With Corona winding down and Canada opening up, canadNow wants to know how you have been financially affected and if your future spending habits will change. Your responses and discussion will help target future articles–we want to bring attention to the real issues Canadians are most concerned about.
The World turns Upside Down
Concern about economic uncertainty spread through Canada when Corona first gained pandemic status. At the time, canadNow offered predictions about what the future held, and the potential ramifications across all segments of society.
Plenty of apprehension remains, and the threat of pandemic surges will persist until we can permanently slow its spread, either through a vaccine or herd immunity.
Meanwhile, the economy has taken an unprecedented hit. Never in recent memory has there been a wholesale, deliberate shuttering of national economies on a global scale.
All levels of society have felt change, and the aspect concerning many Canadians is how they will be financially affected going forward.
The Canadian government, along with the Bank of Canada (BOC), reacted aggressively to this disappearance of cash flow by providing various financial supports.
This was done to preserve liquidity in the markets, since revenue for many businesses and people evaporated in a very short span of time.
Financially affected citizens and businesses were given cash and generous financial options to meet their debt obligations. The payments certainly helped many, but debate continues about if these supports can, or should, continue.
There is still uncertainty concerning how the government will pay for this spending, and if Canadians will have to endure cuts, tax increases, or both.
One of most important questions is how deeply this pandemic has financially affected Canadians, and how this is going to permanently change lives.
For a lucky few, this is not their reality. But for those who had to foreclose on mortgages, were laid off, or struggled to find money for everyday essentials, these last three months have been earth shattering.
Now, with finances plummeting for many people, the question remains: how will this affect future spending habits, and how is Canada’s economy going to look on the other side?
New Spending Habits
With stricter mortgage rules coming into effect this July, action has already been taken to decrease financial risk for lending institutions. This will certainly affect financial decisions for many consumers.
Canadians financially affected may reconsider spending habits, and might revisit emergency funds as a way to offset any further shocks to their income.
These strategies will be top of mind for individuals wanting to establish a buffer for themselves. There are predictions about surges either next flu season or if Canadians don’t follow recommended guidelines in the near term. These situations would exacerbate the pressure already weighing on financially affected individuals and families.
And this is all assuming, of course, that one still has a job or a source of income. The situation will be made even worse if small businesses don’t survive the pinch, further decreasing employment options.
This is certainly a time for new thinking and breaking old habits.
Future Financial Decisions
Those lucky enough to have capital, or who are less risk averse to financial debt, will likely find new purchase opportunities in Corona’s fallout: dealerships offering promotions, cheaper real estate supply from those who have to sell because of financial hardship, new business opportunities appearing in a post-Covid world, etc.
The question now is, will these Canadians be comfortable leveraging themselves? Are the times of aggressive financing gone? Canadians less risk tolerant may pause large purchases in the short term, or wait until the government satisfactorily answers how it plans to address the huge deficit in the next fiscal year.
Have you been Financially Affected?
Uncertainty in this country, and around the world, will persist for the foreseeable future.
Even as excitement grows as the economy opens and life gets back to normal, there is always the lingering threat of another spike in Corona spread, and the question remains: can Canadians bear more financial hardship? Will another lockdown even be possible? And, most importantly, how will Canadians modify their spending habits to cope with this new, uncertain future?
We will continue following these trends, and keep Canadians informed.