Ottawa working with U.S consulting firm on early planning for economic recovery

One of the world’s biggest multinational consulting firms is advising Justin Trudeau’s cabinet on how Canada could emerge from its COVID-19 lockdown, as a growing number of federal ministers get involved in early discussions around an economic recovery strategy.

Canadian representatives of the Boston Consulting Group (BCG) met for several hours at the start of this week with roughly eight of Mr. Trudeau’s ministers, as part of a broader advisory role the U.S.-based consultancy is serving on an unpaid basis.

Federal officials, whose names The Globe and Mail is not identifying because they were not authorized to speak on the government’s behalf, alternately described the meeting held on Monday as a brainstorming session and as an opportunity for BCG to share information on pandemic-related policies that other countries are pursuing.

The agenda for the meeting, which was run by the consulting company, described it as “an early step in charting the course for future-forward recovery.” And the federal officials stressed that the government is not yet anywhere near figuring out specific economic stimulus measures, amid continuing uncertainty about the pandemic’s trajectory and which corners of the economy will be most adversely affected in the long run.

It is nevertheless the latest indication that the government is gathering ideas in advance of the next phase of the economic response to the pandemic, which is likely to involve a shift from short-term relief measures to policies aimed at shaping the economy on the other side of the crisis.

“While we are focused on the emergency response for Canadians at the moment, we are also working on what the next stages toward recovery will look like,” a spokesperson for Innovation Minister Navdeep Bains, one of the cabinet members in attendance, said in reply to a query about the meeting.

Cabinet members are positioning themselves to have their preferred stimulus options ready to roll out when the time comes.

To date, three ministers have been known to be taking a lead within cabinet on early stage recovery planning, with an eye toward “green stimulus” to help make good on Mr. Trudeau’s long-term commitment to transition Canada to a lower-emissions economy while also creating jobs in the short term.

All three of them – Environment Minister Jonathan Wilkinson, Infrastructure Minister Catherine McKenna (a former environment minister) and Heritage Minister Steven Guilbeault (a former environmental activist) – attended the discussion with BCG.

They were joined at the Monday meeting by several other ministers who have economic responsibilities, but were not previously known to be as actively participating in talks around recovery-policy options, including Mr. Bains, Economic Development Minister Mélanie Joly and Natural Resources Minister Seamus O’Regan.

There are mixed accounts from within government as to the level of co-ordination among those ministers, and the extent to which the BCG meeting was part of a continuing process around recovery-policy preparation.

A senior official in one of the ministers’ offices described the initial and more informal work of Mr. Wilkinson, Ms. McKenna and Mr. Guilbeault now turning into a more structured effort by a larger cabinet group. By that account, the group includes those that attended the workshop, as well as others, such as Small Business Minister Mary Ng. The official said the work on preparing stimulus ideas is being supported by the federal bureaucracy, members of which also attended the Monday meeting, as well as outside advisers such as those from BCG.

A senior official in the Prime Minister’s Office played down any sense that recovery planning is accelerating, as well as any suggestion of a new structure to steer it. The PMO official said ministers are welcome to gather stimulus ideas that may eventually be put to use, but that they have not been given the task of doing so. The official added that cabinet’s vehicle for advancing pandemic-response policies remains the COVID-19 committee that is chaired by Deputy Prime Minister Chrystia Freeland.

Only two members of that special committee, Mr. Bains and Ms. Joly, attended Monday’s meeting with BCG, although a spokesperson for Ms. Freeland said that the deputy PM sent a representative in her place. The committee’s other most powerful member, Finance Minister Bill Morneau, was also not in attendance.

The varying messages on where the meeting this week fits into overall planning may indicate the government’s struggle to manage expectations, both among stakeholders and within government, for the timing and ambitions of coming stimulus measures.

Outreach this spring by Mr. Wilkinson, Ms. McKenna and Mr. Guilbeault led environmental groups and businesses in particular to believe that a wave of climate-friendly infrastructure commitments could be coming as early as June.

The government has since signalled that it will be considerably longer than that before it settles on stimulus measures, but there remains much related lobbying activity. And some other government departments have felt the need to start competing within government for their own spending priorities.

At the same time, there is uncertainty – expressed within government by Finance officials, among others – about how much recovery spending will be warranted at all, given the unknown extent to which simply removing COVID-related restrictions will in itself cause an economic rebound.

And across the government, officials make clear that they are still in the early stages of wrapping their heads around what sorts of measures would be most effective, coming out of a very unusual economic disruption that does not primarily affect sectors, such as construction, that typically benefit the most from traditional infrastructure-related stimulus.

While BCG did not respond to a request for comment, it appears to have been providing mostly high-level advice on those challenges. According to the agenda for Monday’s meeting, the consultants provided an overview of the pandemic around the world, before ministers discussed “game-changing ideas” and “building blocks for recovery.” The document pointed out the government still had much work ahead.

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