A Path Forward.
Reconstruction of Our Economy Post COVID.
We are in unprecedented times. The COVID-19 global pandemic has jarred the world, closed down seemingly invincible economies and touched every facet of Canadian society.
The steps taken to date to combat COVID-19 spread had one overarching objective: to “flatten the curve” and not overwhelm Canada’s healthcare system. Our aim was to avoid the tragic situation unfolding in many other countries.
In order to mitigate the serious financial impact of essentially closing the economy, the federal government introduced a series of measures aimed at both individuals and businesses. These measures included the Canada Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy (CEWS), and enhanced access to credit through the BDC, EDC and financial institutions. These and other measures were designed to offset the hardship created by urgently needed self-isolation measures until businesses could reopen and individuals could safely return to work.
In a recent article in the Globe and Mail, Ontario’s former Health Minister, Dr. Eric Hoskins, stated that “there is epidemiological evidence which shows that by the end of April, Canada should be through the worst of the pandemic. Most health systems, remain entirely capable of supporting hospitalized COVID-19 patients.”
His assessment echoes those of other health experts in recent days who, based on careful study of case and death rates from COVID-19, believe that the shelter-at-home strategy has done its initial job. Current projections suggest that Canada’s number of cases and deaths from COVID, while still significant, will be much lower than initially predicted at the start of this crisis. There is growing consensus that the primary objective in shutting down the economy has been met. Now businesses, politicians and Canadians face another monumental challenge: what should happen next? While our focus always needs to be on the health, safety and well-being of Canadians, our attention also needs to turn to reopening the economy in a safe and prudent manner. One does not supplant the other — the two are inextricably linked, as unnecessary delays in reopening our economy (and especially our health care system) will only deepen the already devastating impact of COVID-19 on millions of lives. There’s also no question that reopening the economy is critical to Canadians’ health and well-being. The question is how, and when, to proceed.
Based on the most recent data, it appears that the province of Ontario — along with Quebec the two provinces hardest hit by COVID-19 — has hit its peak caseload, which will continue to decline through the end of April and beyond. As peak deaths from COVID typically lag two weeks behind peak cases, most of Canada should be through the worst of the pandemic by early May. This means that Canada, including Ontario, should reopen its economy shortly thereafter — sometime in the first half of May. This transition towards a reopening phase must occur thoughtfully and gradually, but must also be based on public health evidence around how this virus spreads and the overall risk of transmission. If these early stages of reopening the economy go well and a resurgence of cases is averted, then restrictions can be eased further until the economy is substantially or fully open — likely by the fall. This means we need to start planning for this reopening immediately and with urgency. The respective governments in Canada need to develop this plan with the full support of health, business and academic leaders to achieve a safe and balanced solution. Such a plan also needs to have built-in contingencies, as we continue to track and understand the behaviour of COVID-19.
In this reopening phase, pre-conditions must be set to ensure that the timing of reopening is appropriate and advisable, and that our toolbox for fighting COVID-19 is well-stocked. This includes effective and easy-to-access testing, case isolation and contact tracing, adequate personal protective equipment, health systems capable of managing patient loads, safe work environments, effective physical distancing measures, appropriate travel restrictions, suitable and safe public transportation and restored childcare services, to name a few.
A framework should be quickly yet thoughtfully developed to determine which businesses may be reopened and in which order. The first phase should prioritize the reopening of businesses that are most essential or have the lowest risk associated with sparking a resurgence of infections — in other words, those that can safely adapt to meet physical distancing and other infection control requirements. Businesses that rely on high occupancy or density, such as restaurants, for profitability may need to be partially subsidized so that they can maintain social distancing measures while keeping their doors open and restoring some level of income.
Individuals at higher risk from COVID-19’s health effects may need to remain home during the first phase of reopening except where they can safely social distance. Companies will need to accommodate for employees who must remain — but cannot work from — home. They may require continued government wage subsidies or extended unemployment insurance.
During this early reopening phase, restrictions will still be necessary to limit the size of gatherings, maintain physical distancing, and promote hygiene and cleaning. At the same time, widespread testing and monitoring will be critical in order to identify pockets of contagion so that these may be addressed early, knowing — as we do now — that asymptomatic spread is the biggest impediment to containment. Testing must be widely and easily available so that all contacts can be vetted even in the absence of symptoms. This is the best and only way, short of a cure or a vaccine, to avoid a resurgence of spread and future lockdowns.
Once the economy is open and there are signs of recovery, the next phase can begin: reconstruction.
It is prior to the reconstruction phase that important, unresolved questions should be asked and answered: What kind of post-COVID-19 economy should Canada have? What has COVID-19 taught us about innovation? Where is the country vulnerable?
To borrow from Marc Andreessen’s recent thought piece “It’s Time to Build”, we need to assess whether Canada has veered too strongly into a service-based economy reliant on global supply chains for its food security, manufactured goods, and health and wellness. We should revisit our manufacturing capability in the context of critical supply chains. We need to solidify the technological innovations required to teach our kids online when needed, buy groceries efficiently, test and track COVID-19 (and future pandemics), work from home, and so many other simple tasks we have taken for granted. We should use this opportunity, with the oil and gas sectors hard hit by forces beyond our control, to revisit Canada’s energy strategy and determine how renewable energies could play a long-term role. We should think carefully about the impact of public policy on our private sector vs. public sector employment mix. Might we be inadvertently encouraging more job security and opportunity with public sector employment?
As we consider the type of industries and the model of the economy Canada needs moving forward, strategies can also be developed to address access to capital, talent, customers and markets which will support Canadian companies and transform them into thriving, globally competitive enterprises.
To quote the Greek philosopher Plato, “Necessity is the Mother of Invention”. This crisis has laid bare our vulnerabilities, as well as our business, health and entrepreneurial needs like no other. Let this transform our country and economy, for the better, in ways not seen for generations. Because the next time, none of us can say we did not see this coming.
John Ruffolo, Founder OMERS Ventures, Co-Founder, Council of Canadian Innovators @ruffoloj
Dr. Eric Hoskins, Public Health Specialist, Former Health Minister for Ontario @DrEricHoskins
Chitra Anand, Doctoral Researcher Corporate Innovation, Author, Advisor High Growth Tech @chitra_anand