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COVID-19 to leave some lasting economic damage, Bank of Canada chief says

Last Updated Jun 22, 2020 at 12:39 pm PDT

FILE - Bank of Canada Governor Tiff Macklem takes part in a photo-opportunity at the Bank of Canada amid the COVID-19 pandemic in Ottawa on Monday, June 22, 2020. Macklem will deliver a speech and take part in a press conference at the Bank of Canada later today. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA — Canada’s top central banker says there will be long-term economic damage from the COVID-19 pandemic as the country charts a bumpy and prolonged course to recovery.

Governor Tiff Macklem says the central bank expects to see growth in the third quarter of this year as people are called back to work and households resume some of their normal activities as restrictions ease.

But he warns that Canadians shouldn’t expect the short and sharp economic bounce-back expected over the coming months to last.

The combination of uneven reopenings across provinces and industries, the unknown course of consumer confidence, and unemployment rates will “likely inflict some lasting damage to demand and supply,” Macklem says in a speech today.

He says ongoing physical distancing rules may mean workplaces can’t be as productive as they once were, adding that many services will remain difficult to deliver.

The combination suggests the economy’s productive capacity will take a hit that will persist even as public health restrictions ease, Macklem says in a webcast speech to Canadian Clubs.

This report by The Canadian Press was first published June 22, 2020.

The Canadian Press