National GDP fell by 5% in 2020
Real gross domestic product took a hit in every province and the Northwest Territories in 2020 as governments and industry struggled to deal with the COVID-19 pandemic, Statistics Canada reports.
Over the course of the year, all levels of government in Canada implemented measures to limit the spread of the virus. The mandatory closures of non-essential businesses, schools and public institutions, restrictions on travel, physical distancing rules, and the closure of Canada's international borders, combined with a shift by many Canadians to work from home, affected almost every segment of the Canadian economy.
As a result, the national GDP dropped by 5.3 percent, and most provinces say their most severe drops in GDP in 40 years. Regional impacts varied, including by as much as 8.2 percent tin Alberta, and more than 5 percent in Saskatchewan, Ontario, Quebec and Newfoundland and Labrador.
Ontario (-1.95 percentage points) contributed the most to the decline at the national level, largely because of the size of its economy. Alberta accounted for 1.25 percentage points of the national decline, as ongoing weak oil prices on world markets, combined with the impact of the pandemic, suppressed activity in the important oil and gas sector and related downstream industries.
Both goods-producing and services-producing industries contracted in every province. However, services-producing industries contributed more to the overall decline. The contraction in services-producing industries was widespread, with those services that require in-person interaction and where online delivery was unfeasible impacted most.
In contrast, finance and insurance industries rose in all jurisdictions. Real estate and rental and leasing activities and residential construction increased in most regions in spite of lockdown measures. In many provinces, activity at the offices of real estate agents and brokers surged as the desire for more personal space, including room for home offices, combined with low mortgage rates and higher disposable income, bolstered the housing market.
In Newfoundland and Labrador, where GDP fell 5.3 percent in 2020, construction was hit hard. Output dropped by 25.9 percent, mainly because of a 35.1-percent decline in engineering construction as work at the White Rose project was put on hold and the Muskrat Falls project neared completion.
Construction output varied elsewhere, with increases of 4.8 percent in Prince Edward Island, 3.4 percent in Nova Scotia and 4.2 in British Columbia, and contractions of 4.5 percent in New Brunswick, 2.8 percent in Quebec, 10.7 percent in Manitoba, 10.9 percent in Saskatchewan, and 12 percent in Alberta.
In Ontario, construction activity edged up with higher residential (4.5 percent) and non-residential building (3.6 percent) construction offsetting a decline in engineering (-10.1 percent) projects.