Trade confidence among Canadian exporters has plunged to a record low of 56 per cent as businesses have grappled with the economic effects of the coronavirus pandemic and worried about increased protectionism, Canada’s export credit agency said on Thursday.
In its bi-annual survey of 823 Canadian exporters conducted online in May, Export Development Canada (EDC) said the confidence figure was the lowest recorded in the history of the survey, which began in 1999.
Officials shut most non-essential businesses starting in mid-March and urged people to stay home to slow the spread of the coronavirus, but in recent weeks regions have begun to reopen.
“It’s basically two shocks in one. You’ve got longer-term protectionism and then you’ve got COVID-19 coming in on top of that,” EDC’s deputy chief economist Stephen Tapp said in an interview.
More than two-thirds, or 6 per cent, of those surveyed, said they expect protectionism to increase in the year ahead, Tapp said, almost double the 35 per cent seen six months ago. Almost 40 per cent said protectionism was affecting their global strategies.
Earlier this week Canadian minister Jean-Yves Duclos, president of Canada’s Treasury Board, told reporters the coronavirus pandemic and the resulting economic crisis could trigger a rise in protectionism globally.
“We need as Canadians to be mindful of the fact that protectionism still exists and runs the risk of being even bigger and an even greater threat as we emerge from the COVID health and economic crisis,” Duclos said.
About 73 per cent of exporters surveyed told EDC the coronvavirus pandemic had negatively impacted sales, while 14% said sales had been positively affected. The majority of respondents said they expected sales impacts tied to the coronavirus pandemic would persist into 2021. Sixty-seven percent of respondents said they expected the current global recession would last more than a year.