While we still struggle as a nation, and throughout the world, we can look at the financial shifts and trends that may appear as a result of this crisis.

“Crises accelerate trends, but they’re catalysts for change and innovation.”

(GLC Asset Management)

 

Timelines & Foresight

We are already seeing businesses being hit, forced to close, and this will continue throughout the next 6-8 months and beyond as the ripple effect of this pandemic takes its toll. We can foresee a timeline of financial repercussions over the next 3 years, starting with September when the first of the 6-month mortgage and loan deferral programs end, and people may not yet be in the financial position to cover those expenses.

That September timeline also will impact those receiving government support through CERB, as the final eligibility period ends September 26th. The Government of Canada has still not released anything official stating what will be provided to those Canadians come October who are still unable to return to work or receive their full regular pay because of modified hours, etc.

September will also mark the return to school for many children. What will that look like? Will it perpetuate a further spike as we’ve seen in other nations? How will the modified school day and learning environment affect the kids? All of these questions will only be answered in time, and while all health experts (and those who deem themselves health experts) are predicting a second wave of outbreaks to come this fall, one thing is certain: the economy can not afford to be shut down again.

The hope is that we’ve learned enough that even with a second outbreak our businesses are prepared to be able to continue services, modified, and not have to completely close. Contact tracing, testing, and many people continuing to work from home will all help to reduce the severity of another outbreak.

The next significant economic toll can be expected in January as we see businesses reporting on their 2020 year of earnings. While publically traded companies report quarterly, many have opted to defer this reporting so that they can shape their losses with a plan to recuperate or project their return to positive. Come January it will be clear who the “winners” (safety, hygiene, delivery services, etc) and “losers” (bricks and mortar retail, restaurants, etc.) are, who has increased their debt to get through this rough patch, and who will be filing for bankruptcy.

This information will affect the global markets but will depend on the results reported. We see heavy hitters like Air Canada’s stock still down 60%, but with a strong belief that they’ll weather the storm successfully.

And the next major marker will be March/April 2021 when the federal government will be releasing their new federal budget. This will be under intense scrutiny as the nation posts it’s highest deficit in history, and with a minority government *could* trigger a call for an election.

(Personal political view) My opinion is that it wouldn’t be wise for the political parties to call that election in 2021 when the country is still in a recovery mode, but I think that will depend more on who becomes the Progressive Conservative Party Leader.

Finally, we’ll see when the governments at both the provincial and federal levels start to modify their budget to dig out of the deficit. This could start with 2021, but I think most shifts will be held off until 2022 when the economy has had an opportunity to recover more, and the government has a clearer picture of where to lay those cuts and increases.

 

Trends we can expect:

1. Home is where the heart is: more focus will be on domestically-produced items. Think “onshoring”.
2. Once the threat is gone, we’ll forget about it.
3. Digital processes will be accelerated at all levels, which will impact the remote workforce, commercial real estate, commute, and ultimately where people choose to live. If they can work anywhere, we’ll see a vacate of our urban centres, traded for lower-cost suburban outskirts where square footage and greenery is important.

 

Trends we need to embrace:

1. Reducing our debt instead of overspending, especially while interest rates remain low.
2. Saving for a rainy day, or a future pandemic, so you’re never caught short. Many people saw how they are quite literally one paycheque away from broke. It doesn’t have to be this way. Saving before you spend on “extras” like entertainment and travel are easy during times like these where events are canceled and people aren’t doing as much in public.
3. Making sure our finances, insurance, and wills are in order at all times. Don’t put off what you can do today.

 

While we’re more able to see an end to these extraordinary times, we must reflect and make positive changes while the motivation is present to do so.