Stimulus programs in response to COVID-19 could have lingering impact, experts say

The novel coronavirus pandemic could have lingering and substantial economic and political costs, according to a University of Saskatchewan political scientist.

Garcea said the rapid spread of COVID-19, and the inability of governments to access the needed health care equipment, will trigger a realignment of the public and private spheres, with states moving to be less reliant on markets.

Garcea said the lack of medical supplies needed during the novel coronavirus pandemic showed how dependent people are on markets, and how vulnerable.

He also said the expansion of the state will occur along a similar extension of the concept of national security because so many people died.

Both steps will result in less reliance on overseas production for items that have proven crucial to citizens’ safety.

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He compared the new policies would be similar to other public works.

“The reason we have a post office, the reason we have train services that are run by governments is because there was a sense that the state has the greatest capacity to do what needed to be done,” he said.

Erika Dyck, a historian at the University of Saskatchewan, said the expansion of government fits a pattern of previous changes, like with the Great Depression begetting employment insurance.

She was careful to note a crisis doesn’t necessitate an expansion and explained it’s that a global or national disaster exposes a society’s inequalities and galvanizes social movements designed to remedy them.

“Food security issues, for example, or housing security, all of these things come to bear in ways that actually could be damaging, even to people who have homes or who have food security. And because of that, it becomes everyone’s problem.”

Dyck said paying for the new social programs — which typically outlast the disaster for which they were designed — could take years.

The federal government announced a series of programs designed to help Canadians survive the economic damage of the measures in place to prevent the spread of COVID-19, including a $73-billion wage subsidy package Parliament passed last weekend.

Garcea said the debt the programs will incur will have political consequences, with Canadians having to adapt.

“I think people’s expectations are going to be lowered and they’re going to have to wait a bit longer for the governments to be able to deliver some of the things that they want.”

Canadians, he said, will soon be confronted with choices about how to save money — meaning voters will need to decide which political party has the most appealing platform to do just that.

Saskatchewan voters are some of the first Canadians who will have to start making those decisions. The provincial election is scheduled for October.