Seeking a just recovery from COVID-19

By Jesse Hajer and Lynne Fernandez

First published in the Winnipeg Free Press April 6, 2021.

COVID-19 has been a fundamental shock to households, communities and countries globally. Manitoba, like other jurisdictions, faces significant public health, economic and social challenges. While vaccines may get the public health crisis under control in the coming year, the social and economic challenges will take longer to address. This will require a collective effort of equal magnitude if we are to make up for lost ground and address other crises such as climate change, growing inequality and increasingly precarious work.  The 2021 provincial Budget presents an important opportunity for articulating a vision for recovering from the deepest economic crisis since the Great Depression of the 1930s.  

The social impact of the pandemic-induced economic decline is magnified by its unequal distribution. Low wage precarious workers have borne the brunt of the job losses, with women, non-unionized workers, and small business owners disproportionally losing their livelihoods. Precarious and racialized workers are over-represented in front line jobs deemed essential with all the associated risks and stress, while paradoxically facing the highest continued unemployment.

In the early days of the pandemic, the Manitoba government was slow and stingy with economic supports and initially pursued an agenda of layoffs and broader austerity. A bias towards austerity, both past and present, ultimately left the government and our province underprepared and overwhelmed by the second wave. Manitoba did better with total amounts committed and spent on COVID relief and recovery later in the second wave, but the focus very much remains on conventional infrastructure investments and supports for businesses rather than households and low income people. These policy choices are determining who will ultimately bear the heaviest and continuing burden of the crisis. 

Given the Canadian constitutional divisions of powers, provincial policy decisions will be fundamentally important. Staying on the current trajectory guarantees that economic inequality will be worsened by the crisis.  The Manitoba government’s long standing austerity agenda and extraordinary commitment to fiscal conservatism in the early stages of the crisis raise concerns that the recovery path holds more of the same, leading to greater deterioration of public services that reduce inequality.

While the government has been well engaged with its corporate base, there has been minimal meaningful engagement with the public sector, labour and community stakeholders to chart a strategic path out of this crisis. This approach is constraining the options being considered, and is setting up Manitoba for a slow and inequitable economic recovery.  

Past economic crises of this magnitude have shown that it does not need to be this way. 
Disasters and collective suffering can generate a renewed sense of solidarity, and a shift towards collective well-being. The needed effort and response to the coronavirus pandemic has been compared to that of the Second World War, a traumatic global event that ushered in a historic reduction in economic inequality and decades of relative stability, growth and improvements in living standards for working people.  We have recently published a report that contextualizes and presents Manitoba-specific policy alternatives to austerity that could form part of such an agenda. These recommendations are based on national and international calls by leading economists and public policy experts for an extraordinary and comprehensive socio-economic policy response. 

Manitoba can lead a just recovery that not only provides stimulus but also reduces inequality overall – especially for gendered and racialized people, and meaningfully addresses the climate crisis. Instead of just investing in roads and bridges, we could be investing in people through expanded universal social programs, such as public childcare integrated with the education system and expanding public health coverage to essential services such as dental and vision care. Labour laws and government policies could be changed to better support working people. Investments needed to transition off fossil fuels could generate cost savings and local economic development for years to come. 

The policy alternatives, detailed in our report, require the Manitoba government to act as a leader and steward and to make historic investments in our people and our environment. The time to act is now. Interest rates are at record lows and needs are intensified. Lessons from past economic recoveries show that when governments stimulate the economy, GDP growth is supported along with government tax revenues to help pay down the debt. Budget 2021 needs to recognize the growing trend away from austerity and shift the focus from fiscal debt to the growing economic, social and environmental deficit. Government has the ability to invest, grow our economy, get us out of the recession, and build a greener, more inclusive, and prosperous province. 

We need look no further than our southern neighbour for the dire consequences of a status quo course: increased inequality, intensified racism, polarized political conflict, the broad rejection of science, and intense social unrest.  Manitoba can do better.