Pandemic led to biggest drop in Canadian GDP on record; decreased spending on cars and fuel, more spending on cannabis and food in 2020

No surprises out of Statistics Canada on Tuesday, with a report that indicates Canada saw its worst-performing year ever in 2020. The finger is being pointed squarely at the pandemic.

In 2020, the national gross domestic product (GDP), a measurement of all the goods and services produced, actually contracted by 5.4 percent. That is the biggest drop in GDP Canada has seen since records began in 1961.

The report released Tuesday indicates the biggest hit to Canada’s economy came in the early days of the pandemic, March and April, with the shutdown of many sectors to prevent the spread of COVID-19.

Since then, there’s been a slow-and-steady improvement, with StatsCan noting a 0.9 percent growth in the fourth quarter of 2020 alone. The growth was higher than expected and indicates a rebounding economy.

Household spending fell over the course of 2020 as well; StatsCan reports spending was down 6.1 percent in 2020 compared to the year previous. Among the most notable items we weren’t spending money on in 2020 were vehicles. Purchases of new trucks, vans, and SUVs decreased by 3.5 percent while there were 6.4 percent fewer new passenger cars bought in 2020. Household spending on major appliances and furniture both saw notable gains.

As more people spent time at home, there was an increase in the number of non-durable goods purchased in 2020, with a 17 percent increase in the amount of cannabis purchased across Canada. Food and pharmaceutical products were also bought with more regularity last year than the year before. Fuel expenses dropped, as did money spent on clothing and shoes.

Statistics Canada will file its next report on the status of the Canadian economy on June 1.