Under assumptions that social distancing and self-isolation will remain in place through August 2020 and that members of OPEC and its partner countries will not limit the supply of oil, a real GDP growth rate of –5.1% for 2020 is one possible outcome of the COVID-19 pandemic and recent oil price shocks in Canada. In this scenario, real GDP declines by 2.5% in 2020 Q1 and then by 25% in 2020 Q2. Moreover, as oil and other commodity prices fall, the aggregate price level of the economy will fall too. Combined with real GDP declines, this will reduce the level of nominal GDP by $218 billion in 2020.

By 2020 Q3, Canada could be looking at an unemployment rate of 15%. In addition, the budget deficit for the 2019–20 fiscal year may increase to $26.7 billion and then to $112.7 billion in 2020–21. Coupled with the lower nominal GDP, these budgetary pressures may push the federal debt-to-GDP ratio to 38.1% in 2020–21. In order to ensure the economy is able to reach recovery speed given these economic and fiscal outcomes, it is likely that greater fiscal stimulus measures will be required — greater than those already provided, including the $28.5 billion in direct federal support announced on March 11 and March 18.