The near-halt on travel due to the effects of Covid-19 has cost the Canadian economy billions in economic output and hundreds of thousands of jobs, according to a new study from Statistics Canada.
The study found that the combination of national border closures and curbs on intra-provincial travel “have had a major impact on the economy.”
StatsCan estimated that travel restrictions will cost between $27.9 billion and $37.1 billion in GDP, as well as lead to the loss of between 400,000 and 500,000 jobs in 2020.
The output loss represents a decline in overall GDP of between 1.3% and 1.7%, StatsCan said.
This range of estimates reflects StatsCan’s optimistic and pessimistic scenarios on the resumption of travel.
While the tourism industry only accounts for about 2% of the Canadian economy, the estimated output loss represents 14% of the total GDP decline due to the pandemic, StatsCan said, noting that this “underscores the disproportional adverse impact the pandemic has had on tourism.”
The estimated effect of the travel restrictions includes both direct effects on tourism itself, and the knock-on effects to other sectors.
“As output in the tourism industry declines, the demand for intermediate products and services provided by other industries, such as wholesale and retail trade, utilities, food manufacturing, and other service industries, also declines,” the study said.
In terms of direct impacts, the agency estimated that travel restrictions could amount to a GDP loss of between $17.6 billion and $23.3 billion, costing 306,000 to 406,000 jobs.
Further, it estimated that the indirect impact of curbs on travel could cost another $10.3 billion to $13.8 billion in lost GDP, along with 107,000 to 143,000 jobs.