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The U.S. is on track to reach herd immunity faster than Canada, giving it a head start on restoring economic growth, said BMO Capital Markets.

In a new report, the firm examined Canada’s lagging Covid-19 vaccination performance and its economic implications. While both countries are on track to get 70% of their populations vaccinated this year, the U.S. has managed to deploy vaccines much faster than Canada, BMO noted.

Coupled with higher infection rates in the U.S., that means it’s likely that the U.S. will reach effective herd immunity well before Canada does.

“With its daily vaccination rate already above 1.6 million doses, the U.S. is poised to reach potential herd immunity thresholds by the end of the second quarter,” the BMO report said. Canada, on the other hand, is on track to reach herd immunity by September, but even that target “will require a herculean effort,” it said.

Ultimately, BMO projects that the U.S. will be able to reopen its economy about three months earlier than Canada.

“A three-month lead on herd immunity would effectively give the U.S. economy a three-month head start on reclaiming this lost output,” the report said.

Earlier herd immunity should allow government supports to be wound down more quickly, curbing deficits. It could also affect the timing of tighter monetary policy on both sides of the border, and exchange rates.

In the short run, Canada’s slower vaccine rollout may mean that it lags the U.S. in terms of restoring GDP, jobs, and government finances — and it may weigh on the Canadian dollar.

However, these effects are likely to be relatively short-lived, the report also suggested.

“As it stands now, we don’t believe that there will be a significant long-term or lasting impact of a relatively slower vaccine rollout on the Canadian economy, but the process is still critical to ensure a strong recovery and limit economic scarring,” the report said.