16th March 2020
The news story by Bill Curry “Liberals to unveil federal budget, economic package worth $1 billion in response to COVID-19” published in The Globe and Mail on March 11th 2020, summarizes the government of Canada’s current response to the global coronavirus pandemic. This article was chosen as it relates to the unit on ‘Political Economy of the Global North’ discussed in lecture and illustrates the current political economy of Canada. This essay will begin by briefly summarizing the chosen news article, followed by a critical analysis and assessment of the main points that will be presented. To conclude the essay, an analysis on the importance and relevance of the article will be introduced in relation to comparative politics and the limitations of the article will be analyzed.
In the article written by Curry, he states that the government of Canada has announced a national response to the global coronavirus pandemic in the form of improved employment insurance (“EI”) benefits for employees and an economic package worth $1.1 billion in order to combat the negative economic consequences of the virus. The economic package has allotted “$275 million for medical research and vaccine development” , waived mandatory waiting periods for accessing EI benefits, and additionally increased work sharing programs to further benefit employees affected by the crisis. As stated in the article, Canada’s projected GDP growth has dropped significantly as a result of the pandemic; however, the government of Canada has assured they will take the necessary measures to safeguard the economy by “increasing lending capacity…of the Business Development Bank of Canada and Export Development Canada.” The article illustrates the current political economy of Canada and the governments need to intervene and implement policies to protect their citizens, economy, and country as a whole in response to external market pressures.
As Canada is a capitalistic liberal market economy that relies on market relationships to govern economic activity , the government plays a critical role in providing essential services to citizens and maintaining properly functioning market relationships by responding appropriately to market fluctuations. As noted in the article, the coronavirus prompted a political and economic response from the Canadian government, one in which they had to respond to the fluctuations and current external influences of the market and make suitable decisions for the countries economy based on these factors. Also noted in the article are the government’s plans to increase EI benefits and work sharing programs; this is an example of Keynesian economic policies taking place as the government is recognizing the potential for a market failure and taking precautions to avoid this . The article also notes the effects of the pandemic on Canada’s projected GDP and noted it’s in swift decline; Canada’s response further emulates Keynesian policies as the government is taking any measures necessary, even if this means intervening in the economy and going into a deficit , to manage the economy and keep it afloat during this time of uncertainty.
In relation to the unit on Political Economy of the Global North, this article corresponds to the topics of capitalism, liberal market economies, state intervention in the economy, and Keynesian economic policies. When viewed through a comparative politics lens, this article is incredibly relevant as it provides a tool to analyze and compare Canada’s response to the coronavirus to other responses from governments within liberal market economies. Despite this, there are clear limitations to the scope, sources, and information provided in the Globe and Mail article. For example, the article doesn’t provide clear insight into the sources used, however it clearly refers to Canada’s economic response package as well as data sourced from the Parliamentary Budget Officer. Additionally, the article fails to include any comparative or analytic measures that would help reinforce the information presented within. Furthermore, the article failed to address the external influences on Canada’s declining projected GDP, such as foreign market failures and crippling international stock markets due to the pandemic.
In conclusion, the article clearly relates to the unit on Political Economy of the Global North and provides real life examples of many of the course concepts discussed this semester, such as liberal market economies and the role of state intervention in the economy. However, it fails to provide a clear analysis on the role of the Canadian government during the pandemic and further fails to address certain external factors that affect the information presented within the article.