Ottawa plays catch-up
Canadians have been inspired by how our health-care professionals have rallied in the face of the real and immediate danger posed by the COVID-19 pandemic. At this time, Canada has not faced the kind of challenges that have already afflicted other countries around the world, including some of our closest allies. We may yet avoid that grim circumstance. But it is incumbent on us to plan for the worst. And our healthcare professionals are doing that, every day. It is inspiring, and we are grateful to them.
While our doctors, nurses, public- health experts, support staff and technicians prepare our hospitals, it is incumbent on all of us to prepare for what may be coming. The only priority in this country that could rival the public health effort must be the preservation of the economic strength and wealth that all Canadians rely on. The time will come, hopefully soon, when this virus will be defeated. We must make sure we have an economy left waiting for us at the other side of this crisis.
To be clear, this does not mean we should rush ourselves into any form of premature economic restart. The best medical advice continues to be self-isolation and the outright quarantine of those returning from abroad. But this is undeniably a massive shock to the economic well- being of this country, and its trading partners. How best can we endure that shock while trusting in our medical professionals to handle the front line danger?
The question may seem insensitive to some, but every war involves the home front. In the battle against the coronavirus, the home front is the economy itself.
Canada has not moved as quickly as some of its allies have. On Friday, the government announced it will be providing interest- free loans to small businesses and cover up to 75 per cent of their payroll, which was increased from a wage subsidy of 10 per cent announced on March 18. But even before the Liberals made their initial announcement last week, France, which is determined to ensure that no business fails as a result of this crisis, had already announced a € 45- billion ($ 70 billion) aid package for businesses and said it would guarantee € 300 billion worth of bank loans. The U.K. had already pledged to support companies with £ 330 billion ($ 573 billion) in government-backed loans and £ 20 billion in tax cuts and grants for affected businesses. And mere days after Canada announced its 10 per cent wage subsidy, the British unveiled a program that subsidizes up to 80 per cent of wages.
This editorial board does not routinely make a point of calling for government intervention in the economy. But in this exceptional circumstance, it is entirely appropriate for the government to provide economic support. This is not about pork-barrelling, picking winners and losers, or raining down money on pet priorities in a handful of electoral ridings. We would obviously have no toleration for that, nor would the voters. But Canadians recognize the enormity of this unique challenge. Only government has the ability to respond quickly and massively enough.
Up until now, it had seemed reluctant. Interest rate cuts, some support to unemployed Canadians, some tax deferrals, all were welcome, but they were also obviously insufficient. The government is no doubt doing its best to respond to this fast- moving crisis. But the fact that every day brought new announcements revealed an uncomfortable truth: the government’s plans were not keeping up with the pandemic’s steady march.
The announcement on Friday of major wage supports to small- and medium- sized Canadian businesses is a big step in the right direction. These businesses employ almost 90 per cent of the private- sector workers in Canada. The vast majority of these businesses are fundamentally sound, and would be operating normally if not for the necessary but devastating government- mandated restrictions on travel and commerce.
As of press time, there was no information as to the cost of Ottawa’s latest plan to backstop wages, but we know it will be gigantic. Yet this is the kind of support that is needed in order to prevent millions of Canadians from losing their jobs as thousands of businesses shut down.
It is too soon to say how long this crisis will last. Canadians are coming to realize that it will last longer than they originally thought. When it is over, our economic recovery will hopefully be strong and swift. That will depend on having strong Canadian businesses, thousands of them in all their resilient diversity of specializations, in a position to resume operations without delay. Our future return to normal will be greatly sped up by efforts to preserve this critical national asset: our private sector. Our closest trading partners have already moved aggressively in this direction, and Canada cannot be left behind. It is a good thing that Ottawa has finally come to realize the necessity of strong, immediate action. The country could not have waited much longer.