The Uneasy Days of May

As we reach the end of the first week of May, the discomfort and lack of ease over what to do about the future of the COVID-19 situation is starting to show amongst politicians across governments.

The effect of COVID-19 on the economy is unprecedented. Highlighted by the release of the April labour force survey, 5.5 million Canadians are either unemployed or working substantially reduced hours compared to February. That’s a drop of 15.7 per cent in two months, far exceeding both the quantity and speed of previous economic downturns. The unemployment rate now stands at 13 per cent. With this backdrop, the federal government announced that the Canada Emergency Wage Subsidy will be extended past June.

Carefully laid plans to slowly reopen economies are being deployed across Canada in hopes of reversing COVID-19’s devastating impact to the economy and employment. But the path to reopening is not without its own hurdles. Greater Montreal has delayed its initial reopening back to May 25 as officials attempt to get the COVID-19 outbreak in that city under control (Montreal was already slated to open later than the rest of Quebec).

In Alberta, Jason Kenney has said that the pace of Alberta’s relaunch would vary across regions, depending on local outbreaks. While Ontario has extended all emergency orders until May 19, the province continues to incrementally loosen restrictions for segments of the economy.

As provinces begin the process of reopening, health systems will also begin to resume non-COVID related medical care, while maintaining capacity to respond to COVID-19. Addressing the growing backlog will be a significant task. In BC, there is an estimated backlog of 30,000 patients that will take 17 to 24 months to clear, and Ontario estimates that close to 53,000 elective surgeries have been cancelled since March 15.

Ontario has announced a framework on ‘the how,’ not ‘the when’ for the gradual resumption of surgeries and procedures in hospitals. Regardless of the approach taken, ensuring timely care will continue to be disrupted for months, if not years, and health care providers and governments will continue to explore opportunities to improve care delivery and reduce the time patients spend in acute care settings through the use of virtual care.

In Ottawa, the embattled oil and gas sector found itself in the sights of the opposition. Bloc Québécois Leader Yves-François Blanchet and the Green Party’s Elizabeth May both took aim at the sector, and called for the federal government to redirect support away from the sector and towards a new energy mix, including renewables. Alberta Premier Jason Kenney responded Thursday, calling their comments attacks on Alberta’s oil industry and highlighting that prosperity the sector has brought the country – and especially Quebec – funding for social programs and government services, and more recently, Alberta’s donation of PPE to Quebec during the pandemic.

Despite these moments of tension and discord there are still moments of cooperation, as demonstrated by the confirmation of a plan for the federal, provincial and territorial governments to cost share wage top-ups for essential workers, to a total of $4 billion in income support for low-income wage earners. First announced three weeks ago, the federal government is contributing $3 billion towards the program and the provinces and territories will determine eligibility and the amount of support received. In essence, the program raises the minimum wage – albeit temporarily – in a coordinated way across the country that has not been seen before.

Taken together, the pandemic challenged governments to not only create and implement policy at a breakneck pace, but it is also seeding greater debate over what comes next. Big questions are being posited on what is essential, what we value, what does stimulus look like, and what role governments should play. The answers to these questions could shape greater change in economic and social policy in the years to come.

Recent Updates

• Industry Minister Navdeep Bains is striking a new Industry Strategy Council, chaired by Monique Leroux, to provide advice on the depth and scope of COVID-19’s impacts on industries and specific sectoral pressures. While the membership of the Council is to be announced, it will leverage the existing Economic Strategy Tables, and two new tables will be added for the retail and transportation sectors.
• A $252 million package from the federal government to support farmer, food businesses, and food processors was announced this week, providing funding for access to PPE, cattle, and hog management programs to support livestock backed up on farms and a food surplus program to redistribute existing and unsold inventories. The package was welcomed but fell short of the $2.6 billion that the Canadian Federation of Agriculture sought to ensure stability of Canada’s domestic food supply.
• Ontario has extended all emergency orders until May 19, while also easing some restrictions on retail stores. Through a phased approach between May 8 and 11, hardware stores, safety supply stores, garden centres, and nurseries opening for in-store purchases, and retail stores with a street entrance can provide curbside pick-up and delivery. The government is also expanding essential construction to include below-grade multi-unit residential construction projects like apartments and condominiums to start being built and for existing above-grade projects to continue. Finance Minister Rod Phillips has also indicated that the government will be able to share more details related to the province’s re-opening plan in the near future.
• BC will move to phase 2 of its restart plan on May 19, permitting non-essential businesses and services to reopen but with a twist. Organizations will have to implement and publicly display plans to reduce the risk of COVID-19 spread. The third phase, which could start between June and September, would ease restrictions on travel if transmission remains low, but Premier John Horgan cautioned that the final phase of reopening is still 12-18 months away, when a vaccine, broad treatment, or evidence of community immunity significantly diminishes COVID-19.
• The approach to school closures remains variable across the country. As Quebec’s French-speaking schools begin to open their doors starting on Monday, Saskatchewan has announced that its schools will remain closed until at least September.