RVDA Canada said it is advising members that it is too early to properly project the full extent of disruptions to the 2020 Canadian economy. Much like the U.S. market, GDP growth could be significantly reduced during the first half of 2020. Economic growth in Canada is forecasted to be weaker than predicted as rail blockades and the COVID-19 (Coronavirus) pandemic create growth headwinds.
RVDA Canada said overall, auto and RV sector production and global supply chains have been disrupted at unprecedented levels and will with certainty impact vehicle production in both Canada and the U.S.
Additionally, factory closures and quarantined workers have taken a toll on both industries outside the borders of China, as shortages in supply stall vehicle production. RVDA Canada said there may be shortages in certain vehicle models and/or OE/aftermarket repair parts in the short-term in Canada.
The Canadian government recently announced a $10 billion fiscal stimulus to assist with the economic and health response to the COVID 19 outbreak. In addition, the Bank of Canada has taken the extraordinary preventive step to cut rates to mitigate the impact of the outbreak on the country’s domestic economy. The Superintendent of Financial Institutions also announced an additional $300 billion to ease lending capacity by major banks.
While monetary and fiscal policy are only a few solutions to address the issue, RVDA Canada said it believes these recent changes will certainly help spur consumer spending and boost business confidence. The association stated the situation will remain fluid, and the federal government will likely be announcing more fiscal stimulus this week to support businesses and workers.
RVDA Canada will product updates and continue to release information relevant to its members as it becomes available.