Canada’s Economy Could Lose Up To 500,000 Jobs As A Result Of Travel Restrictions
Since the onset of the pandemic, Canada has kept is borders shut to international tourists and other non-essential travellers as a means of mitigating the spread of the coronavirus. In addition, some domestic travel has also been curtailed or discouraged for higher-risk regions, especially as some provinces are now mulling the reintroduction of certain restrictions following a sudden and alarming spike in COVID-19 cases. Certainly, such serious mandates on travel ultimately produce a profound effect on the economy and GDP levels.
Statistics Canada recently took a delve into the economic impact of travel restrictions, and the results are rather quite startling to say the least. The report found that the travel restrictions imposed in order to curb the spread of the virus will lead to an estimated loss of anywhere between 400,000 to 500,000 jobs, and a reduction in GDP between $27.9 billion and $37.1 billion. Although travel restrictions have a serious impact on the tourism industry itself, they also have indirect implications for industries that produce inputs for the tourism industry in question.
Statistics Canada estimated that the direct impact to the tourism sector, which includes accommodation, transportation, travel arrangement and reservation services, food services, entertainment, as well as recreation, will amount to an approximate GDP decline between $17.6 billion and $23.3 billion. In addition, given both optimistic and pessimistic scenarios, the tourism industry could lose anywhere between 306,000 and 406,000 jobs, respectively.
While the output in the tourism industry remains significantly subdued, the demand for secondary services and products such as utilities, wholesale and retail trade, and food manufacturing will also decline. The Statistics Canada report found that indirect impacts from travel restrictions could lead to losses of $10.3 billion and $13.8 billion in GDP levels, as well as the loss of 107,000 to 143,000 jobs this year.
Likewise, the recovery path for the tourism industry will be heavily dependent on several key variables. Although potential dates of the commencement of a recovery will rely on the border reopening for international travel, much of the turnaround will be based on the restoration of consumer’s incomes, as well as their trust in travel amid health and safety concerns.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.