BMO Blue Book: Canadian Small Businesses Begin the Post-Lockdown Recovery
- BMO Blue Book combines expertise of BMO’s economists with information on business conditions from its bankers
- Small businesses are the foundation of local economies and their rebound will influence Canada’s recovery
TORONTO, July 22, 2020 – Following the steepest, deepest, and fastest recession in history, there are clear signs that the Canadian and global economies have begun the initial stages of recovery, according to the newly-released BMO Blue Book: Small Businesses in the Recovery.
The BMO Blue Book, published by BMO Economics and BMO Business Banking, combines the expertise of BMO’s economists with information on current national and provincial business conditions provided to BMO’s business bankers by local businesspeople. The BMO Blue Book features a report for Canada at large, each province and the Greater Toronto Area. This edition also features an outlook for five key sectors of the Canadian economy: technology, agriculture, energy, manufacturing and construction.
The BMO Blue Book states that the Canadian economy will contract by roughly 6 per cent in 2020, by far the deepest annual decline in economic activity in the post-war era. “Yet, as we have consistently maintained since the shutdowns began, growth is expected to rebound to roughly 6 per cent next year, helping bring the jobless rate down markedly,” said Doug Porter, Chief Economist, BMO Financial Group. “Even with a forceful recovery, the challenge will be to get the economy back to full health. It will undoubtedly be a bumpy road but, as key drivers of Canada’s economy, it’s vital to understand how businesses will be affected over the coming months.”
“As the Bank for Business, we stand ready to support our customers during these challenging times,” said Ernie (Erminia) Johannson, Group Head, North American Personal and Business Banking, BMO Financial Group. “The BMO Blue Book represents another part of our effort to provide specialized content and resources to help our business clients navigate the COVID-19 pandemic and economic recovery. Now more than ever, we need to work with our clients to support their needs and provide them with opportunities to make clear financial progress.”
“Small businesses have been more adversely affected by the economic downturn resulting from COVID-19,” said Mike Bonner, Head, Business Banking, BMO Bank of Montreal. “It’s crucial that we all help small businesses bridge the gap back to profitability – they are the foundation of local economies across this country and account for a large portion of local tax revenue and local employment. Their rebound will influence Canada’s recovery.”
Provincial forecasts at-a-glance according to the BMO Blue Book:
- British Columbia’s economy is expected to contract 5.3 per cent this year, but rebound to 6.3 per cent in 2021. Unemployment is expected to remain below the national average.
- Alberta’s GDP decline will be deeper than in the rest of the country. The province has been faster to re-open, with the CFIB reporting that almost 60 per cent of small businesses were fully open as of mid-June.
- Saskatchewan’s economy will contract 6.2 per cent this year. That said, the COVID situation has been milder than in most other provinces – leaving the province flexibility to re-open earlier.
- Manitoba’s economy is expected to contract 4.8 per cent in 2020, milder than the national decline. Manitoba has typically weathered downturns much better than the rest of Canada, but COVID-related lockdowns will still weigh heavily.
- The Ontario economy is expected to contract 6.0 per cent this year, in-line with the decline expected nationally. The province entered the downturn in a position of strength, but struggled with a steeper COVID curve early on.
- The Quebec economy is expected to decline 6.3 per cent this year, slightly worse than the national figure given more widespread shutdowns early in the pandemic.
- Nova Scotia, New Brunswick and PEI are all seeing GDP contractions that are milder than the decline expected nationally, with reductions of 3.8 per cent, 3.2 per cent and 3.0 per cent, respectively. Faster re-opening in these provinces has provided significant benefits.
- The Newfoundland & Labrador economy is expected to contract 7.5 per cent this year, deeper than the decline expected nationally. The province was already in a challenged position pre-COVID, and current shutdowns and the decline in oil prices have exacerbated the headwinds.
The BMO Blue Book can be downloaded at: https://bmoficc.bluematrix.com/sellside/EmailDocViewer?encrypt=97c0d8cd-f2d4-430e-82d2-b73dce5354f9&mime=pdf.
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of $987 billion as of April 30, 2020, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.