The global economy has really suffered in the past 6 months. The covid-19 fiasco has sent many businesses to the brink of bankruptcy, many seeking protection from their creditors while others simply closing up shop. What is more remarkable is that the shutdown of the global economy has touched not only several industries, but the economy as a whole. I did not conduct an extended research on the matter however the total collapse of the world economy has to be worse than during the World Wars. The US recently divulged that the GDP (Gross Domestic Product) fell 32.9% in the second quarter of 2020, which is 3 times lower more that the lowest ever recorded since 1947. (2) Since our economy is based on consumerism, the stay at home orders that temporarily closed businesses due to covid-19 hit the economy quite hard and will have a ripple affect for many years to come, despite some who have a positive outlook on the future claiming that once the pandemic is over, the economy will go back to normal. The only problem with this reasoning that is that we do not know how long this pandemic will last. I do not think waiting is an option in order to survive. We need to adapt and adapt quickly.
In this 2020 pandemic, in most countries, the government came to the aid of its citizens reducing the direct economic impact of covid-19 on the consumer. At least most people are able to pay their rent and buy some food. This is the case in Canada resulting in the Canadian government ballooning the national debt to over 1,2 trillion dollars in which $212 billion dollars was to support Canadians and Canadian businesses (1) and is still growing because many of these financial aid programs have been extended. I think it is the role of the government to help its people when something like this happens. A social net is quite important. You see what happens when this is non- existent when you look at the United States. There is no leadership at the Federal level and not much of financial help to its citizens. At least in Canada, despite the mix messages from the Canadian government, on the most part, they are doing a great job. This type of intervention can be used on a short-term basis, but it is not sustainable on a long-term basis because we do not have a proper structure in place. This has reopened the debate whether A Basic Income Guarantee Program (which ensures everyone has “sufficient income to meet basic needs and live with dignity regardless of work status”) should be put in place in Canada (4). However, within the current structure, what will happen once the government programs stop, but the pandemic roams on? Unless you are a psychic. no one can predict it. I believe the worse is yet to come. What we have lived through in the past 3 months is only the tip of the iceberg.
The cooperation of the citizens also is required for us to beat this pandemic as a whole. Questioning the health officials guidelines, like wearing a mask, does to help the cause. This is not political or against human rights. It is about public health and preventing the spread of a virus that demonstrated how deadly it could be when not taken seriously. I found this is a compilation of some people creating a scene because they do not want to wear a mask from The Howard Stern Show. It sums up what some individuals are thinking not only in the USA but around the world. It is also demonstrates the state of our world, where people do not take our government officials seriously. (5)
Businesses, large or small, will have to adapt to the new reality. Business as we know it will never be the same. I believe retail business will have to re-organize and re-think on how they conduct their business. This reorganization will have a domino affect through different parts of the economy. Real Estate, more specifically the malls, will have to re-invent themselves. This pandemic is slowly changing people’s habits. The longer it goes on, the least likely people are going to go back to their old habits. The times where a retail chain had a store in every mall or every street corner in the downtown core are over. The retail troubles did not start with covid-19, but just accelerated the purging process. Many retailers were struggling before the pandemic. The main obstacle they came around is the lack of cooperation from the landlords. They do not seem to want to work with and help the retailers, which led many of them to file for bankruptcy protection, allowing them to close down locations that are not profitable. Aldo and David’s Tea are good examples who just recently filed for bankruptcy protection for the reasons mentioned above.
This is a Global News Report that aired this past May. It does a great job explaining the impact on Retail business due to covid-19, and how it will change in the future. (3)
In summary, as the threat of a second wave of covid-19 is on our doorsteps, we need to work together in order to survive this pandemic. Governments and businesses need to put their greed and partisanship aside and do everything in their power to help its citizens weather the storm that will be around for some time. Overall, Canada is not perfect but compared to many countries is doing a great job taking care of its people. Instead of wasting time to see if the Prime Minister of a minority government acted ethically, which in normal circumstances I would understand that the government need to answer for their actions, all parties need to work together on helping Canadians stay afloat. Their role is also to develop an action plan for when this crisis will come to an end. It will end one day, just we do not know when. Until then we need to stay safe, follow the recommendations of public health, and help the most people you can. If every citizen around the world would follow these principles, combined with the cooperation of our governments, we will all get through it together. In other words, look at the USA and learn what not do to during a pandemic.
Thank you for stopping by and until next time. Keep on smiling.
(1) CBC News: https://www.cbc.ca/news/politics/bill-morneau-fiscal-update-budget-deficit-1.5641864#:~:text=Net%20federal%20debt%20will%20hit,treasury%20an%20additional%20%2481.3%20billion.
(2) The Globe and Mail: https://www.theglobeandmail.com/business/economy/video-covid-19-crushes-us-economy-in-second-quarter/?utm_medium=Newsletter&utm_source=Top%20Business%20Headlines&utm_type=text&utm_content=TopBusiness&utm_campaign=2020-7-31_7&cu_id=c6XxhAV0t3Xq2pGzjEceejhfca%2Fpbvls
(3) Global News : https://www.youtube.com/watch?v=DvgPDB7Tf6U
(4) Basic Income Canada Network: https://www.basicincomecanada.org/
(5) Howard Stern Show: https://www.youtube.com/watch?v=7dFz4sJ5RPs