Lockdowns, oil prices hit provincial economies

The severity of physical distancing restrictions and the trajectory for oil prices are the most important drivers of the impact of the Covid-19 outbreak on provincial economies, Statistics Canada reports.

According to experimental indexes of economic activity developed by StatsCan to measure the effects of the pandemic at the provincial level, the differing public health restrictions imposed in response to the initial outbreak were directly reflected in the outcomes for various provincial economies.

The toughest restrictions were adopted in British Columbia, Ontario and Quebec to start, with less strict measures in most other provinces.

At the same time, a sharp drop in oil prices also hit the big energy-producing provinces: Alberta, Saskatchewan and Newfoundland.

As a result, while all of the provincial economies enjoyed growth over the summer as restrictions were relaxed, StatsCan’s experimental indexes show that Alberta, Saskatchewan, Ontario and B.C. remained the most impacted, compared with conditions before the pandemic.

“This is consistent with the dual effects of the pandemic and the decline in oil prices on the economies of Alberta and Saskatchewan, and the fact that Ontario was the last province to lift the most restrictive physical distancing measures,” StatsCan said.

Economic activity remained below pre-pandemic levels in most provinces, StatsCan said.

The provinces that fared best, according to the experimental indexes, were Nova Scotia, Prince Edward Island Quebec and Manitoba.

“Up to August, Manitoba was a jurisdiction where the effects of Covid-19 were less prevalent, and Quebec was among the first provinces to ease restrictions,” StatsCan noted.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.