The Economic Impacts of the COVID-19 Pandemic on the City of Winnipeg - A Summary of Local and Global Economic Challenges Paul Beckta and Tyler ...
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The Economic Impacts of the COVID-19
Pandemic on the City of Winnipeg
A Summary of Local and Global Economic Challenges
Paul Beckta and Tyler Kroeker
Manitoba Planning Conference
January 21, 2021
Economic Research 1
Presentation Outline • The Initial Impact of COVID-19 on the Local Economy • What Others Are Saying • Our Approach • Scenario Results • Plausible Implications for the City of Winnipeg Economic Research 2
Manitoba Retail Sales and COVID-19
Sharp decrease in March and April coincides with pandemic
COVID-19 Pandemic Retail Trade - Year-over-year % Change
15%
10%
5%
0%
% Change Y-o-Y
-5%
-10%
-15% First presumptive case of COVID-19
-20% detected in Manitoba on March 12, 2020
-25%
-30%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O
2016 2017 2018 2019 2020
Source: Statistics Canada. Table 20-10-0008-01 Retail trade sales by province and territory (x 1,000). For
Manitoba, Seasonally Adjusted
Economic Research 3Manitoba Retail Sales: Lowest point in April
Clothing, Sporting Goods, Music, Books, and Vehicle sales hit the hardest
Manitoba Retail Sales % Change in April 2020 over April 2019
Retail Trade - Overall
Clothing and clothing accessories stores
Sporting goods, hobby, book and music stores
Motor vehicle and parts dealers
Gasoline stations
Electronics and appliance stores
Furniture and home furnishings stores
General merchandise stores
Building material and garden equipment
Health and personal care stores
Miscellaneous store retailers
Food and beverage stores
-100% -80% -60% -40% -20% 0% 20%
Source: Statistics Canada. Table 20-10-0008-01 Retail trade sales by province and territory (x 1,000)
Economic Research 4Manitoba Employment Rate and COVID-19
Sharp decrease in March and April coincides with pandemic
COVID-19 Pandemic Employment Rate - 15 Years and Older
70%
65%
Employment Rate
60%
55%
Marginal decline in November and
50%
December coincides with additional
45% response measures
40%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
2016 2017 2018 2019 2020
Source: Statistics Canada. Table 14-10-0017-01 Labour force characteristics by sex and detailed age group,
monthly, unadjusted for seasonality
Economic Research 5Manitoba Employment Rate by Education Level
Those with higher levels of education have fared better in the labour force
COVID-19 Pandemic All High School Certificate or Diploma Bachelor's degree Above bachelor's degree
90%
85%
80%
Employment Rate
75%
70%
65%
60%
55%
50%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
2016 2017 2018 2019 2020
Source: Statistics Canada. Table 14-10-0019-01 Labour force characteristics by educational attainment,
monthly, unadjusted for seasonality
Economic Research 6Manitoba: Share of Employees Working Zero Hours per Week
While cyclical, sustained increase observed during pandemic
COVID-19 Pandemic Share of MB Employees working 0 Hours
20%
18%
Double-spike: one due to restrictions in Spring, and
16%
another due to seasonal occupations (e.g. education)
Share of Total Employed
14%
12%
10%
8%
6%
4%
2%
0%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
2016 2017 2018 2019 2020
Source: Statistics Canada. Table 14-10-0036-01 Actual hours worked by industry, monthly, unadjusted for
seasonality (x 1,000)
Economic Research 7Winnipeg Employment by Industry
Recovery taking place, but Accommodation/Food Services and Manufacturing still severely affected
Winnipeg CMA Employment Gains/Losses by Industry Oct. to Dec. average 2020 versus 2019
Accommodation and food services
Manufacturing
Construction
Information, culture and recreation
Business, building and other support services
Wholesale and retail trade
Utilities
Agriculture
Health care and social assistance
Finance, insurance, real estate, rental and leasing
Forestry, fishing, mining, quarrying, oil and gas
Other services (except public administration)
Professional, scientific and technical services
Public administration
Transportation and warehousing
Educational services
-10,000 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000
Source: Statistics Canada. Table 14-10-0097-01 Employment by industry, three-month moving average,
unadjusted for seasonality, census metropolitan areas
Economic Research 8Winnipeg Employment Change by Neighborhood Declines in Employed Estimated to be More Significant in Central and Northern Neighborhoods Economic Research 9
Winnipeg Labour Market Summary
Statistics Canada Labour Market Summary - Winnipeg CMA (Three-month Moving Average)
Category Indicator – Winnipeg CMA December 2019 December 2020 % Change
Labour Force 469,200 468,200 -0.2%
Labour Force
Not in Labour Force 232,600 240,200 +3.3%
Total Employed 447,000 430,800 -3.6%
Employment
Employment Rate 63.7% 60.8% -2.9%
Total Unemployed 22,200 37,400 +68.5%
Unemployment
Unemployment Rate 4.7% 8.0% +3.3%
Source: Statistics Canada. Table 14-10-0095-01 Labour force characteristics by census metropolitan area,
three-month moving average, unadjusted for seasonality
Economic Research 11Change in Housing Prices Across Canada
November 2020 versus November 2019 via Teranet House Price Index
20% 18.7%
Year-over-year Change in House Price Index
15.7%
14.7% 14.5%
15%
10.3%
10%
6.3% 5.9%
5.3%
5%
1.0%
0%
-2.3%
-5%
Ottawa Halifax Hamilton Montréal Toronto Vancouver Québec Winnipeg Edmonton Calgary
Source: Teranet and National Bank of Canada House Price Index. Data accessed January 8, 2021.
Economic Research 12Winnipeg Housing Starts
Starts down compared to 2017 and 2019, but still on track with recent historical averages
Cumulative Housing Starts by Year and Month – All Dwelling Types
6,000
2017
Annual Cumulative Housing Starts
5,000
2018
2019
4,000
2016
3,000
2,000
2020 Total: 4,350
1,000
0
January February March April May June July August September October November December
Source: CMHC Starts and Completions Survey. City of Winnipeg (CY) geography used.
Economic Research 13Manitoba’s Population: Immigration
Severe decline in Permanent Residents to Manitoba; Study Permits in-line with Historical Averages
Permanent Residents: Monthly Cumulative, Manitoba Study Permit Holders: Monthly Cumulative, Manitoba
20,000 20,000
16,535
15,000 15,000
10,605
10,000 10,000
5,000 5,000
7,420 7,785
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Immigration, Refugees and Citizenship Canada. Permanent Residents – Monthly IRCC Updates (open data portal, accessed January 8,
2021); Temporary Residents: Study Permit Holders – Monthly IRCC Updates (open data portal, accessed January 8, 2021); City of Winnipeg
Economic Research
Economic Research 14City of Winnipeg’s Population
Decline in non-permanent residents (primarily study permit holders) and increase in provincial out-migration
has resulted in reduced population growth in 2020
Feb. 2020 Forecast (Pre-COVID) City of Winnipeg Population
800,000
2020 Population Estimate prior to
COVID-19 pandemic: 774,700
775,000
Difference:
-7,800
750,000
725,000
2020 Actual: 766,900
700,000
675,000
650,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Statistics Canada, Table 17-10-0142-01 Population estimates, July 1, by census subdivision, 2016
boundaries, City of Winnipeg Economic Research
Economic Research 15National Studies of Socio-economic Impacts from COVID-19
Initial job losses were heavily concentrated among the most financially vulnerable
• Indigenous Peoples:
“36% of Indigenous participants reported that the COVID-19 pandemic had a strong or moderate
impact on their ability to meet their financial obligations or essential needs, compared with 25%
of non-Indigenous participants” – Statistics Canada, 2020-07-14
• Visible Minorities:
"Among participants who were employed prior to the shutdown, around one-third in most
groups experienced job loss or reduced work hours. Filipinos and West Asians reported a higher
share, at 42% and 47%, respectively, compared to 34% among White participants.“ – Statistics
Canada, 2020-07-6
• Peoples with Disabilities:
"Overall, 61% of participants aged 15 to 64 with long-term conditions or disabilities reported a
major or moderate impact from COVID-19 on at least one type of financial obligation or essential
need.“ – Statistics Canada, 2020-08-27
Source: Economic Impact of COVID-19 among Indigenous People, Statistics Canada, 2020-07-14
Economic Impact of COVID-19 among visible minority groups, Statistics Canada, 2020-07-06
Impacts of COVID-19 on persons with disabilities, Statistics Canada, 2020-08-27
Economic Research 17Winnipeg Macroeconomic Projections by Scenario
Our Approach to Modelling the Economy
Macroeconomic Projections were generated utilizing a scenario-based approach:
• Three different scenarios on how severely COVID-19 may affect public health and economic
output in Manitoba and Winnipeg were developed with a focus on current epidemiological
research, provincial government response plans, and internal discussion.
• Approximately 180 expenditures within Manitoba’s Gross Domestic Product (GDP) are then
linked to each these three scenarios, or are assumed to grow at a recent trend rate.
For example, expenditures linked to tourism will be dependent on each scenario’s status with respect
to international and interprovincial boarder restrictions.
• Economic output is dependent on the variety of social and health measures put in place
across time within each scenario (e.g. vaccine deployment and availability, border restrictions,
and provincial pandemic response levels).
• Provincial pandemic response levels are modelled at a provincial level only.
• It is assumed that there will be a reluctance in the population to return to pre-COVID-19
behaviours without a vaccine (or other medical treatment).
Economic Research 19Winnipeg Macroeconomic Projections by Scenario
Best-Case Scenario (Low) Timeline Assumptions
Scenario
We Are Here
Starts Here
2020 2021
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Vaccine Availability Not Available Deployed and Available
Additional COVID-19 Wave(s) None
Government of Manitoba Reopening 3 4 Caution (Yellow) Limited Risk (Green)
Phase
Interprovincial Borders Status - West Closed Open
Interprovincial Borders Status - East Closed Open
International Borders Status Closed Open
Economic Research 20Winnipeg Macroeconomic Projections by Scenario Best-Case Scenario (Low) Results Indicator - Winnipeg CMA 2020F 2021F GDP Growth Rate -5.4% +4.6% Change in Employment -28,700 +23,300 Unemployment Rate 8.9% 8.0% Source: City of Winnipeg Economic Research Economic Research 21
Winnipeg Macroeconomic Projections by Scenario
Best-Case Scenario (Low) Results – CMA GDP Growth Rate
Historical Conf. Board Autumn 2020 Forecast Best Case
8%
6% 4.6%
Year-over-year GDP Growth Rate
4% 2.7% 3.1%
1.5% 2.7% 1.7% 1.8%
2%
0%
-2%
-4%
-5.2%
-6%
-5.4%
-8%
Source: Conference Board of Canada, Autumn 2020 Metropolitan 1 Outlook; City of Winnipeg Economic Research
Economic Research 22Winnipeg Macroeconomic Projections by Scenario
Medium-Case Scenario Timeline Assumptions
Scenario
We Are Here
Starts Here
2020 2021
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Vaccine Availability Not Available
Additional COVID-19 Wave(s) None
Government of Manitoba Reopening
Phase
3 4 Caution (Yellow)
Interprovincial Borders Status - West Closed Open
Interprovincial Borders Status - East Closed Open
International Borders Status Closed Open
Economic Research 23Winnipeg Macroeconomic Projections by Scenario Medium-Case Scenario Results Indicator - Winnipeg CMA 2020F 2021F GDP Growth Rate -5.4% +2.1% Change in Employment -28,700 +9,600 Unemployment Rate 8.9% 8.5% Source: City of Winnipeg Economic Research Economic Research 24
Winnipeg Macroeconomic Projections by Scenario
Medium-Case Scenario Results – CMA GDP Growth Rate
Historical Conf. Board Autumn 2020 Forecast Medium Case
8%
6%
Year-over-year GDP Growth Rate
4% 2.7% 3.1% 2.1%
1.5% 2.7% 1.7% 1.8%
2%
0%
-2%
-4%
-5.2%
-6%
-5.4%
-8%
Source: Conference Board of Canada, Autumn 2020 Metropolitan 1 Outlook; City of Winnipeg Economic Research
Economic Research 25Winnipeg Macroeconomic Projections by Scenario
Worst-Case (High) Scenario Timeline Assumptions
Scenario
We Are Here
Starts Here
2020 2021
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Vaccine Availability Not Available
Additional
Additional COVID-19 Wave(s) Additional Wave
Wave
Government of Manitoba Reopening Caution Restricted Restricted Restricted
Phase 3 4 (Yellow) (Orange)
Critical
(Red)
(Orange)
Caution (Yellow)
(Orange)
Interprovincial Borders Status - West Closed
Open Closed Open Closed
Interprovincial Borders Status - East Closed
International Borders Status Closed
Economic Research 26Winnipeg Macroeconomic Projections by Scenario Worst-Case (High) Scenario Results Indicator - Winnipeg CMA 2020F 2021F GDP Growth Rate -5.8% +0.7% Change in Employment -32,200 +100 Unemployment Rate 9.4% 9.5% Source: City of Winnipeg Economic Research Economic Research 27
Winnipeg Macroeconomic Projections by Scenario
Worst-Case (High) Scenario Results – CMA GDP Growth Rate
Historical Conf. Board Autumn 2020 Forecast Worst Case
8%
6%
Year-over-year GDP Growth Rate
4% 2.7% 3.1%
1.5% 2.7% 1.7% 1.8%
2% 0.7%
0%
-2%
-4%
-5.2%
-6%
-8% -5.8%
Source: Conference Board of Canada, Autumn 2020 Metropolitan 1 Outlook; City of Winnipeg Economic Research
Economic Research 28Winnipeg Macroeconomic Projections by Scenario
GDP Growth Rate by Scenario Comparison
Conf. Board Autumn 2020 Forecast Best Case Medium Case Worst Case
8%
6.4%
6%
4.6%
4%
Real GDP Growth Rate
2.1%
2%
0.7%
0%
-2%
-4%
-6% -5.4% -5.4%
-5.8%
-6.5%
-8%
2020F 2021F
Source: Conference Board of Canada, Autumn 2020 Metropolitan 1 Outlook; City of Winnipeg Economic Research
Economic Research 29Winnipeg Macroeconomic Projections by Scenario
Unemployment Rate by Scenario Comparison
Conf. Board Autumn 2020 Forecast Best Case Medium Case Worst Case
10% 9.4% 9.5%
8.9% 8.9%
9% 8.5%
8.0% 8.0%
8%
Unemployment Rate
7% 6.4%
6%
5%
4%
3%
2%
1%
0%
2020F 2021F
Source: Conference Board of Canada, Autumn 2020 Metropolitan 1 Outlook; City of Winnipeg Economic Research
Economic Research 30Other Organizations: Also Taking a Scenario-Based Approach Source: Bank of Canada, July 2020 Monetary Policy Report Economic Research 32
Other Organizations: Also Taking a Scenario-Based Approach
Other Organization’s Projections for Canada’s Real GDP Growth Rate
Organization Scenario 2020F 2021F
Parliamentary Budget Office (PBO) COVID-19 + Oil Shock -6.8% N/A
COVID-19 Single-wave -8.0% +3.9%
Organisation for Economic Co-
operation and Development (OECD)
COVID-19 Double-wave -9.4% +1.5%
Source: Canadian Parliamentary Budget Office (PBO), Organisation for Economic Co-operation and
Development (OECD)
Economic Research 33Plausible Implications for the Municipality
As a municipality, the primary risks to our revenue and services would be in the
following areas:
• Transit
Reduced ridership from social distancing guidelines, employers transitioning to work-from-home
policies either temporarily or permanently, and risk-aversion even after pandemic subsides
• Community Services
Reduced users from social distancing guidelines, temporary closures, and general apprehension
among health-conscious population could reduce demand for services over the short term
• Accommodation Tax and Convention Centre Revenue
A decline in tourism and conventions, and the subsequent decline in accommodation taxes pose a
risk to this revenue stream
Economic Research 34Summary • The impact of COVID-19 on lives and livelihood in Winnipeg is real and quite substantial. • Overall the economy has seen a historic shock, and specific industries have been hit at a historic rate. • Because of this uncertainty, Economic Research has produced three scenarios of varying impacts of COVID-19 on the economy. • Our first round of scenarios were used as part of navigating the crisis early on and our second round results were used for planning the 2021 budget. Economic Research 35
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