The Canadian Government has implemented several broad (multisectoral) and specific sectoral policy responses to offset COVID-19’s Canadian economic downturn. As of October 9, 2020, COVID-19 has caused more than 1,064,533 deaths worldwide, with Canada experiencing 9,638 of those deaths (Worldometer, 2020). Canada’s real GDP is set to decrease by 12.1% in the second quarter with a cumulative decline of 8.2% for 2020 (Base year 2012) and is not expected to reach pre-COVID levels until 2021 (Conference Board of Canada, 2020). Broad policy responses such as mandatory Canada-wide masks and the Canadian Emergency Response Benefit (CERB) have been implemented to reduce further COVID-19 spread and sustain the economy. Specific policy responses like the Canada Emergency Wage Subsidy (CEWS) and the Mandatory Isolation Support for Temporary Foreign Workers Program (MISTFWP) are used to maintain and help specific sectors impacted heavily by COVID-19 (Government of Canada, 2020). While the effects of COVID-19 are felt across Canada, each sector is experiencing the virus differently (see Figure 1 for sectoral distribution of real GDP from February 2020 – June 2020 and Figure 2 for Canadian real GDP from February 2020 – June 2020 (Statistics Canada, 2020).
From February to April 2020, most Canadian sectors experienced declines from decreased consumption, imports and exports, and investment, both foreign and domestic (Abel et al., 2014; Government of Canada, 2020: Lemieux et al., 2020; Maliszewska et al., 2020; Vidya and Prabheesh, 2020). Figure 1 illustrates these sectoral declines by depicting the variance in Canadian sectoral economic impact from COVID-19. The aggregate declines are seen in Figure 2, showing a broad decline in real GDP from February to April 2020. Similarly, a steady incline is seen across most sectors from April to June 2020. This consistent incline is correlated to the quarantine, public health efforts used to reduce COVID-19 spread and several Canadian Government policy responses to COVID-19 (Moran et al., 2020). Unlike most other sectors, the agriculture, forestry, fishing, and hunting sector has not experienced the same pattern. This sector has experienced monthly increases (except April) from February to June 2020 (see Figure 3). While there is little evidence to determine precisely why the agriculture, forestry, fishing, and hunting sector has experienced this growth, it is argued that the combination of broad and specific policy responses from the Canadian Government has offset their otherwise intuitive decline.
Agriculture, Forestry, Fishing, and Hunting Sector
Agriculture and Agri-Food Canada, Natural Resources Canada, and Fisheries and Oceans Canada each influence the performance of the agriculture, forestry, fishing, and hunting sector. Each of these departments has developed and implemented several policies to increase this sector’s contribution to Canada’s economy over the last several decades (Office of the Prime Minister, 2020). These policies range from endorsing certification schemes for sustainable forestry and fisheries to offering grants and wage subsidy programs for various agricultural research and employment (Auld, 2014; Canadian Federation of Agriculture, 2019). Each of these policies have, and continue to allow the agriculture, forestry, fishing, and hunting sector to remain competitive in the global economy, thereby making Canada desirable to purchase goods from (Al-Katib, 2020; OECD, 2020). These policies have positively contributed to Canada’s GDP; keeping people employed helps hold a portion of consumption steady, cutting-edge applied research helps keep investment from foreign and domestic firms in Canada, and certification schemes help Canada meet its sustainability goals leading to more efficient government spending (Al-Katib, 2020; Auld, 2014; Statistics Canada, 2019: 2020a: 2020b). Since COVID-19, each department listed above has developed and implemented new COVID-19 specific policies to keep this sector’s increasing contribution to the Canadian economy steady.
COVID-19 Policy Responses
Each department in the agriculture, forestry, fishing, and hunting sectors has helped workers and businesses maintain their income. The MISTFWP, a one-time $50-million program, was used to alleviate the COVID-19 impacts on the Canadian food supply by assisting the farming, fish harvesting, and food production and processing industries. This policy was used to assist Canadian employers with some of the incremental costs associated with the mandatory 14-day isolation period imposed under the Quarantine Act on temporary foreign workers entering Canada (Agriculture and Agri-Food, 2020a: 2020b; Quarantine Act, 2005). Similarly, the CEWS is used to support business in re-hiring workers to prevent further job loss. Specifically, the Canadian Government has signed the Fish Harvester Benefit and Grant program (administered by the Department of Fisheries and Oceans) to provide funding support for Canada’s fish harvesters during the economic impacts of COVID-19 (Government of Canada, 2020). These policies are aimed at wages and employment, both being key macroeconomic indicators for the national economy (Abel et al., 2014).
Possible Policy Effects on the Canadian Economy
While little research has been published on the economic effects of COVID-19 on the Canadian economy, we can understand the rationale and theory behind why the Canadian Government is developing and implementing policies aimed at wages and employment. During the 2008 financial crisis, the Canadian Government and several other countries developed and implemented policies aimed at wages and employment (International Monetary Fund, 2009). According to Abel et al. (2014), these policies are favoured over other fiscal or monetary policies during economic downtowns for two reasons: they help stabilize worker income and allow businesses to remain in operation longer. Both reasons are tied to short and long-term macroeconomic trends. Typically, less employment contributes to frictional and structural unemployment, which affects the labour force’s productivity. This effect subsequently impacts a country’s standard of living, measured by GDP per capita, and its potential for economic growth measured by aggregate demand and GDP (Abel et al., 2014). Like the 2008 financial crisis, the Canadian Government is using the same rationale and theory for its fiscal policies, hoping to control and increase the Canadian employment levels. These policies are used to keep the Canadian standard of living and GDP from falling too far. Figure 2 shows a slow rise in Canadian real GDP, likely correlated with the previously mentioned wage and employment policies efforts from the Canadian Government (Beland et al., 20200; Goddard, 2020; Hailu, 2020). Interestingly, the combination of the broad and specific policies mentioned in this article may have helped the agriculture, forestry, fishing, and hunting sector fend off their intuitive decline and grow during the COVID-19 pandemic.
Tables and Figures
Figure 1: Canadian sectoral distribution of real GDP from February 2020 to June 2020 using 2012 as the base year (Statistics Canada, 2020b).
Figure 2: Canadian real GDP from February 2020 to June 2020 using 2012 as the base year (Statistics Canada, 2020b).
Figure 3: Real GDP Contribution Change: Agriculture, Forestry, Fishing, and Hunting Sector from February 2020 to June 2020 using 2012 as the base year (Statistics Canada, 2020b).
Benjamin Faveri is a Master of Public Policy and Administration student at Carleton University. He has received SSHRC, OGS, the Social Innovation Graduate Fellowship, and several other scholarships and awards to support his research. He holds undergraduate degrees in Criminology and Psychology and Certificates in Global Entrepreneurship and Foreign Intelligence Assessment. He works on research projects surrounding: jury decision-making; Canadian police body-worn camera data governance policy; and private artificial intelligence governance.
Banner image by Ali Tawfiq, courtesy of Unsplash.
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