Shipping containers are seen at the Fairview Cove Container Terminal in Halifax on Friday, Aug. 25, 2017. THE CANADIAN PRESS/Andrew Vaughan

Shipping containers are seen at the Fairview Cove Container Terminal in Halifax on Friday, Aug. 25, 2017. THE CANADIAN PRESS/Andrew Vaughan

Canadian economy contracted 5.4 per cent in 2020, worst year on record

Drop was largely due to shutdowns in the spring as COVID began to spread

The Canadian economy posted its worst showing on record in 2020 as the COVID-19 pandemic swept across the country, shutting down businesses and putting millions out of work.

Statistics Canada says real gross domestic product shrank 5.4 per cent in 2020, the steepest annual decline since comparable data was first recorded in 1961.

The drop for the year was due to the shutdown of large swaths of the economy in March and April during the first wave of the COVID-19 pandemic that crushed the economy.

Since then, economic activity has slowly and steadily grown.

Statistics Canada says the economy grew at an annualized rate of 9.6 per cent in the fourth quarter of last year, down from an annualized growth rate of 40.6 per cent in the third quarter.

That was higher than expected, with the average economist estimate at 7.5 per cent, according to financial data firm Refinitiv.

However, despite the better-than-expected result for the quarter as a whole, December eked out a 0.1 per cent increase, which followed a 0.8 per cent increase in November.

Statistics Canada noted that total economic activity in December was about three per cent below the pre-pandemic level in February 2020.

Looking ahead to January, Statistics Canada said its early estimate was for growth in the economy of 0.5 per cent.

CIBC chief economist Avery Shenfeld wrote in a note that the early January figure should set aside fears of an outright downturn in the first quarter.

Statistics Canada said wholesale trade, manufacturing and construction sectors led the increase, while retail trade fell to start the year.

BMO chief economist Douglas Porter said the economy soldiered through second-wave restrictions better than anticipated, and may signal a better-than-anticipated quarter, and potentially year overall.

“Look for new growth drivers to kick into gear as the economy re-opens in stages through this year, leading to roughly (six-per-cent) growth — a nice mirror image to last year’s deep dive,” he wrote in a note.

“It’s not precisely a V-shaped recovery, but it’s very close.”

The Canadian Press

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sooke plans to begin construction of the $4.9-million Church Road corridor project this summer. (Kevin Laird - Sooke News Mirror)
Sooke hopes to start Church Road Corridor project this summer

Road upgrade includes a roundabout, sidewalks, bike lanes and boulevards

Pacific Institution in Abbotsford. (Black Press Media file photo)
Inmate with ties to Victoria dies in Abbotsford institution

Brodie Bingley, who was sentenced for aggravated assault in Maple Ridge died April 13

Victoria’s bylaw restricting businesses from providing most plastic checkout bags came into effect on April 15. (THE CANADIAN PRESS/Paul Chiasson)
Victoria’s bylaw banning plastic bags back in effect

The bylaw restricts businesses from providing most plastic checkout bags, charges for alternatives

An online panel discussion on April 16 is set to discuss the benefits of advance care planning. (Black Press Media file photo)
Online panel to discuss planning for death with Greater Victoria residents

Advance care planning allows people’s wishes to be respected even if they can’t speak for themselves

The site of the proposed rental housing development at 2197 Otter Point Rd. (District of Sooke)
District of Sooke approves development with 77 rental units

New parking lot for John Phillips Memorial Park included in project

A woman wears a protective face covering to help prevent the spread of COVID-19 as he walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
Top doctor warns B.C.’s daily cases could reach 3,000 as COVID hospitalizations surge

There are more than 400 people in hospital, with 125 of them in ICU

(Black Press Media file photo)
POLL: Do you have a plan in place in the event of a tsunami?

Tsunamis have claimed the lives of more than 250,000 people between 1998… Continue reading

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of April 13

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

The District of Sooke will continue to flower with Communities in Bloom. (Pixabay)
Sooke will bud but not bloom in provincial competition

Council scales back participation in Communities in Bloom

An armed officer walks outside Cerwydden Care on Cowichan Lake Road near Skinner Road Wednesday, April 14 around 5:30 p.m. (Kevin Rothbauer/Citizen)
Police standoff at Duncan apartment ends peacefully

Officers surround building as homeowner held in apartment for nearly four hours by adult son

A crossing guard stops traffic as students wearing face masks to curb the spread of COVID-19 arrive at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. A number of schools in the Fraser Health region, including Woodward Hill, have reported cases of the B.1.7.7 COVID-19 variant first detected in the U.K. THE CANADIAN PRESS/Darryl Dyck
COVID-infected students in Lower Mainland schools transmitting to 1 to 2 others: data

Eight to 13 per cent of COVID cases among students in the Lower Mainland were acquired in schools, B.C. says

Latest modelling by public health shows cases generated by COVID-19 infections into places where it can spread quickly. (B.C. Centre for Disease Control)
Industrial sites, pubs, restaurants driving COVID-19 spread in B.C.

Infection risk higher in offices, retail, warehouses, farms

Hwy. 4 was shut down in both directions for 10 hours on March 23 as a rock bluff was blasted as part of Kennedy Hill’s ongoing construction. Commuters can expect five more 10 hour closures on five consecutive Wednesdays beginning April 28. (Photo courtesy of Ministry of Transportation and Infrastructure)
Five 10-hour Pacific Rim highway closures planned in the next 6 weeks

Closures needed for rock blasting as part of the Kennedy Hill Safety Improvement project.

Bulldogs forward Stephen Castagna flips the puck into the Clippers zone during a game on Oct. 24. (ELENA RARDON / ALBERNI VALLEY NEWS)
Island BCHL game postponed due to ‘potential positive’ COVID-19 test

Nanaimo Clippers team suspends activities, players isolating pending further test results

Most Read