The advent of the Covid-19, belatedly acknowledged as a pandemic, is hurting the world in more ways than one. The world economy is tittering on the verge of a recession, caused by a health issue coupled with a war between Russia and Saudi Arabia which has crumbled the price of oil. Governments around the world are scrambling, and yet Canada is still wandering what to do. The bigger question is where is the Prime Minister?
Ever since the virus was identified in China the spread of the epidemic has grown by leaps and bounds. While the rise of cases in China is plateauing, the numbers are rising in other parts of the world. Italy, South Korea and Iran are the ones mostly affected. Passengers on cruise ships are being quarantined because of the spread in confined quarters. What is causing panic is that there are now cases of community infection. The World Health Organization has been slow to react and the media and the Democrat Left has seized upon themselves to search for means of blaming Trump for whatever happens in the United States. The Canadian media, every night, spends more time talking about Trump rather than giving the Canadian public a more detailed explanation of what is happening in Canada. British Columbia is the province with the most cases, followed by Ontario and now Alberta.
The Canadian economy is not only being hurt by Covid-19, but is damaged by the recent blockades and also now by the fall in oil prices. In all cases the Trudeau government has been slow to react and so far Canadians have no answer from this feckless PM, who is more interested in a UN seat instead of the welfare of the nation. Alberta’s economy which is being decimated by the lack of oil and gas development and a low price of oil, is now facing a more dire future. The Kenney government will have to reassess its latest budget and make more difficult decisions. Given the loss of revenue, it is clear that without drastic measures the deficit will grow. The NDP opposition, just like the Democrats in the U.S., seem to be wringing their hands at the thought of an economic collapse for political reasons.
The International Monetary Fund is asking that governments around the world “to implement targeted fiscal, monetary and financial measures to help households and businesses weather the impact of the corona virus”. But it is not only the virus affecting the economy, environmental and oil policies are perhaps larger factors. Opec countries are losing $500m a day, Quebec has lost some $4B of investment in a LNG project, Alberta lost Teck Resources proposed $20B oil-sands mine. Furthermore the delay in the Transmountain pipeline continues to be a major barrier to growth in Alberta. All governments are being urged to take measures to mitigate the unpredictable circumstances, but the Trudeau government mired in its ideological environmental policies coupled with the inability to make tough decisions due to their ‘reconciliation’ policy is now fully responsible for an upcoming recession made in Canada.
It is perhaps ironic that the Covid-19 will be the catalyst for governments to start using technology together with fiscal and monetary policies to create a better economic environment. As personal contact is being frowned upon, schools and businesses are encouraging people to stay at home. For teachers unions, who are bickering about their wages and large classes, let me advise them that they are playing with fire. I encourage governments to implement classes via the internet for students in grades 9 -12. They can have classes for three days and work from home for two days. That will free teachers to have more time to focus on development of younger students from grades 5 – 8 who need more attention in their formative years. Class size, the curmudgeon used by teachers’ unions becomes a moot point. This is just one example on how technology can be used to cut costs. Furthermore governments need to stimulate the economy, not by spending but by cutting taxes. Trump is making a payroll tax cut. The Trudeau government should cut the carbon tax which is a burden on businesses and customers, and they should also consider a 1% reduction in the GST, while removing many of their environmental regulations which are detrimental to foreign investment and economic growth.
There is no doubt that Covid-19 and oil politics have had a massive impact on the stock market and the world economy. However from a Canadian point of view, our problems rest solely on the shoulder of the Liberal government fixated in ideologies emanating from a Prime Minister’s feckless behaviour and personality. His response or lack of it, in all cases is affecting this country since the beginning of year and demonstrates that his government is no longer fit to run the country.