Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

David Williams, DPhil, is vice-president of policy at the Business Council of British Columbia.

Jock Finlayson is the council’s executive vice-president and chief policy officer

The COVID-19 pandemic is the most serious public health, economic and financial crisis in modern history. Governments around the world are deliberately deactivating their economies, albeit to varying degrees, as a central part of their public-health strategy to address the pandemic. This supply-side shock will elicit a severe downturn in domestic and global demand across 2020-21.

Story continues below advertisement

For governments in Canada and elsewhere, the first priority is to bolster the acute health-care system, and accelerate COVID-19 testing and contact-tracing. The second is to drastically reduce physical interactions across the population to slow virus transmission. The third is to help the economy ride out the storm and emerge more or less intact. Going forward, Canada will need every dollar of GDP and every job it can safely sustain in order to feed, shelter and pay the population, and to support the millions of citizens who have been rendered economically inactive by government fiat.

Governments should consider carefully which businesses must cease operation and which ones are essential. It should also weigh whether a middle ground exists, where a business can safely operate through innovative practices that achieve physical distancing. The goal should be to achieve as much physical distancing and infection mitigation as possible at the least economic cost. As much of Canada’s consumer-based economy is shuttered, governments should be looking to the industrial and digital economies to operate safely, and support the rest of the country and its supply chains.

A fourth priority for policy makers is to provide timely palliative relief for the economic pain that their public-health programs – and the contemporaneous global recession – is causing. After a hesitant start, the federal government has unveiled a series of fiscal measures worth about $190-billion, or about 8 per cent of 2019 GDP. This is broadly in line with what other advanced economies are doing. The provinces have also announced fiscal packages, worth another 2 per cent of GDP in the case of British Columbia. The purpose of these programs is to provide bridging cash flows to households and businesses through a shutdown of uncertain duration.

The centrepieces of the federal government’s economic support package are the Canada Emergency Response Benefit (CERB), one-off payments through the Canada child benefit and GST credit, the Canada Emergency Wage Subsidy (CEWS), tax deferrals, and interest-free loans and guarantees for small businesses. In addition, the Bank of Canada and other federal agencies are keeping financial and credit markets functioning.

The CERB and CEWS are massive programs – around $95-billion in total. Their success will hinge on expeditious implementation. That is, on whether the money arrives in recipients’ bank accounts in time for the next due dates for rents, mortgages or payrolls.

There are some elements missing from Canada’s economic support package, however. First, so far, very little is being done to assist hard-hit industries or regions. By contrast, Australia, France, Germany, Britain and the United States are directly supporting specific sectors to preserve their human, physical and organizational capital.

Second, Canada is not acting to encourage new private sector investment. The more capital-intensive a business, particularly in the use of digital technologies, the better its prospects for survival in a world of physical distancing. In a recent survey of Business Council of B.C. member companies, two-thirds indicated they were deferring or cancelling capital projects. Canada should follow Australia’s lead in providing additional accelerated depreciation for capital investments over the next two years.

Story continues below advertisement

Third, it is unfair to force retirees to sell securities at distressed prices to meet required minimum withdrawal limits for Registered Retirement Income Funds (RRIFs). Canada’s temporary 25-per-cent reduction in the withdrawal limit for 2020 should be increased to 50 per cent for two years, in line with Australia, to mitigate sequencing risk. This will assist retirees, and the companies their savings help finance, to ride out the crisis.

The federal government’s economic support package is a good start. Effective implementation will be crucial to its success. The government should also be looking to assist hard-hit industries and key export sectors, incentivize much-needed capital investment and safeguard retiree pension accounts.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies