The fight against COVID-19 plunges us into a crisis that upsets our certainties. Will this crisis change our way of living and our relationship with others? The duty asked different figures to reflect on the consequences of the pandemic in our lives. This series, which continued for three weeks, ends this weekend with Henri-Paul Rousseau, who gives us a second text today on the economy.
The actions of our governments to support Canadians during the pandemic have generated huge deficits ($ 250 billion federally). These deficits are legitimate because thousands of the unemployed could not be allowed to sink into poverty and hundreds of businesses forced into bankruptcy. However, our governments cannot abandon these programs overnight and eliminate their deficit anytime soon, because the pandemic has wreaked havoc that far exceeds its duration.
Think of the thousands of unemployed in the airline, food, tourism, oil and gas and cultural sectors and the thousands who have been or will be laid off permanently because their businesses will have been swept away by the crisis.
Hear Henri-Paul Rousseau’s point of view
In a few months, the shortage of labor turned into surplus labor, with the influx of unemployed workers from sick companies of COVID-19. All of these unemployed people and businesses will call for help again and put enormous pressure on the federal government. The temptation will therefore be great for the latter to adopt a short-term approach to reviving the economy by scattering its aid by economic sector. Without denying that some companies will indeed need to be “saved”, we believe that the government should rather favor a long-term approach, focused on a vision for the future of the whole Canadian economy.
Such a vision would translate into new economic policies, which would transform support programs into investment programs, to place Canada in the major trends emerging from modern economies.
Here are some examples of these economic policies:
a bold national policy of human and scientific capital;
a real digital transition policy;
a major infrastructure improvement policy.
The main goal is to equip the country to do well in this new world. These major trends are those of the digitization and robotization of production and distribution processes, product traceability, the ecological transition to clean energies and the consideration of extreme risks.
Here are some examples of economic policies inspired by this vision.
1- A bold national human and scientific capital policy
The objective of this policy would be to improve the skills, abilities and competences of the workforce and to increase the scientific and technological capital of the country. The federal government must invest heavily, along with the provinces and the private sector, in training and retraining programs based on best Canadian and foreign practices. Such an initiative would involve our colleges and universities, which the pandemic has brought to develop the offer of online courses but which need additional financial resources to better equip themselves and to attract and retain the best talent. Workforce training and education are provincial responsibilities, but this crisis provides an opportunity for governments to unite their efforts to help the workers that the crisis forces to retrain and to support all workers in the digital transition and in the automation of our industries. This policy would finally provide us with a lasting framework for training the workforce while ultimately facilitating the integration of immigrants.
2- A real digital transition policy
The digitization of transport, logistics, ports and airports is essential so that our manufacturers, artisans, farmers and retailers can compensate for breaks in the supply chain and thus maintain or even increase their position in trade. Digitization provides traceability and security for the goods and commodities that today’s consumers and businesses demand. Whatever the tools of this digital transition policy – accelerated tax depreciation, tax credits or subsidies – the government must guide them so as to increase the digitization of our businesses.
The federal government must also, like those of the provinces, switch to digital and, in the process, take advantage of it to strengthen the role and place of Canadian digital and artificial intelligence players. Each industrial and commercial sector should establish with governments a plan to strengthen its ecosystem in order to successfully transition to digital, and this in line with the human capital policy mentioned above.
3- A major infrastructure improvement policy
This policy would foster a successful ecological transition for the production and distribution of energy and for the transportation of people and goods. The current challenge of our governments and of the main socio-economic actors, including the leaders of the ecological movement, is twofold: first to obtain a consensus on a critical path towards the energy transition and then to include all regions of Canada. Indeed, the ecological transition will lead to a gradual abandonment of fossil fuels and the regions producing these fuels will be shocked by the fall in the value of their oil and gas assets, these “stranded assets”, furthermore depreciated by the current health crisis. . These regions will need help and clean energy producing regions will need to be ready to support them in this transition. Bold projects must be dared, such as the creation of a hydroelectric company in eastern Canada, bringing together Quebec, the Atlantic provinces and the federal government, to strengthen the production of clean electricity and open up the Canada-wide market. to this energy. Green transit projects, such as a high-speed train in the Quebec City-Windsor corridor, will need to be put back on the agenda. It’s time for green and smart infrastructure.
These few long-term policies, described in more detail in a Burgundy report published in CIRANO (Rousseau, 2020), will require investments of several billion dollars delaying a return to balanced budgets by a few years. But at least this deficit will serve to improve the human, scientific, digital and ecological capital of our society, while boosting economic activity rather than simply supporting it. They will also require very close consultation between our governments and socio-economic actors, which must be orchestrated during sectoral and regional summits which, in turn, will specify the priorities and enrich the project book. Such an exercise is certainly ambitious, but no more than the great G20 summits or the multiple summits held successfully in the past. This exercise is above all up to the challenges that are ours. No one knows the future, but this approach will go down in history as a “SAGE” decision by our government if the worst-case scenario turns out.