Understanding the effects of the crisis on household finances and behaviour patterns in Quebec

A group of researchers led by Pierre-Carl Michaud is studying the impact of the closure of a large part of the economy from March 2020 onwards on household finances and resulting behaviour patterns in Quebec.

The lockdown and economic slowdown are affecting household finances

• Between March and May 2020, the pandemic caused lots of individuals in Quebec to lose their jobs or reduce their working hours, thereby impacting incomes and household expenses.
• Many households missed or deferred payments, while others went into debt, used up their savings, cut spending, or benefited from government support such as the Canada Emergency Response Benefit (CERB).

Measuring the effectiveness of support policies to improve them

• A very detailed online survey, conducted from May 8 to 20, 2020 with an impressive sample of 3,000 Quebec residents aged 25–64 years, was used to measure the state of household finances in April 2020, compared to 2019.
• Research reveals for example that few Quebeckers used their savings, but that many could have done so. Similarly, although all households cut their spending in April 2020, those that had lost a job tightened their belts further and made more use of payment deferrals.
• The researchers were also able to model the effects of the CERB, which were much more substantial than Employment Insurance when the claimant was not working. As the CERB was only made available to workers earning less than $1,000 per month, there was a disincentive to resume work when the economy reopened.
• These findings also made it possible to propose guidelines for more targeted public assistance measures subsequently. A case in point was the implementation of an “improved employment insurance” in the fall of 2020.

Suggested links

Pierre-Carl Michaud’s website

Virtual conference by Pierre-Carl Michaud on his work in connection with COVID-19

Peer-reviewed article on household finances in Quebec, published in Analyse de politiques/Canadian Public Policy

Short illustrative note on income support and the incentive to work, published in CIRANO