No, it won't come roaring back by the summer. Canada is enduring an economic collapse many economists warn will make the Great Recession seem tame by comparison.
When the Chainsaw bar in Waterloo, Ont., opened its doors in mid-2009, it was just weeks after the official end of the last recession and the start of the long-slog recovery that followed. Even so, the bar soon became one of the university town’s most popular watering holes, renowned for its cheap drinks and raucous karaoke nights.
There are a host of reasons for this, says Tal, but one of the most acute will be enduring anxiety about a second wave of the pandemic hitting, and whether that could force another tightening of social distancing restrictions. In the 1918 Spanish flu outbreak, the second wave proved far more deadly than the first.
Of course, these forecasts stand in stark contrast to what stock markets seem to expect. Throughout April, investors seemed willing to give optimists the benefit of the doubt. Since global markets bottomed on March 23, with the S&P/TSX composite index having plunged 37 per cent, markets everywhere rebounded sharply in April in what was the best month for stocks in more than three decades.
The strains were already starting to show before the pandemic sped up the process. A closer look shows that a lot of businesses were struggling amid a slowing economy even before the lockdowns put a freeze on economic activity—meaning some of the businesses laying off workers were already at risk of closing for good.
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