03.28. 토요일 아침
Prime Minister Justin Trudeau addresses Canadians on the COVID-19 pandemic
from Rideau Cottage in Ottawa on Friday.
Justin Trudeau will deal with the economy later. For now, he just wants to make sure you have a paycheque
Federal authorities have identified their economic arch-enemy in this crisis, and it is bankruptcy.
Both the federal government and the Bank of Canada showered small businesses with money and measures on Friday — tens of billions in subsidies, credit and deferred taxes, plus many billions more to help the financial system function well enough to support them.
While there are still many important details to be worked out, their approach is clear: a dormant company is much better than a dead company, and they’ll move aggressively to prevent firms from going under. Even if it means subsidizing them to do nothing.
That’s a relief to many, and an entirely appropriate focus at this point in the crisis.
“Canadians are counting on you and I am counting on you to come back strong from this no matter what comes next. You’re going to get the support you need to help rebuild a more resilient and prosperous economy,” Prime Minister Justin Trudeau said on Friday, speaking directly to the small and medium-sized businesses that make up well over a third of Canada’s economy.
“To businesses across the country, please keep your workers on the payroll or think of hiring them back.”
Those companies — the local firms that make our communities vibrant and usually employ millions of people — are in terrible shape. The Canadian Federation of Independent Business found that 55 per cent of its members have partially or totally stopped operating, 60 per cent have seen a significant drop in sales, and more than half have started laying off staff. And that was four days ago.
But neither Trudeau’s government nor the central bank is fostering any hope of bringing the economy back to life right now, and they’re not even trying. Bank of Canada Gov. Stephen Poloz, for one, shunned all discussion of a recession or even a firm measurement of where the economy would be in the next few months.
It’s “almost irrelevant” to talk about recession right now, Poloz said, because the economy has been purposefully shut down. Rather, it’s more important that businesses and individuals maintain enough confidence to wait out the pandemic, and then be ready to get back to productive work when it’s over. The billions are meant to bridge us to better times, not stimulate recovery.
Success is defined as “limited — or possibly avoided — permanent damage to the economy,” Poloz suggested, and the way to achieve that is to keep as many businesses as possible on life support, with employees still on a heavily subsidized payroll so they keep their connections to their employers.
That may be optimistic thinking, but the new measures will certainly stave off tens of thousands of small and medium-sized bankruptcies in Canada, says Perrin Beatty, head of the Canadian Chamber of Commerce.
What makes a dormant firm preferable to a bankrupt firm? Employees, even if they’re not working, will likely still receive their benefits. They remain part of a professional community, which is important for social and mental health. And they have at least some certainty that they will have decent work when the economy eventually rebounds, he says.
There are technical reasons as well. Entrepreneurs with bankruptcy on their records carry around a black mark for the rest of their professional lives, says Ted Mallett, an economist with the Canadian Federation of Independent Business. They risk being kicked out of supply chains. And they lose all their assets in the bankruptcy process, leaving them to start again from scratch when the economy picks up