Social Policy in Ontario

In the short space of the next four weeks, the Trudeau government will design not just a proposed economic recovery plan for Canada, but a lasting economic renaissance only a notch or two shy of Sir John A. Macdonald’s National Policy in its impact.

The government will present highlights of its plans for pandemic economic recovery in the Throne Speech that soon follows the return of Parliament Sept. 24. More details will come with an economic statement later in the fall, and we’ll see the plan in full in a budget next year.

You can be sure that this vision of a new Canadian economy will be bold.

Having promised a thoroughly overhauled post-pandemic economy, especially in strengthening the social safety net, the Liberals have gone all in. They can’t back down from it.

Given the minority status of the government, and a confidence vote it faces after the Throne Speech that they could lose, the country might find itself voting on the Liberals’ proposed economic renaissance in an election sooner than later.

An early sign of the government’s resolve is the $37-billion package of new income supports it unveiled Aug. 20. Those measures extend pandemic-related emergency payments far beyond those of a U.S. counterpart program, which ran dry weeks ago and show no sign of resumption, though millions of Americans remain out of work.

In that same announcement, made jointly by newly appointed Finance Minister Chrystia Freeland and Employment Minister Carla Qualtrough, Ottawa also introduced increased sick-leave, caregiver, and maternity benefits.

The backdrop for those enhanced protections is a Liberal plan, signalled by the government for several weeks, to effectively replace the antiquated Employment Insurance program with the more streamlined and user-friendly Canada Emergency Response Benefit, which will still go under the name EI.

How much further the party intends to take its planned reinvention of the economy will be determined by intense cabinet, caucus and bureaucratic negotiations over the next few weeks.

That will be a high-stakes exercise, bearing resemblance to the lead-up to Medicare’s rollout in 1965 and the advent of the Charter of Rights and Freedoms in 1982.

The prospect of a snap election will influence those deliberations, of course.

But the Liberals seem intent on asking Canadians to consent to a sweeping economic renewal that tackles income inequality, climate crisis, immigration, economic sovereignty, industrial self-sufficiency, the gender-pay gap, Canada’s undernourished R&D sector and considerably more.

“The restart of our economy needs to be green,” Freeland said Aug. 20. “It also needs to be equitable, it needs to be inclusive, and we need to focus very much on jobs and growth.”

The Grits, in other words, are giving themselves an open-ended mandate for change, the ambition of which the country has seldom seen.

It’s fair to ask why they have embarked on this high-risk mission. It could see them reduced to opposition status in Parliament by this time next year if Canadians reject it.

On climate change, for instance, the Trudeau government wants to lay the groundwork for a Canada able to exploit the lucrative environmental industries that will help define the 21st century — a public- and private-sector project already underway but still in its infancy.

And for the Grits, economic sovereignty largely takes the form of self-sufficiency in essentials like medical supplies that were long ago outsourced abroad.

Ottawa is also worried that Canada will suffer competitive disadvantage if it doesn’t match the heavy investments that Europe is making — during the pandemic, no less — in upgrading its social-safety nets, its tech-oriented intellectual property development, and environmental industries rich in export and job-creation potential.

And in the more recent four years of deficit-financed investment in Canada for which the Trudeau government won an electoral mandate in 2015, the average debt-to-GDP ratio has been just 31.6 per cent.

The Grits or their successors stand a good chance of restoring that pre-pandemic ratio once the days of extraordinary pandemic spending have passed.

For purposes of comparison, a prosperous Japan’s debt-to-GDP ratio has exceeded 200 per cent for decades. Kevin Page, the former parliamentary budget officer, said recently that Canada’s public finances are in better shape than most advanced economies.

As for our emergency pandemic government spending, it’s worth noting that Canada is on a level playing field our biggest trading partners — they too have run up their deficits and debt to protect their people.

But perhaps what most influences the Grits’ thinking is that Canadians, in adjusting so quickly to pandemic realities, are geared to accepting sensible change on economic reinvention if a good case can be made for it.

Nor are Canadians fretful about deficits and debt, regarding this year’s pandemic spending as money well spent to limit permanent pandemic damage to individuals’ finances and to the economy.

Actually, Liberals are betting that most Canadians are impatient for change in a gap between rich and poor that has widened even more during the pandemic, especially for women; and about our stubbornly slow progress in the fight against climate crisis.

The Grits could bungle this once-in-a-lifetime chance to create a more successful economy, as they did with the National Energy Program (NEP). Or they can get it right, as they did with a Medicare system that Canadians cherish — a triumph that was achieved by a minority government.

The NEP was sprung on Alberta and the country with notoriously little genuine consultation.

By sharp contrast, for the economic renaissance they’re now planning, the Grits have been soliciting input all year from the premiers, leaders in industry and organized labour, environmental and poverty activists, and of necessity in a minority government, opposition leaders and backbenchers.

And because an election is on the near horizon, we will all have our say on this proposed latest nation-building project.

https://www.thestar.com/business/opinion/2020/08/29/trudeaus-using-our-moment-of-crisis-to-reinvent-our-economy-thats-exciting.html