Cost of pandemic will shape 2021

There are few examples in recent history where the new year has evoked as much hope as it does in 2021.

Barring unforeseen setbacks in COVID-19 vaccines, there is every reason to believe the novel coronavirus pandemic will come to an end this year.

Manitobans will not be doffing their masks or crowding concert halls anytime soon; the return to normal is still far off. Herd immunity through mass immunization will not likely be achieved until much later in the year.

In Churchillian terms, it may not be “the beginning of the end” of the pandemic, “but it is, perhaps, the end of the beginning.”

As case numbers fall and hospital overcrowding subsides, though, the damage caused by the COVID-19 pandemic will have to be reckoned with. The financial blow to government balance sheets alone may take a generation to reverse.

The federal government is facing a deficit approaching $400 billion and a record debt of more than $1 trillion. So far, Prime Minister Justin Trudeau’s Liberal government has offered no blueprint on how to return to balance; nor have they proposed a strategy on how to repay the billions borrowed during the pandemic. It can’t all be done at once. But a long-term plan is needed in 2021.

It will not be an easy fix. Spending cuts, the deferral of proposed programs and tax increases will all be on the table. It will be a harsh reality Canadians will not be able to ignore. Failure to take steps today to chip away at the debt left behind by the pandemic would saddle future generations with an unfair burden.

The Manitoba government is also facing a record deficit of just over $2 billion. The province’s net debt is approaching 40 per cent of GDP (the highest level in decades).

Manitoba’s financial position is not as severe as Ottawa’s. That’s partly because the federal government has done most of the heavy lifting to stimulate a pandemic-ravaged economy. Ottawa also provided provinces and municipalities with tens of billions of dollars in COVID-19 relief funding. Manitoba’s share was $648 million.

The Pallister government has said it would likely take two terms to eliminate the pandemic deficit. That would be a prudent approach. A race to balance the books in a shorter timeframe would be harmful to the economy and cause unnecessary disruption to front-line services.

Nevertheless, a long-term plan that puts the province on a path to a balanced budget should be presented this year.

Government shortfalls will not be the only deficits to contend with in 2021; there will be a human deficit. The full impact and emotional toll of shutting people off from each other for prolonged periods of time is still unknown, but is likely significant. The elderly, many of whom have been forced into isolation (including in personal care homes), have been particularly hard hit.

The pandemic has placed a heavy burden on the mental health of many who lost jobs and businesses. People struggling with addictions have been severely affected; opioid overdoses have soared during the pandemic.

Manitobans have good reason for hope as they begin 2021. A dark chapter in history will likely come to an end. But the pain and destruction left behind by the COVID-19 pandemic will take time to heal and mend. Manitobans must be prepared for that as they begin the new year.

» Winnipeg Free Press