A provider of last resort

During this pandemic, countries with the strongest public safety nets and leaders who listen and trust their public health officials’ guidance will make the better decisions.

Leaders continuing to score political points and focussing on their re-election are killing disproportionally more of their citizens and it is predicted their countries will struggle longer with the pandemic and its economic fallout.

Nobel prize winning economists, Paul Krugman, in an interview on PBS with Christiane Amanpour, said the economic response requires a two-pronged approach. 

First, provide disaster relief on a scale never before seen to ensure individuals and families aren’t worrying about how to feed or house themselves.

Second, ensure the economic infrastructure stays in place—transportation, small and medium-sized businesses and solvent local governments—all critical for the economy to re-open quickly.

Our federal government seems to have closely followed this model. The programs they announced and continue to adjust are structured to support individuals and to keep as many employees attached to their employers as possible through the economic shutdown.

But Krugman’s last point about local governments is worth pondering.

In Canada, we’ve never adequately supported local governments. All austerity-focussed governments, without exception, take large sums of capital and operating dollars away from municipalities every time they want to balance their provincial budgets.

Yet it is local governments that provide citizens and businesses the most direct and essential services—clean water, sewage, roadway construction and maintenance, policing, fire services, weed control, community supports, garbage services, recreational facilities. 

All these services come with huge capital investments and/or significant operating costs. If not supported consistently and adequately by provincial governments, it harms the economic base of communities and regions.

Quite frankly, it’s always been a stupid strategy of provincial governments but now even more so as increased property tax burdens or reduced essential services in communities will cause exponentially more harm as economic activity tries to re-bound.

With an austerity-focussed Alberta government, we can only hope that the federal government will step in to backstop our local governments. Maybe the feds will backstop our rural doctors as well!

Isn’t it interesting how during an economic disaster, publicly-traded corporations, austerity-driven provincial governments and tax-resistant citizens expect the federal government to bail them out?

If there is one lesson we should have learned from this pandemic, it’s that governments cannot be run like corporations. Corporations build no resiliency into their organizations—their go-to-strategy in an economic crisis is to lay off thousands of workers and throw them into government-support programs.

Whereas governments need to have built-in resiliency in order to respond quickly and ably to disasters. 

Let’s hope through this terrible time, Canadians will re-commit to the importance of governments and set aside the dangerous trend that governments be run like profit-taking corporations.

Alistair Darling who was UK Chancellor of the Exchequer (finance minister) during the 2008 economic crisis was also interviewed by Amanpour. 

He said, “In a time of crisis and an acute crisis like this [Covid-19], governments are not only the lender and insurer of last resort, but they very often are the provider of last resort.”

It’s time to stop worshipping American exceptionalism, stop demeaning our Canadian institutions of governance and our civil servants, and start appreciating how lucky we are to live in Canada.

 

B. Schimke

ECA Review

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Brenda Schimke

Brenda Schimke

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