What were the contributing factors to our decisions to take extraordinary policy steps? I would characterize our policy decisions in two phases.
The first was in March 2020. This was at the very beginning of the pandemic. At that point in time, what we were facing was extreme market volatility. What often happens when there is a big shock to the economy is that everyone—investors, companies and households—wants to be cash rich. They want to liquidate investments into cash, so there was what we called a dash for cash. The market was swamped with people looking to liquidate investments.
What the bank did was intervene and ensure that there was enough liquidity in the market to keep markets moving and make sure that this dash for cash didn't result in a downward spiral in the price of assets. That is a role that central banks around the world play. We intervene in markets when there is a severe disruption that makes the markets not function effectively to support the economy.
That was the first phase of our response.
I think somewhere around May or June of 2020, the market volatility started to normalize and settle down, so markets went back to a more functioning condition. However, at that point, the GDP had plunged. There were about three million Canadians unemployed, and many more were not working as much as they wanted or needed to. There was no vaccine in sight at that point in time. We were still in lockdown. We were all locked in our houses. I think that at that time, the view was that were were staring down the potential for something on the scale of the Great Depression.
The other thing I remember distinctly is that oil was trading at about $18 and oil futures were negative. I had never seen that in my lifetime. Those were the conditions in June.
The judgment of the Bank of Canada and central banks around the world was that we needed to take extraordinary measures to support the economy. Just as in March 2020, it was our judgment that on top of a health crisis, Canadians didn't want to face a financial crisis. In June 2020, in addition to a health crisis, we didn't think Canadians should have to face an economic crisis. Therefore, we intervened to provide stimulus to the economy by ensuring that long-term rates stayed low and Canadians could access credit to keep the economy running.