The COVID-19 pandemic gives us an unprecedented opportunity for a sustainable economic recovery based on smart investments that fully leverage the value of our natural resources. Stimulus provides a good bandage, but a well-thought-out recovery strategy ensures the right long-term deployment of our resources, technology focus and labour force.
Demand for everything from crude oil to consumer goods has cratered, as billions follow stay-at-home orders. At the same time, the global supply chain has been severely disrupted: Many factories in China emerged from months-long shutdowns only to impose mass layoffs as orders dry up. The Canadian economy, so reliant on global trade, is expected to contract by more than 12 per cent by year’s end.
It’s time to flip our accustomed model on its head: To invest purposefully in those industries most directly supported by Canada’s natural resources, and to regard the global supply chain as a useful adjunct to domestic manufacturing and export.
Doing so would address our growing income disparity by spurring job growth and increasing wages. It would also maximize the domestic return on Canada’s unique array of natural resources, supporting myriad primary and downstream industries in a targeted, sustainable fashion.
Take batteries, for example. Canada is one of only a few countries capable of producing and refining all the raw materials needed to produce the lithium-ion batteries that power everything from personal electronics to electric vehicles. Yet, we produce a vanishingly small number of such batteries here at home.
A sensible, targeted mix of streamlined regulations and infrastructure investment would allow Canadian manufacturers to take advantage of our unique raw material supplies. It would also help spark much-needed capital investment in the mining industry to pivot to the electrification segment, and would encourage development of related industries such as auto assembly plants, as well as further research on portable energy sources.
Such an investment would also foster the innovation and economies of scale needed to bring electric vehicles more assuredly into the mainstream. More sustainable mining practices would enable the manufacturing of more environmentally sustainable products, representing a double victory for the natural resources on which Canada ultimately depends and already has a leadership edge.
Taken together, the industries involved in the manufacturing and export of lithium-ion batteries typically generate job multipliers of seven and above, making them especially powerful drivers of sustainable employment. With greater demand for labour, an increasing number of Canadians will be working in higher-paying and more secure jobs. With these more sustainable jobs, workers will give back to society by paying more taxes.
Of course, not all investment needs to come from the government. The same factors that make targeted economic stimulus such a winning proposition for federal and provincial authorities stand to make affected industries more appealing to investment from private entities in Canada and abroad.
More sustainable mining practices would enable the manufacturing of more environmentally sustainable products, representing a double victory for the natural resources on which Canada ultimately depends and already has a leadership edge.
To be fair, not everyone will agree this is the ideal time to support private businesses with public funds. And many countries seem eager to return as quickly as possible to a global and domestic economic order that matches the one we left behind in 2019. But that order was unsustainable. It was damaging our global environment and was marked by an accelerating disparity in Canadians’ income.
As it happens, we have long needed a new economic strategy, one based on domestic production and export, increased wages for workers at all levels, and a strong commitment to environmental sustainability. The COVID-19 pandemic merely brought the risks of a skewed economic model to light, and their consequences into every home in the country.
The pandemic should not limit our imaginations to memories of what preceded it. Nor should it constrain our ambitions for a better and more sustainable economy. We will recover – Canada always does. The questions are how and how fast? A post-pandemic industrial strategy and economy that draws sustainably from our natural resources, while comprehensively reinvigorating our manufacturing sector, is not only within our power to imagine. With the right policy decisions, it is within our power to enjoy.