Trudeau’s $1B coronavirus plan won’t do for long

With his $1-billion package to stare down what is now officially a global pandemic, Justin Trudeau did what he had to do earlier this week — but it’s the bare minimum, just enough to buy his government a bit more time to figure out what really needs to be done.

The $500 million for the provinces to plug holes in their health-care systems is certainly welcome as they rush to keep ahead of the COVID-19 curve.

Likewise, the $200 million for public education, testing and medical supplies, as well as the commitment to step up again if needed.

But the attempts to temper the economic pain that will only increase as the virus spreads are superficial so far.

For sure, easing the ability of employers to allow job-sharing and eliminating the one-week wait period for employment insurance for people who are in quarantine are smart things to do.

Extending job-sharing arrangements to 76 weeks will allow precarious employers to hang on to their workforce until the good times return.

And if a sick employee needs income support to leave the workplace, the elimination of the one-week wait for EI sick benefits will make the decision to stay home a bit easier.

But by the government’s own admission, those measures don’t even begin to deal with the most vulnerable workers and caregivers in Canada, who too often don’t have access to employment insurance or who already are barely making enough to get by.

All the talk about working from home or self-quarantining is the talk of the privileged, says Lindsay Tedds, an economics professor at the University of Calgary, who researches income supports for vulnerable people.

It’s fine for a university or a government department to contemplate telecommuting or using up their weeks of sick leave if the virus spreads, she says, “but what about the cafeteria staff? It’s the people we don’t see. They aren’t covered.”

Trudeau and his team are well aware of the gaps in the system and they’re brainstorming solutions. One hopes those solutions arrive before the virus drives too many people out of the workforce.

For Ottawa, the trickier and more expensive problem is the disruption ripping through the private sector — the travel industry, airlines, retail, trade, transportation and oil and gas.

At a national level, growth has already slowed to a crawl and some economists say we are hovering in recession territory already — especially since the coronavirus crisis follows on the heels of February’s rail blockades in Ontario and Quebec.

Scotiabank’s latest projections peg growth at just 0.7 per cent this year, and that’s assuming both the Bank of Canada and the federal government quickly pull out all the stops (and billions of dollars) to revitalize the economy.

Without stimulus, “the country would likely be in recession, and growth would come in at 0.3 per cent for the year.”

The jury is still out whether massive amounts of federal money would do much to encourage fearful Canadians to spend and invest more, rather than hunker down and hide from the virus — and each other.

The federal remedy for now, Trudeau says, is to stand at the ready with extra capital for federal credit facilities so that companies can make sure they always have access to loans.

And the Canada Revenue Agency might be willing to be flexible if a troubled firm can’t make its payments on time.

Those measures are smart; expanded credit certainly smoothed the way during the financial crisis of a decade ago.

But at this point, there is no credit crunch. There is, however, a rupture of supply chains, a crash in the oil price and little hope for the travel, tourism and airline industries.

In the United States, where the virus has taken a firmer hold than here, the Washington Post reported layoffs in airport and travel-related services.

It’s hard to know exactly how the global slump will affect companies here. There’s a chance that China, as it moves past the coronavirus crisis, becomes less of a drag on the global economy than it is right now.

Trudeau and Finance Minister Bill Morneau have hinted heavily for days now that they have lots of money and goodwill to deal with the problems at hand.

In the next couple of days, they will hear from the premiers about how best to spend it. And at the end of the month, they will present a new budget, revised over the next few weeks to take the sickened economy into account.

And as Morneau keeps saying, the government can move any time it likes to increase aid to a troubled part of Canada.

“We will be there for them,” Trudeau promised on Wednesday.

Governments are often judged by how well they respond to crises, as Justin Trudeau well knows.

He watched as Stephen Harper’s minority Conservative government was nearly toppled after Harper’s initial response to the global financial crisis of 2008-09 was widely deemed inadequate.

On Wednesday, the Liberal response was adequate. But it won’t be for long.

Heather Scoffield is a columnist with Torstar Syndication Services.

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