Canada's economy had its worst quarterly showing since 2009 through the first three months of 2020 owing to COVID-19, Statistics Canada said Friday, warning an even steeper drop may be coming.
Gross domestic product fell at an annualized rate of 8.2 per cent in the first quarter, including a 7.2-per-cent drop in March as restrictions by public health officials began rolling out, including school closures, border shutdowns and travel restrictions.
The drastic drop in gross domestic product likely doesn't fully reflect the experience of every Canadian, said BMO chief economist Douglas Porter, noting GDP is just one barometer of how the pandemic has affected the domestic economy. A preliminary estimate released by the Finance Department on Friday showed deficit of $21.8 billion for the fiscal year that closed in March. The figure will still be subject to revisions, which may land it closer to the government's last estimate of $26.6 billion.Many of the items adding to this year's deficit are expected to show up in supplementary spending estimates.
The latest federal spending figures showed $41.44 billion has been paid to 8.29 million people through the Canada Emergency Response Benefit, and $7.9 billion in wage subsidies to 181,883 companies. Statistics Canada said household spending, a backbone of the Canadian economy, was down 2.3 per cent in the first quarter of 2020, the steepest quarterly drop ever recorded.
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