Unlocking The Lockdown

As Ontario looks at easing COVID-19 restrictions next month, experts say the economy must reopen slowly, in stages. And some industries will take priority as workers return

As political leaders and planners take aim at reopening the economy, they should consider the archery target, says a top University of Toronto economist.

With Ontario and other jurisdictions looking to ease COVID-19 rules as early as May, officials should first concentrate on industries and services critical to life - the centre of the target - before moving on to other concentric circles of economic activity, says Anita McGahan.

McGahan, a professor at U of T's Rotman School of Management, is an expert in strategic management and global health - a specialty that seems made for just this moment.

As the country prepares to climb out from under the global pandemic, she and other experts say it's going to be a difficult process, painfully slow and complicated even under the best circumstances.

"I think of reopening the economy as emanating from the centre of a bull's-eye," said McGahan. "At the very centre is medical health, food security and ... pharmaceuticals."

McGahan says it's critical to first shore up these overburdened sectors before moving on to the next ring - which would include the bank services, energy and basic manufacturing needed to economically support that centre. "We need to secure jobs for people in sectors that can support the core," she said.

Sadly, the last ring to worry about would be the one that held most of the enjoyment the pre-pandemic economy had to offer.

"I don't say this because I want it to be true, (but) it's not going to be a lot of luxury spending. It's not going to be a lot of international travel," McGahan said.

"It's not going to be big vacations. It's not going to be, unfortunately, sporting events or concerts," she said.

"It's going to be the core things that keep us alive and keep us prosperous."

Premier Doug Ford last week said he might start to ease Ontario's coronavirus rules by May 24. And in Europe, several countries - most notably Austria - have already started the process and put methodical and scheduled reopening goals in place over the next month.

Last week, the Alpine country allowed garden centres, DIY shops and stores of less than 4,300 square feet to reopen. On May 1, shopping centres, larger stores, hair salons and other service providers will be allowed to do the same. Then on May 15, restaurants, bars and cafés - along with religious services - follow suit.

Denmark is adopting a similar strategy.

But even if Austria's experiment works - and the virus does not come roaring back - expect Canada's reopening to be much more difficult and protracted, McGahan said.

For one thing, she says, the small nation took much earlier and more aggressive steps to combat the disease, with the resulting lack of cases and casualties making reopening less dangerous.

"There was never really a community transmission level that characterized (the U.S.), which closed so late," said McGahan. "Closing early required taking an unpopular position back in early February, but the dividends of that are paying off now."

As well, McGahan said, some European societies have a different set of risk priorities - putting the economy first - while in Canada we are less likely to choose economic risks over those to our health.

Despite these considerations, McGahan says, all economic recovery in Canada will depend on an ability to keep the virus under control. And that means - at the very least - continued social distancing, she says.

"We can't get out of COVID until we have advances on the medical front. Period," she says.

David Soberman, a U of T marketing expert and professor at the Rotman School of Management, says that could mean some radical changes in the way we conduct business, especially in skyscraper-strewn Toronto.

Soberman says having people return to work - many via mass transit - in 60- and 70-floor office buildings may depend on staggering access for the companies that inhabit them.

He says property managers at First Canadian Place or Commerce Court, for example, could allow Law Firm A access to the building on Mondays and Tuesdays, while Law Firm B would take Wednesdays and Thursdays.

Even then, Soberman says, companies and organizations typically housed in the towers may well go back to the workplace earlier than those in other sectors - simply because they can more readily practise socially distancing.

"I think you're going to gradually see people going back to the financial sector, back to law offices, certain manufacturing jobs," he said.

"Things that might take a bit longer ... might be some of the bigger restaurants and some retailers simply because that's a place where people are congregating more."

But the idea - touted by some - that we can reopen the economy by gradually increasing jobs deemed essential is probably a non-starter, Soberman says.

"That's something we're hearing about in the U.S. (but) I think here in Canada our approach to that tends to be, let's say, a little less aggressive," he said.

"And I think in Canada we're kind of reluctant to declare things as essential services because we're also law-abiding (and) if there's another pandemic, you won't be able to close it."

Still, Soberman said governments may rank companies by their economic, health and social importance - level one, two or three, for example - and bring them back to work accordingly.

But Bernie Wolf, professor emeritus at York University's Schulich School of Business, says whatever process is followed to send people back to work, it has to be seen as fair.

"There has to be some logic in it; there has to be some reason as to why (it's) this group and not another group, or else you'll start to get social conflict," Wolf says.

He says such conflict is more likely given the frightened and agitated state of a shut-in population. "And then if they don't see themselves as being treated equitably, they are going to start to question the system," Wolf said.

The ability to test people for the coronavirus - coupled with social distancing - is also crucial in getting the economy back on track, he says.

"If you don't have adequate testing, this is really not going to work," Wolf said.

"It would also be nice if you had a reliable antibody test; then you would know there were people that were so-called immune that could go into the workforce (and) not spread the disease."

In the end, however, the virus could defeat many economic reopening plans through the fear it has spread over shuttered societies, said McGahan, a dual Canadian and American citizen who is sheltering in Cape Cod.

"Even if the governor here (in Massachusetts) did reduce social distancing restrictions, which there's no sign he's going to do, I'm not sure I would go out anyway," she said.

"It's one thing to lift restrictions and it's another thing for people to want to stay home despite that."

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This article was written by Joseph Hall from The Toronto Star and was legally licensed by AdvisorStream through the NewsCred publisher network.