How much have lockdowns cost us?
Montreal, June 30, 2020 – Lockdown measures were put in place hastily and, apparently, without considering their economic and social costs. In a publication launched today by the Montreal Economic Institute, researchers attempt to quantify the impact of lockdown measures.
“A simple way of estimating job losses is to analyze Statistics Canada’s unemployment data. In Canada, the unemployment rate almost tripled between the beginning of the crisis and April, reaching 13.7%,” explains Peter St. Onge, Senior Fellow at MEI. “In Quebec, the unemployment rate almost quadrupled, reaching 17%. This means that 820,000 jobs were lost in March and April,” declares Mr. St. Onge.
“We can easily conclude that job losses are a result of lockdown measures as there was an immediate bounce back when restrictions targeting some sectors, such as construction, were lifted,” argues Mr. St. Onge. “In terms of blue-collar jobs, Quebec loosened restrictions quicker than most provinces and, as a result, Quebec saw unemployment drop in April whereas it continued to rise in the rest of the country,” states Mr. St. Onge.
“The cost of lockdowns can also be evaluated using Canada’s fiscal outlook. By April, the federal government had already announced $257 billion in new spending,” says Gaël Campan, Senior Economist at MEI. “The parliamentary budget officer estimated in May that the federal deficit might reach $260 billion this year, which is unprecedented,” asserts Mr. Campan.
“Considering that Canada has lost its triple-A rating, we can expect this to be even costlier for taxpayers. In fact, the PBO has already warned that higher taxes are likely as the federal government seeks to balance the books,” observes Mr. Campan. “Such measures could exacerbate the long-term impact of the crisis on economic growth and ensure that we continue to pay for these strict lockdown measures for years to come,” concludes Mr. Campan.
The Viewpoint entitled “Ending the Lockdown Depression” was prepared by Peter St. Onge, Senior Fellow at the MEI in collaboration with Gaël Campan, Senior Economist at the MEI. This publication is available on our website.
* * *
The MEI is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
-30-
Interview requests: Daniel Dufort, Senior Director of External Relations, Communications and Development, MEI. Tel.: 438-886-9919 / Email: ddufort@iedm.org