Industry Strategy Council proposes ambitious economic growth plan in the face of COVID-19

Last month, Canada’s Industry Strategy Council released its “growth plan for building a digital, sustainable, and innovative economy.” Created to assess the impact of COVID-19 on Canada’s economy and on industry, the report is intended to help the council advise the government on sectoral pressures and facilitate input from the business community on the pandemic’s impact.

The report notes that COVID-19’s impacts on the economy, though widespread, have been unevenly distributed. For instance, hospitality, retail, and airlines have experienced the greatest drop in economic performance, and women and minority communities — who are overrepresented in the worst-hit industries — continue to disproportionately feel the effects of COVID’s economic slow-down. As a consequence, economic recovery is also expected to be uneven, with some sectors not expected to return to pre-pandemic levels of performance until 2024.

The Council’s Plan, Restart, Recover And Reimagine Prosperity For All Canadians, is intended as a blueprint for managing the economic fall-out of the pandemic shutdowns, and to shape Canada’s economic trajectory as it moves into a post-pandemic phase, and beyond. The Plan is divided into three interconnected phases described in the report's title. The Restart phase focuses on “restor[ing] confidence among Canadians, by continuing employment and income assistance and managing health risks so that we can safely restart business to the greatest extent possible.” The aim is to stabilize some of the worst-hit industries through a series of targeted measures, such as by providing long-term financial assistance and finding new ways to safely accelerate domestic travel.

To the extent that the pandemic revealed existing structural weaknesses in Canada’s economy, the report notes, the aim of the second stage in the growth plan, the Recover phase, will be to invest in Canada's economic strengths, by streamlining or eliminating ineffective programs, and “expand[ing] and bolster[ing] those that do work to strengthen four key factors of economic success.” The Council defines several pathways for recovery: becoming a digital and data-driven economy; being the ESG (environmental, social, governance) world leader in resources, clean energy, and clean technology; building innovative and high-value manufacturing where we can lead globally, and leveraging Canada’s agri-food advantage to feed the planet. The Council's goal is for Canada to “train and attract the best talent, strengthen its ecosystem, accelerate digitization and ‘de-risk’ innovation projects.”

The final stage of the plan, the Reimagine phase, aims to rethink the way the country creates wealth and the place it seeks to occupy in the world by developing a made-in-Canada industrial strategy. In this phase, the Council proposes "[using] the challenge posed by the COVID-19 crisis as an opportunity to build solidarity and create new partnerships between the public and private sectors … and between governments within the federation,” while also respecting the authority of all parties.

The authors of the ambitious plan believe that its implementation will ensure a strong economic recovery for the country. Their preliminary estimates suggest that “$110 to $140B of private capital by 2030, combined with $105 to $145B of public investment, could result in additional long-term annual GDP growth of 0.8% to 1.1% by 2030 and beyond.” Additionally, they predict, the first two stages of the Plan alone (Restart and Recover) could add $100 to $155 billion to Canada’s GDP by 2030; stage three could add $235 to $310 billion.

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