To quote the legendary Ron Burgundy, “Boy, that escalated quickly. I mean, that really got out of hand fast.”
Now that we’re well past the point of no return, it would serve us well to have a discussion about what the recovery from this mass-quarantine is going to look like.
We don’t know the extent of the virus’ reach, or how long this mess is going to last. But we do know that the hospitality, tourism and service industries are frozen in their tracks. The resource industries aren’t doing much better, commodities are down across the board and a barrel of Canadian West Select crude is cheaper than a six pack of beer these days.
As I said, exactly how long this ordeal is going to last is anyone’s guess, but those who know what they’re talking about have put the estimate at several weeks. Exactly how a small business, even if frozen in place, could survive that is a mystery.
One thing we can definitely expect — if you are of the type of citizen who dreads large government deficits, you are going to be very unhappy. There is no way governments are going to be able to bail out Canadian owned businesses without going deep into the red. We’ve already seen governments find trillions of dollars that otherwise would not be available to bail out the stock market.
But keeping our organizations afloat is only going to be half the battle. The reality is that if people are unemployed or underpaid as a result of the economic fallout and are choosing either “eat or heat” as often occurs already in the north, there will be no recovery because there will be no money entering the marketplace.
The solution? Universal Basic Income.
Originally conceived as a libertarian solution to big government, the idea has since been analyzed by scholars on all points of the spectrum who have noted it would help alleviate several social problems at once.
The idea is simple — rather than forcing minimum wages on small businesses, the government sets a minimum income level, say $20,000 a year, and guarantees that for all citizens. Essentially, if you are unemployed you would receive that as a base income to assist you in your basic needs.
Varieties of the idea keep the basic $20,000 in place for people who are employed as well, up to a reasonable level, say if you are making $100,000 a year you no longer would need the subsidy. But the UBI would remain in place for people with jobs to be able to not just survive but possibly even get ahead and have a reserve fund for emergencies.
Will it cost a lot? Of course it will. Are we going to spend the money anyway? You bet. Would doing it this way ensure there actually is a market for businesses to re-establish themselves? Absolutely.
In her tough but indiscriminate way, mother nature has wiped the slate clean for us and given us an opportunity to rebuild the right way. Universal Basic Income can give Canadians a solid foundation to rebuild their lives and keep Canada a competitive economic power in the post-COVID-19 world.
Oil and gas are not going to save us this time. We need to grow people.