The clamour to reopen the economy has reached a crescendo in many parts of North America. But the global economic impact of the COVID-19 pandemic will be far-reaching for years to come.
Canadian historians list 1935 as the year the worst of the Great Depression was over. But the nation really didn’t begin to return to prosperity until the Second World War was over in 1945.
So if history is any guide, we could expect a decade or longer, and significant public expenditure in the interim, before we return to some semblance of economic normalcy.
It shouldn’t take a world war this time to recover economically. But it will take considerable government intervention, in the forms of jobs programs and public investments.
In 1944, Canada had a population under 12 million but more than 750,000 served in the country’s armed forces. In economic terms, this was a massive jobs program. Canada was among the world’s largest military powers in terms of air force and navy. This investment was a significant part of the nation’s gross domestic product (GDP).
Do Canadians have the nerve to make a similar investment towards economic recovery post-COVID-19? In 1944, we invested in items of war; in 2020, we should invest in much-needed infrastructure to position Canada as an economic superpower.
Canadians will need government support but let’s view this as an opportunity to invest in things that will enrich our nation. Here are some ideas:
Small business startups
With persistent high unemployment likely to prevail for the next few years, we ought to encourage small business startups as an alternative to traditional jobs.
Statistically, the average small business entrepreneur tends to be female, which should please our pro-feminist prime minister.
Rather than offer subsidies, which only encourages unnecessary red tape, governments should offer five-year tax holidays for startups, giving these new companies a chance to take root and then flourish.
Suspend capital gains taxes
Our economy needs investment. And private investment has generally been much more impactful than public sector investment.
To encourage private investors betting on Canada, the government should consider suspending all capital gains taxes for a short period, if these investments are made in Canada.
Build Energy East pipeline
Canada has been blessed with some of the world’s greatest natural resources wealth.
Contrary to Green Party Leader Elizabeth May’s recent comments, oil is far from dead. In fact, the opposite is much more likely true. Demand for cheap energy will increase exponentially as the globe struggles to restart shuttered manufacturing and commence trade.
Shipping Canadian oil through the Panama Canal to Saint John, N.B., for refining is a national embarrassment.
We need construction on the Energy East pipeline to start immediately and public ownership of the pipeline is likely the best way to make that happen.
Invest in agriculture
The pandemic has been an eye-opener on the precariousness of our food supply chain. We have an urgent need to support domestic agriculture.
Former federal cabinet minister Ralph Goodale recently suggested opening up 400,000 acres of Saskatchewan land to agriculture through irrigation by way of canals to Lake Diefenbaker.
Although the construction cost of this project would be $3 billion, the canal would eventually add four per cent annually to the GDP of that province.
Canadians already depend on grains and other foods grown in Saskatchewan, of which the excess produced is exported around the globe.
Develop Ontario’s mines
We need roads and other infrastructure to begin mining Ontario’s ring of fire.
In addition, Canada should be investing in creating a stainless-steel industry for northwestern Ontario to supply domestic and foreign manufacturers.
Build protective sea walls
Scientists expect ocean levels to rise significantly starting around 2050.
We have an opportunity to begin construction on sea walls in critical areas to preserve land and municipal infrastructure.
Develop north sea route
Potentially our most important asset is our northwest shipping route, which connects Asia to European and eastern U.S. markets faster and more effectively than the Panama Canal.
With development of Arctic ports and construction of ice breakers, we should be taking full advantage of the warming of the Arctic region, as the Russians have done in the northeast.
These ideas are far from exhaustive but they would offer much-needed economic boosts to all the provinces and territories. Hundreds of thousands of jobs would be created by these projects.
The expense would indeed be massive. But Canadian leaders from 1930 to 1945 made proportionately similar expenditures to recover from the Great Depression and it ultimately led to tremendous prosperity.
We don’t need another version of Canada’s Economic Action Plan, highlighted by photos of numerous politicians holding large novelty cheques. To recover from COVID-19, we need calculated investments that put Canada in a more economically advantageous position.
We need to take the risk because the alternative is bleak.