A new study released by Statistics Canada says that the travel restrictions imposed to contain the spread of COVID-19 has led to 400,000 to 500,000 in lost jobs.
Travel restrictions have also led to a reduction in Canada's gross domestic product (GDP) in the range of $27.9 to $37.1-billion dollars, the report says.
Statistics Canada released "The Economic Impact of Travel Restrictions on the Canadian Economy due to the COVID-19 Pandemic” on Friday (Oct. 23), highlighting just how travel restrictions have impacted the country’s economy.
Since mid-March, as travel advisors know well, Canada has fully or partially closed its national borders to tourists and non-essential travellers to contain the spread of the coronavirus. Travel across regions within Canada, too, has also been restricted.
New insight into tourism
The new research shows that these restrictions have a direct impact on Canada’s tourism industry, but also on the industries that produce inputs used by the tourism industry.
The study uses multipliers from Statistics Canada's supply and use tables—a useful tool for economic impact analysis—to estimate both the direct and indirect impacts.
It considers several scenarios that assume different timelines for the beginning of the gradual recovery of the tourism industry.
While the potential dates for the start of the recovery period are associated with the lifting of domestic and international travel restrictions, the turnaround will also depend on the restoration of travellers' incomes and their trust with regard to health and safety, says Statistics Canada.
Among the scenarios considered, one assumes the lifting of domestic travel restrictions in early July and international restrictions in early December, while the most pessimistic assumes the lifting of both domestic and international travel restrictions in early December.
Travel restrictions could significantly damage the tourism industry, which includes transportation, accommodation and food services, travel arrangement and reservation services, and recreation and entertainment, the study says.
Statistics Canada estimates that the direct impact of travel restrictions could result in a GDP loss of $17.6 billion to $23.3 billion and the loss of 306,000 to 406,000 jobs in 2020, between the most optimistic and pessimistic scenarios.
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 estimates that the indirect impact of travel restrictions could lead to a loss in GDP of $10.3 billion to $13.8 billion and to the loss of 107,000 to 143,000 jobs in 2020
Compared with 2019, the estimated overall impact amounts to a reduction in Canada's GDP of 1.3% to 1.7%, which accounts for more than 14% of the total decline in GDP as a result of the pandemic, as forecasted by the International Monetary Fund and the Organisation for Economic Co-operation and Development.
Statistics Canada says there is still a great deal of uncertainty about the future paths of recovery because Canada is still in the middle of reopening.
Click here to access the study.
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