Will government involvement shift after pandemic?

One historically significant consequence of major global-type crisis has been an almost invariable increase in reach of governments — usually well beyond what most people might otherwise have reasonably expected.

My favourite example has always been Canada’s First World War “temporary” income tax. Paying it annually today for most Canadians is a somewhat dreaded routine which was not always the case. To help finance a war Canada “borrowed” a tax concept from Montreal.

Canada has always been a country where government has had a significant role well beyond the traditional and classic stance of conducting defence, building transportation roads, hubs or harbours, plus promoting trade that supports employment.

Historically, governments in Canada have taken initiatives to support private entrepreneurs who were enjoined to build a railway across the country. Initially, early Canadian governments supported private sector pursuit of major public policy goals with subsidies and land grants.

However, when federal government support of private railway building failed in the 1920s, Canada’s government intervened to bail out private investors. Thereafter we had a second national railway, the CNR.

The federal government at that time committed to more or less universal access which launched a national radio broadcasting system (CBC) and a national airline (Trans-canada Airlines, TCA).

Unlike the U.S., Canadians have always lived intimately with our governments. In my opinion, that has largely well served Canadians. Our current medical system shames that of those enduring a global pandemic in the U.S.

For example, consider the unfolding tragedy of unemployed Americans vs. unemployed Canadians. In the U.S., the unemployed lose medical coverage unless they can afford an estimated $500 per month for private coverage.

In Canada, you are not without basic medical coverage even when unemployed. And in Ontario, seniors have access to many basic prescription drugs. Has that perhaps played a role in how Americans are contracting and dying of COVID-19 in record numbers?

Historically, almost all governments have found in crises such as war, famine, plague or COVID-19, opportunities often deemed ‘of necessity’ to intervene in the economy.

Ostensibly, as we have witnessed recently, this is done to protect jobs, businesses, incomes, agricultural workers, airlines, trucking, meat packing or food supply plants, non-profit organizations and the oil industry.

And there are more groups knocking at the government treasury door asking for support.

The alert here is that once governments begin to move into a policy area it can be politically difficult to convince subsequent governments either to do the same again or to back out.

If there is an irony to current federal and provincial bottomless handouts to needy or essential persons, if the COVID-19 pandemic continues into autumn, then reappears again in 2021, governments may have enormous difficulty sustaining these bailout programs.

Financing government during a crisis brings up another fundamental question. How much government do you personally want or need?

Political parties do offer some cumulative guidance with party policies reflecting either “more government” or “less government.” But regardless of party ideologies, crisis inevitably demands greater government involvement in virtually every sector of life and economy.

Unsustainable government expenditures often come with assurances there will be significant retreats once free from a pandemic. But how far will governments retreat? Should we demand less government for the well-off and more for those in need?

Backing out of the current level of government involvement in our lives in terms of personal privacy, income and public services, perhaps will be one of the most complex and challenging political contests facing those in Ontario and Canada for the next generation. We are bound to argue and even snarl. We were already there with railway blockades. But let us hope our public debates will not descend to the level of intense acrimony, racism and hostility being experienced in the U.S.

We are, after all, very fortunate to be Canadians.