‘We still have firepower in terms of fiscal capacity,’ federal Economic Development Minister says
While some of Canada’s leading economists are suggesting Ottawa won’t be able to deal with the second wave of COVID-19 with the same financial largesse it has shown up to now, federal Economic Development Minister Melanie Joly says the Liberal government is well positioned to continue along the path it has been on since the beginning of the pandemic.
In a report issued by the C.D. Howe Institute last May shortly after the pandemic started, the Ottawa-based public policy research organization warned that Canada would not be capable of implementing another comprehensive shutdown of the economy if new cases of COVID-19 were to climb, while the federal government, the provinces and Canadian households were also taking on massive new amounts of debt.
More targeted approach
“Placing the economy in a partial coma made sense during the first wave of the pandemic,” stated the report. “But if there is a second wave, a second economy wide shutdown should be avoided in favour of more targeted approaches that are effective and avoid further erosion of public finances and the risk of hitting debt walls and loss of borrowing capacity.”
During an interview with Newsfirst Multimedia last week at her Ahuntsic-Cartierville riding office, we asked Joly whether concerns have arisen within the Liberal government that at some point there may be a limit to the amount of financial assistance Ottawa can provide before reaching a cut-off point.
The only way, Joly says
“Well, you know, we’ve been generous,” said Joly, who sits on the Trudeau inner cabinet committee dealing with COVID-19. “It is the only way to deal with this pandemic. Because if people lose their jobs, they go usually on unemployment. But who pays for unemployment but the federal government?
“So, for us the most important thing is to make sure that businesses can keep their employees, and that’s why we have a wage subsidy. But in some cases, like the hospitality sector, tourism and entertainment sectors, where it’s not possible now to have large gatherings and not possible to travel, we are there for these people who have lost their jobs. And that’s why we’re providing the help that is required.”
‘We still have firepower,’ she says
Joly noted that Canada is the only country along with Germany that has been able to relatively maintain its pre-COVID-19 credit rating, even though it was dropped from AAA to AA+ by Fitch Ratings in late June. “We’re in the best position and we still have firepower in terms of fiscal capacity,” she said.
“We’ve been really following what our experts have been saying,” continued Joly. “We want to make sure to develop a vaccine soon and fast. We also want to make sure that we are prepared for the next wave, the second one.
“And so meanwhile, while we are dealing with everything that is related to health, well that uncertainty is creating a lot of disruption within the economy. So my job is to be there to support people in keeping their jobs and help businesses to survive.”
As part of her ministerial role and as a member of the COVID-19 cabinet response team, Joly has partial responsibility for overseeing Ottawa’s highly-publicized Canada Emergency Response Benefit (CERB) program.
Challenge during pandemic
At the same time, she oversees a $2 billion fund ($500 million of which is allotted for Quebec), whose purpose is to make targeted investments in businesses, including those in the tourism sector, to keep them afloat through access to money until the end of the pandemic.
In one of the most notable COVID-19 recovery program developments, the CERB subsidy (which was established in early April and which pays $2,000 per month to persons who became unemployed because of COVID-19) was extended recently by the Trudeau government until December. Businesses are also being offered additional support during the continuing crisis.
While emphasizing that in normal times her job as Economic Development Minister consists primarily of creating jobs as well as protecting them, Joly acknowledged that “economic development in times of pandemic is a challenge. Which is why we are doing everything we can right now to help people and businesses just to survive.”
Tourism sector impacted
Oversight of the federal tourism ministry is also one of Melanie Joly’s mandates. Asked whether her department has been able to make a preliminary assessment of the damage done to the tourism sector by COVID-19, she responded:
“We’re still in the midst of doing that evaluation. But one thing that’s sure is that last year we had 22.1 million international visitors and that’s clearly not the case this year. Based on that, obviously we know that billions of dollars have been lost. And that’s why we have come up with support such as the wage subsidy and the CERB.”
While noting that tourism this summer to destinations within Canada, such as Quebec’s Gaspé region, has flourished in spite of the pandemic, she also pointed out that Montreal is undergoing an exceptionally drastic drop in tourism, largely because of the forced shutdown of normally-scheduled sporting events, public gatherings and entertainment festivals.
Tourism spreading the virus
Newsfirst Multimedia asked Joly whether her ministry is concerned that encouraging tourists this summer to visit regional attractions like Gaspésie may inadvertently cause COVID-19 to be spread by people from densely-populated cities into rural areas that were relatively unimpacted up to now by the pandemic.
“That’s something that we are really, really focused on and that we are working with the Quebec government on,” she said. “At the end of the day, what we’re trying to do is to protect the capacity of our public health system. And in certain regions, the health system is not as developed as Montreal. So that’s why we are being extremely vigilant. And, yes we are very much aware.”
Official languages in Quebec
Another of Melanie Joly’s responsibilities is oversight of Canada’s official languages policies. In recent years, successive Quebec governments have broached the possibility of amending Bill 101 so as to override the federal government’s standing pledge to provide services at all times in English and French at federal government offices. Jolie was asked how the Liberal government would respond to such a development.
“We’ll always defend the constitutional rights of people,” she said. “It’s a bilingual country and so are our federal institutions. There has been jurisprudence from the Supreme Court of Canada regarding these issues. And it is now well established that official bilingualism is part of our constitution and a province cannot go against it.”
On Gov.-Gen. Julie Payette
Finally, Melanie Joly waded into the recent controversy involving allegations of abusive conduct by Governor-General Julie Payette against employees at Rideau Hall in Ottawa. “I believe in the work that the Governor General is doing, that’s not the question,” she said.
“The issue is much more that we need to make sure that everybody has a right to be working in a place that is harassment-free. This is something that I take very, very seriously. And so therefore there needs to be work done. Because obviously these allegations are unacceptable.”