The Canadian branch of an international accounting firm released a report on Tuesday which predicted that Canada’s full production capacity will not recover until 2023.
In the report, titled “The Real Economy: Canada Edition,” RSM outlines how the recovery of Canada’s economy is contingent on coronavirus vaccine distribution efforts.
“Canada’s economy has been decelerating since the end of 2017 and in outright decline for the whole of 2020. Prospects for recovery and expansion in 2021 are directly linked to an equitable distribution of a safe and effective vaccine,” claimed the report.
“Once that vaccine is in place, we are confident that the reopening of the domestic economy coupled with a reduction in trade frictions in North America will combine for robust growth over the next two years. For this reason, Canadian output is likely to expand by roughly 4 per cent in 2021 and 2022. While this is solid, the Canadian economy is not likely to reach its full capacity to produce until 2023.”
So far, the Liberal government has been slow to ship an adequate vaccine supply to the provinces despite acquiring a high number of commitments from international distributors.
Recently, Pfizer announced that it would be temporarily halting Canada’s vaccine shipments while several provinces have indicated that their initial supply is already dwindling.
Both Alberta’s and Ontario’s premiers have already raised the warning bell about the state of the rollout in their respective provinces.
“All of Ontario will be out of Pfizer vaccines by the end of next week, my friends, we are all hopeful that the federal government will get us more vaccines,” said Ontario Premier Doug Ford.
According to the RSM report, Canada’s economic outlook will also be dependent on whether the United States recalibrates its attitude towards trade.
“If early reports are, in fact, true and the United States re-enters the Trans-Pacific Partnership (TPP,) it could give the boost that Canada needs over the medium to long term to help the economy grow and shrink the deficit,” claimed the report.
“Indeed, the end of the trade war, along with the re-entry of the United States into the TPP, could go a long way to helping pay for this additional spending.”
US President-elect Joe Biden is due to be inaugurated this week on Wednesday, however, Biden has already indicated that one of the first executive decisions he will be making is to scrap the Keystone XL pipeline agreement with Canada.
Critics have noted that scrapping such a deal would substantially harm economic prospects for both nations.