How has the Covid-19 impacted Economic Growth and Trade in Atlantic Canada?

             The 2019-2020 Covid-19 pandemic has shocked the whole world. The origin of this virus is speculated to be Wuhan, China, and was identified in December 2019. Since then, the virus has been spreading across the globe. In 2020 the disease spread to over 219 countries with over 51 million people infected. By November the same year, the number of deaths had reached 1.2 million and continued to increase (Islam et al., 2020). Despite the health concerns, the economic impacts of the Covid-19 outbreak have been having a tremendous effect on the well-being of families and the whole society. For the vulnerable families, losing their earnings due to the outbreak can result in poverty, which leads to food insecurity and little or no access to healthcare facilities. Covid-19 has also led to severe global social disruptions. Most social events such as sports, religious meetings, political and cultural events have been canceled. The paper examines the impacts of Covid-19 on Economic growth and trade in Atlantic Canada.

            Statistics have shown a sharp decline in sectors such as; agriculture, travel sectors, tourism, and trade due to the pandemic. Experts suggest that the developing countries will be the most affected, particularly the large South Asian economies. There are various ways of measuring the significant impacts of the Covid-19 pandemic on the economy. Literature shows that economic growth and welfare are attributed to life expectancy but are negatively related to child and maternal mortality rates (Islam et al., 2020). Due to the vast spread of the Corona Virus across the globe, experts predict that the economy can reduce by 4.9%, which is far much from the contraction during the 2008-2009 global financial recession. Moreover, the situation breakdown is expected to impact the supply chain field and related parties such as; employees, suppliers, financial intermediaries, consumers, and organizations.

            According to the Atlantic chamber of commerce (ACC) CEO, six industries were strongly hit by the pandemic. These sectors are; restaurants, tourism, oil and gas, manufacturing, construction, and retail. The industries, when combined, are said to have lost approximately 412 billion in 202 revenues. Those are the sectors that seem to be the most affected, but some companies in manufacturing were able to adapt quickly after the pandemic outbreak (Morris & Mintz, 2021). Some shifted to manufacturing hand sanitizers to keep their business open. In Atlantic Canada, small businesses are the backbones of the community, and they were on the list of the hardest hit business by the pandemic. For small businesses in this region, their week starts on Sunday, but after the outbreak of Covid-19, it was a rollercoaster year for most of them.

             In Atlantic, Canada, manufacturing is considered an essential service, and work continued in most facilities through modified operating requirements. This sector contributes $7 billion of the GDP in Atlantic Canada, which accounts for $6.7 of the overall regional GDP. The annual sales between 2017- 2019 of manufacturers in this region accounted for approximately $36 billion. The sector employs over 78000 people, which is 7% of the total employment making the sector to be the 7^th largest employer in the region. Various large operations were scaled back or completely stopped production due to the reduced demand for their products caused by the safety concerns of Covid-19 (Bennett et al., 2020). The impact of these industries affected other sub-sectors such as food manufacturing, refineries, forest product, and shipbuilding. The retail sector was still facing some challenges before the Covid-19 disruption.

The financial impacts have entirely changed the outlook of retail spending. After the emergence of Covid-19, things changed within a blink of an eye as the commodity and equity prices dropped drastically. Most retailers reduced their hours while others closed down their stores. Customers are said to be the heart of every business, and therefore one of the primary considerations for keeping the company successful is maintaining consumer’s confidence. However, the outbreak of Covid-19 led the isolated and depressed consumer to only demand the essentials. In March 2020, consumer confidence posted the most significant decline. In the same month, unemployment increased as most employers shut down their operations or scaled down. By the second quarter of 2020, the Canadian economy was projected to contract by 20%, while the unemployment rate was expected to double digits and the non-essential retailers were at the forefront of the projected contraction (Weersink et al., 2021). Besides, the Canadians were also affected by the rout in international and domestic equities, which negatively affected their wealth. For each dollar lost inequity, it attracted a reduction of 1-3% of consumer spending. Although the percentage does not sound as much, it has signed on economic growth.

In 2021 the Conference Board of Canada released its predictions of local economic activities based on a comprehensive recovery which is to be aided by Covid-19 vaccines. A rebound is expected in the sectors that were affected by the pandemic. Every province is expected to report a sharp rebound in its GDP by the end of the year. After the vaccination, the government is expected to uplift economic activity and travel (Weersink et al., 2021). The recovery is expected to receive a boost from increased demand as those who retained their jobs accumulated considerable savings. The world oil prices and other commodities prices are also expected to recover. Although the economy recovered from lockdowns imposed on 202, there is still a long way to go before things get to every day. Unemployment is at 4.4% below the pre-Covid levels, which is still reflected in the recession.

Industries such as retail, culture, food, beverage, recreation, and any sector related to tourism are expected to have a slow recovery. The oil and natural gas exports were also heavily affected. The Atlantic economic councils predicted that the economy could recover by mid-2021. Although the overall impacts of the pandemic were terrible and led to a significant decline in overall output, the council believed that if citizens cooperated on the input measures, the region could witness some recovery. The governments have been responding by giving economic stimulus to address the negative shock of the pandemic (Sachs, 2021). The governments have been providing incentives for work-sharing and wage subsidies while the Canadian banks stepped up with mortgage deferrals and were willing to help individuals with financial difficulties.

Conclusion                                                                                       

the pandemic strongly hit six industries. These sectors are; restaurants, tourism, oil and gas, manufacturing, construction, and retail. Unfortunately, it is hard to tell when the pandemic will end, putting most regions in a genuinely unprecedented economic environment. The silver lining is that the federal government is trying hard to respond to the challenges by doing everything possible to ensure Atlantic Canada is of the economic weaknesses. The banks were also encouraged to extend the credit by lowering the capital requirement of charted banks.

Outline

Title/Topic: Impact of Covid-19 on Atlantic Canada’s Economic Growth

Introduction: The 2019-2020 Covid-19 pandemic has shocked the whole world. The origin of this virus is speculated to be Wuhan, China, and was identified in December 2019 (Islam et al., 2020). Since then, the virus has been spreading across the globe. In 2020 the disease spread to over 219 countries with over 51 million people infected.

Thesis statement: Atlantic Canada is among the countries whose economy was affected by the pandemic

sentence 1:  There are various ways of measuring the significant impacts of the Covid-19 pandemic on the economy.

Supporting sentence: Due to the vast spread of the Corona Virus across the globe, experts predict that the economy can reduce by 4.9%, which is far much from the contraction that happened during the 2008-2009 global financial recession (Islam et al., 2020).

sentence 2: According to the CEO of the Atlantic chamber of commerce (ACC), six industries were strongly hit by the pandemic

Supporting sentence: These sectors are; restaurants, tourism, oil and gas, manufacturing, construction, and retail (Morris & Mintz, 2021).

Sentence 3: In Atlantic, Canada, manufacturing is considered an essential service, and work continued in most facilities through modified operating requirements (Bennett et al., 2020).

Supporting sentence: This sector contributes $7 billion of the GDP in Atlantic Canada, which accounts for $6.7 of the overall regional GDP (Bennett et al., 2020).

Sentence 4: After the emergence of Covid-19, things changed within a blink of an eye as the commodity and equity prices dropped drastically (Weersink et al., 2021).

Supporting sentence: unemployment increased as most employers shut down their operations or scaled down.

Sentence 5: A rebound is expected in the sectors that were affected by the pandemic.

Supporting sentence: Every province is expected to report a sharp rebound in its GDP by the end of the year. After the vaccination, the government is expected to uplift economic activity and travel (Weersink et al., 2021).

Conclusion: Unfortunately, it is hard to tell when the pandemic will end, putting most regions in a genuinely unprecedented economic environment.