Just a few months ago, Canadians were part of a mad scramble to obtain masks, gloves and other personal protective equipment.
The shortage was so acute that policymakers started a concerted effort to build a supply chain in Canada, a process known as reshoring.
On this week’s Down to Business, Irene Lauro, a senior economist at Schroders, explains the ripple consequences of reshoring and offered a high-level analysis of the state of the economic recovery as part of an ongoing series on the challenges and opportunities of Reopening Canada.
Lauro said reshoring may be accelerating an existing trend towards a gradual reversal of globalization, and that there may be unintended consequences, including that companies look to offset the higher cost of labor, in jurisdictions such as Canada, by relying more on automation.
Deflation, the term for when prices start falling, is a top concern for economists as the recovery moves forward, because this could change people’s spending habits and stall progress.
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