Investment Opportunities in Canada 

Even before the pandemic hit the Canadian economy and exacerbated an already pre-existing negative situation characterized by high household debts and sluggish consumer spending, falling oil prices had worsened the overall outlook for Canada. This “double hit” will lead to an estimated gross domestic product slump of around 6% in 2020.

The reactions of the Bank of Canada and the Government were as rapid and drastic as similar measures taken by other industrial countries, e.g. slash of interest rates, the introduction of further asset purchase programs, loan guarantee programs, and wage subsidies for the employment sector.

However, a high level of uncertainty about the path forward and the recovery will remain for a while, as the government drives containment measures, and an economic recovery depends on public health outcomes, government’s responses and the resulting impact on consumer confidence. Another cause for concern is the declines in immigration, and decreasing house sales, as these two segments are usual growth drivers of the Canadian economy. Overall a gloomy picture which can be painted for the next months and years to come.

However, as is known, every crisis gives rise to opportunities. The booming and in some areas overheated real estate markets experience setbacks and lead to more attractive purchase prices with corresponding higher yields for investors while the financing rates for mortgages are becoming partially cheaper. Canadian stocks and bonds are likely to recover in specific segments, even though the respective industries and business models have to be thoroughly analyzed. 

Overall, a long-term investor, who wishes to diversify his assets internationally, should consider those opportunities in a country which is known for its long-term and stable growth, its reliable law system, and its liberal and open society.