(Image Credit: CFJC Today / Kent Simmonds)

By Dylana Kneeshaw

COVID-19

Consumer demand after COVID-19 interruption expected to prevent full economic recession

Mar 24, 2020 | 5:21 PM

KAMLOOPS — A widespread economic downturn as a result of the COVID-19 virus has brought financial anxiety to many Canadians — however experts are not forecasting a permanent hit.

For families, and individuals who are unsure what could happen to their income flow, Mark Bertoli, Investment Advisor with Abbott Wealth Management, says reviewing monthly expenses is a good place to start.

“People’s spending is going down like crazy right now because you’re not going out to the restaurants, there’s no theatres open, and things like that, more localized things like hikes. So there is going to be a drastic reduction in spending in general. However there is still food, mortgages, and rent,” he explains. “So I would say check with your bank — see if you can defer your mortgage, or do interest-only, or a three-month deferral. Also take a look at what the basics are.”

In regards to people who have been laid off, or quarantined, the federal government has enacted a number of measures to prevent a complete loss of income, or housing.

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Along with answering calls about returning from travel, Kamloops-Thompson-Cariboo MP Cathy McLeod says her office can direct people on how to apply for Employment Insurance (EI).

“So for example, there are people that do not qualify for EI, and the legislation today was to allow them to have some emergency funding. So those (funds) would be for people that don’t normally qualify and find themselves out of work.”

Employment insurance claims are now filed online, and Service Canada says the one week waiting period for EI sickness benefits will be waived for those who are quarantined.

“Lots of programs, lots of information out there, especially online. So I encourage people to go online, and of course make phone calls if they need to.”

Looking ahead, investment advisors like Bertoli figure consumer demand after the crisis will make the current situation an economic interruption, rather than a recession.

“We had a great economy as we entered this situation, and the question is, ‘is there going to be pent up demand, or is the consumer going to be hurt in the long run?’ My feeling is that this is kind of a reset and that the consumer will be wanting to get back to work, and getting back to their normal lives.”

Bertoli says many firms are keeping a close eye on the investments people have already made, and this economic situation doesn’t mean future investment status is in jeopardy.

“This will clear up, things will come back, we’re up eight per cent as we stand here today in one day. We’ve had two days with close to 10 per cent returns to the upside in the last couple of weeks. This is unprecedented,” he notes. “However, just realize that if you own something of value, it truly has value, it’s not going to go away because people are scared.”

For help navigating financial aid applications, people are asked to check the Government of Canada website, or get in touch with their local MP’s office.