Quantifying the economic impacts of COVID-19 policy responses on Canada's provinces in (almost) real time

We develop a methodology to track and quantify the economic impacts of lockdown and reopening policies by Canadian provinces in response to the COVID-19 pandemic, using data that is available with a relatively short time lag. To do so, we adapt, calibrate and implement a dynamic, seasonally adjusted, input-output model with supply constraints. Our framework allows us to quantify potential scenarios that allow for dynamic complementarities between industries, seasonal fluctuations and changes in demand composition. Taking account of the observed variation in reopening strategies across provinces, we estimate the costs of the policy response in terms of lost hours of employment and production. Among other results, we show how a more aggressive response, even though it imposes higher economic costs in the short run, can lead to lower economic costs in the long run if it means avoiding future waves of lockdowns.