

The_Novelty-Account on August 23rd, 2020 at 05:00 UTC »

And this shouldn't be surprising. We know that based on previous pandemics, stronger and more immediate responses tend to lead to better long-term economic outcomes: https://news.mit.edu/2020/pandemic-health-response-economic-recovery-0401

The idea of a “trade-off” between public health and economic activity does not hold up to scrutiny; places that are harder hit by a pandemic are unlikely to rebuild their economic capacities as quickly, compared to areas that are more intact.

“It casts doubt on the idea there is a trade-off between addressing the impact of the virus, on the one hand, and economic activity, on the other hand, because the pandemic itself is so destructive for the economy,” Verner says.

The illness and death of hundreds of thousands of people has an economic cost too. Too many people are forgetting this.