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“As Canada begins to lift emergency measures, the focus shifts from the peak economic impact under lockdown to how reopening will proceed,” TD Securities analysts said.

Key quotes

“While some are wishing for a swift return to normal, we expect the resumption of economic activity will be gradual and guided by local progress in flattening the curve.”

“Some regions have effectively stamped out the virus but others, including Quebec, Ontario, and Alberta, have more active cases. As these provinces restore activity, a failure to control contagion amid increased mobility carries risk of a second wave that would further dampen the recovery.”

“Even if things proceed in more orderly fashion, we expect some parts of the economy to operate well below capacity until a vaccine is developed, which will weigh more heavily on services. The BoC has already committed to maintaining support through the recovery but a second wave/drawn out reopening process might require added stimulus from the Federal government.”