For the past few weeks, we’ve become accustomed to Prime Minister Trudeau’s daily update from Rideau Cottage in Ottawa. To help ease the economic impact of the COVID-19 pandemic, the government has put forward several measures intended to support those who have lost their jobs due to the outbreak.
With tens of thousands of Canadians suddenly and unexpectedly facing unemployment, the country’s banks also stepped up to provide short-term relief for those now unable to make their upcoming mortgage payments. This relief comes in the form of a mortgage payment deferral plan to help unemployed workers get through the next few months.
Mortgage Deferral Program Highlights
The Canadian Bankers Association recently provided updated information regarding the program on the CBA website. The plan allows for mortgage holders impacted by the COVID-19 crisis, and who are not currently in arrears, to apply for a deferment of their mortgage payments. Some financial institutions are also offering a similar arrangement for other loan payments, including credit card debt…
Following are the highlights from a telephone conversation with Jean-Francois Perrault, Chief Economist Scotiabank and John Webster, President and CEO Scotia Mortgage Corporation which took place on Thursday, April 9, 2020 at 4:30 p.m.
First, it’s not all bad news. While I’ll have to include some unpleasant information in order to provide a complete picture, that is not the focus.
We are in the early stages of a deep recession. A deep global recession. How deep will it be? How long will it last? It all depends on the virus and how quickly we can get back to work.
A decline of 30% to 40% in economic activity in the second quarter is forecasted. This is a huge number; one we have not seen before.
Although social distancing will continue, to some extent, well beyond the end of the second quarter, it is assumed that the lockdown will begin to unwind during the second half of the year.
That’s the bad news… On the other hand, we will start to reverse this economic slowdown in the third quarter if we see a flattening of the pandemic curve…