Mr. Chair, members of the committee, I would first like to thank you for your invitation to appear before the committee. I'm delighted to be here.
I would like to share with you my thoughts on three main elements: first, on the nature of current and future assistance measures; second, on the need to train the workforce; and lastly, on the need to work well with the provinces.
First of all, I note that the public debt is large and sustainable at the moment. We can afford to run a large deficit this year, but the real test for budgetary policy lies ahead.
Following the 2009 crisis, the Organization for Economic Cooperation and Development, or OECD, suggested that the government take consistent measures applying the three Ts rule: “timely, targeted, tailored”.
I believe that these principles should be at the heart of our reflections from here on in, and that, eventually, the almost unconditional assistance that is currently being given to individuals will be detrimental to the recovery.
Policies based on maintaining the employment relationship came somewhat late, after the Canada emergency response benefit, or CERB, which was intended to transfer large amounts of cash to individuals as quickly as possible. Of course, for a variety of reasons, the wage subsidy did not take well.
Transfer policies, which are extremely broad in scope, are effective when it comes to redistribution. However, they also have a significant social cost, first, on the government's budget, and second, because they interfere not only with the wage policies of provincial governments, particularly in the area of health, but also with those of private companies. I'm thinking of Quebec's agricultural sector. Some groups will have to continue to receive assistance for months, if not years. I say certain groups.
I believe that the government should not continue to pay the CERB for too long for one simple reason: to promote recovery and to fight unemployment, we must be careful not to subsidize it. If we are going to reform the employment insurance program, it must take over from the CERB.
Of course, the CERB has paid out so much money to so many people over such a long period of time that it will be difficult to move on to the next stage because many Canadians will feel they are losing out.
I am of the opinion that the pedagogy of getting back to normal should start as soon as possible in Ottawa.
Second, in terms of workforce training and productivity, let's mention that we made the decision to put the economy of a G8 country on hold in order to save human lives. And the longer that pause, the greater the risk of creating long-term unemployed people with the scars it leaves on their careers, on their employability and on the human capital they represent.
Canada, through employment insurance, will have to break with its tradition of not focusing enough, at times, on the employability of Canadians. Employment insurance should be redesigned quickly to fund labour market training in partnership with the provinces, and it should be enhanced.
Obviously, linking the employment insurance program to these new priorities will be complex and will require coordination with the provinces, particularly Quebec. This requires that discussions begin as soon as possible.
Finally, the opening up of trade has enriched us enormously since the post-war period and has brought us a lot. However, we have relocated a lot of economic activity. Some of my colleagues who work in international trade expect that there will be a return to the regionalization of certain economic activities that have been relocated. This regionalization will involve artificial intelligence, robotics and home automation. We have to be ready and we have to open a major national training project for the workforce.
I would add that the provinces need short-term financial support for the delivery of front-line public services, and I'm thinking of health care. And I believe that we should, at least in the short term or if not permanently, continue the practice of further increasing Canada health transfers.
Furthermore, in the short term, Ottawa could consider immediately transferring a significant amount to the provinces in the form of transfers, for example, on a per capita basis, which would have the effect of transferring part of the provinces' debt to the federal government, which has more means to act than many provinces.
In conclusion, I think it would be a mistake to weaken the provinces by succumbing to the short-term temptation of establishing new transfer programs based on the federal spending power. The provinces are on the front lines. Their needs are different, and they are changing too quickly. I think the provinces need to be treated as full partners in the transfer and aid programs that will follow in the coming months and years.
Thank you very much.