The Bank of Canada Governor says it will take a lot of time for economic activity to come back to levels at the end of 2019, before the pandemic and there are many reasons why the recuperation phase may be protracted suggesting some businesses will close while others will be unable to return to pre-pandemic levels of activity.

Tiff Macklem says business and consumer confidence have been shaken and consumers are likely to be cautious with their spending. In addition, many people may find it hard to return to work particularly if schools and child care facilities cannot reopen.

The Bank of Canada is keeping its key interest rate at 0.25 per cent. Macklem says the economy contracted about 15% in the first half of this year and as severe as that is, it appears the economy avoided the most dire scenarios laid out in April.

The Bank of Canada says the contraction in the Canadian and U-S economies, because of the pandemic, is essentially the same but the Bank of Canada, as novel coronavirus surges in some U-S states, is projecting Canada will grow faster than the United States.

Tiff Macklem says that does spill back into Canada because exports to the United States are an important component of GDP in Canada and he stresses that the source of any uncertainty surrounding projections is the evolution of the novel coronavirus itself.