A few weeks back, Business in Vancouver’s Kirk LaPointe penned a timely column calling on the provincial government to ramp up its focus on the economy.
He argues that B.C. needs an economic counterpart to top public health official Dr. Bonnie Henry, who has provided strong leadership throughout the COVID-19 ordeal. Lapointe suggested that we now need “another leader to speak clearly, responsibly, cautiously and sternly – a business twin for our medical guru….”
We sympathize with this view. However, Dr. Henry is a public servant who functions with a clear statutory mandate. No comparable office exists when it comes to steering the economy.
As the staged re-opening of business gets underway, rebuilding the economy has to become the provincial government’s all-consuming priority, likely for the next 18 to 24 months. Many reasons can be cited to support this contention – economic growth has tumbled deeply into negative territory, thousands of B.C. businesses are set to disappear, huge numbers of presently laid-off workers may not have jobs to return to, and the province’s major export industries are being hammered by the worst global economic slump since the 1930s.
One only has to look at the shocking job numbers to recognize the depth of the economic hole the province has fallen into. Over the past two months, employment has plunged by almost 400,000. By the time the worst of the virus-triggered economic downturn is behind us, the toll may be closer to 500,000 lost jobs. The combination of small job declines throughout 2019 and the unimaginable job destruction over the past two months means 16 years of cumulative job growth has been wiped out.
Young people have been especially hard hit. Since February, one in four people aged 15 to 24 have lost their jobs, with employment among this age group tumbling to its lowest level since the 1970s. Young workers fill many positions in the food services, entertainment, retail and accommodation industries – sectors that have seen stupendous drops in employment. Some of these jobs will return as the economy reopens and slowly recovers. But some will not. We see a profound risk of escalating human and economic costs related to higher structural unemployment, widespread financial stress, and the atrophying of skills if displaced workers and young post-secondary graduates are unable to find jobs in the months and years ahead.
As the government gears up for the anticipated economic rebound, we suggest that it appoint a small, non-partisan commission with a mandate to advise on the steps needed to kick-start economic growth in 2020-21 and to strengthen the foundations for prosperity over the medium and long term. Reporting to the premier and the minister of finance, the proposed commission on economic recovery and rebuilding would operate with a tight, three-month timeline to enable the government to digest its recommendations by the end of August. Outreach by the commission to stakeholders – including MLAs from all parties as well as business, First Nations, labour leaders and others – would take place electronically. The commission should also study what other jurisdictions are doing to position themselves for economic success in what is sure to be a more competitive and less forgiving world.
What specific topics would such a commission examine? We suggest three main focus areas.
First, ideas to accelerate economic recovery in the initial phase of the post-virus environment. For example, the commission could identify priorities for both private and public sector capital investment projects that can be advanced in the short term, and then enumerate the actions required to bring these projects to fruition quickly – that is, without the protracted delays and mountains of red tape that slow things down at the provincial and local government levels in normal times.
Second, re-employing British Columbians in the wake of the biggest job market shock in history. Academic research confirms that people who lose their jobs – or can’t find employment – during recessions, especially young adults, often suffer lasting damage as a consequence. Thus, policymakers should do everything they can to get people back to work as rapidly as possible.
Third, improving “hosting conditions” for the industries that drive the B.C. economy – especially industries that supply the bulk of the province’s exports. Even before the onset of COVID-19, the province was struggling to remain competitive in our major traded industries – forestry, mining and energy, advanced manufacturing, high-technology goods, agrifood and the infrastructure services that support trade. Looking to the future, B.C. must be able to attract the investment dollars and the managerial attention that’s necessary for these sectors to thrive and to grow. In our view, that will call for a rethinking and recalibration of existing government policies in a number of areas. •
Jock Finlayson is the Business Council of British Columbia’s executive vice-president and chief policy officer; Ken Peacock is the council’s chief economist.
As published in Business in Vancouver.