Redirect Stimulus from Social Programs to Growth

Redirect Stimulus from Social Programs to Growth

September 21, 2020

On Monday morning the Financial Post published an op-ed piece that should be required reading.

In this piece, Mark Wiseman, chair of the Alberta Investment Management Corp.,  drew up a blueprint for an economic recovery that we can only hope gets on the federal Liberal government’s radar screen. Here are five notable quotes from this piece that resonated deeply with me, and I hope will do the same with the Prime Minister and his Finance Minister:

  • The key, he said, is to ensure that deficit spending is done on programs that can immediately put GDP on a higher growth trajectory than it was pre-COVID 19 so the country can “grow out of the debt.” Social programs such the Canada Emergency Response Benefit, which Wiseman referred to as a “blunt force instrument,” are no longer a solution for a government that not only has to spend big but also spend efficiently, he said.

  • Wiseman outlined three areas Canada can invest in that could put it on a higher growth trajectory: infrastructure, natural resources and technology.

  • “For us to stand up and say we’re no longer going to produce oil — that’s not an option,” said Wiseman, who said that transporting crude in pipelines is more efficient and environmentally friendly than doing so by rail. “That wasn’t an option before COVID and it’s not an option in a post-COVID world.”

  • As far as investing in the tech sector goes, Wiseman would like to see the government create the conditions for startups and SMEs to thrive over the next few years while directly investing in areas where Canada is already strong, primarily IT, agra-tech and clean energy. The government isn’t going to create the next Shopify, but it can help create the conditions where the next 10 flourish in this country,” he said.

  • And in a move that would send Canadians back to work, Wiseman is pushing for a national childcare strategy. It may sound like a social program, but he views it as economic. Childcare, including earth childhood education is almost prohibitive for many Canadians due to the extremely high costs associated with it, particularly in Ontario where daycare can easily cost parents more than $20,000 per year.

Let’s see what happens on Wednesday when Parliament reconvenes for a Throne Speech. For, as Mr. Wiseman concluded above, “We’ve created this big hole and the only way to fill that hole is through growth,” he said. “Or we’re going to cripple a generation of Canadians.

 

- Rick Peterson


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