Second wave of COVID-19 could push many off loan deferral cliff: economist

Article content

It’s too early to tell if and when Alberta’s economy will recover back to normal during the COVID-19 pandemic, but a second wave and lockdown could wipe many businesses out, an Alberta Central‘s chief economist said.

A spike in infections and subsequent closures could have even more devastating impacts for businesses than the first public health restrictions because many extended loans are due to expire in the coming months, Charles St-Arnaud said in an interview Friday.

“A lot of businesses have used the reserves that they had — they’ve used every savings that they had to keep their businesses afloat. But another setback might be the nail in the coffin for them,” he said.

In the coming months, it could be a more “tepid” recovery than the V-shaped, or relatively brief, hoped for by economists in the beginning of the pandemic, he said.

“It’s clear that by the end of the year, we’ll still be below the level of economic activity that we had when we started the year. There will be a decent proportion of workers that will still be out of work because of the pandemic,” he said.