THE RECOVERY

The most pressing economic issue remains the pandemic. The high rate of vaccination in Canada has allowed businesses to reopen over the summer, with workers preparing for a return to the office this fall. But the Delta variant of the virus is creating uncertainty. Alberta, the province that was the furthest along in loosening pandemic restrictions, declared a health emergency last week and reintroduced strict measures to fight the virus.

The Canadian economy has rebounded since the spring of 2020, when the first round of lockdowns and plummeting oil prices caused the sharpest contraction in history. But there are still 156,000 fewer jobs than in February, 2020, and recent Statistics Canada data show the recovery may not be as far along as previously thought. Meanwhile, COVID-19 continues to disrupt global supply chains, pushing up shipping prices, making it hard to source manufacturing inputs and weighing on exports.

The most important public-health decisions will continue to be made at the provincial level. But the incoming federal government faces crucial choices about border restrictions and vaccination requirements, most notably for transportation. It will also have the delicate task of winding down support for businesses and individuals – moving from broad-based relief to targeted support for the hardest-hit sectors – without triggering a wave of bankruptcies and layoffs.

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