It’s outlook week here at RealAgriculture, and we’re trying to spend the week looking forward, instead of back. We’ve been talking so much about 2020 – it’s time to talk about 2021. However, the key to 2021 really does play off of the year of 2020.
Glen Hodgson of the C.D. Howe Institute joined RealAg Radio to take a look on what the economic forecast could look like for the year and — spoiler alert — we could be seeing up to 5 per cent growth this year. This is a good news story, except for when you compare it against a contraction of almost 6 per cent last year.
“By the end of the year, GDP will still be lower than it was at the end of 2019. We have growth, but we had a really difficult 2020. Of course, because of the pandemic, but also because of what happened in all markets. We are going to end the year still growing, but it won’t feel that great for a lot of people that are still really hard hit,” Hodgson explains.
One of the things that we continue to see is a greater spread between the “haves” and “have-nots”, whether that is people or industries. Why is that? Hodgson says this is in part because it’s not what we’d considered a typical recession, and an extremely unfair recession, at that.
“This recession is based on the sector where you work, the province or region where you live, your age, your income bracket, your education, etc,” Hodgson says. “One example: people like me. So I retired from a full-time job almost five years ago. I still do a bit of consulting, and calls like this. I can’t spend what I’m bringing in. So I’m actually saving money right now, because I’m not going out. So if you are a retiree like me, you are saving. Which is crazy — we’re supposed to be spending our savings from our lifetime.”
In contrast, a young person who is working in the service industry that hasn’t been able to get back to work and has no access to childcare and COVID-10 and the economic slow down becomes a really difficult situation.
The agriculture industry appears to be in that curve that is going up. However, we know this isn’t the situation for many industries out there, such as tourism and foodservice. As Hodgson puts it, the gap is widening there too, as the industries that are doing well, are really recovering, and the ones that aren’t — are getting killed.
“Most of the economy is actually more or less recovered to a normal state. In the food sector, people are still eating. We’ve kept the stores open, but most of the hospitality sector is shut down. So where we are spending our food dollars has changed. And globally, there is still a demand for protein,” he says, adding that the only wildcard that Canadian agriculture is really facing is trade and exports, and keeping our commodities moving.
Check out the full conversation between host Shaun Haney and Hodgson, below: