The COVID-19 impact on Canadians
There is no single person who has not felt the impact of the COVID-19 pandemic on their livelihood. We live in a world that physical & social distancing and wearing the mask has become part of daily lives. The majority of Canadians may think that the COVID-19 pandemic only negatively impacted our lives, but is this a fair statement?
To state the obvious, the Coronavirus took many lives and caused many around the globe to get hospitalized. Everyone is hoping for proper treatment and vaccine to come out, but that is unlikely to happen until mid-2021. Many have lost their jobs, businesses, and homes; people cannot see their loved ones and can not travel and enjoy their lives the way they use to. Therefore, yes, the COVID-19 pandemic had a strong negative effect on our lives, but it has positively impacted some people.
Let’s take a deeper dive into this pandemic and its impact on Canadian by analyzing Transportation, Shopping & Dining, Work, Real Estate & Mortgage and Saving and Retirement.
The COVID-19 impact on Transportation
The covid-19 impact the way we travel, and public Transportation took a massive hit during the COVID-19 pandemic and the lockdown. Even after the economy reopened, public transit has yet to recover. Due to health and government physical distancing measures, fewer people can travel on buses and trains. On top of it, many are still hesitant to use public transportation to travel.
Therefore, this has created a higher demand for many Canadians to own a car and travel in a contained environment. The recovery in oil prices suggests the same thing. Besides the increase in the demand for travelling with personal vehicles, bicycles’ need has increased dramatically.
The pick of phase one of the pandemic was during the summer, and since the weather is genuinely lovely during the summer season in Canada, many rushed to purchase bicycles. Therefore, we saw a great demand for bikes during May and June.
The COVID-19 impact on Shopping & Dining
As mentioned earlier, the demand for bicycles increased during the first wave of the COVID-19 pandemic, and bicycle shops experienced a nice increase in their sales and revenue. In bicycle shops case, the pandemic has benefited them; however, many businesses experienced a decline in sales and even bankruptcy in some cases. To know how retailers were effect during the pandemic, we must look at the Canadian shopping states.
Since the pandemic started, Canadian grocery store businesses are booming, and Canadian consumers’ demand for flour, coffee and cleaning products has increased dramatically. During the first wave, alcohol sales increased since visiting bars and patios were not an option for many.
From the start of the pandemic, we witness a considerable increase in online sales. As the physical distancing and the fear of the virus spread increased, more Canadians went online to shop. As a result, the online retail growth to double; for instance, Shopify, a Canadian multinational e-commerce company, went from $1 billion pre-pandemic value to $140 billion. As a result, the retailers with the E-commerce infostructure experienced a surge in sales and others decline.
As the pandemic went on and now Canada is in the second wave of COVID-19, businesses had to come up with ways to draw consumers to shop from them; therefore, many retailers have gone online, and delivered products to their customers have curbside pick up option available.
Restaurants were hit hard by the pandemic, many had to close for a while, and when the time came to open, they were open for a short period and had to follow strict health rules. Therefore, many restaurants focused on food delivery, throw Uber Eats, Doordash and other platforms. Many restaurants created their online platform to deliver both food and alcohol. Restaurant alcohol delivery is another impact that this pandemic had on dining.
The COVID-19 impact on Work
The covid-19 impact on businesses and the Canadian workforce has been significant. From the start of the COVID-19 pandemic, the government has helped both businesses and employees out. From offering CERB/CRB to employees and self-employed to wage and rent subsidy for businesses, the government has tried to keep businesses open and help people survive.
Since we mentioned Shopify exponential growth, let’s take a look at how the COVID-19 impacted this company’s employment style. Shopify recently announced employees could work from home permanently.
Shopify is just one of the few companies that adopted work from home as a way to operate. This is perhaps one of the few positive aspects that this pandemic had one on our lives. Until last year working from home was impractical for most companies. However, currently, many companies are offering work from home with more flexibility. Even though some companies were considering offering more flexibility to their employees and allowing them to work from home sometime in future, this pandemic speeded things up indefinitely.
Many believe that this new flexibility is here to stay, and it is much better than the traditional fixed employment system.
The COVID-19 impact on Real Estate & Mortgage
The covid-19 impact on real estate is undeniable. For the first six months of the pandemic, the government introduced the mortgage deferral, which broke all the homeowners and put everything on pause. There are many factors why the real estate experienced slowdowns, such as lack of open houses due to physical distancing and concerned buyers of the market future.
Many realtors will say the market slowdown is just a temporary hiccup since the demand has been there, and many sellers are hesitant to sell. However, many policymakers are concerned about the market future, and the prediction is for the real estate prices to drop by 20% until it starts to rebound by 2022.
Many factors impact Canada’s real estates slowdown, such as the general slowdown in the economy and lack of immigration. On the other hand, Canada’s bank tried to stabilize the market by cutting interest rates to an all-time low, which enviably would cause the mortgage rates to drop. However, the mortgage rates have not fallen as they were supposed to since the banks are uncertain about Canadians’ future.
Considering all the factors, Canadian real estate will drop substantially, making an excellent market for buyers and not a bad one for sellers.
The COVID-19 impact on Saving & Retirement
The covid-19 impact on saving and retirement has taken a big bite of Canadians savings and retirement. Over half of the Canadians who have been financially impacted by COVID-19 were forced to reduce their savings and investmentments. Many had their salary or earnings reduced due to the pandemic, and in Ontario, over 40% experience income fall. The data suggest that the COVID-19 has had a more damaging impact on near retirement Canadians than the financial crisis.
Many Canadians had to eat up their savings and investment or take money from their retirement funds to survive this pandemic. That will cause many to stay in the workforce for longer or downgrade their retirement quality, which is far from ideal.
The pandemic has pushed many to consider safer investment options even though the volatile stock market has shown promising growth since late March, and indexes such as S&P 500 or Dow have jumped by almost 40%.
To conclude, the COVID-19 pandemic has changed everyone’s lives around the world. For better or worse, we adjust to these changes as some of them are here to stay indefinitely. COVID-19 changes the way we interact with each other, and many now express themselves with less physical contact (e.g. hug or handshake). Consumers instead shop online, and many employers and employees are comfortable working from home. However, there are many temporary changes as well, and when the virus is defeated, things will slowly go back to normal. For example, Transportation and dining will go back to somewhat familiar in the next few years. This crisis shall pass, and we will thrive stronger.
As the old saying goes, “In every crisis there is opportunity.”, so make sure to take advantage of the current situation. Unfortunately, the second wave of COVID-19 pandemic has started, and there is not much that we can do besides following health guidelines. Therefore, we must understand the opportunity in front of us, save more, invest better (both real estate and stock) and manage our risks.