National Post (National Edition)
Start thinking about the recovery now
In the midst of a global crisis, it can be hard to step back and take stock. But it is important to realize that the actions taken by governments here in Canada, and many other countries, are completely unprecedented.
Not since the Second World War have we seen such a massive restructuring of the economy. Back then, commercial factories were converted to produce military equipment, and women entered the workforce in large numbers as men went overseas to fight. Today, storefronts are closing their doors to comply with government edicts and factories are shutting down because nobody’s buying new cars in the midst of a pandemic.
As this week came to a close, the extent of the damage started to become a little more clear. The Big Three auto makers announced they will be closing all their North American plants next week, with Fiat Chrysler alone saying it is laying off 8,900 Canadian workers. Canadian-based auto parts manufacturer Magna International announced it’s shutting down most of its manufacturing facilities around the world.
Montreal-based Cirque du Soleil is laying off 4,679 people. Irving Shipbuilding is temporarily laying off 1,373 employees. Air Canada is putting 5,100 out of work. Sunwing issued layoff notices to 470 pilots. Porter Airlines cancelled all its flights, which will affect most of its 1,500 employees.
The list goes on and on. Retail stores across the country have closed shop and laid off staff. Restaurants
have been relegated to only serving pickup and delivery orders, making serving staff unnecessary. Many hotels have shut down and those that remain open only have skeleton crews on hand.
Even many of those who are lucky enough to have jobs that could allow them to work from home have been forced to take a leave of absence to care for their children, as schools and daycare centres throughout the country have locked their doors.
What we are experiencing, in other words, is an economic shutdown on a scale that was completely unimaginable only a few weeks ago. And this is only the beginning. If this drags on for months — and we should all expect that it will — we’ll be hearing many more stories like these.
The scale of this is so much bigger than the “Great Recession” of 2009, there is a real danger this will become a fullon economic depression. As it stands, this month may turn out to be much worse than any in the 1930s, when the largest monthly drop in employment was “only” 2.5 per cent.
Most of us now hunkered down in our basements aren’t public health experts. When our elected leaders and medical officers of health tell us not to go to work or visit friends and family, we stay put, because we don’t have any better ideas about how to stop this invisible threat. We want to do what’s right. But we cannot lose sight of the bigger picture. When the virus is contained, what will be left of the economy we all depend on?
The vast majority of people who contract COVID-19 end up experiencing very mild symptoms, similar to the common cold, if they experience any at all. This is, of course, not true of every segment of the population. COVID-19 seems to pose little risk to children and healthy adults; senior citizens and those with pre-existing medical conditions, on the other hand, are at serious risk of being hospitalized, and even dying, as a result of this virus.
So why not focus our containment efforts on the at-risk population, rather than locking down the entire country, especially given the economic hardships this has so clearly caused for so many Canadians?
It may be too late to change course now. Even if the government tells Canadians to go back to work and put their kids back in school, it’s likely that many would choose not to venture out given that the number of confirmed cases is still increasing substantially on a daily basis. Still, governments can, and must, at least begin offering Canadians some sense of when economic life could begin to return to normal. What target would we need to reach? What benchmark can we hit? And what would that recovery look like? What can we be doing now to prepare for it, so that we’re ready?
We need to have a national conversation. We also need to make sure that we don’t prolong these restrictions a moment longer than necessary. Right now the focus is on containing and defeating the virus. But it’s not too soon to be thinking about the economic restart and recovery that is still to come.
WHAT WILL BE LEFT OF THE ECONOMY WE ALL DEPEND ON?