How COVID-19 has changed the economy of Canada for the worst but for the better

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All aspects of Canadian life has been changed by the current pandemic, from where and how we live, how we shop, eat and work. Although not all changes were for the better, COVID-19 could bring positive changes for the economy of Canada.

The place where we live

The pandemic has certainly wreaked havoc on one of the traditional pillars of Canada’s economy — the housing market.

Physical distancing requirements at the beginning of the pandemic, in March hit sector of the real estate, because that estate agents could not host open houses, and buyers are anxious about the future. This year has been the worst April for home sales in nearly 40 years, and it was only slightly better.

Real estate agents are quick to say the downturn is a blip, and that demand remains strong. But policy makers are clearly a little worried. The Bank of Canada is expected to COVID-19 will be the cause of the mortgage deliquencies to more than double the peak they hit during the financial crisis of 2009, and Canada’s national housing agency expects prices could fall almost 20% before rebounding starting in 2022, or later.

The lower prices are bad news for sellers, but a slowdown does not represent an opportunity for buyers looking for access to a market that had escaped them.

COVID-19 has prompted lenders to cut mortgage rates to record levels, a welcome development for buyers. And those lower rates are helping the current owners, too.

Lowestrates.ca, a comparison website for mortgages, insurance and loans, it is to see the benefit of refinancing to skyrocket right now.

Home sales are in free-fall, but the new buyers are offered the lowest interest rates on record. The existing owners are refinancing, too. (Joan Dymianiw/CBC)

“We’ve seen a huge increase in the number of consumers coming to our site to compare rates and see if they can save money by breaking their current mortgage and renewing early or refinancing,” said chief executive officer Justin Thouin.

Where we work

The pandemic is also affecting commercial real estate. It may have begun a small shift away from the standard office of the city centre of tours, as a lot of question about how much they want to live and work in dense urban areas if they don’t have to.

The public transport has fallen in the course of the pandemic, and has not yet recovered as the economy has begun to open.

Toronto is cash-strapped transit system has missed almost $100 million worth of the rates, city officials said recently, without a corresponding reduction in the operating costs of the system.

Bike sales are booming and cycling trails are experiencing a renaissance. But a partial recovery in oil prices may suggest, even the much-maligned car could see an increase in demand as consumers opt for the safety and security of their own journey of bubbles.

“It is perfectly logical that nobody wants to be in a crowded space currently to themselves or others,” said Mark Le Dain, head of business intelligence and strategy at Validere, a data intelligence firm that advises companies in the energy sector.

How we shop

Retail trade is another sector of the economy of Canada, which has taken the pandemic on the chin. New figures published last Friday showed retail sales fell by more than a quarter in April, their biggest plunge on record.

The Canadian retailers have been hard hit by the pandemic, but experts say that those that will survive and thrive will be more agile. (Cole Burston/Bloomberg)

While some stores do well (business in the grocery store is in full swing, for example),stores that sell discretionary items are being hit hard for most consumers focus on what they need to get out of it.

Widespread store closures hit just about every chain, and it seems that many may not recover. Detail enthusiasts like Reitmans and Aldo have sought protection from its creditors in recent weeks, as the pandemic exacerbated the problems they had to deal with already.

Online shopping, on the other hand, is proving to be one of the pandemic’s greatest achievements. Online sales have more than doubled in April and now represent almost 10% of everything sold in Canada — the highest proportion on record.

The Canadian chains that had problems with have been lacking on the e-commerce side, but the experts say that the crisis has prompted companies to dive into the world of online retail.

“Retailers and suppliers have been forced to build online shopping capabilities at an accelerated pace,” said retail consultant Bruce Winder. “Today, consumers have the convenience of being able to buy almost anything online and deliver them or use them on the curb for collection. “

While overall sales are down, some sectors, such as grocery stores and liquor stores are booming. (Joan Dymianiw/CBC)

There may be no better example of the rise of the online sale that the rising Shopify, the Ottawa-based company that helps the real world, stores sell online. Shopify has been assessed at just over $ 1 billion when it went public five years ago. Last month, he moved to the Royal Bank of Canada to become the most valuable company in Canada — a value of more than $ 140 billion at the last count.

Shopify is an excellent example of the type of company that could be set to prosper in the post-COVID economy: agile, innovative and digitally focused.

High-tech businesses like Shopify represent a small but growing part of the economy of Canada. The technology sector has grown twice as fast as the rest of the economy during the last decade, and now five percent of the entire GDP, according to the Bank of Montreal.

Canada’s technology sector is now approximately five per cent of the whole economy, to grow much more quickly than any other part. And then HE was struck by COVID-19, the impact has not been as dramatic, either. (Scott Kitchen/CBC)

Even tech was not spared by the slowdown of COVID-19, but the sector has not dipped nearly more than the other. The resilience of Canada’s technology sector is an encouraging sign that the economy of Canada is attempting to reorient itself to the post-pandemic reality.

How we work

The radical change of COVID-19 has had an impact on Shopify itself, that the company has recently announced that it would now allow its employees to work from home permanently, if they so desire. The company has a stylish seat in the centre of the city of Ottawa.

Such an approach would have been unthinkable not too long ago, but the pandemic has precipitated the long changes in the way Canadians work.

A positive trend emerging from COVID-19 is that he has turned to flexible working from something that companies used to pretend to care about, in a must-have for any business with a prospect of long-term development, ‘ said Jennifer Hargreaves, entrepreneur and founder of the recruitment agency tellent.

The change was underway before the COVID-19, but it has certainly accelerated the course of the pandemic, ” she said.

“It is very much about the collaboration and to make work work better for all the world,” Hargreaves said.

Instead of trying to fix the system, the companies of hiring of the best talents of today are the decision-flexibility seriously. “This is where you’re going to see businesses thrive,” she said. “This old way of thinking the economy will not be sustainable. “



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