The COVID-19 pandemic has battered the Canadian economy. As people across the country experience hard times, the discussion amongst governments decision-makers has turned to a more hopeful future. One where we can build back better by advancing an economic recovery that is both green and inclusive.
These green and inclusive recovery plans make for smart economics, and will lay the groundwork for future prosperity. But a full recovery can't start while this pandemic continues. As well, getting this recovery right will require preparing a stronger foundation on which to build a better country.
Governments will need to wait before beginning to spend on a recovery. Waiting is needed because the economy is now in an extended period of ups and downs. We call this phase “the climb,” and the economy’s up-and-down trajectory in the coming months will likely resemble a mountain range of peaks and valleys. For as long as the climb continues, which will be until a vaccine is found, a full economic recovery cannot begin. The risks of infection from bringing people together, potentially leading to future lockdowns, are too great.
Governments are aware of this. The prime minister opened last week’s cabinet retreat by saying, “We need to get through this (pandemic) in order to be able to talk about next steps.” The immediate challenge of handling a potential second wave, a characteristic of the climb, will take precedence in the minds of Canadians, and time to manage.
Rebuilding the economy once this pandemic has ended will also be challenging. Addressing the unequal impacts of the pandemic on vulnerable communities and mitigating the drivers and impacts of the changing climate that are currently clouding Canada’s skies will both be critical in a spending package that advances national resilience. It is entirely possible, but will require careful planning to get right.
"It is possible to have a recovery that is both green and inclusive — but it will take careful consideration and planning."
Managing complex problems in parallel offers a chance for governments to use the time spent combatting the pandemic strategically. In this climb spent managing the epidemic, governments can begin to plan for the eventual recovery spending that will support a more impactful set of investments.
A recovery that aims to support sustainability will first need to understand where the potential for job creation and future prosperity in the clean economy is highest. Similarly, an inclusive recovery will need to identify where the impacts of the COVID-19 recession are most highly felt before deciding where stimulus spending would offer the greatest benefits. In both areas, governments can build on existing research by leading organizations around both a green and inclusive recovery.
Putting principles into practice requires a multi-step approach. Governments first need to identify what goals they are aiming to achieve to support sustainability and inclusivity, then collect data to understand where these goals are not being met across the country.
Governments then need to ensure they are accounting for the benefits to human health, well-being, and accessibility that investments in green and social infrastructure offer. Finally, they need to target the major barriers to labour force participation in vulnerable communities to ensure all Canadians are able to participate, and benefit, in an economic recovery.
Recent work from Smart Prosperity outlines what governments should be doing during the climb to ensure a green and inclusive recovery fulfills its potential. The key takeaway from this work is that it is possible to have a recovery that is both green and inclusive — but it will take careful consideration and planning before a recovery is underway, and creative thinking about management of the economy.
Addressing and implementing each step will take time, and planning will need to begin today. If they do not, a number of groups, including women, youth, small businesses, Indigenous peoples and the disabled, may be left behind in a recovery.
The pandemic will continue to hold back a full recovery until it is defeated. During the climb, governments should begin to plan to ensure a recovery drives sustainability, inclusivity and prosperity in Canada.