The Chief Economist for Farm Credit Canada says the economic recovery is going to take some time.
J.P. Gervais says this is a recession like no other, we're imposing this on ourselves, shutting down the economy for good reasons, for public health reasons.
He notes there was massive government support to avoid some sort of negative long term consequences for businesses and households that were more exposed to the downfall and economic losses that we were going through.
He says people were hoping for a positive "V" shaped recovery, but that's turned into a "U" because it's dragging on, and we've hit a second wave.
Gervais points out that while the economy had started to recover before the second wave, what we know right now is that the GDP is 5 per cent lower than where we were prior to the pandemic.
"Just to put things into perspective, at the worst of the financial crisis of 2008 and 2009 we never got to a point where we lost 5 per cent of the GDP. So to me that's pretty powerful to think about, just the size of the current economic crisis."
Gervais says the rebound is going to happen, but it's just going to be at a slower pace than we might like.
"That just might be towards the end of 2021 and even into 2022 that we get back to where we were prior to the pandemic. Obviously, vaccines send a positive signal and hope for a quicker recovery but were going to have to wait and see how fast the economy can readjust to this new normal. That may only happen into early 2022."
He notes as we start to reopen the economy we're seeing the unemployment rate come down and businesses hiring.
A lot of areas of the economy took a hit with this pandemic including Agriculture.
Gervais says there was a lot of volatility in the grain markets early on and especially the livestock sector which took a big hit.
"We still have in some sectors, and supply chains a little bit of a backlog of animals. So this is going to take a little bit of time to work it out. Maybe going into 2021."
He thinks the early part of 2021 could still see some pressure on profitability for livestock producers, but feels the second half of 2022 will see some positive signals with stronger demand and our concerns over supply issues behind us.