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www.policymagazine.ca May—June 2020 Canadian Politics and Public Policy The Pandemic $6.95 Volume 8 – Issue 3
Essential to the Economy Serving exporters, importers, retailers, farmers and manufacturers, CN’s transportation services are integral to modern life, touching the lives of millions of Canadians every day. $250B WORTH OF GOODS 25% OF WHAT WE TRANSPORT TRANSPORTED IS EXPORTED 16,500 RAILROADERS $6.6B CAPITAL EMPLOYED IN CANADA INVESTMENTS IN CANADA (2017-2019) cn.ca
Canadian Politics and Public Policy Canadian Politics and Public Policy EDITOR AND PUBLISHER L. Ian MacDonald lianmacdonald@policymagazine.ca ASSOCIATE EDITOR Lisa Van Dusen lvandusen@policymagazine.ca Adam Scotti photo CONTRIBUTING WRITERS Thomas S. Axworthy, Andrew Balfour, Yaroslav Baran, Derek H. Burney, Catherine Cano, In This Issue Margaret Clarke, Rachel Curran, John Delacourt, Susan Delacourt, 2 From the Editor / L. Ian MacDonald The Pandemic Graham Fraser, Dan Gagnier, Helaina Gaspard, Martin Goldfarb, Sarah Goldfeder, Patrick Gossage, 3 Robin V. Sears Why is This Crisis Different From all Other Crises? Frank Graves, Shachi Kurl, Brad Lavigne, Kevin Lynch, Jeremy Kinsman, Peter Mansbridge, Carissima Mathen, 6 Lori Turnbull Democracy Locked Down: Canada’s Institutions Respond Elizabeth May, Velma McColl, David McLaughlin, David Mitchell, Don Newman, Geoff Norquay, 8 Jeremy Kinsman Canada’s Leadership Challenge Fen Osler-Hampson, Kevin Page, Robin V. Sears, Brian Topp, 11 Kevin Lynch Beyond the Shutdown: The Prognosis for a Post-Pandemic Recovery Lori Turnbull, Jaime Watt, Anthony Wilson-Smith WEB DESIGN 15 Perrin Beatty Managing Change Amid a Pandemic Nicolas Landry policy@nicolaslandry.ca 17 Guest Column/Mike Rencheck Being There for Our People SOCIAL MEDIA EDITOR Grace MacDonald gmacdonald@policymagazine.ca 18 evin Page K The Lockdown Recession and the Federal Response: GRAPHIC DESIGN & PRODUCTION $100 Billion and Counting Monica Thomas monica@foothillsgraphics.ca 21 Karl Moore Canada’s Airlines Are an Essential Service Policy 23 elaina Gaspard and Valencia Gaspard H Policy is published six times annually A Tale of Two Responses: by LPAC Ltd. The contents are Canada-U.S. Neighbouring in the Time of COVID-19 copyrighted, but may be reproduced with permission and attribution in 26 Sarah Goldfeder Inequality in the Time of COVID-19: A Narrative of Two Americas print, and viewed free of charge at the Policy home page at policymagazine.ca. 29 Lisa Van Dusen Oh, America: The Wartime Election Price: $6.95 per issue Annual Subscription: $39.95 PRINTED AND DISTRIBUTED BY 31 John Delacourt Only Connect: The Politics of COVID-19 Crisis Management St. Joseph Communications, 1165 Kenaston Street, 33 Dr. Tim Evans Nothing Like the Real Thing: Lessons So Far from the Pandemic Ottawa, Ontario, K1A 1A4 Available in Air Canada Maple Leaf Lounges across Canada, as well as 35 Paul-Émile Cloutier The End of the Beginning: VIA Rail Lounges in Montreal, Ottawa What We’ve Already Learned about Pandemic Response and Toronto. Now available on PressReader. 37 Shachi Kurl What a Difference a Crisis Makes: How Canadians are Uniting in a Pandemic Special thanks to our sponsors and advertisers. 40 Column / Don Newman Towards a New Normal COVER PHOTO: Adam Scotti Connect with us: @policy_mag facebook.com/policymagazine
2 From the Editor / L. Ian MacDonald The Pandemic W elcome, if that’s the right ous national timetables and trajecto- the United States. “The comparative word, to our special issue ries, it wraps the crowded globe in a management of the COVID-19 cri- on The Pandemic, the shared fearful narrative that will like- sis,” they write, “is a case in point.” COVID-19 coronavirus contagion that ly alter the way we all live.” Sarah Goldfeder is also an Ottawa has swept into our lives this winter Kevin Lynch, who was Clerk of the policy specialist on Canada-U.S. files and spring, leaving death and de- Privy Council during the financial at Earnscliffe, but grew up on the struction worldwide like nothing crisis of 2008-09, says there’s real- American side and served as a State seen in a century. ly no comparison between then and Department adviser to two ambassa- How to measure it, how to get over now. “The COVID-19 global reces- dors to Canada. She sees COVID-19 it, how to move beyond it, are glob- sion is significantly worse than the as a narrative of two Americas, the al themes explored by our writers global financial crisis, which severely haves and have-nots. amid this devastating health and eco- traumatized Western economies,” he Our associate editor, Lisa Van Dusen, nomic crisis. And all we know about writes, adding: “This is the first truly has lived and worked as a journalist a post-recovery world is that it will global recession since the 1930s.” in Washington and New York, and likely be different from the one we Perrin Beatty, president and CEO of sees the COVID-19 storyline as just knew. Abnormal is the new normal. the Canadian Chamber of Commerce the latest crisis further catastrophized Our extraordinary team of contribut- suggests that “After the immediate by Donald Trump’s leadership. ing writers, as well as guest contrib- dangers have passed, we will need to The streets of Ottawa have been de- utors, have brought the best of their take stock.” How so? “Every institu- serted for months as part of the social talents to this story: how it has un- tion will have to ask whether it was distancing lockdown, but John Dela- folded in Canada and elsewhere; how prepared to deal with the pandemic.” court has been working his high-level it has changed our lives; and in many In a guest column, Bruce Power Presi- Liberal and government sources and cases brought out the best of Canadi- dent Mike Rencheck writes of business shares his impressions of how they’re ans being there for each other. giving back to communities, such as running the country. the ones served by his company in Canada’s health care providers are al- Robin Sears begins our journey by Ontario. “These are difficult times,” ready absorbing the lessons of suc- borrowing the question asked at fam- he writes, “and they bring out the cess and failure from the COVID-19 ily Seders: “Why is this night differ- very best in our people.” Well said. ent from all other nights?” He asks: pandemic. McGill’s Dr. Tim Evans, a “Why is this crisis different from all Kevin Page, Canada’s first Parliamen- leading authority, was appointed by other crises?” In Canada, Sears sug- tary Budget Officer and founder of the prime minister to the COVID-19 gests the pandemic has brought us the Institute for Fiscal Studies and immunity task force as we were go- together as never before, even across Democracy, looks at the numbers, ing to press. A key source of exper- the partisan lines of politics. “There and doesn’t like what he sees. “It is tise in the recovery process will be has been an outbreak of political co- the perfect storm that depresses both HealthCareCAN President Paul-Émile mity,” he writes, “unseen even during demand and supply,” he writes. Cloutier, who shares his immediate O the two world wars.” recommendations. ne of the biggest shocks has Donner Award-winning Lori Turn- been to the airline industry, Finally, on the mood of Canada in the bull looks at Ottawa and concludes in Canada and worldwide. pandemic, Shachi Kurl checks in from both politicians and public servants McGill University’s Karl Moore notes the Angus Reid Institute with new data have stepped up, but adds: “There that “Even when the crisis has passed, on how Canadians are faring, and how is no substitute for Parliament. The people will be reluctant” to fly again. they are feeling about all this. elected legislature is the link between Helaina and Valencia Gaspard grew And columnist Don Newman looks the governors and the governed.” up in southern Ontario with Detroit ahead to the so-called new normal Looking globally, our lead foreign af- in their backyard. Now public policy after the crisis passes, but concludes fairs writer Jeremy Kinsman observes practitioners in Ottawa, they have an that “normal won’t be the same nor- that as “the coronavirus pandemic instinctive understanding of differ- mal as it was before.” cuts a traumatic swath through vari- ing governance issues in Canada and Be well and safe. Policy
3 Prime Minister Justin Trudeau speaks to the House and the country during an unprecedented sitting Easter Saturday on the government’s emergency job legislation. By all-party agreement, only 30 MPs attended for a bare quorum necessary to pass Bill C-14. Adam Scotti photo Why is This Crisis Different From all Other Crises? Humanity has endured and prevailed over catastrophes Robin V. Sears O both man-made and natural since the dawn of time. In ne of the most powerful mo- a chapter of that saga when both the management and ments in a family Seder comes when the youngest at repurposing of crisis as opportunity have become policy art the dining table asks before the group forms, how will we learn from the mistakes of this pan- begins to eat, “Why is this night dif- ferent from all other nights?” The demic to create a better world than the one it ravaged? child then runs through four ques- tions that define the painful his- tory of the Jewish people in Egypt and their celebration at winning their freedom. They are a powerful teaching moment, in an emotional night of bonding. A “lest we forget” moment. That happened only on screens during this somber Passover season, but under the shadow of the pandemic, many of these Seders have had even greater emotional impact. We might well all ask ourselves, “Why is this crisis different from all other crises?” May/June 2020
4 One answer might be: “We have cut, its independence from the oth- wine, rape and debauchery. Plagues never had a pandemic globally in a er giants of the health care sector was throughout history have typically few days, overwhelming the entire undermined. It became the victim of brought out the best and the worst world.” At a deeper level, we must ex- what public health advocates call the of humanity. We always recover, but amine how and why this epidemic “tyranny of the acute.” A heart attack sometimes it takes decades, and some- became more broadly tragic in more is highly visible and a successful in- times it leaves scars for generations. places, than any before it. We need tervention must come within min- So far, we can be grateful that the he- to remember this pandemic’s lessons, utes. A long-term campaign’s success roes far outnumber the fools. The mil- and ensure that we never forget them. against childhood diabetes is mea- lions of front-line workers, too many sured in years, even decades, and is of whom have died on the job due to Four specific crisis questions might be: mostly invisible. inadequate preparation and protec- 1. W e had several smaller crises in the past two decades, from the same So, the health care sector in Cana- tion, have not quit. The hostile idi- source, with the same method of da, always pressed for adequate levels ots who deliberately endangered the attack, why was the whole world of funding to heal the sick, found it health of friends and neighbours have caught flat-footed—again? Why did much easier to cut the champions of been mercifully few. With the excep- we not listen to all the warnings? public health rather than trim fund- tion of the usual oligarchs, who have 2. How can we use this painful ing for the acutely ill. The giants in the used the crisis to seize ever more pow- experience to build bridges across sector—hospitals, drug companies and er, most democratic governments partisan, ethnic, religious and doctors’ unions—fell victim to one of have honoured the values of the En- national divides—not allow the Henry Kissinger’s favorite cautions to lightenment—that their first obliga- suffering to become an excuse for new political leaders: “Never let the ur- tion is to the protect the safety and cementing divisions more deeply? gent drive out the important.” freedoms of their citizens. 3. What innovations and learnings That tale of the world forgetting the As Angela Merkel, using her powerful should be made permanent? Which three virus threats we have already credentials as a physicist, as a survivor of our former foolish behaviours faced in this century—SARS, H1N1, of tyranny, and as the most respected should be forever banished? MERS—is how and why the whole leader of her nation in half a century, 4. How can we build a better Canada world paid no attention to the worst said as she resisted demands for the use in a better world as a result of the health crisis in a century until the of the military to enforce social con- lessons we have learned? middle of March this year. Where trol, and rallied her country one more P China—the source of this virus and time, “We are a democracy. We don’t erhaps, as we commemorate several predecessors—is concerned, achieve things by force, but through wars and other emotional an- they knew of their explosion in Wu- shared knowledge and co-operation.” niversaries, we should develop han in November, but only revealed I a ceremony to those whom we lost to it in late January. n Canada, there has been an out- during this awful assault. Each year, A break of political comity unseen we would honour their memory in merica will have the high- even during the two world wars. ceremony and by ensuring our de- est death tolls in the world, Our leaders have responded too tim- fences are in place and ready at the mostly a result of a late and in- idly and too slowly in some cases, but push of another pandemic button. competent response to the epidem- were wisely open to quick course cor- It is incredible to reflect that until ic, one that President Trump declared rection. More importantly, almost two decades ago, Canada—a nation he took “no responsibility for,” jeering without exception they have avoided overweeningly proud of its health that the pandemic was a Democratic partisan games or damaging attacks care system—did not even have a na- “hoax” until the end of February. With on opponents. How improbable was tional public health agency. Dr. Da- less than five percent of the world’s it for Deputy Prime Minister Chrys- vid Butler-Jones was its estimable first population, by mid-April, the Unit- tia Freeland, a Liberal, to declare that head for a decade following SARS. Dr. ed States represented nearly one out Ontario Premier Doug Ford, a Con- Carolyn Bennett was our first Minis- of four deaths globally. It is surely not servative, had become her “therapist” ter of Public Health, working closely too harsh to ask how many thousands in a marvelous exclusive by the To- with Butler-Jones to set up the Public of American lives would not have been ronto Star’s Susan Delacourt. Health Agency of Canada, and the Ca- sacrificed if there had been a compe- The public reaction to this dramat- nadian Public Health Network, con- tent leader in the White House. ic change in what was becoming far necting medical officers of health and Thucydides description of the impact too regularly a pugilistic approach to related officials across the country. of the worst plague Athens had until politics has been enormously posi- Yet by the time of Butler-Jones’ de- then faced is a tale of violence, cruelty tive. Quebec Premier François Legault parture in 2014, public health was and selfishness on the part of its citi- has reached the stratospheric height sliding back down the policy agen- zens in their panic to save themselves of a 90 percent approval rating. Let da across the country, funding was or to die in a last indulgent night of us hope that we can preserve at least Policy
5 some of this new civility, this focus London commissioned from Sir Chris- thousands of miles away to come to on policy, not personal attack. And topher Wren. It is a vision for the city our rescue in a crisis when their own that it is matched by a sense of unity after the massive destruction of the citizens need supplies just as badly. in Canada across regional, racial and Great Fire of 1666. It included broad This crisis was unlike any other. It religious lines. sweeping avenues, many new public skipped from Wuhan, to Shanghai, Perhaps the most startling aspects squares and parks. It also recommend- to Los Angeles, to London in the time of global responses to the pandemic ed the beginning of new garbage, san- it took to fly a virus-afflicted passen- have been in the domain of upended itation and water treatment systems, ger. It will happen again, and our re- mythologies and the death of sacred partly to prevent a return of another sponse must be faster, more compe- cows. Worrisome national debt ceil- massive fire and subsequent epidemic. tent, and more universal as a result. ings—pshaw! We have a nation, an Instead, the city was rebuilt much as But, hopefully, there is another economy, a world to rebuild. Thou- it was. Few of the public engineering truth. That we can rebuild a better sand-dollar cash gifts with few lim- recommendations were implement- Canada and a better world out of the itations on who can qualify? Do it, ed, and less than two centuries later, pain of this experience. In the par- now! Governments triaging who will the city was devastated by a rat-fed liamentary showdown over tweak- get taxpayers’ money by sector, by cholera plague. ing the various relief packages, NDP company, by province—even Con- When I first walked down the con- Leader Jagmeet Singh laid out such servative politicians and commenta- gested, narrow streets of older parts of a vision and once again offered the tors are demanding such surgical in- Tokyo, framed on all sides by wooden core of his political values: tervention in the economy. buildings, I imagined they must have “The decisions we make in the next Will this lead to permanent chang- been relics from another century, be- weeks and months will be some of the es in monetary, fiscal, and econom- fore the Great Kanto earthquake or most important of our lives—some of ic policy? Maybe. Blue ribbon panels the firebombing of the Second World the most important that any Canadian are being assembled, wise policy vet- War. But no, many of them were few- government has been faced with… erans are coming out of retirement to er than 50 years old. offer their counsel. Canadians of all I hear a lot of people talking about Crises define leaders and reveal na- ‘when will things return to normal?’ types are beginning to listen to advo- tional culture. America has a new hero But I believe we need to do far better cates of a universal basic income, of in Andrew Cuomo as the epitome of than normal. the importance of teaching wellness a wartime leader—conveying compe- and not merely treating sickness, of Normal is workers not having paid sick tence, confidence and empathy ev- the role of governments in the econ- leave. Normal is families struggling on a ery day. In Florida and Australia, too omy, with a more open mind. minimum wage. Normal is people who many young people—with the com- are essential to health and safety not W ill we travel less? Certain- plicity of local politicians, indulged in getting paid enough to live. ly, business travel seems the same behaviours that Thucydides unlikely to rebound giv- warned Athenians against. Many of Normal is a public health care system en the immersion we have all had in them carried the virus back home that has been starved of funding. the power of a variety of communi- with them, as we now know. Normal is a society that is neither fair nor resilient. We can’t ever go back to A cation technologies. Will we demand s in most arenas, Canada sits normal. Canadians are showing their more local food, local products, even somewhere between those compassion. They’re showing their desire at higher prices? Probably, but it may poles. We have been good at to care for one another…Let’s not return not last unless legislation and regu- physical distancing and hygiene. But to the old normal. Let’s build a new lation support the changes. Will re- we came to it a month later than our normal where we take better care of each gionalization supplant globalization? other. Where we have a strong social political leaders should have prescribed. Again, probably and along continental safety net that lifts us all up together. lines immediately. The NAFTA coun- Some will argue that permanent tries, the EU and the members of the changes have now been ingrained Let’s build a Canada that is fair and Asian trade agreements, are all likely to into the social fabric: working from resilient. Canadians are counting on us. see their fellow trade pact members as home, telemedicine and schooling, They’re counting on us to learn from partners, and others, not so much. better general hygiene, tougher hy- this crisis, to build a better Canada for giene rules for nursing homes and all of us.” But as the history of the past two de- prisons, a greater civility in public Contributing Writer Robin V. Sears is cades, even the past two millennia, amply demonstrates we all have a discourse. Perhaps. a Principal of the Earnscliffe Strategy strong tendency to recidivism, unless One thing is indisputable, if we work Group in Ottawa, and has lived and we take strong measures against it. I at it, we need never return to some of worked in London, Tokyo and Hong have a large print of a London we will the foolishness of our past: deep in- Kong. He was national director of the never see. It depicts what the City of equalities, dependence on suppliers NDP during the Broadbent years. May/June 2020
6 Deserted downtown Ottawa on April 20 in the Byward Market at the corner of York and Sussex Drive, with Parliament up the hill. Asif A. Ali Flickr photo Democracy Locked Down: Canada’s Institutions Respond The combined public health, social, political, geopolit- Lori Turnbull W ical and economic impacts of the COVID-19 pandemic hatever the social, eco- present unprecedented challenges to Canada’s democrat- nomic and public health prognoses may be for our ic institutions at a moment in history when democracy post-pandemic future, COVID-19 has worldwide was already under attack. So far, those in- already transformed how we live. stitutions—including Parliament and the federal public Non-essential businesses are closed, service—have risen to the occasion. parks and gathering spaces are emp- ty, pubs are shuttered, and classrooms and meetings have moved abrupt- ly into virtual spaces. Though public health officials and other leaders as- sure us that we will get through this period, particularly if we follow direc- tives to stay at home, there is no cer- tainty about when physical distanc- ing requirements might be lifted and when we might commence efforts to create a new normal. The response to COVID-19 in Canada has demonstrated strength, agility, cre- Policy
7 ativity, and commitment in all juris- come a subject of debate and analysis. It is possible that online sittings will dictions and sectors. With the utmost In the COVID-19 era, when gather- generate a more collegial tone, which gratitude, we celebrate public health ings are prohibited, what does demo- might carry over once physical dis- professionals as heroes who are risk- cratic accountability look like? tancing is behind us. Admittedly, a ing their own lives to keep the rest of major concern with online sittings is It’s close quarters in the chambers, us safe. Public servants have deployed the potential for problems with con- both in the House of Commons and benefits programs both for individu- nectivity, which could undermine in- the Senate. And the thought of a als and businesses with unprecedented clusiveness and equal representation. bunch of MPs flying back and forth speed and continue to work on solu- between home and Parliament Hill When it comes to the scrutiny func- tions and bridges to get us through every week is completely offside with tion, the most important consider- the COVID-19 period. Businesses what governments are asking us to do. ation here is that parliamentary com- have demonstrated their capacity to mittees are able to meet and work. evolve and adapt operations to emerg- Back in March, the decision was made They have been doing so electronical- ing COVID-19 realities, many of them to adjourn Parliament until April 20, ly, with some manageable hiccups. In working with partners on innovative due to physical distancing require- the COVID-19 era, we have all found strategies for delivering services and ments. The media have certainly had new ways of connecting with one an- sharing risk. Charities and non-prof- access to political leaders for question- other. Parliament has no interest in its are working to respond to an over- ing, so it cannot be argued that leaders being the exception. whelming demand for their services. haven’t been held to account. We’ve I never seen the prime minister and t is not clear when a post-pandemic Political leaders are under enormous premiers with as much regularity as restart will occur, or what it will pressure to provide clarity and assur- we do now. look like. There are serious dif- ance amid increasing anxiety about how difficult recovery will be. That said, there is no substitute for ferences between provinces in terms Parliament. The elected legislature is of the spread of COVID-19, and so During this period of isolation, we ac- the link between the governors and economic recovery might happen at tually see quite a lot of the prime min- the governed and, without parlia- a sporadic pace across the country. ister and provincial premiers, who give mentary accountability, our claim to Sectors will reopen at different paces press conferences almost daily. Some democratic legitimacy becomes ten- as well. of these briefings are substantive and come with announcements about new uous. Confidence cannot be mere- Many Canadians will not be financial- programs or updates in COVID-19 sta- ly assumed, particularly in a minori- ly able to be active consumers, as a re- tistics and models, while others are ty government context such as the sult of the impacts of COVID-19, and aimed primarily at checking in, pro- current one at the federal level. The so governments and businesses will viding visibility and reassurance. government is making the kinds of have to be both patient and innova- decisions that would have been un- tive in revitalizing parts of the econo- P oliticians are making strategic imaginable just months ago. Argu- my and creating new areas for growth. choices about how to approach ably, the confidence of the House in None of this will be possible without crisis communications. For ex- the government has never been more immediate first steps, including in- ample, the Prime Minister has posi- vitally important. creased testing and contact tracing tioned himself as a Canadian work- P arliament passed a motion on so that the spread of COVID-19 can ing from home. In the beginning, he April 20 that will allow in- be contained while physical distanc- was self-isolating as a result of Sophie person sittings on Wednesdays ing restrictions are relaxed. Provinces Grégoire Trudeau’s COVID-19 diag- (including a question period of over are not all the same in their capacity nosis. He has chosen to remain large- two hours) and virtual sittings on for this. ly at home, giving his press confer- ences from his driveway, perhaps as Tuesdays and Thursdays. The major COVID-19 has shone a revealing a way of reinforcing the importance question is whether Parliament can be light on inequities that exist in Can- of the “stay at home” message. If the effective virtually. ada and around the world, with its prime minister can do it, you proba- What is lost if Parliament works on- most devastating effects felt by those bly can, too. Premier Doug Ford has line and what are the criteria by who are already vulnerable. It is im- been praised for his direct communi- which we would judge its effective- perative that, as we look toward re- cation style and his authenticity. Pre- ness? There is some appeal to hold- building, we create the conditions for mier Stephen McNeil has made inter- ing virtual sessions. For instance, inclusive, compassionate growth in national headlines (and has inspired a heckling and noise would not trans- all parts of Canada. line of merchandise) by telling Nova late well to the online format. No one Contributing Writer Lori Turnbull, Scotians to “stay the blazes home”. is going to heckle while sitting alone a co-winner of the Donner Prize, The role and relevance of Parliament at their computer (at least one would is Director of the School of Public as a democratic institution has be- hope not). Administration at Dalhousie University. May/June 2020
8 Justin Trudeau with Donald Trump at the 2019 G7 Summit in France. In the pandemic crisis, Jeremy Kinsman writes that “Trudeau remains focused on outcomes over attitude, biting his lip to avoid criticizing the mercurial American president.” Joyce N. Boghosian White House photo Canada’s Leadership Challenge As widely predicted so loudly, vehemently and repeatedly Jeremy Kinsman A by so many observers over the past three years, Don- s the COVID-19 coronavirus ald Trump’s presidency has veered from preposterous pandemic cuts a traumatic swath through various na- to downright dangerous—amid the crisis management tional timetables and trajectories, it demands of a global pandemic. Canada has an imme- wraps the crowded globe in a shared diate responsibility to first do no harm to our bilateral fearful narrative that will likely alter the way we all live. relationship, and then to help the global recovery, both economic and geopolitical. After the Berlin Wall fell on November 9, 1989, Serge Schmemann of the New York Times wrote that “something es- sential had changed (and) that things would not be the same again.” This pandemic feels like the epidemiolog- ical version of that geopolitical be- fore-and-after moment. No question, COVID-19 will change how we live, travel, work, learn, and keep track of Policy
9 each other. On global cooperation, Internationalist, multilateralist, but with national French economist Thomas Piket- interests intricately interlinked with the U.S., ty warns, we can’t just press the “re- sume” key. International institutions Canada must pursue two parallel tracks: re-building and economic presumptions need global cooperation, and sustaining efficient synchrony reform. with our neighbour. Past seismic events have suddenly al- tered the global agenda by episodes of violent human disruption—world wars, the Russian Revolution, or 9/11. This pandemic has no human force imperatives: strengthening national ed health authorities. The consensus or ambitions behind its global shock self-reliance, while tightening the re- commitment to flatten the curve and wave, whose indifference to borders liability of continental supply chains; crush the virus through self-denial should deepen essential international internationally, deepening and ex- reflects a stronger social contract and cooperation. But retrograde national- panding other bilateral partnerships; degree of trust in government than ist competition is instead thickening while working multilaterally to sup- exists in the U.S., where Trump’s protective borders. If great powers port forces of greater international co- role as a daily lightning rod means do not cooperate, the world econo- operation. Globally, all governments each and every public issue gets me- are scrambling to provide economic dia-raked through the coals of seeth- my will fail. We expect a hit to the and social relief for affected workers ing political and social polarization. U.S. and other economies as great as and businesses, printing money and the Great Depression’s. Already-high Canadians reel from random, provoc- incurring massive public debt. Inter- stakes for Canada are aggravated by ative presidential news-bursts that national cooperation is vital to miti- the collapse of oil markets. the U.S. is about to station troops on gate public disarray. Internationalist, multilateralist, but the border, block contracted exports It is a stress test for democratic gov- from a U.S. company of vital protec- with national interests intricately in- ernance. All countries missed ear- tive equipment, or unilaterally “open terlinked with the U.S., Canada must ly warnings of the pandemic. But, as the border.” Like a mongoose star- pursue two parallel tracks: re-building World Policy Conference founder Thi- ing-down a cobra, Trudeau remains global cooperation, and sustaining ef- erry de Montbrial recently observed focused on outcomes over attitude, ficient synchrony with our neighbour. in this magazine, “populism is the biting his lip to avoid criticizing the Both have been disrupted by the U.S. great beneficiary of inefficiency.” In- mercurial American president. The President’s mantra of “America First,” deed, populist nationalists are ramp- high-maintenance bilateral relation- a deficient slogan intended to con- ing up authoritarian control while ship is similarly managed with skills ceal America’s relative decline in the disparaging inclusive liberal democra- patience, tact, networks and tacti- world order. cies as “ineffective.” German Chancel- cal know-how that are NAFTA bat- lor Merkel points to the “democratic tle-hardened by a disciplined team W hile Donald Trump may edge” of transparency that can suc- under Deputy Prime Minister Chrys- be a one-term president, cessfully mobilize social commitment tia Freeland that manages to work the motif of “America to rise to great challenges. Coming out with practical Americans to put out First” won’t entirely exit—it was a of the crisis, democratic governments the flames again and again. popular theme of Pat Buchanan and will face accountability for their man- agement, but with dependency on sci- For Global Affairs, the extraordinari- Ross Perot decades before Trump— ence and on collective action through ly complex operation to repatriate Canada needs a policy framework we essential services strongly reinforced. as many Canadians as possible from can count on for all kinds of weath- Leaders who have unified their coun- shut-down locales around the world er. Clearly, reliance on NAFTA to less- tries—Canada’s Justin Trudeau, Em- has been its greatest effort in con- en our vulnerability to abrupt unilat- manuel Macron of France, Giuseppe sular crisis management ever. Trade eral measures by Washington is not Conte of Italy, Pedro Sanchez in commissioners have pivoted to solic- enough. As Ontario Premier Doug Spain—are standing higher. it and screen almost 4,000 leads for Ford—earlier, a Trump admirer— supply, most of which were fanciful I lamented recently, “I just can’t stress n Ottawa, and in provincial capi- or phony, to enable urgent delivery how disappointed I am in President tals, the health and economic of life-saving equipment. Trump … I’m not going to rely on crises are all-consuming. The W any PM or president of any country COVID-19 crisis is our national stress hen the health crisis eases, ever again.” test. We seem more united than we what will Canada do to So, Canada needs an open-eyed stra- thought via elected leaders deferring mitigate the longer-term tegic plan that integrates our different to science-based assessments of trust- effects? The government counts on May/June 2020
10 O a healthy balance sheet to carry a re- f the wider world on which care and infrastructure. As ex-Pres- medial deficit unprecedented since we also depend, Foreign ident Ellen Johnson-Sirleaf of Libe- the Second World War until eco- Minister Philippe Cham- ria warned, if the world is too self-in- nomic recovery enables pay-down pagne has already engaged interna- volved to think of Africa, African over time. But as stated at the outset, tional counterparts, in part via an problems will become everybody’s, we need separate but interlocking ac- ad hoc solidarity group, the “Alli- for a world that is becoming phobic tion plans to reduce our current vul- ance for Multilateralism” that Free- about migration. Yet, internation- nerabilities—to the effects of “Amer- land had initiated with France and al financial and trade organizations ica First” on our border, and to the Germany and other countries—mi- are too hobbled by lack of political world’s current adversarial and frag- nus the United States—to bolster will from the competing great powers mented state. essential international institutions and unremitting U.S.-China hostil- that Trump has repeatedly attacked. ity to reform. Among political insti- Sometimes in our history, political However, shifting from crisis man- tutions, the United Nations Security shock has produced abrupt policy agement to creative re-construction Council has had no role in mediating change. In 1972, unilateral and high- can be a challenge for organizations this world crisis for the same reasons. ly damaging U.S. tariffs from Presi- exhausted by the struggles to save The G-7, and the G-20, have buckled dent Nixon persuaded Pierre Trudeau ourselves from a plague, and to re- under self-interested U.S. and Saudi to reduce our vulnerability to U.S. knit our finances. There is a tempta- chairs. political decisions over which we had tion to relax. no control by strengthening our na- U.S. “continental drift,” its evacua- tional productive self-sufficiency, tion of world leadership, absolutely the “Third Option.” Later, Trudeau Canada needs to does not mean Canada should shel- struck the Macdonald Commission dialogue with ter in place. on the economy and, in 1985, Brian everybody. In hoping the As the “other North America,” Cana- Mulroney happily accepted its major U.S. will sort itself out, da needs to dialogue with everybody. recommendation of a free-trade pact with the United States. It later be- Canadians should keep the In hoping the U.S. will sort itself out, Canadians should keep the faith came NAFTA. faith with supportive U.S. with supportive U.S. civil society. civil society. We must We must connect to China, despite The worldview of Ronald Reagan, who was indispensable to that bilateral connect to China, despite objections to the regime’s stance on boom, is nowhere in evidence in the objections to the regime’s openness and human rights. The no- tion that Canada today can deny Trump administration, but the ben- stance on openness and the need to interact with energy and efits of economic inter-dependency human rights. ambition with the massive Chinese and productive cooperation remain economy is delusional. valued by many Americans, provid- ed they are fair. We need our connec- As an internationalist country with tions with state, local, and business citizens from everywhere, that knows interests who support what Freeland the value of borders as well as the ex- defines as the long-haul defence of After the Cold War, Western democ- istential necessity of international such an essential relationship. racies had the chance to reach out to cooperation, Canada has to lead by consolidate an inclusive one-world leaning into the project of making co- But concomitantly, we need an ambi- spirit for the future that was fairer to operative diversity work for human tious national effort to shore up our all. But we complacently slipped into survival. The project to define Cana- self-sufficiency. RBC CEO Dave McK- the self-involved belief that democ- da’s continental and global responsi- ay calls for a collective plan to make racy, freedom and open markets had bilities and opportunities is a partici- Canada more self-reliant—in capital, “won” and would remain the uncon- patory task for all Canadians. It equals trade, technology, and skills. BMO’s tested way of the world. our active engagement in the creation Darryl White sees an opportunity Again, the industrialized world man- of the post-war world. It offers a ren- to “leapfrog” in productivity gains aged the 2008-09 financial crisis by dezvous with human destiny. through innovation. Then, there saving Big Finance, but ignored the is the urgency of getting a nation- Let’s see if we’re up to it. destructive effects of monetized glo- al act together on the energy-envi- balization, unfettered capital flows, Contributing Writer Jeremy Kinsman ronment swirl that threatens nation- and widening income disparity. is a former Canadian Ambassador to al unity. Canada needs a new royal Italy, to Russia and to the European commission, on the consequences of This pandemic’s effects and econom- Union, and High Commissioner to the the COVID-19 crisis and how to face ic costs will be especially grave for U.K. He is a Distinguished Fellow with these national priorities. Africans, without substantial health the Canadian International Council. Policy
11 Beyond the Shutdown: THE PROGNOSIS FOR A POST-PANDEMIC RECOVERY While there are aspects of this pandemic recession that ample, the IMF forecasts growth in the advanced economies to rebound echo the wreckage of the 2008-09 global financial crisis, 4.5 percent next year, which sounds the differences, including the uncertainty of having the robust, but after a 6 percent decline this year this will still leave levels of pace of containing its human and economic damage sus- economic activity in 2021 some 2 ceptible to the whims of both a virus and unpredictable percent below 2019, and even fur- policies in certain countries, are crucial. Outgoing BMO ther below (5-6 percent) where they would have been in the absence of Financial Group Vice Chair Kevin Lynch lays out the the pandemic. possibilities for a recovery. At the end of 2019, global debt across all sectors was a whopping $255 tril- lion, or 322 percent of global GDP. This mountain of debt was $87 tril- Kevin Lynch brunt of the downturn while coun- lion higher than at the onset of the tries like China and India main- F 2008-2009 global financial crisis. or those who managed com- tained growth of roughly 8 percent panies, steered financial insti- and developing countries overall ex- Governments have accounted for tutions and helped run govern- perienced positive growth. This year, the lion’s share of this increase in ments during the global financial cri- China and India will barely grow and indebtedness since 2007, followed sis of just over a decade ago, it is hard developing countries overall will ex- by non-financial corporate debt and to imagine a more challenging time, perience negative growth. then households, with financial in- but we are in the midst of one now. stitutions being the virtuous excep- As the new managing director of the tion. Emerging markets account for International Monetary Fund (IMF), This is the first truly almost a third of this total global Kristalina Georgieva, noted without debt and, outside of China, there is global recession since significant foreign currency expo- hyperbole at the first-ever global vir- tual meeting of the venerable institu- the 1930s, unlike 2009 when sure to this debt, which is problem- tion, “this is a crisis like no other”. advanced economies bore atic at a time of widespread flight to And, as the political scientist Rob- the brunt of the downturn safety among currencies. ert Kaplan once observed, “crises put while countries like China T history on fast forward.” he global debt mountain is and India maintained about to get much higher. Context is helpful in these circum- growth of roughly 8 percent With massive new stimulus stances. First, the COVID-19 global and developing countries programs coming onstream and the recession is significantly worse than worst of the downturn expected to the global financial crisis, which se- overall experienced hit in the second quarter, govern- verely traumatized Western econ- positive growth. ment debt will soar over the remain- omies. Global growth in 2009 de- der of 2020 and into 2021. As a result, clined by –0.1 percent whereas IMF the IMF expects a sharp upward tra- estimates of the COVID-19 recession jectory in global debt-to-GDP ratios, for 2020 are for a fall of –3 percent in with long lasting implications. global growth. This recession will be And third, with such volatility in eco- Prior to the pandemic, Canada stood the worst since the Great Depression. nomic statistics, it is important not out globally for a highly indebted Second, this is the first truly global re- to confuse growth rates and levels of household sector and high nonfinan- cession since the 1930s, unlike 2009 economic activity: simply put, recov- cial corporate debt-to-GDP ratios but when advanced economies bore the ery does not mean recovered. For ex- with a relatively low government net May/June 2020
12 debt-to-GDP compared to other G20 At the end of 2019, global debt across all sectors was countries. Large and lasting increas- a whopping $255 trillion, or 322 percent of global es in Canadian government, central bank and private sector debt will be a GDP. This mountain of debt was $87 trillion higher than at consequence of measures to respond the onset of the 2008-2009 global financial crisis. to the COVID-19 pandemic and re- cession. Once the recovery is firmly underway, governments (and firms) will need determined strategies to In this environment, forecast- Drawing on this analysis in develop- address this surge in debt in order to ing must include epidemiological ing its baseline forecast, the IMF as- protect longer-term growth, compet- modelling on the effectiveness of sumes that the shutdowns result in itiveness and living standards. COVID-19 containment measures the loss of up to 8 percent of work- Economic forecasts typically have a such as social distancing, travel ing days in affected countries, that bans and curtailment of non-essen- the pandemic fades in the second half number of core underlying assump- tial business, estimates of the tim- of the year as the result of contain- tions, usually about monetary and fis- ing of the development of new ther- ment measures and shutdowns are cal policy, perhaps commodity pric- apeutics and vaccines and, finally, significantly unwound by the end of es, sometimes geopolitics affecting projections on when and how the the second quarter, that governments confidence, and recently U.S. trade shut-downs will be lifted. In addi- protect lives through investments into and tariff actions. Never before have tion, forecasters have to come to a public health systems and livelihoods global economic forecasts confronted behavioural view on how lingering through income support to house- today’s range of unknowns and the health concerns of citizens may al- holds and liquidity support to firms, intersection of a public health crisis ter their normal patterns of working, that stimulus measures targeted to and an economic crisis. buying, saving and leisure. rapid recovery are implemented when World Economic Outlook April 2020 Growth Projections (real GDP, annual percent change) ACTUAL FORECAST REVISED FORECAST Forecast change for 2020 2019 2020 2021 from January forecast World output 2.9 –3.0 5.8 –6.3 Advanced economies 1.7 –6.1 4.5 –7.7 United States 2.3 –5.9 4.7 –7.9 Euro area 1.2 –7.5 4.7 –8.8 Germany 0.6 –7.0 5.2 –8.1 Japan 0.7 –5.2 3.0 –5.9 United Kingdom 1.4 –6.5 4.0 –7.9 Canada 1.6 –6.2 4.2 –8.0 Emerging markets and developing economies 3.7 –1.0 6.6 –5.4 China 6.1 1.2 9.2 –4.8 India 4.2 1.9 7.4 –3.9 Other Russia 1.3 –5.5 3.5 –7.4 Brazil 1.1 –5.3 2.9 –7.5 Mexico –0.1 –6.6 3.0 –7.6 Source: IMF Policy
13 the shutdowns unwind, and that ade- For Canada, the forecast projection lor of Exchequer Gordon Brown elo- quate monetary stimulus and support is a dramatic decline of –6.2 percent quently set out in The Guardian, un- to financial markets are provided. in growth this year. Underlying this less we tackle the pandemic with a is a huge decline in economic activ- coordinated global approach utiliz- The key risk to this forecast is non-eco- ity during the first half of this year ing the G20 and the WHO, we risk nomic: namely, the duration and in- followed by a fairly sharp rebound second and third waves of the virus tensity of the pandemic. Michael Os- from these historic lows in the sec- rolling around the world. And un- terholm, a leading researcher in the ond half. For 2021, a recovery in field, has cautioned that pandemics less we respond to the recession in growth of 4.2 percent is projected developing economies through G20 typically come in waves and the ul- but this still leaves activity levels timate public health response is not and IMF leadership, we run the risk next year below those of 2019. Re- of an emerging-markets sovereign social distancing but a vaccine and cent Canadian private sector fore- effective therapeutics which could be debt crisis washing into internation- casts are in the same ballpark—RBC up to 18 months away. The alterna- al capital markets. projects a decline in growth of –5 tive scenarios considered by the IMF percent, BMO forecasts –4.5 percent The second is what will happen to reflect these cautions. and TD estimates a –4.2 percent— global supply chains, and the likeli- and all stress these are moving tar- hood that companies will be increas- Never before have gets given the uncertainty surround- ingly required, by markets or regula- ing the path of the pandemic. tors, to map out their supply chains, global economic accompanied by pressures for “re-lo- forecasts confronted today’s Underscoring this uncertainty, the Bank of Canada stated in its recent calization” beginning with health range of unknowns and the care supply chains. Third, moves to- Monetary Policy Report that “it is intersection of a public more appropriate to consider a range wards greater corporate concentra- health crisis and an of possible outcomes, rather than tion may be a structural consequence economic crisis. one base-case projection.” In one of a deep recession and a shift to Bank scenario, very much mirror- more online commerce. The fourth ing the IMF baseline forecast, Can- is inequality, which was a concern in ada experiences a recession in 2020 most countries before the pandemic that is abrupt and deep but relatively and the recession, and we now face short-lived, with a robust rebound in the additional risk of “COVID-19 in- G lobally, after an expansion growth, particularly if oil prices firm. equality” with respect to economic of 2.9 percent last year, most A second scenario, characterized by and health impacts during the crisis. forecasters as recently as the pandemic and shutdowns last- January expected relatively smooth ing longer, loss of productive capac- And finally, the general theme with growth for the world econo- ity due to bankruptcies and linger- respect to policy at these virtual my in 2020. How quickly things ing low oil prices, would see a deeper meetings of the Bretton Woods in- can change. and longer recession, a less robust stitutions was “we need to do what recovery and longer-term structural we need to do.” There was wide- The revised world economic outlook spread praise for the actions of cen- damage to the economy. of the IMF suggests the global econo- tral banks and a generally support- W my will sharply contract this year, by ive view of fiscal actions to date. hile the immediate pri- some –3 percent, before recovering at But, as was frequently stressed, orities for all countries are a 5.8 percent pace next year. In this health care systems are as critical slowing the spread of the global forecast (see Table 1), the U.S. as macroeconomic policy in a pan- coronavirus among their populations economy declines by –5.9 percent in and providing liquidity and income demic-induced recession. And here, 2020, Japan by slightly less, Canada support to firms and households concerns were raised about the abili- and Britain by slightly more and the during these unprecedented shut- ty of countries to effectively unwind Euro area by more still. China ekes out downs, there are other policy matters shutdowns and restart economies small positive growth (1.2 percent) as that we ignore at our peril. without significantly allaying pub- does India, but overall, the emerging/ lic concerns of contagion and per- developing world contracts. Not sur- The first is the importance of inter- sonal fears of contracting the virus prisingly, world trade volumes tum- national coordination since the pan- ble by double digits (11 percent). For as work resumes. demic is, by definition, global and 2021, there is a recovery forecast in the the resulting economic recession is Contributing Writer Kevin Lynch, range of 4-4 ½ percent for advanced also pervasively global, something former Clerk of the Privy Council, economies and somewhat stronger for we have not experienced since the is retiring as Vice Chair of BMO emerging/developing markets. 1930s. As former British Chancel- Financial Group. May/June 2020
14 Downtown Toronto, heart of the Canadian business community, which is essential to leading the country out of the deepest recession since the Great Depression. Daryan Shamkhali, Unsplash photo Managing Change Amid a Pandemic As the world has learned from previous crises, society’s re- Perrin Beatty T sponses to catastrophe can range from adaptation to in- he COVID-19 tsunami is far novation to over-correction. In Canada, so far, our gov- from over. But even as lives are ernments have managed the pandemic response as well lies arestill being cut short and fami- reeling, we must start looking as could be expected given the uncertainty involved. But for lessons from this disaster. what can we learn about how to make Canada better as Crises remake societies. The Great we move from crisis to aftermath? Depression led to the New Deal and taught a generation about frugality. The Second World War ended Ameri- can isolationism and led to seven de- cades of international collaboration and institution-building. The events of September 11, 2001 destroyed old assumptions of international security and diplomacy and refashioned how Policy
15 we saw privacy and security here at After the immediate dangers have passed, we home. The Fukushima disaster led Ja- will need to take stock. Every institution will have pan and Germany to pull back from nuclear power to meet their energy to examine whether it was prepared to deal with the needs. And the SARS outbreak here in pandemic and if its response met the need. Canada 17 years ago forced large busi- nesses and public institutions to cre- ate business continuity plans to pre- pare for future outbreaks of disease. A As the present crisis continues, we im- ments strain to implement them with t some point, the disease will provise. Businesses and governments the speed that’s needed. subside to the point where we alike are piecing together solutions can restart our lives and our A based on partial information, with- fter the immediate dangers economy, but the world into which out the time needed to understand have passed, we will need to we emerge will be different from the implications of the options they take stock. Every institution the one where we lived just a few choose. In normal times, our goal will have to examine whether it was weeks ago. might be perfection. In a crisis, it’s to prepared to deal with the pandemic find something that’s good enough and if its response met the need. Some changes are already evident, under the circumstances. Surgical starting with the nature of globaliza- masks don’t deliver the protection of In addition, Canada should launch a tion itself. N95 respirators, but they beat having much broader review, at arms-length to governments, run by leaders from Since the Second World War, Cana- no protection at all. dians have been resolutely interna- medicine, science, business, labour and technology, to consider our over- tionalist. We should remain so. The The lessons of all response as a society. Its purpose lessons of fascism, of terrorism, of cli- fascism, of terrorism, should not be to assign blame, but to mate change, of the 2008 economic of climate change, of the examine what we did right and what crisis, of AIDS and of COVID-19 all we did wrong, so we can save lives teach us that the best way to combat 2008 economic crisis, of AIDS international threats is through inter- and avoid the immense human and and of COVID-19 all teach us economic cost of future crises. national collaboration. None of these that the best way to combat issues can be adequately addressed What we don’t need is to simply international threats is by even the richest and most pow- prepare better for a recurrence of erful countries acting alone. More through international COVID-19. Instead, we must learn than ever, we need global solutions collaboration. None of these the lessons that will prepare us in to global problems. issues can be adequately an increasingly connected world to overcome crises we haven’t had to But supporting internationalism does addressed by even the richest not require abandoning national strat- face before now: pandemics that take and most powerful countries a different and even more menacing egies. In ordinary times when supply acting alone. course, cyberterrorism that collapses chains remain open, it’s simple logic our economic and administrative in- to allocate production to the least-ex- frastructure or devastating natural di- pensive locations. N95 respirators sasters that could threaten hundreds would be an obvious candidate for of thousands of lives. global supply. They are comparative- The same applies to hard decisions ly low-value products. A small number It’s important not to simply refight the of manufacturers can produce them at now being made by all levels of gov- current battle but to prepare for ones the scale needed, they don’t spoil and ernment. Societal lockdowns are that seem inconceivable today. After they are light and cheap to ship. Hand crude and often cruel instruments, but our experience at the epicentre of SARS sanitizer and simple protective equip- they are the tools we have. The lists in 2003, we were in good shape to re- ment like face shields and gowns can of essential businesses we need to keep spond to a health crisis on the same also be easily be supplied in the quan- open are a rough form of triage. Gov- scale, but we remained unaware and tities needed in ordinary times. ernment aid programs that would or- unprepared even as we watched this dinarily take months to design are now new virus ravage the Wuhan region of Sadly, these are not ordinary times. conceived in days or hours and may China. We hoped the stringent mea- Global demand for these products need to be redesigned several times sures imposed by the Chinese would has skyrocketed and governments when we discover problems they miss. contain the disease. Unfortunately, around the world are engaging in And once they are unveiled, govern- hope is not a strategy. pandemic protectionism that, cou- May/June 2020
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