As a result of the recent coronavirus infestation, the best current medical advice to limit the spread of the virus was and is to keep your neighbour at a safe distance. Hence the closure of many businesses where this was not possible. Other businesses found a safe way to keep their businesses open by changing their business models.
Either way, businesses have lost income and the federal government (and provincial governments) are doing their best to minimize losses to businesses and taxpayers.
The pandemic has caused many people to reconsider what they had become used to over the years.
Instead of flying in aircraft where passengers are packed like sardines in a can, the new generation of travellers will demand more space, and not just space but more quality space.
Likewise, when travelling in a train or bus, passengers will demand more space or simply use an alternative mode of transportation, such as a car, motorcycle, bicycle or walking.
Employees (unionized or not) will demand more space in which to work or not come in to work. Many employees who had previously been assigned to small cubicles will request to work at home, not just because they have more space at home but also because they can avoid a crowded bus or train.
For those in the education business, parents and students should check the space allocated to students in a classroom and to the offices of teachers/instructors/professors as students will inevitably want to meet with them privately.
What most people will not like is to line up in long lines two metres apart between each person, especially in winter time. People will prefer to place an order and either pick up the order or have it delivered locally or through parcel post.
The net effect of all these changes will be to increase the cost of doing business or avoid doing business (not use a plane, train or bus).
Business models will change. Some people will pay more for goods and services and some people will pay less by, say, eating at home instead of eating out, or have a packed lunch.
Next year and beyond, I suspect we will have inflation over the current set rate of about two per cent.
When the pandemic has run its course, probably in 2021 or 2022, the federal government will likely impose a wage and price freeze for about a year or two in order to assess the damage the pandemic has done and then plot a path forward.
What the provincial government could do to help carry it over the crisis is to consider issuing special tax-free bonds to residents in the province on a yearly basis, the interest on which should be attractive to residents.
An arrangement would have to be made with the federal government to have the interest free of tax.
Because of the current very low interest rates, governments are taking in much less tax on interest than they did, say 15 years ago.
Ian McMaster
St. John’s
