COVID-19: Canada’s Road to Economic Recovery

As the calendar turns to May, some jurisdictions across Canada are starting to slowly loosen public health restrictions to re-open their economies, while others are establishing plans to do so.

When COVID-19 set in, federal and provincial governments were required to work together to slow and contain the spread of the virus, by not only coordinating public health measures but also desperately working to try and acquire masks, gowns and other equipment.

As the pandemic runs its course, COVID-19 has impacted the provinces in different ways – both in terms of public health and economic impact. As quickly as efforts converged at the beginning of the pandemic, they are now beginning to diverge as provinces reveal their plans to re-open economies in similar, but different, ways over the coming weeks.

Shared Principles of Re-Opening

The Prime Minister and Premiers released a joint statement on principles to guide the restart of the economy, recognizing that strong public health measures must be in place to contain future outbreaks until there is a vaccine or effective treatment developed. This also enables a “new normal” where economic activity can be restored through a gradual and phased approach.

The guidance outlines that decisions should be informed by criteria and measures, including:

• COVID-19 transmission is controlled, with a stabilization in the number of hospitalizations and/or new cases
• Sufficient public health capacity to test, trace and isolate all cases
• Expanded health care capacity for all patients, COVID-19 and non-COVID-19, recognizing that surge capacity is in place to enable support for all patients
• Supports in place for vulnerable groups/communities and key populations, including seniors, residents of group living facilities, workers in close quarters, inmates, homeless people, and Indigenous people and those living in remote locations, along with health care workers and other essential workers
• Workplace preventative measures, including workplace protocols to prevent introduction and spread of COVID-19
• Avoiding risk of re-importation, including easing and coordinated management of non-essential domestic travel and re-opening of international borders in later stages
• Engagement and support for communities, industry and economic sectors to ensure that that health and safety are protected while the economy restarts

Re-opening the Provinces: Similar, but Different

The First Ministers’ statement followed the release of re-opening plans in many provinces, including Ontario and Quebec, where the pandemic has hit the hardest. Other provinces, including Alberta and British Columbia, remain locked down.

Ontario’s plan, outlined on Monday, focused on three stages of gradual re-opening, with Premier Doug Ford emphasizing that the plan focused on the ‘how’ of re-opening, but provided no hard dates on re-opening. Even while announcing the release safety guidelines to employers prepare to re-open, the Premier cautioned that it might still be some time before the province begins to reopen. Ontario’s Chief Medical Officer of Health indicated that as of April 30^th, the province is in day five or six of gradual decline in COVID-19 cases, and that he’d like to see 14 days of decline and “well below” 200 new daily cases before recommending a slow re-opening of the economy.

In contrast, Quebec Premier Francois Legault presented that provided dates for portions of Quebec’s economy will begin to re-open throughout May, with stores (not including those in shopping malls), construction and civil engineering businesses and manufacturing businesses opening at set dates throughout the month, putting an estimated 475,000 workers back to work by the end of May.

The two provinces have also diverged on their approach to re-opening schools. Ontario’s schools will remain closed until at least May. In contrast, Quebec’s elementary schools and day cares will re-open, with physical distancing measures in place, on May 11 outside Montreal and on May 19 on the island of Montreal. High schools, colleges and universities will remain closed until late August.

Across other provinces, early May is also the starting point for re-opening efforts in New Brunswick, Prince Edward Island, Saskatchewan and Manitoba. Each of these provinces have provided a phased approach that initially provides for some loosening of physical distancing measures and then gradually escalating to provide greater access to medical services, retail stores, and other workplaces under strict guidelines. The details of each phase is unique to each jurisdiction, demonstrating there is no “one size fits all” approach to re-opening – except, perhaps, for the recommendation to continue allowing people to work from home where possible.

Despite the existence of shared principles on restarting the economy, each province will carve their own unique path to the new normal. Regardless of the status of re-opening plans, provinces will be looking to the experiences in each other’s backyards to inform decision-making and next phases of re-opening.

The federal government will also be watching closely, as the economic support it is offering to Canadians and businesses is based on an assumption of a time limited shutdown, leading to a somewhat ‘U’ shaped recovery to follow as people returned to work and to jobs quickly after the pandemic ends. However, as the pandemic endures, emergency programs will reach the end of their proposed life span and the slope of the economy’s recovery curve will flatten, inhibiting the return to the previous normal.

The Canadian Survey on Business Conditions, joint effort between Statistics Canada and the Canadian Chamber of Commerce, found that business stabilization is needed urgently, with thousands of businesses approaching permanent closures. As Canada moves ahead in the next few months, governments will be balancing the need for economic recovery with an abundance of public health caution to avoid a second wave of the pandemic and the cumulative – if not exponential – strain it would put on the economy.

Highlights

• The House of Commons met Wednesday to pass Bill C-15, which implements the government’s proposed student benefits. The Senate will sit on Friday to pass the bill. As part of the motion to pass the bill, the government will be looking to encourage employment, implement new financial incentives to connect students and youth to jobs available to support economic stability and food production, and provide an additional $250 in support for students with dependents or disabilities.
• The House of Commons sitting follows two virtual meetings of the House of Commons’ Special Committee on COVID-19. Full virtual sittings of Parliament remain the subject of study for the House of Commons Procedure and House Affairs Committee, which will report back no later than May 15.
• Federal and provincial governments continue to work towards implementing the wage top-up for essential workers, initially announced on April 15. Ontario announced a pandemic pay top-up for front line staff on Sunday, complementing top-ups already in place in Quebec and British Columbia.
• Ontario has released a series of more than 60 technical sector guidance documents to provide guidance to protect workers, customers and the general public in preparation for the gradual re-opening of the economy. 58 new provincial labour inspectors will be added to communicate COVID-19 safety guidelines to essential workplaces or enforce emergency measures.
• Ontario has launched the COVID-19: Tackling the Barriers website for businesses to request temporary rule or regulation changes to support ongoing work through COVID-19. The requests can help to assist the health care system meet the needs of the emergency, assist businesses in retooling or producing essential or health related products and supplies or make it easier for businesses to operate remotely or in a non-traditional fashion and are facing unexpected challenges.
• To further reduce burden on business, Ontario announced that it is pausing or extending any existing public consultations, delaying non-urgent related consultations while the emergency situation remains in place, and considering extending deadlines for reports and audits.