Bennett Jones Spring 2022 Economic Outlook

When the pandemic was declared in March 2020, and lockdowns were imposed across the major economies, there was high uncertainty about economic prospects and a policy priority to support household incomes and business viability through a period of turbulence. COVID came after years when policy globally had been fixated on an aggregate demand deficit, when central banks struggled to get inflation up to their target range, and when low borrowing costs pushed asset values higher and encouraged higher indebtedness of governments, businesses, and households.

The pandemic also struck as major economies confronted a diminishing social and political consensus over the tenets of sound economic policy, including growing doubts about an open trade and investment environment, as well as rising geopolitical tension. For an open, middle power like Canada, a slow growth, fragmented world was a difficult backdrop to transform the economy in response to population ageing,