Canada's ex-central banker gives country low marks for pandemic preparedness, A+ for benefit spending

·3 min read
Mark Carney speaks during the Bank of England interest rate decision and inflation report press conference at the Bank of England in London on Aug. 1, 2019. (Chris J Ratcliffe/Pool Photo via AP - image credit)
Mark Carney speaks during the Bank of England interest rate decision and inflation report press conference at the Bank of England in London on Aug. 1, 2019. (Chris J Ratcliffe/Pool Photo via AP - image credit)

The Canadian government was ill-prepared when the COVID-19 pandemic struck, with dwindling stockpiles of personal protective equipment and a lack of domestic vaccine manufacturing capacity — but it took the right approach by spending generously on income supports, says former Bank of Canada governor Mark Carney.

Carney offered that assessment of Canada's pandemic response in a wide-ranging interview airing Sunday on CBC's Rosemary Barton Live.

"We weren't prepared in terms of PPE stockpiles. We weren't prepared in terms of vaccine capacity," Carney told host Rosemary Barton. "We're living with the consequences of that."

Carney said the scramble to procure PPE for health care workers and the general population in the early months of the pandemic left Canada at the mercy of global supply chains that were unstable because of soaring demand.

A similar dynamic is playing out now as the country waits for vaccines to be delivered from a small group of foreign manufacturers — vaccines it lacks the ability to produce at home.

"It's hard to rely on the global system ... I think we've learned a lesson from that," said Carney.

Crisis banker

Carney is no stranger to global crises, having been a central banker through three of them. He served as Bank of Canada governor during the 2007-2008 financial crisis and the subsequent European debt crisis, and as governor of the Bank of England as that country negotiated its rocky exit from the European Union.

The former Goldman Sachs investment banker compared the global response to COVID-19 to that of the 2008 crisis, which he said caught most countries off guard.

"Resilience will come from Canadians, will come from our own domestic capacity," said Carney. "We were resilient [10-12] years ago in the financial sector because we had built that capacity in Canada and we had a huge wave of shocks coming from the U.S., from Europe, but our capacity in Canada meant that we were able to do it.

"That's that's what we will need on the health side."

Carney said the Liberal government made the right decision to spend big on pandemic benefit programs like the Canada emergency response benefit (CERB) and the federal wage subsidy. He echoed Prime Minister Justin Trudeau's message that these programs were meant to act as a bridge to better times while the economy shuts down for health reasons.

"I'm not going to quibble about exact orders of magnitude or targeting or all that broad brush. It's the right thing to do," said Carney, who acted as an informal adviser to Trudeau on the federal government's response to COVID-19 in the early stages of the pandemic.

In a new book being released next week called Value(s): Building a Better World for All, Carney argues that, going forward, Canada and other countries will need to bring emergency spending — which has soared to historic levels — back into balance with regular government spending.

He also argues that governments need to make major investments in physical and digital infrastructure, climate-related initiatives and human capital in order to build a more sustainable and equitable world.

"We've lived through a decade in a year — at least, if not more than a decade — in terms of digitization, different types of jobs," Carney told Barton. "We want to retool so the Canadians can take the biggest advantage of that."

You can watch full episodes of Rosemary Barton Live on CBC Gem, the CBC's streaming service.