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The most recent labour force data released by the Yukon Bureau of Statistics last week paints a startling picture of the state of Yukon’s private sector economy. Compared to January of 2020, our labour force has shrunk and unemployment has grown. If adjusted to account for COVID-19, the Bureau tells us that unemployment would be a staggering 9.3 per cent.
While this is bad on its own, it is worse when we consider that those job losses have come almost entirely from the private sector and particularly from a few key industries. It is becoming clearer that the economic recovery of the territory will be the primary challenge for the Yukon Government over the next few years. This recovery will require leadership that is willing to act, be bold, and think outside the box in order to ensure we make it out of this pandemic in a position to succeed.
Initially, the government’s response to the economic hardships caused by the pandemic was largely seen positively. They created the Business Advisory Council and sought input from a range of industries, moved quickly to develop programs and got money flowing to those businesses that needed it. However, for many of the businesses I have met with over the past months, the lack of urgency from the Yukon Government in responding to these growing economic storm clouds has been troubling. The initial responsiveness has disappeared and the government’s urgency has been replaced by a wait-and-see approach.
Businesses are now required to engage with multiple departments in multiple governments, and an ever-growing ball of red tape has bogged down many of the processes. New funding for tourism businesses, which unfortunately took seven months to be announced, was welcome at first, but the lack of detail or information about how that funding will be used has replaced relief with uncertainty. To date, only about a third of the $15 million tourism funding package has been accounted for. To many, it is clear that the government rushed out this announcement to respond to negative headlines. Unfortunately, while the government was prioritizing press conferences, this meant they were not working with businesses to understand what they actually need.
Going forward, there are changes needed to both the near-term business support programs related to the pandemic, as well as the approach we take as a territory to economic recovery. As long as government-imposed restrictions remain in place throughout our economy, it is only reasonable that affected businesses should expect to receive government support. The delivery of that support however, must be simplified and streamlined.
Business support should be delivered through a single window, and businesses should not have to bounce from department to department or government to government. The needless barriers to funding applications need to be relaxed, such as the government’s insistence that bars and restaurants prove 60 per cent of their revenue came from tourists when there is no reason to have this requirement unless you simply do not want to support these businesses. The Yukon Government also needs to lobby the federal government to remove the automatic escalator tax on alcohol and beer. Further, the remainder of the funding allocated for the tourism industry should be immediately detailed and explained so companies can have certainty about what they can expect from government over this period.
Governments also need to get more innovative about how they help certain industries. The finger pointing between the Minister and the Mayor this summer about whose fault it was that Whitehorse restaurants and bars could not expand their patios, utilize sidewalks, or get creative with public spaces would have been comical if it was not so unfortunate for those businesses. Governments should be bending over backwards to help businesses find creative solutions and to operate in new ways. Unfortunately, while governments were bogging the private sector down with more red tape, Yukon bars and restaurants missed out on a real and exciting economic opportunity.
At some point, the public health restrictions currently in place across the country will begin to lift, and we need to ensure we are prepared to hit the ground running when they do. The priority for government in this respect, should be to place the private sector at the forefront of our economic recovery. Governments of all stripes have talked about reducing red tape and easing the regulatory burden, but tragically little has actually been achieved.
The time is now for concrete measures to address this persistent drag on our small businesses. A perfect example is Yukon’s burgeoning cannabis industry, where government involvement in the sector is hampering the growth and success of private operators. Not only does red tape in the government-run distribution system make it difficult for private retailers to meet the demands of their customers, but the government continues to compete with business by selling cannabis online, which is something that government expressly prohibits private retailers from doing. The additional perverse effect of this is that the goal of displacing the illegal market is failing.
While these are just a few examples, the economic recovery of the territory is too important to rely on old thinking. We will need a fresh perspective, bold ideas, and a renewed appreciation for the benefits the private sector brings to the Yukon.
In the short term, we will need to do more work to ensure our current supports are meeting the needs of the businesses that need them the most as the pandemic carries on. But if we are going to successfully emerge from this, and chart a path forward for economic recovery in the Yukon, the private sector needs to be our focus. Government will continue to play an important role, but we will only have long-term success if the private sector leads the way. One of the best ways that government can help businesses do this is by getting out of the way.
