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

The Revelstoke Women's Shelter Society has released an educational video about unhealthy relationships. (Contributed)
Revelstoke Women’s Shelter Society educates on healthy relationships with new video

April 11-17 is Prevention of Violence Against Women Week

A 46-year-old man from Armstrong died in Revelstoke hospital after being injured in the Lumby area. (File photo)
Armstrong snowmobiler dies in Revelstoke hospital

46-year-old man injured in Tsuius Mountain area of Monashees around Lumby area

Guy Barber in front of his jewellery store at 208 Mackenzie Avenue, circa 1915. (Revelstoke Museum and Archives photo 272)
Glimspes of Revelstoke’s past for April 8

Local history as recorded by the newspaper of the time

Downtown Revelstoke. (Liam Harrap/Revelstoke Review)
LETTER: Finding Common Ground Through COVID-19

‘How do you eat an elephant? One bite at a time.’

Alchemy Studio received a ticked from the RCMP on Thursday, April 8, for staying open despite provincial restrictions ordering yoga studios be closed to prevent the spread of COVID-19. (Contributed)
Revelstoke yoga class fined for defying COVID-19 orders

The RCMP were called to the Alchemy Studio on April 8

Burnaby MLA Raj Chouhan presides as Speaker of the B.C. legislature, which opened it spring session April 12 with a speech from the throne. THE CANADIAN PRESS
B.C. NDP promises more health care spending, business support in 2021 budget

John Horgan government to ‘carefully return to balanced budgets’

The Red Pill Rapper performs to the crowd gathered for the Rally For Food Security at Blackburn Park on Saturday, April 10, 2021. (Kristal Burgess Photography)
The Red Pill Rapper performs to the crowd gathered for the Rally For Food Security at Blackburn Park on Saturday, April 10, 2021. (Kristal Burgess Photography)
Suspicion of ‘fake news media’ makes rally uncomfortable for Salmon Arm event photographer

More than 300 people counted at city park for ‘Rally For Food Security’

A lady wears a sticker given out after receiving a COVID-19 vaccine at a clinic in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS
B.C.’s COVID-19 case count slows after last week’s peak

3,219 new cases since Friday, 18 additional deaths

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

North Cowichan councillor Tek Manhas did not violate the municipality’s code of conduct by posting a sexist meme on Facebook, council concludes. (File photo)
B.C. municipality to take no action against councillor who posted sexist meme

Tek Manhas’s meme doesn’t violate North Cowichan council’s code of conduct, municipality concludes

The former Summerland Asset Development Initiative building on Prairie Valley Road in Summerland was suggested as the site for a temporary transitional housing facility for the community. However, Summerland council has rejected this proposal. (John Arendt - Summerland Review)
Summerland council rejects transitional housing facility

Concerns raised about short timeline and condition of municipally-owned building

Shayla, an 8-pound black and grey Havanese, was stolen from outside a store on Banks Road on Saturday. (Contributed)
Stolen pup located, Kelowna RCMP confirms

Mounties said on April 12 that Shayla, the 8-pound, black and grey Havanese dog, has been located safe and sound

—Image: contributed
Indoor wine tastings still allowed in B.C., not considered a ‘social gathering’

“Tasting is really just part of the retail experience. The analogy I use is you wouldn’t buy a pair of pants without trying them on.”

Penticton Vees continue their winning streak carrying a 5-0 win title as of Sunday night's hockey action. (Cherie Morgan/Cherie Morgan Photography)
Penticton Vees continue winning streak

Sunday night’s 6-1 win has them with five in a row since the start of the season

Most Read