The financial system is helping Canadians, but risks remain
The impact of the pandemic on lives and livelihoods is beyond anything we’ve experienced in our lifetimes.
Along with actions by the government and the Bank of Canada, a resilient financial system is helping Canadians through the COVID‑19 crisis. But it will be a long, slow climb to get everybody back to work. A full recovery from the crisis will take time, and many risks remain.
The longer the pandemic threatens jobs and incomes, the greater the risk of trouble for households with a lot of debt. Government support programs have bridged the financial gaps for people through the crisis, and lenders have been flexible about payments. The six-month deferrals that financial institutions offered are ending, though, so the next few months will be crucial.
Businesses are also finding it hard to cover debt payments with lower revenues, especially those in service industries such as restaurants and hotels. This too could become a bigger issue the longer the recovery takes.