When two columnists in the Globe and Mail – on the same day – call for more government intervention in the economy and additional programs for the welfare state, you know some sort of seismic shift is underway. Who would have thought an economist from that venerable conservative paper would ever say, as Eric Reguly did on May 23, that “Nationalization isn’t all bad”? Of course Reguly hastened to re-assure his shocked readers that “nationalizations do not mean socialism has won” because “companies can be re-privatized as soon as market conditions improve.” More importantly, though, he actually conceded that governments have an important role to play in society because, as with other crises that have produced a similar conversion on the road to Damascus (such as 9/11 and the 2008 Great Recession), “COVID-19 is not a war that can be won by capitalism alone.”[1]
Reguly’s comments are echoed by fellow columnist Andrew Coyne. In his article on the federal government’s CERB program, Coyne not only acknowledged that it has set a positive precedent, but argued some sort of basic annual income is both likely to be introduced and urgently needed in Canada in the post-pandemic economy. [2]
Then there are the repeated demands of the Conservative premier of Ontario, Doug Ford, for the federal government to establish national programs for almost everything he can think of. Looking like a deer in the headlights at his daily press conferences, Ford, who has seen his popularity plummet as the pandemic in his province remains stubbornly out of control, has also had a change of heart. Six months ago no one would have expected the former staunch opponent of all things Ottawa to argue that Canada now needs the feds to set national standards for virus testing and tracking, and to take over long-term care homes, both clearly provincial areas of responsibility. No doubt Ford’s sudden enthusiasm for government intervention, and especially for the potentially positive role of the federal government, was one of the developments that led another Globe columnist, Campbell Clark, to conclude that Canada is on the cusp of another period of centralized federalism and weak provinces, similar to that which followed the Second World War.[3] (Even Quebec’s Francois Legault, whose initial positive ratings over his handling of the pandemic have cratered like Ford’s, and who felt obliged to point out to Trudeau and Ford that provinces are indeed in charge of health care, is likely to be less combative after pleading for help from the Canadian army in his stricken province.)
In short, it would appear that the Trudeau Liberals have been handed an unprecedented opportunity to implement their agenda. “Real Change”, their rallying cry in the past two elections, has never been more attainable. Despite their government’s minority status, the combination of their lofty standings in the polls and the lack of meaningful opposition – demonstrated so clearly by the Conservative Party’s identity crisis and disastrous leadership contest – along with the unexpected quiescence of premiers, is providing the Liberals with a golden opportunity to implement many of their progressive platform planks and long-standing party policy resolutions. These include such things as the annual basic income, national pharmacare and homecare plans, a national childcare plan, and a truly national broadband network with high speed access for remote and rural communities and low-income Canadians.
Normally Conservatives and conservatives would retort that there will be no money to pay for these ambitious programs after the huge upfront expenditures incurred by the federal government during the pandemic. But with the notable exception of former prime minister Stephen Harper, who chose the Wall Street Journal [4] to make that point, almost no prominent politicians or economists have done so. On the contrary, most have pointed to the government’s solid economic fundamentals and the rock bottom interest rates of the day as an indication that there has never been a better time to invest in people, infrastructure and innovation. In addition a Parliamentary Budget Office (PBO) report of April 30[5] indicated that despite the massive spending projections, the federal debt to GDP ratio would rise from a pre-pandemic 28.5% to 48.4%, well below the average of most OECD states, to say nothing of the pre-pandemic problems of Italy and Japan at well over 100%.
Re-starting the economy successfully depends on workers and consumers who need childcare and other support, investment in infrastructure and in innovation, including sustainable development technology, more national manufacturing and/or control of the supply chain. If he chooses, the prime minister can make the case for investing in the environment and for aiding indigenous peoples as part of building a strong resilient economy. He can also insist on progressive strings being attached to federal financial support for big corporations and the oilpatch, as he has already begun to do.
Opportunity is knocking. The Liberals, to paraphrase detective manuals, now have the means, motive and opportunity to enact meaningful change. They have the fiscal means and the electoral/philosophical motive to do this. The widespread current public support for such progressive policies, and the weak position of the opposition and the provinces, have provided the opportunity.
Political will is the only remaining factor. Big change is always hard for governments, but now is clearly the time to take a risk. The prime minister’s father did not hesitate to do so on several occasions, and hopefully the son is made of the same stern stuff. The next federal election could and should be fought on the Liberal versus Conservative visions for the post-pandemic economy and the appropriate role of government in managing it.
[1] Eric Reguly. “Nationalism isn’t all bad – it could keep many virus-bashed companies alive”. Globe and Mail. May 23, 2020. B3
[2] Andrew Coyne. “While Nothing Like a Basic Income, CERB Opens the Door to the Idea”. Globe and Mail. May 23, 2020. D2
[3] Campbell Clark. ‘It’s the Provinces That Will Emerge Weaker After this Crisis as the Power Shifts to Ottawa”. Globe and Mail. May 22, 2020.
[4] Rt. Hon. Stephen Harper. “After Coronavirus, Big Government will Have to Shrink”. Wall Street Journal. May 12, 2020.
[5] Jolson Lim. “PBO Says Deficit Could Reach $252 Billion This Year”. IPolitics. April 30, 2020.
