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The Canadian Economy in Turbulent Times

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Revised on 28 July 2020, 8:35 a.m.

(Disponible en français : L’économie canadienne dans la tourmente)

Over its history, Canada’s economy has been affected by major international and domestic events such as financial crises, pandemics, international conflicts and environmental incidents. For example, in 1907 a credit crisis began in the United States, spread to Canada and caused a significant contraction of gross domestic product (GDP). Now, the COVID-19 pandemic may result in an even larger recession in 2020.

The infographic below shows the growth of the Canadian economy from 1900 to the present. Certain important events that affected Canada over various periods of time are also indicated.

Note that different measurements were used to portray the changes in GDP between 1900 and 2019. These methodologies vary across the three periods of 1900–1925, 1926–1962 and 1962–2019. In addition, the projections for Canadian economic growth in 2020 are affected by the uncertainty stemming from the COVID-19 pandemic. These projections are calculated using forecasts from the Royal Bank of Canada (RBC), the Toronto-Dominion Bank (TD), Scotiabank and the Office of the Parliamentary Budget Officer (PBO).

This infographic presents the annual percentage change of Canada’s gross domestic product (GDP) from 1900 to 2020 while highlighting major events such as financial crises, pandemic outbreaks, international conflicts or environmental incidents in Canada and worldwide. For 2019 and 2020, the infographic explicitly shows the quarterly (3 months) percentage change reported and forecasted for 2020. It shows that the current COVID-19 pandemic may result in an economic contraction never before seen in Canadian history and that the resulting 2020 recession could be the most important economic decline since the Great Depression of 1929-1933. The infographic lists 13 economic contractions in Canada and associated major events if attributable. The Credit Crisis of 1908. The First World War from 1914 to 1918, with a recession in 1914. The Spanish Influenza from 1918 to 1925, with a recession in in 1921. The Great Depression from 1929 to 1933. Drought in the Prairies in 1936 with quarterly recessions in 1937 and 1938. The Korea war from 1950 to 1953, with a quarterly recession in 1951. The quarterly recessions in 1957 and 1958. The quarterly recessions of 1960 and 1961 followed by with the Cuban missile crisis in 1962. The First Oil Shock in 1973 with the quarterly recessions of 1974 and 1975 associated with the Second Oil Shock of 1979, with a recession over the 1980-1982 period. The Persian Gulf War from 1990 to 1992, with a recession over the 1990-1992 period. The Great Recession of 2008-2009, followed by the H1N1 Pandemic. The forecasted recession in 2020 associated with the current COVID-19 Pandemic.Authors: Emmanuel Preville and Corentin Bialais, Library of Parliament

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Categories: COVID-19, Economics and finance, Health and safety

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