The Canadian economy is getting a timely assist this winter from a broad-based upswing in commodity prices, helping to soften the blow from the second wave of COVID-19 and spurring talk of another “super cycle” in key resources.
From lumber to iron ore, soybeans to canola, just about everything has clawed back to prepandemic prices or multiyear highs. Excluding energy, a Bank of Canada commodity price index has surged 36 per cent from April, taking it close to a record.
Even oil is looking up. Ten months after it tumbled into negative pricing, the U.S. benchmark has rallied to around US$60 a barrel, just as production climbs in Alberta.
There’s reason to believe the rebound has legs. China has carved out a V-shaped recovery, and industrial production has surged to record levels in emerging markets.
The U.S. economy is poised to get a boost from another round of stimulus. And in Canada, companies and households are sitting on billions in excess cash, creating a potential wave of demand.
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