In the midst of pandemic, bold action is required
Governments must be ready to protect workers’ health and use stimulus wisely
This is the first in a series of commentaries by thought leaders about how Canada can respond to economic and other effects of the coronavirus pandemic and prepare for a post-pandemic future.
We are living in unprecedented times.
The COVID-19 pandemic exposes the strengths and weaknesses of public health systems around the world. The necessary responses to that pandemic are testing broader social safety nets, many of which have been damaged by years of austerity. As many economies fall into likely recession, governments are demonstrating their capacity, or lack thereof, to respond to this tremendous challenge.
The health implications of the coronavirus are severe. So is the potential economic fallout. Its impact could exceed that of the 2008-09 financial crisis.
Remember, at that time, many governments were slow to act. Canada pledged to spend the equivalent of a modest two per cent of GDP to kick-start the economy. The U.S., Australia, Italy, Germany and South Korea all spent more.
This time, government has a chance to act faster and be smarter. They should commit to a much more ambitious and strategic stimulus program — as large as four or five per cent of GDP — and make sure as much of it as possible gets directly into the hands of working people, to fuel consumer spending and help individuals pay their bills.
Economic damage has been swift. In a matter of days, stock values have plummeted and resource prices have crashed. In workplaces across the country, shifts are being cancelled, and layoffs loom. Some factories have temporarily stopped production.
We have two major asks of government. First, protect public health and improve workers’ rights by ensuring all workers have access to paid, job-protected sick leave as well as proper health care and income assistance. Second, act quickly to deliver a fiscal stimulus package to mitigate job losses in the near term and get people back to work in the long term.
Federal supports to expedite EI sick leave benefits and expand work-sharing are welcome first steps, but much more must be done.
Employment Insurance must be made more accessible by reducing, or even eliminating, the hours required to qualify. Increasing the benefit rate to cover a greater share of lost earnings, say 80 or even 100 per cent, is also needed in this time of emergency. The waiting period for economic layoffs must also be waived.
Governments must also enact special measures to supplement the lost earnings for the large number of precarious workers historically denied EI benefits, including some part-time, gig-based, and temporary migrant workers.
Some of the emergency measures may prove so effective that they become permanent. That is more than worth considering.
Once this acute phase of the pandemic has subsided, governments must double-down on investment in social infrastructure, supports such as universal childcare, a critical economic stabilizer that promotes gender equality and creates jobs, good ones, if government focuses funding on higher wages and benefits. They must also deliver, immediately, on Universal Pharmacare.
Any fiscal stimulus package must move rapidly on long-overdue investments in physical infrastructure, too, including expansion of public transit systems, guided by a new National Public Transit Strategy, along with
waste water treatment, road construction, public utilities and other vital public works projects. They should use this opportunity to end long-term drinking water advisories on First Nations reserves. Requiring that tools, materials and equipment are sourced from Canadian suppliers, wherever possible, would stimulate domestic production. To be clear, with historically low interest rates, Canada has substantial fiscal room to do all of this and more.
As governments plan their responses, they must also recognize that crises will become more commonplace. Climate-related events will have a comparable and damaging effect on our economy in the future. Now is the time for big and bold ideas to stabilize our economy with an eye to sustainability.
Canada needs a massive, historic investment in clean technology, green infrastructure and associated job creation. Focus a permanent transit fund on emissions-free technology, build and retrofit affordable housing, invest heavily in zero-emission vehicle technology and production capacity for the auto sector and clean up abandoned wells in Alberta while investing in the skills and abilities of oilsands workers to meet our future energy needs.
This pandemic has frontline workers bearing the weight of a chronically underfunded health care system, making us all vulnerable. Our opportunity — to which governments must rise — is to invest in programs and infrastructure to strengthen our ability to stand strong in the face of whatever crisis comes next.