May 6, 2020

To spur economic recovery, focus on HEALTH (Gallant)

By Brian Gallant

To spur economic recovery, focus on health

Brian Gallant, Q.C. is a Senior Advisor with the public affairs firm, Navigator Ltd and is the former Premier of New Brunswick

Many jurisdictions are looking to ease restrictions put in place to combat the COVID-19 pandemic. As decision makers ponder these difficult and complex decisions, governments must not lose sight of one of the most important lessons from this global crisis; when push comes to shove, people collectively choose to prioritize health over perpetual economic growth.

Political leaders must, therefore, resist the temptation to base their COVID-19 recovery plans on a simplified tagline like “opening up the economy.”

A significant economic consequence of the COVID-19 pandemic is reduced consumer spending, but a recovery plan needs to address the underlying causes and not the economic symptoms alone. By focusing on people’s physical, mental and financial health simultaneously, governments can catalyze economic recovery as individuals return to being able to spend money.

The current political debate regarding the effectiveness and potential unintended consequences of the Canada Emergency Response Benefit is implicitly demonstrating the different frames with which to approach the response and recovery stage of COVID-19.

On one hand, there is the ‘economic’ frame which could lead to the conclusion that by providing direct financial support to those who have lost their jobs due to the pandemic, governments could be providing a disincentive for people to return to the workforce and for some, considering different jobs such as in farming or fish processing (as is being discussed in New Brunswick). This approach it is being argued could prolong the response phase and weaken the recovery stage.

On the other hand, there is the ‘health’ frame which could lead to the conclusion that governments should be supporting those who have been physically, mentally, or financially impacted by the pandemic through direct financial support. It is being argued that this approach will help people get through the response phase and be better positioned to enable the recovery stage.

The goals of helping people get through the immediate challenges faced by many due to the disruption of the pandemic through financial support and helping people get jobs as soon as possible to assist the economic recovery are both valid. The political discussion, therefore, should be focused on which policies to pursue in parallel to each other to achieve both goals.

Herein lies the challenge for the political class regarding this debate; it’s often hard to have constructive dialogue on a policy question without there first being agreement on the frame in which to use and the objectives to pursue.

Taking all of this into account, here are five considerations – humbly proposed – for political leaders to consider while devising their COVID-19 recovery plans.

1- Prioritize the health of the citizens by following the advice of health experts.

The speed of the economic recovery will be directly linked to the efficacy of our collective health response to COVID-19.

Governments must have the capacity to meet the conditions put forward by public health experts that allow restrictions to be lifted while keeping people safe and healthy, such as increased testing capability and healthcare systems capacity. .

2- Properly set expectations.

The public needs to be made aware that opening things up does not mean things will revert to normal right away as it will need to be done gradually and in phases. Furthermore, there will need to be changes to the way things have previously been done.

How can the health care system quickly innovate to address the longer than usual backlogs that have been created? What needs to be done to get daycares up and running again safely? What policies will be put in place to protect people in long term care facilities? What is the order and priority for industries and businesses to return to work? How can workplaces modify working conditions to adhere to public health advice and protect employees?

3- Map out how to open things up fairly.

Decision makers need to ask themselves how to equitably address the diverse challenges faced by Canadians, regions, communities, industries and organizations that COVID-19 has created or aggravated.

They should also consider how the easing of any restrictions will impact the most vulnerable populations due to health conditions or age; people with low-income or no income; people living in urban, suburban, and rural areas; different genders; indigenous people; workers and employers; and large businesses and small businesses. Moreover, a plan to enhance mental health services for the people who are struggling will be a necessity.

4- Aspire to create something better.

Canada’s leaders should take the exercise of rebuilding the economy as an opportunity to create a more sustainable and inclusive economy that combats climate change and addresses inequalities instead of exacerbating these challenges.

How can the new normal generate a fairer economy which creates more educational opportunities for more people, reduces income and wealth inequality, and promotes gender equality? What lessons can be learned from this aggressive and collaborative global response that can be applied to the fight against climate change? In the stimulus packages conceived, how can there be additional investments in what Canada and the world need more of such as research and development, innovation, accessible and affordable post-secondary education, environmental protection, and green energy.

5- Help replenish consumer spending.

Employment is arguably the most important variable for an economy’s level of consumer spending. Governments should, therefore, continue to provide support for businesses to employ their workers through to the recovery stage. Plus, it will be important for governments to stimulate the economy by investing in public infrastructure quickly and by enacting policies which will unlock private sector capital investments.

Furthermore, direct financial support during the response and recovery phases to those who have or will suffer financial difficulties due to the pandemic will certainly help mitigate the hit to consumer spending.

In addition, the implementation of the considerations proposed – listening to health professionals and easing restrictions in phases and fairly, coupled with addressing systemic inequalities – will help get consumer spending back on track more rapidly and create a faster economic recovery.

There are many uncertainties facing decision makers due to the unprecedented nature of this global crisis. One thing is certain, however; a sole focus on “opening up of the economy” which does not include a sustained evidence-based health response to COVID-19 risks a more prolonged and deeper economic recession.