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Opinion: A wartime economy is a very particular thing – The Globe and Mail

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Every day the wartime analogies seem more apt. Governments are borrowing massive amounts – as much as 10 per cent of GDP – to bankroll equally massive increases in spending. Central banks are pledging to buy all of that newly issued government debt, if necessary, and every other kind of debt besides, in whatever amounts may be required.

Whole industries are being retooled to provide materiel for the “war,” only today it is ventilators and test kits under requisition, not bombs and fighter jets. We may even see hotels being commandeered as makeshift hospital wards before this is over.

Then there are the range of new income-support programs in the works or being considered: from emergency benefits for workers who have been told to self-isolate, to wage subsidies aimed at persuading firms to keep workers on their payroll, all the way to simply sending cheques to every adult citizen – a full-blown universal basic income.

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All in all it’s a good time to be a fan of the activist state. “There’s nothing like the threat of a deadly pandemic to make us appreciate big government,” a Toronto Star headline chirped, happily. Online, the hot takes are everywhere: Wait, so deficits aren’t the devil’s handiwork? Maybe printing money to pay off debt is not so crazy after all. Looks like industrial policy is back in style. Basic income for the win!

The gist of them all is that the use of such extraordinary measures to address an economic crisis such as we have not seen since the Second World War vindicates their use more generally. If that sounds simplistic, it is not without precedent. The great expansion of the state across the developed world in the 1950s and 1960s would not have been thinkable without the experience of the Great Depression, but even more the War.

The successes of governments in mobilizing resources for the war effort led to increased faith in government’s capacity generally. If governments could plan a wartime economy, it was asked, why could they not plan a peacetime economy just as well? All it took was the brightest minds, and a lot of cash: the combination that led to victory in one theatre would assure it in another.

But of course a wartime economy is entirely different from a peacetime economy – as different as war and peace. First, it’s temporary. It goes on for a while, then stops, at which point so do the spending and other measures enacted to fight it. Federal spending hit 44 per cent of GDP at its 1943 peak, half of it borrowed, but by 1947 it had fallen back to less than 15 per cent of GDP and the budget was in surplus.

Most if not all of the measures that are being brought in to fight the current war seem likewise crafted to be temporary. A tax holiday, such as the federal government has promised, only cuts into federal revenues for as long as the holiday, or the crisis, endures. The emergency support payments can similarly be unwound quickly once the emergency has passed. The assets central banks purchase to keep financial markets liquid can be sold off soon enough.

So the kind of deficit that would be extremely worrying in peacetime – there is now talk of a federal deficit for 2020-21 of $100-billion or even $150-billion, roughly 6 per cent of GDP – is less so in the current situation. This isn’t about “stimulus,” or fanciful claims of “multiplier effects.” This is about keeping the lights on, in the middle of a government-ordered shutdown. In that context, it’s entirely appropriate.

The second thing that makes a wartime economy different has to do with what an economy is for. A wartime economy is designed to do one thing above all: win the war. Everything else is subordinated to that singular aim. Productive resources that might have been devoted to making consumer goods are instead diverted to the military, and by and large the public accepts the sacrifice, in part because, again, it’s temporary.

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Governments are pretty good at that sort of thing. When there is only one economic objective, and everyone agrees what it is, central planning works tolerably well. But a peacetime economy, at least in a market-based democracy, isn’t about making one thing that everybody wants. It’s about harmonizing millions of individual, and competing, wants – wants that change constantly, and in unpredictable ways. Central planning is no good at all at that.

That doesn’t mean we can’t learn from wartime experience. Good policy ideas that are, for one reason or another, politically impractical at most times often become possible in crises, when the risks and rewards of experimentation are seen rather differently. The baby bonus came out of the Second World War. Perhaps some form of basic income will be the legacy of “World War C.”

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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