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What potential impacts COVID-19 could have on B.C.'s economy

Last Updated Mar 9, 2020 at 11:28 am PDT

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Summary

There are concerns the tourism sector in B.C. could feel the impacts of COVID-19

Canada's top doctor has recommended Canadians avoid cruise ship travel amid the outbreak

Fewer visitors on cruise ships to Vancouver could mean a hit to restaurants, retail business sales, industry experts say

VANCOUVER (NEWS 1130) – With Canada’s top doctor advising Canadians to avoid cruise ship travel amid the COVID-19 outbreak, there are concerns about what the move will mean for B.C.’s tourism sector.

Even if there are no official bans on cruises, the whole situation will likely lead to a drop off in the number of people willing to get onboard a vessel, meaning the pain will be felt for local tourism reliant industries.

“Food services, when cruise ships come to the region, well that’s going to be that lost type of economic activity,” Central 1 Credit Union Deputy Chief Economist Bryan Yu told NEWS 1130. “Adding to that is just the number of airline travelers — we’re going to expect to see a big drop off from China and other Asia-Pacific nations as well.”

The recommendation from Chief Public Health Officer Dr. Theresa Tam is similar to an advisory out of the U.S. State Department, which warns citizens against travel on cruises.

COVID-19 has already had a number of economic impacts. For example, just last week, the Bank of Canada and U.S. Federal Reserve both slashed their interest rates in an effort to dampen the impact of the virus. On Monday, March 9, North American stock markets plunged in initial trading.

Yu noted oil prices also took a hit.

“There’s a couple of things going on there,” he said. “If we go back a little bit more, if we look at the overall impact of COVID-19, we’re seeing the ramifications of that slowdown in economic growth. Whether it’s the tourism cycle being a big drop off in airline activity, we are expecting to see supply chains interrupted, we’re seeing more economies and more countries doing more measures in order to stem the spread of the virus. And all of these factors combined really does mean lower level economic conditions, and that’s what the market is essentially bringing into its price right now for equities as well as bonds.”

Companies in the tourism industry in many parts of Canada have already cited drop offs in business since the outbreak began, and Yu anticipates travel warnings will mean a bigger hit to Lower Mainland businesses.

Retail, hotels, and restaurants are just some of the players that could be impacted.

Ian Tostenson with the B.C. Restaurant and Food Services Association said there are a few different concerns when it comes to impacts of COVID-19 on his industry.

“You’ve got, at this point, quite a decrease in travel from Asia, obviously,” he told NEWS 1130. “Cruise ships are still, at this point, scheduled, but we don’t know what that looks like. And then you’ve got your car traffic, which is by far the most prevalent out of the United States.”

He explained it’s possible we’ll see more Canadians traveling within Canada in the short term, but only time will tell.

B.C.’s restaurant industry has already seen its fair share of struggles recently from high property taxes to staffing shortages. Tostenson said this current situation is just another thing to add to the pile.