The Bank of Canada held its overnight benchmark rate at 0.25 per cent as widely expected Wednesday, unveiled tens of billions of dollars in additional asset-buying programs, and described a dire potential outcome for the economy as a result of devastation caused by COVID-19.

Rather than presenting detailed forecasts that have become the norm for the central bank’s quarterly monetary policy reports, the central bank instead opted to present scenarios due to uncertainty surrounding the pandemic.

Under the “less severe scenario,” the Bank of Canada said the country’s economy will face a “relatively short-lived” sharp decline in activity.

Under the “more severe scenario”, where coronavirus containment measures remain in place for a prolonged period of time, the Bank warned a “significant” number of businesses would close and out-of-work Canadians could face “longer spells” of unemployment.

“Together, these effects could cause structural damage to the economy that might not be undone for several years, if ever,” the Bank said in its monetary policy report.

However, when speaking with reporters Thursday morning, Governor Stephen Poloz admitted to being an optimist at heart who believes the economy could be spared from that worst-case scenario as Canadians follow the advice of public health experts.

“The fact is that we are doing a good job. I’m impressed with how people are observing the guidelines and the rules around social distancing,” he said. “Just take a trip to the grocery store, once a week at most, and there you can see everybody practicing it really carefully.”

“I’m reasonably optimistic that the positive scenario that we have here is still achievable. The negative one is there because we have to at least imagine or think through what things would look like if we don't succeed with social distancing, and don't succeed at getting the economy at least sequentially coming back on line relatively soon.”

All told, the Bank’s analysis of various scenarios indicates Canada’s economy could slide as much as 30 per cent in the second quarter compared to activity in the fourth quarter.

The Bank said on Wednesday credit markets remain “strained”, and so it’s bulking up its asset-purchase programs, including plans to buy up to $50 billion in provincial bonds, and up to $10 billion of investment-grade corporate bonds in the secondary market.

The policy announcement is the last scheduled decision with Poloz at the helm.

The central bank has cut its key rate three times since the beginning of March in response to the COVID-19 pandemic.