NOW LET’S SEE OTTAWA’S RECOVERY PLAN.

Let’s start with some facts about our current economic situation, which is dire.

On Tuesday, Statistics Canada reported that real GDP has dropped a breathtaking 18 per cent since February. This news follows on the heels of IMF reports last week that the pandemic and low commodity prices are two knockout blows to the Canadian economy.

The IMF World Economic Outlook expects our GDP to fall 8.4 per cent in 2020 with a rebound gain of only 4.9 per cent in 2021. By 2022 GDP will still be four points below its end-of-2019 level.

The IMF also predicts that Canada’s consolidated government deficits will be a whopping $270 billion this year — that’s 12.6 per cent of GDP — as governments prop up businesses, households and non-profits (like the WE Charity) to bridge the economy over the pandemic. Even worse, because the IMF uses national accounting methods, its estimate ignores growing shortfalls in government employee pension plans.

For 2021, the IMF expects Canada’s all-government fiscal deficits to be 5.8 per cent of GDP or roughly $130 billion. That is a big number. Deficits likely will continue for most of this decade — which is why running surpluses during good years, as we should have been doing since about 2011, is such smart policy.

As a result of these deficits, the IMF expects Canada’s gross public debt to rise by 20 points of GDP to about $2.6 trillion by the end of 2021. As for our private debt, which is already over $4 trillion, the IMF reports it is second highest among 19 advanced countries, behind only the Netherlands. The one saving grace — for now — is that interest rates are low. But as we saw with last week’s downgrade of Canada’s federal debt, we should not assume interest rates will stay low if (when?) credit risks get out of hand.

All this sounds very bad. Terrible even. How will we get people back to work? Is all this new spending fiscally sustainable? Can we can recover? Is there hope?

Enter Alberta, the first government in Canada to think beyond the short-term liquidity crisis. As Premier Jason Kenney emphasized in presenting the Economic Recovery Plan on Monday, it is a work-in-progress — as it should be, given all the uncertainties ahead. It was built by broad consultation, including with advice from the Premier’s Economic Recovery Council, which I chair.

The plan is a confidence-booster focused on growth. It has three main parts: stimulate investment, skill training and helping people get back to work; build shovel ready — and shovel-worthy — infrastructure; and diversify the economy.

So many new measures are included in the plan’s strategy that it would be impossible to list them here. The government will remove regulations that have made it difficult to build infrastructure, invest in new industries or hire newcomers to the province. Getting the provincial corporate tax rate down to eight per cent will be done by yesterday (literally: the change was made Canada Day) rather than the original deadline of Jan. 1, 2022. Cutting corporate taxes has already been criticized by the left but most countries did that after the 2008 financial crisis as an effective, low-cost way of supporting investment and jobs. There will also be a new research and development tax credit for technology startups that can’t benefit from lower corporate taxes because they don’t yet have corporate income.

Over $10 billion in new and accelerated infrastructure spending in 2020 is expected to create immediate demand for workers. Funding initiatives are planned for irrigation projects in agriculture, water treatment, technology innovation, emission reduction, flood resistance and municipal funding.

The province also plans strategic investment in various sectors, including value-added activities in petrochemicals, forestry and agriculture, tourism, minerals, finance, aviation, aerospace and logistics and emerging sectors. It promises co-investments through technology funds, as well as acceleration of skilled immigrant streams and post-secondary education reforms to support innovation.

It is an aggressive plan with many details still to be worked out, especially the fiscal plan. But at least Albertans now have a long-term plan to talk about rather than focusing only on the short term.

Which gets us to the federal government. Ottawa has plucked billions of dollars off the money tree to support the economy through the summer. The minister of finance has been mum but the Parliamentary Budget Officer and, as we have seen, the IMF have made clear we will face record federal deficits in the next several years.

Canadians are starting to wonder. What is the future going to be like with so many people out of work? What will encourage new businesses to come to Canada and grow here? Will taxes be increased or spending constrained in the future? How much more public and private debt can we sustain?

Ottawa should show us its own recovery plan. The Liberal-NDP “alliance” should bring back Parliament and start a conversation about our future. Measures should be debated to make sure we get the biggest bang for the buck. Our job creation was more than good leading into the pandemic but our productivity performance needs big improvement.

How to begin dealing with the pandemic’s economic fallout with a coherent plan is the most important lesson to learn from Alberta this week.