Governments must budget courageously through this pandemic

Over the last month, the Ontario and federal governments have released economic updates for 2020. I’ve had some time to consider them - what’s in them and what’s not. While I often talk about the need for courage by Canadian businesses, governments must also demonstrate courage to challenge the status quo, take calculated risks, and do what’s right.

I was buoyed to see both Governments use the latest updates as an opportunity to lead in three critical ways:

Not being afraid to spend

Unlike past Conservative governments who have reverted to austerity during challenging times, the Ford Government is continuing to spend in targeted, meaningful ways that will help Ontario recover. With $680 million in funding to expand broadband, the Ford Government is injecting money into projects that will create both short and long-term gains for the people of Ontario. This approach is needed during the pandemic and is the right pivot from their initial campaign promises to reduce spending.

For its part, the federal Government has committed to spend around $50 billion in new near-term initiatives and between $70 to $100 billion in the post-pandemic recovery. While the Government will need to introduce a fiscal anchor to protect its credit rating soon, that day is not today. Right now, the Government must see that the money flows quickly to the people and businesses that need it urgently. Only by ensuring this funding has the desired impact, will the Government be able to eventually close the taps.

Getting people back to work

Over the next decade, the share of Canadians over age 65 is expected to nearly double. Combined with a low fertility rate, Canada’s labour force growth will stagnate unless we both maintain high levels of immigration and reskill our workforce. Using this opportunity to invest in the retraining and skills upgrade of out-of-work Ontarians will pay dividends for decades. The Ford Government has rightly acknowledged the importance of skilled trades to the future of our province. Their investments in simplifying the system and encouraging employer participation in skills training will get people back into respected, fulfilling and productive work.

But retraining and skills upgrades won’t matter if half of the population are unable to afford or access childcare. COVID-19 shows that the bulk of childcare duties still disproportionately fall to women, as women’s workforce participation dipped to 55 percent for the first time since the mid-1980s. The federal government’s commitment of $20 million over 5 years to create a federal secretariat on early learning and childcare to analyze childcare policies is a step in the right direction of helping women get back to work.

Support for Black economic inclusion

The Ford Government also announced historic investments in economic empowerment for Black youth, doubling the province’s Black Youth Action Plan from $14 million to $28 million annually, to support Black youth in achieving social and economic success. In response, community advocate Jamil Jivani, wrote in the National Post, "Conservative provincial governments across the country ought to take note of this collaboration as a model for how Conservatives can, and should, build relationships with Canadians of all ethnic backgrounds."

“Conservative provincial governments across the country ought to take note of this collaboration as a model for how Conservatives can, and should, build relationships with Canadians of all ethnic backgrounds,” - Community advocate Jamil Jivani, National Post

This along with the federal government’s announcement in September of $221 million to support Black entrepreneurs is another step towards achieving greater Black economic inclusion. I was pleased to discuss the importance of these initiatives with Andria Barrett, President of the Canadian Black Chamber of Commerce, on my podcast Courage Inc., recently (episode will be available on December 15).

It was also pleasing to see a federal commitment to general youth employment in their recent economic update. Young workers have been particularly impacted by the pandemic-related recession. To help, the federal government will create an additional 40,000 summer job placements for young people next year and allow employers to hire youth outside of the summer period. A boost to the Youth Employment and Skills Strategy over the next two years is truly an investment in Canada’s future.

So, there are many things to like in the recent financial updates from the provincial and federal governments. Where the rubber hits the road is how they get the resulting deficit under control. Increased spending now to support people and businesses in a pandemic doesn’t mean governments can ignore the need for fiscal prudence in the future.

Where the rubber hits the road is how they get the resulting deficit under control. Increased spending now to support people and businesses in a pandemic doesn’t mean governments can ignore the need for fiscal prudence in the future.

For the next budgets expected in the Spring, Governments will need to muster the courage to develop a long-term fiscal plan that will unite Canadians toward a fiscally responsible future with a clear plan to reduce our record deficit and a timeline for future balanced budgets.

Some considerations for all governments as they lead our country into a thriving post pandemic future:

Do what’s right

Courageous governments take actions that generate positive, long-term impacts for their people and, ultimately, their country. As hard as it may be to ignore the election cycle, resist the temptation of short-term gains and lead our country towards a long-term better future for all.

Seek out opposing views and avoid echo chambers

People tend to avoid information that runs counter to their existing set of beliefs or convictions. Courageous leaders actively look for and encourage opposing viewpoints as a means of fostering sounder, more objective decision-making. Engaging business, community groups and other stakeholders will help create better answers.

Reframe risk as an opportunity

Governments, by their very nature, are risk-adverse. This is a time for our governments to embrace the uncertainty we are facing with the courage to understand the different ways the future might unfold and create the capability and processes within government to be flexible to respond to changing circumstances.

All governments, federal and provincial, must lead our country forward through this second wave, into the recovery phase, and ultimately into a world where we can all thrive.