Cri­sis is the Mother of Col­lab­o­ra­tion: Fed­er­al­ism and COVID-19

Policy - - In This Issue - John Dela­court

To adapt John F. Kennedy on Canada-U.S. re­la­tions to our fed­eral-provin­cial dy­namic: Ge­og­ra­phy has made us room­mates, his­tory has made us skep­ti­cal and a pan­demic has made us co­op­er­ate. De­spite all the sys­temic weak­nesses re­vealed by the COVID-19 cri­sis, its pub­lic health and eco­nomic ex­i­gen­cies have proven that Canada’s gov­ern­ments are ca­pa­ble of work­ing to­gether. Long­time Lib­eral strate­gist and Hill + Knowl­ton VP John Dela­court ex­am­ines the eco­nomic and po­lit­i­cal im­pli­ca­tions of that break­ing news.

It is a time that now seems as re­mote as the Cold War years, given the cur­rent fog-of-war re­al­ity of this pan­demic. But in 2004, Paul Martin’s Lib­eral gov­ern­ment, com­ing off an elec­tion that had seen a con­fi­dent ma­jor­ity re­duced to a ner­vous mi­nor­ity, con­vened a meet­ing of the first min­is­ters on health care at the old rail­way sta­tion in down­town Ottawa—the build­ing that now houses the Se­nate.

Much was ex­pected for a na­tional vi­sion. The con­fer­ence was sup­pos­edly go­ing to set the co-or­di­nates on how health care would be man­aged in Canada for gen­er­a­tions to come. Im­plicit in the rhetoric lead­ing up to the dis­cus­sions was an evo­ca­tion of a larger theme: a defin­ing tone for co-op­er­a­tive fed­er­al­ism for the new cen­tury.

Yet for those among the press gallery who knew Prime Min­is­ter Paul Martin well, they did not have high ex­pec­ta­tions that he would use this meet­ing as a bully pul­pit for fed­er­al­ism, even though a re­port writ­ten by for­mer Saskatchew­an Premier Roy Ro­manow just two years be­fore called for an as­sertive po­si­tion that would have the feds pro­vid­ing 25 per­cent of all health care fund­ing to the prov­inces and ter­ri­to­ries. Apart from Ro­manow’s rec­om­men­da­tions there was also the prospect of a na­tional phar­ma­care plan be­ing dis­cussed in the halls—and per­haps even an op­por­tu­nity to look ahead and mit­i­gate the risk of a cri­sis for se­niors’ care. Yet af­ter four days of meet­ings, with a re­sult that might have been in­dica­tive of risk aver­sion or canny trans­ac­tional pol­i­tics by Martin and his team, the fi­nal deal was far less than a “fix for a gen­er­a­tion.” There was an agree­ment on wait times for five pri­or­ity ar­eas and an­other on an es­ca­la­tor clause for fund­ing, and those were the high points of a con­fer­ence so un­der­whelm­ing that Al­berta Premier Ralph Klein skipped the last day and was ru­moured to be spend­ing most of his free time at the new casino across the river in Gatineau.

This 2004 con­fer­ence has taken on a new his­tor­i­cal res­o­nance when viewed through the lens of how our cur­rent Lib­eral mi­nor­ity gov­ern­ment has, be­cause of the chal­lenges of COVID-19, been com­pelled to adopt a bolder fed­eral role. The fact that 80 per­cent of the deaths due to the virus have oc­curred in care homes, even though only one per­cent of the pop­u­la­tion is liv­ing in them, is a stark enough statis­tic and a sign that the prov­inces are strug­gling to man­age this cri­sis with lim­ited help or lead­er­ship from Ottawa. Se­niors Min­is­ter Deb­o­rah Schulte has stated there will be a “Team Canada ap­proach” to es­tab­lish­ing fed­eral guide­lines for these homes now. An­other Lib­eral mi­nor­ity gov­ern­ment, sim­i­larly chas­tened by a loss of ma­jor­ity for­tunes, now has to deal with what was over­looked 15 years ago.

Yet there are two other fac­tors that are pulling strongly, like a mag­netic force, on the com­pass points di­rected to­ward fed­eral lead­er­ship: the eco­nomic im­pact of the pan­demic on our cities and the strong un­der­cur­rents of a new eco­nomic na­tion­al­ism, ow­ing to the grim re­al­iza­tion that de­pend­ing on global sup­ply chains for es­sen­tial goods in a time of in­ter­na­tional cri­sis seems in­creas­ingly ill-ad­vised. The tragedy that has be­fallen the long- term care homes may have been the first sign that a new way of work­ing col­lab­o­ra­tively with the prov­inces on so­lu­tions is needed, but our cities and our abil­ity to man­u­fac­ture and man­age our own es­sen­tial prod­ucts

and tighten our hold on our great­est re­sources are now the cru­cial longterm chal­lenges.

No one knows this bet­ter than min­is­ters Cather­ine McKenna and Mélanie Joly, tasked with man­ag­ing in­fra­struc­ture and the re­gional eco­nomic de­vel­op­ment agen­cies, re­spec­tively. As McKenna and her team have been fo­cused on the cre­ation of a kind of sec­ond Eco­nomic Ac­tion Plan, work­ing with the prov­inces on a pri­or­i­tized list of “shovel-wor­thy” projects, they have quickly come to the re­al­iza­tion that rev­enue short­falls at the mu­nic­i­pal level are go­ing to make part­ner­ing on needed projects very dif­fi­cult. McKenna’s of­fice has stated they were ini­tially look­ing at mak­ing changes to the gas tax fund, in­creas­ing the an­nual es­ca­la­tor of two per­cent, but be­cause the tax is al­lo­cated on a per capita ba­sis for prov­inces and ter­ri­to­ries, smaller com­mu­ni­ties may not ben­e­fit to the same de­gree. Joly has had to look squarely at the dark hori­zon for cities as well. Un­der nor­mal cir­cum­stances, re­gional eco­nomic de­vel­op­ment agen­cies tar­get their sup­port at com­mu­ni­ties large and small. If any­thing, they will de­vote greater at­ten­tion to the lat­ter to help grow the tourism and ser­vice economies, es­pe­cially in places that never re­ally re­cov­ered from the last re­ces­sion in 2008. But as store­fronts and restau­rants are boarded up on for­merly busy down­town streets, with no signs of re­turn, there are just too many Cana­di­ans out of work in Mon­treal and Toronto. With cul­tural events and con­fer­ences now taken off the ta­ble for the next few quar­ters, fed­eral re­sources and lead­er­ship are needed more than ever dur­ing the long months of re­cov­ery ahead.

And as these ur­ban economies stut­ter-start back to life, the mer­its of look­ing out­ward and re-em­brac­ing the cen­tral tenets of glob­al­iza­tion are be­ing re-ex­am­ined. Prov­inces largely man­ag­ing their own sup­plies of, say, sur­gi­cal masks for per­sonal pro­tec­tion made em­i­nent sense just months ago. Now, re­ly­ing on the

U.S. or China for what we’ll need in fu­ture crises no longer seems wise or for­ward-think­ing. No one has come to this re­al­iza­tion as swiftly as Deputy Prime Min­is­ter Chrys­tia Free­land and her of­fice, whose con­ver­sa­tions with the pre­miers have fo­cused on avert­ing short­ages as sup­ply chains have hard­ened like clot­ted ar­ter­ies, strug­gling to pump some lifeblood into com­mu­ni­ties whose need is great­est. A re­think­ing of the pos­i­tives and neg­a­tives of wide-open mar­kets has gone from a rip­ple to a wave around the world now, and Canada has learned the same lessons as other na­tions in the G7. It would be an ex­ag­ger­a­tion to pre­sume the next elec­tion will see cam­paign plat­forms tout­ing a new eco­nomic na­tion­al­ism, but a new fo­cus on how Canada can ably de­pend upon it­self in times of fu­ture crises will be plau­si­ble, and will likely sound very com­pelling to an elec­torate made war-weary by this virus.

Still, as it is with most COVIDera phe­nom­ena, it is too early to say if a greater role for the fed­eral gov­ern­ment in Cana­di­ans’ lives will main­tain its ap­peal past that next cam­paign or through the worst of this re­cov­ery pe­riod. Yet there are strong voices from other fronts that are be­gin­ning to sug­gest so. A trio of prom­i­nent names from academia and the cul­tural sec­tor re­cently au­thored an op-ed for the Globe and Mail call­ing on the gov­ern­ment to cre­ate a vari­a­tion of Pres­i­dent Franklin D. Roo­sevelt’s Works Progress Ad­min­is­tra­tion, a De­pres­sion-era ini­tia­tive that got Amer­i­cans work­ing on brick­sand-mor­tar con­struc­tion projects but also on films, mu­rals and pho­tog­ra­phy projects. It is less fan­ci­ful a no­tion than it sounds at first; as the au­thors note, nearly three per­cent of Canada’s GDP is from the cul­tural in­dus­tries; greater than agri­cul­ture, forestry, fish­ing and hunt­ing, ac­com­mo­da­tion and food ser­vices and util­i­ties. The hear­ken­ing back to the Great De­pres­sion for in­spi­ra­tion may be more apt a no­tion than we cur­rently want to con­sider.

And yet. Out­go­ing Bank of Canada Gover­nor Stephen Poloz, with one of the few heart­en­ing com­ments of his fi­nal days, stated the dire eco­nomic fore­casts for the next few quar­ters may be “overblown” and that a wave of in­no­va­tion and new star­tups may emerge over the hori­zon. With that, the new tide of fed­er­al­ism may re­cede over the stronger terra firma of this re­cov­ery phase. The stim­u­lus mea­sures, in this sce­nario, will have achieved the ob­jec­tive of cush­ion­ing the im­pact on all sec­tors and pro­vid­ing a smoother tran­si­tion back to small but in­cre­men­tal growth.

There is a say­ing about marathon run­ning and child­birth—that peo­ple do it over and over be­cause we have short term mem­o­ries of pain. The Cana­dian econ­omy is un­doubt­edly on a long trek for re­cov­ery and when it’s over, the hard­ships may fade quickly from mem­ory as well. But per­haps some of the lessons from a more co-op­er­a­tive fed­er­al­ism will res­onate be­yond this cri­sis. For the Trudeau gov­ern­ment’s for­tunes, that might be the best news they can hope for be­fore an­other elec­tion cam­paign.

Con­tribut­ing Writer John Dela­court, Vice Pres­i­dent and Group Leader of Hill + Knowl­ton’s pub­lic affairs prac­tice in Ottawa, is a for­mer di­rec­tor of com­mu­ni­ca­tions for the Lib­eral Re­search Bu­reau. He is also the author of three nov­els.

The Cana­dian econ­omy is un­doubt­edly on a long trek for re­cov­ery and when it’s over, the hard­ships may fade quickly from mem­ory as well. But per­haps some of the lessons from a more co-op­er­a­tive fed­er­al­ism will res­onate be­yond this cri­sis.

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