COVID-19 and the financial system

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The financial system helps Canadians, but the risks remain

The impact of the pandemic on lives and livelihoods goes beyond anything we have experienced in our lifetime.

Along with the actions of the government and the Bank of Canada, a resilient financial system is helping Canadians weather the COVID-19 crisis. But it will be a long, slow climb to get everyone back to work. A complete exit from the crisis will take time and many risks remain.

The more the pandemic threatens jobs and incomes, the greater the risk of problems for heavily indebted households. Government support programs filled the financial deficits of populations during the crisis, and lenders have shown flexibility in payments. However, the six-month postponements offered by financial institutions are ending, so the next few months will be crucial.

Businesses are also struggling to cover debt payments with lower incomes, especially those in service industries like restaurants and hotels. This too could become a bigger problem with the recovery time.

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