By DARSHAN MAHARAJA
After what feels like an eternity, the restrictions on normal life that had been made necessary due to COVID-19 threat are being eased, albeit in a cautious manner. One thing that appears certain is that this episode will leave lasting changes in our society, and some of these will not be for the better. Nevertheless, there will need to be a collective effort to recover from this severe setback as much as possible. It has almost become a cliché to say that we are all in this together. The time is now fast approaching when all of us will have to live up to these words.
Some of the damage is irrecoverable. For example, the Ontario government announced that public schools will not be reopening for the remainder of the academic year. The loss of over three months’ worth of education to well over a million students is one such example. In particular, this affects high school students even more. Even before COVID-19 struck, their studies had been impacted due to the tussle between the province and the teachers’ unions over the renewal of their contract. These students have lost out on pretty much half the academic year’s worth of education at a crucial stage in their lives.
On the economic front, many analysts are predicting that over half of the business establishments in the hospitality sector may not reopen at all. If this prediction turns out to be even halfway true, it would spell disaster for many. Apart from the individuals employed in businesses such as restaurants, there are entire towns or municipalities that depend on the seasonal economy of tourism in the summer months. Some of these towns have had to take the difficult decision of asking the owners of time-share properties to stay away for this season, in the interest of the health and safety of the local population. The financial impact of this is not hidden from anyone. By the time the tourist season ends, these towns will have to come up with a way to compensate their residents for their loss of income. Whether they will have the resources to do so is another matter. At some point, it is likely that they may seek the assistance of the federal government to help them tide over their difficulties.
Talking of the federal government, it has had to take unprecedented measures to provide financial support to various categories of people, from those who were suddenly rendered jobless to small businesses, to students and seniors. The deficit in the federal budget for this year is already pushing $ 300 billion. This is a jaw-dropping number. Just a few months ago, there was much hullabaloo when it was revealed that the federal deficit had come in at about $ 27 billion. There has been much criticism of the present government about its financial prudence (or lack thereof). That seems like a far cry from today, when talk is already turning to the deficit possibly exceeding one trillion dollars. While this expenditure is necessary in order to provide support in people’s hour of need, the long-term consequences of this humongous deficit are likely to be severely adverse. Fortunately, interest rates are low currently. However, if and when they revert to their historical levels, Canadians could be in for a world of hurt.
Darshan Maharaja is an independent blogger and writes regularly on Canada’s social, political and financial issues at his website darshanmaharaja.ca. He can also be followed on Facebook (Darshan Maharaja) and Twitter (@TheophanesRex).