TORONTO — The C.D. Howe Institute’s COVID-19 crisis Working Group on Business Continuity and Trade has issued a statement calling for governments to accelerate productivity-enhancing infrastructure projects to provide stimulus and help Canada’s economy recover.
The working group also emphasized in its June 17 statement the need for adapting Canada’s bankruptcy and restructuring process to cope with the potential for widespread insolvencies.
The group of industry experts and economists is co-chaired by Dwight Duncan, senior strategic adviser at McMillan LLP and former Ontario minister of finance, and Jeanette Patell, vice-president of government affairs and policy for GE Canada.
Measures for enhancing Canada’s prospects for a resilient recovery should include:
- stimulus through accelerated infrastructure spending, designed to boost depressed aggregate demand through a protracted period of weakness, enhance productivity and address specific social and environmental objectives;
- ensuring the adaptability of Canada’s bankruptcy and restructuring processes to COVID-related insolvencies;
- recognizing the importance of expedient merger review and open access to foreign capital, as well as the need to “sunset” government interventions in markets and restore competitive forces as soon as practical; and
- highlighting governments’ use of tools for assessing risk versus economic cost in order to stage reopening and better calibrate any “second wave” retightening of activity restrictions.
The group said in its statement Canada should “seize this near-term opportunity to address its maintenance backlog for aging public infrastructure assets, for example, repairing bridges, roads and linear water infrastructure.”
The working group suggested that broadband connectivity is a critical “backbone” for long-term national prosperity. To guide future national infrastructure priorities, Canada needs a national strategic assessment initiative to identify infrastructure investments that would boost long-run economic growth, enhance social well-being and enhance resilience, particularly in response to risks from climate change.
Governments should put in place backstop facilities for “debtor in possession” (DIP) financing in the event that traditional DIP lenders become overwhelmed, said the working group. In addition, the group emphasized the need for the expedient and flexible review of acquisitions by the Competition Bureau and under the Investment Canada Act.