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The economic impacts of COVID-19 were widespread, but the data clearly shows that the downturn caused by the pandemic, lockdowns, and other public health restrictions hasn’t been shared equally by all.
It should come as no surprise that hospitality and tourism have been the hardest hit. Thousands of restaurants and small businesses across Canada have shut down since March 2020, and there are still over a million unemployed Canadians, many of whom work in the food and beverage sector.
Many millions of Canadians now working from home have been able to save money on costs like commuting, travel, child care, and dining out. CIBC estimates that they’ve saved a total of $170 billion, meaning many Canadians have an excess of cash.
It’s a very different story for the many Canadians who work in industries dealing with long restrictions due to public health measures. Although government programs like CERB and extended employment insurance have helped, it’s often not enough to pay rent, buy groceries, and cover other living expenses. Workers still impacted by COVID-19 and business shutdowns are turning to credit to cover essential costs.
As vaccinations roll out and government stimulus plans inject more money into the economy, workers who have spent the better part of a year unemployed will re-enter the economy under a heavy debt burden. High credit card balances, lines of credit, and unpaid bills will severely drag down Canada’s economic recovery and leave a persistent inequality in the recovery.
Debt Management Solutions in Canada
It will be up to Canadians to find their own debt solutions. That’s where non-profit agencies like Credit Canada Debt Solutions are going to play a key role in the economic recovery. The country’s first and longest-standing non-profit credit counselling agency assists Canadians with high levels of unsecured debt.
Recently, Bruce Sellery, one of Canada’s most prominent voices in financial literacy, took the helm as Credit Canada Debt Solution’s new CEO. With a background in personal finance, including roles as a BNN Bloomberg Anchor, Money Columnist for CBC Radio, Cityline and MoneySense Magazine, among others, the new CEO plans to expand the organization’s role in promoting financial education in Canada.
How Debt Management Will Aid the Economic Recovery
Economists predict that Canada’s economy will rebound quickly once mass immunization is achieved, with GDP set to grow by 4.5 to 5% in 2021 and 2022. That’s a faster growth rate than the country has seen in decades.
Although it will spur investments and job growth, those who have had to go into debt just to get by may feel left out of the good times ahead. Debt can stay with consumers for years unless they take action to eliminate it.
Non-profit credit counselling in Canada can help Canadians find a way out from under their debts and includes assistance such as lower interest rates and relief from collection calls. It will likely be a key ingredient in Canada’s broader post-COVID-19 recovery.