Getting ready for a new world

The coronavirus pandemic is turning the world upside down. Yesterday’s conventional wisdom is overthrown. Old ideas are new again — especially if it seems they’ll help us fight the disease.

The idea that governments should run an “industrial policy,” scorned for decades in favour of free markets and unfettered globalization, is suddenly on everyone’s lips. When worldwide supply chains fail and Canada is left scrambling for crucial medical equipment, relying on factories halfway around the world doesn’t seem like such a great idea anymore.

So governments are enlisting Canadian companies in the fight against the virus, and hundreds are answering the call. They’re switching over to making medical gowns, masks and, as Prime Minister Justin Trudeau announced on Tuesday, as many as 30,000 life-saving ventilators.

Good for them, and for the governments that are quickly orchestrating the biggest peacetime mobilization of industry in the country’s history.

In the short run, companies like Thornhill Medical, CAE, Linamar and so many more will help to fill the gaps and supply our front-line health care workers with what they need.

But this looks to be more than a temporary emergency measure. The pandemic is like an x-ray that reveals flaws in our social and economic body that we can no longer ignore.

The most obvious is that Canada can no longer rely on others for certain vital goods. We need to rebuild our industrial base and be prepared to rely more on our own resources in the future. This pandemic will end, but other challenges are bound to follow.

All around the world, countries are turning inward. Canada has long championed open markets and free trade, but it would be foolish to think this country can ignore the global trend and return to business-as-usual once the crisis has passed.

Afundamental shift is underway. Governments are showing they are indispensable to organizing the collective response to a major crisis, and it won’t be possible to turn back the clock entirely.

The Trudeau government has already sketched an outline of a new industrial policy, involving a greater role for such agencies as the National Research Council and more direct support for key economic sectors.

Likewise, in a new paper for the Public Policy Forum, researchers Robert Asselin and Sean Speer call for a “new forward-thinking industrial policy.”

The same kind of urgency and national coordination, they suggest, could be applied in future to big issues like climate change and the country’s aging demographic. Like the pandemic, they argue, those challenges are important enough to warrant a collective response and not be left simply to the best efforts of the market.

All this runs counter to decades of economic orthodoxy. But it should be seen as an opportunity to finally address the shortcomings of the current system.

Rebuilding the industrial base, for example, would help to create (or re-create) some of the vital middle-class jobs that were traditionally the foundation of stable communities.

Not everyone can join the “creative class” of tech-savvy elite urban workers. The drive to outsource everything possible in the name of the cheapest possible product has left far too many stranded in precarious, poorly paid work.

Making more things closer to home is one way to fix that — even if it means we pay more.

The gaping holes in the social safety net laid bare by the pandemic make clear that we’ll end up paying one way or the other, either in higher prices needed to provide decent wages, or in expensive social benefits.

Even Premier Doug Ford now argues that it’s time to “look after ourselves,” even if that means paying more for what our fellow citizens produce. That’s a sea-change.

Of course, there’s a potential dark side to all this. As governments elsewhere turn away from globalization, some may reject freedoms that have gone along with it.

For Canada, the challenge is to avoid those pitfalls but get ready for the new world that will surely emerge from this crisis.

The Trudeau government has already sketched an outline of a new industrial policy