Canada must begin the march to recovery soon

Support agriculture, energy sectors, says Derek H. Burney.

Amidst all the gloom and doom and anguish about the COVID -19 pandemic, there is at least one ray of light — the prospect that the enormous effort underway to develop a vaccine may bear fruit by the end of this year.

The race to succeed with a vaccine is global. A White House task force “Operation Warp Speed” is determined to make hundreds of millions of doses available by January 2021. In the U.S., there are at least 115 projects running in companies and research labs. The Gates Foundation alone is sponsoring seven separate vaccine projects. Several other countries, including Canada, are in the hunt.

But the promise of a vaccine earlier than anticipated is refreshing — a remarkable triumph of public- and private-sector collaboration, most notably in the U.S. It may be quite literally the shot in the arm needed to quash the doomsaying and restore confidence in our ability to move from mitigating the pandemic to a priority focus on economic recovery. Similarly encouraging breakthroughs are anticipated on treatments for the virus intended to reduce mortality rates.

Even more serious than the consequences from the pandemic itself is the devastating toll already taken on the global economy with declines in GDP and increases in unemployment that are already at Great Depression levels.

What we do know is that the longer the lockdown prevails, the slower will be the recovery. Notions that a weak second quarter will start to turnaround in Q3 and deliver robust recovery in Q4, as the White House suggests, are conjectures based more on hope than analysis. Recovery is more likely to be difficult and drawn out. Small businesses are particularly vulnerable after two months of closure. Many will not survive, especially if the lockdown persists.

Canada must begin the march to recovery soon. If we insist on having a capacity to test and retest everyone or await complete information on how many are affected as a precondition for lifting restrictions, we will doom ourselves to a prolonged and deeper recession. We should move away from guidelines that presume all in every location are vulnerable and target specifically those who we know are the most vulnerable.

The easy part is dispensing seemingly limitless public funds to mitigate the damage to individuals and to sectors of the economy that are most negatively affected by a complete lockdown. The key question is how best to stimulate economic recovery without leading the country into insolvency. We need a strategic plan keyed to support sectors like energy (which Alberta needs now more than ever) and agriculture that are critical to our well-being, along with targeted industrial support that will provide greater self-sufficiency in such things as pharmaceuticals, medical equipment and meat processing. Infrastructure spending should also command a priority, especially for public health facilities to improve our capacity to cope with future pandemics and upgrades for shipping terminals and transportation networks that are needed to bolster recovery.

Not needed are indulgences in fads of the moment like aspirations for a greener economy, on which so much has already been spent. The severe economic downturn has already done more to reduce carbon emissions than all the government subsidies and green taxes combined.

Nor is it time for guaranteed-income schemes. With a debt load already nearing $1 trillion, Canada simply cannot afford such a program. The response to record claims for unemployment insurance in the U.S. (over 30 million and counting) demonstrated that a universal approach giving more money to some not to work than they had received while working suppresses the desire to return to work. Government handouts without incentives simply create demands for more of the same. The risk of going too far in that direction is that we will have more people riding in the wagon than pulling it — a surefire way to squelch the prospects for economic growth.

In order to temper growing regional tensions in Canada the plan should be national in scope and not tilted heavily to vote-rich Ontario and Quebec. A national emergency is no time for partisan bickering.

The government should assemble a council of the best and brightest minds from industry, science and finance to help chart the path forward. Above all, we need programs that serve the national interest, and confident political leadership to guide a solid recovery.

A career Foreign Service officer for more than 30 years, Derek H. Burney is a former Canadian Ambassador to the U.S. and Chief of Staff to Brian Mulroney.