Managing Change Amid a Pandemic

Downtown Toronto, heart of the Canadian business community, which is essential to leading the country out of the deepest recession since the Great Depression. Daryan Shamkhali, Unsplash photo


As the world has learned from previous crises, society’s responses to catastrophe can range from adaptation to innovation to over-correction. In Canada, so far, our governments have managed the pandemic response as well as could be expected given the uncertainty involved. But what can we learn about how to make Canada better as we move from crisis to aftermath? 

Perrin Beatty 

The COVID-19 tsunami is far from over. But even as lives are still being cut short and families are reeling, we must start looking for lessons from this disaster.

Crises remake societies. The Great Depression led to the New Deal and taught a generation about frugality. The Second World War ended American isolationism and led to seven decades of international collaboration and institution-building. The events of September 11, 2001 destroyed old assumptions of international security and diplomacy and refashioned how we saw privacy and security here at home. The Fukushima disaster led Japan and Germany to pull back from nuclear power to meet their energy needs. And the SARS outbreak here in Canada 17 years ago forced large businesses and public institutions to create business continuity plans to prepare for future outbreaks of disease.

As the present crisis continues, we improvise. Businesses and governments alike are piecing together solutions based on partial information, without the time needed to understand the implications of the options they choose. In normal times, our goal might be perfection. In a crisis, it’s to find something that’s good enough under the circumstances. Surgical masks don’t deliver the protection of N95 respirators, but they beat having no protection at all. 

The same applies to hard decisions now being made by all levels of government. Societal lockdowns are crude and often cruel instruments, but they are the tools we have. The lists of essential businesses we need to keep open are a rough form of triage. Government aid programs that would ordinarily take months to design are now conceived in days or hours and may need to be redesigned several times when we discover problems they miss. And once they are unveiled, governments strain to implement them with the speed that’s needed.

After the immediate dangers have passed, we will need to take stock. Every institution will have to examine whether it was prepared to deal with the pandemic and if its response met the need.

In addition, Canada should launch a much broader review, at arms-length to governments, run by leaders from medicine, science, business, labour and technology, to consider our overall response as a society. Its purpose should not be to assign blame, but to examine what we did right and what we did wrong, so we can save lives and avoid the immense human and economic cost of future crises.

What we don’t need is to simply prepare better for a recurrence of COVID-19. Instead, we must learn the lessons that will prepare us in an increasingly connected world to overcome crises we haven’t had to face before now: pandemics that take a different and even more menacing course, cyberterrorism that collapses our economic and administrative infrastructure or devastating natural disasters that could threaten hundreds of thousands of lives. 

It’s important not to simply refight the current battle but to prepare for ones that seem inconceivable today. After our experience at the epicentre of SARS in 2003, we were in good shape to respond to a health crisis on the same scale, but we remained unaware and unprepared even as we watched this new virus ravage the Wuhan region of China. We hoped the stringent measures imposed by the Chinese would contain the disease. Unfortunately, hope is not a strategy.

At some point, the disease will subside to the point where we can restart our lives and our economy, but the world into which we emerge will be different from the one where we lived just a few weeks ago.

Some changes are already evident, starting with the nature of globalization itself. 

Since the Second World War, Canadians have been resolutely internationalist. We should remain so. The lessons of fascism, of terrorism, of climate change, of the 2008 economic crisis, of AIDS and of COVID-19 all teach us that the best way to combat international threats is through international collaboration. None of these issues can be adequately addressed by even the richest and most powerful countries acting alone. More than ever, we need global solutions to global problems.

But supporting internationalism does not require abandoning national strategies. In ordinary times when supply chains remain open, it’s simple logic to allocate production to the least-expensive locations. N95 respirators would be an obvious candidate for global supply. They are comparatively low-value products. A small number of manufacturers can produce them at the scale needed, they don’t spoil and they are light and cheap to ship. Hand sanitizer and simple protective equipment like face shields and gowns can also be easily be supplied in the quantities needed in ordinary times.

Sadly, these are not ordinary times. Global demand for these products has skyrocketed and governments around the world are engaging in pandemic protectionism that, coupled with the disruption of Asian manufacturing operations, threatens lives here in Canada. 

Simon Evenett, professor of international trade and economic development at the University of St. Gallen in Switzerland, tracks restrictions on international trade. His most recent report paints a stark picture:

“As of 21 March 2020, 46 export curbs on medical supplies have been introduced by 54 governments since the beginning of the year. Thirty-three of those export curbs have been announced since the beginning of [March], an indication of just how quickly new trade limits are spreading across the globe.”

By Easter, the number of countries imposing beggar-thy-neighbour export controls on medical goods had risen to 75, including the United States, where the American president used Korean War legislation to temporarily force 3M to cut off Canada’s access to their N95 respirators. Particularly in election years, logic, fairness and even basic decency fall victim to self-interest

When China shuttered much of its industrial capacity to control the coronavirus, its customers discovered the risk of stuffing too many eggs into a single basket. The Wall Street Journal reports that, following China’s shutdown, the smartphone industry shipped 38 percent fewer units world-wide in March compared with a year earlier. It was the biggest single-month decline in industry history, reflecting both the production bottleneck and anticipated customer decline. 

To prevent future problems like this, manufacturers have a number of options, starting with securing suppliers of key components from more than one country. They may also decide to nearshore their production or to repatriate it altogether. Or they may move from-just-in-time production to stockpiling inventory. Unfortunately, all of these options drive up costs that get passed down to customers.

The crisis will transform businesses in other ways as well. Having endured a trial run of employees working remotely, many businesses will not return to traditional office operations. Retailers that have moved online will focus more of their efforts there and less on brick and mortar. Many of their customers will shift further towards click and buy instead of making the trip to the shopping centre or the grocery store.

And the spread of telemedicine will make services much more accessible to people with disabilities, seniors and people who live in remote areas. The pandemic has forced us to adapt to a much more digital world. We must not attempt to return to the status quo ante. Our governments and businesses should build on the transition that has been forced upon us to make Canada one of the most digital economies on the globe.

The experience will inevitably shape public policy in other areas as well. We have allowed Canada’s manufacturing sector to atrophy and lost many of the traditional skills like tool-and-die making that underpin successful manufacturing. But just as our national security requires a defence industrial base that can meet our needs in an emergency, we must fortify our capacity to meet future public health needs from a Canadian base. We can meet those requirements with a combination of Canadian and multinational companies as long as we can be confident that supplies will be there when we
need them.

When the government called for businesses to retool to produce emergency supplies, the response overwhelmed its capacity to evaluate potential suppliers and match them to the needs. The daily realities of business require that companies move at a speed that governments can’t match. Having discovered that capacity, how do we intend to use it once the immediate crisis has passed? We need both to retain the new capacities we have developed and to avoid reimposing excessive regulation that ham-strings innovation.

The lessons the pandemic teaches us are sobering and come at a high cost, but we are better-positioned to rebound than most. Canada’s rich resource inheritance means we can meet our energy needs from domestic sources and that we have vast supplies of precious metals, food and forestry products. Our universities and colleges can help provide the technology and the skills we need to become more self-reliant. And despite years of official neglect, we still boast some of the most innovative manufacturers in the world.

Most important of all, our democracy is both diverse and strong. Our resilience and ability to adapt can help us chart where we want to go as a country and sustain our determination to do whatever it takes to get us there.  

Perrin Beatty is President and CEO of the Canadian Chamber of Commerce, which has more than 200,000 members across Canada. He has held seven federal cabinet posts, five of them during the Mulroney years, 1984-93, including Defence, Health and Communications.