Skip to content
Join our Newsletter

Les Leyne: Planners didn’t dream of anything like this

The cost of fighting COVID-19 is far beyond anything imagined in B.C.’s planning for the economic disaster that accompanies a pandemic.
a8-04012020-test.jpg
Katie Kempton, a laboratory technologist at LifeLabs, demonstrates one of the steps taken when a specimen is tested for COVID-19 at the company's lab in Surrey.

The cost of fighting COVID-19 is far beyond anything imagined in B.C.’s planning for the economic disaster that accompanies a pandemic.

There’s been lots of thinking over the years about the medical and health implications, although most of it didn’t conceive of what we’re going through today.

On the economic side, there isn’t much modelling of the effect a major public health emergency would have on the economy.

There’s one cautious document on file written 14 years ago, “Potential Impact of Pandemic Influenza on the B.C. Economy.”

But it’s main recommendation: “Create an epidemic economic response strategy,” doesn’t appear to have produced anything.

In 2006, the B.C. government commissioned a detailed look at the potential impact an influenza pandemic could have.

It was put together after an outbreak of “bird flu.” But even making the grimmest, most pessimistic assumptions and adopting worst-case scenarios, they underestimated what’s happening today by a country mile.

And the document only concentrated on the cost and damage associated with the influenza itself, not the drastic prevention and mitigation measures of today.

Reading the document reinforces the constant refrain: “We’ve never imagined anything like this.”

The planning document, written by KPMG for the government’s Economic Development Ministry, noted influenza pandemics come in waves that last 15 weeks. It presumed infection rates between 15% and 35%.

A drop in the gross provincial product of about 2% was predicted after a single wave of the pandemic. That estimate jumped to 4.4% if there were multiple waves..

That’s barely half or even a third the current estimate of the damage caused by the coronovirus and the massive curtailment of activity that’s been mandated to fight it.

“The most immediate cause is likely to be driven by a decline in consumer demand arising from uncoordinated efforts of people trying to avoid infection,” said the report.

But the decline now underway dwarfs that, because it’s driven by a coordinated effort by government to curtail entire sectors of the economy.

“Sectors with a high degree of interpersonal contact (the entire service sector) might be most vulnerable to a demand shock.”

They got that right.

Travel restrictions would pile up more losses. All sectors would experience shocks due to increased absenteeism. But that was assumed to stem from 15% to 35% of the workforce taking a few days off sick. What’s happening today is vast numbers of healthy people losing employment for an unknown period of time.

The report also assumed that a vaccine would be made available in a few months following the initial outbreak.

Since the current pandemic is a novel coronovirus, rather than influenza, most estimates are that a vaccine will take much longer than that. Which means any subsequent waves could hit harder than they would if a vaccine was available.

The report was submitted with the recommendation that government create a provincial epidemic economic response strategy.

There’s no public record such a document was created, although some observations are folded into the Health Ministry’s pandemic response plan.

The authors of the report said they followed methodologies used by the World Bank and other global entities. That suggests nobody had any concept of the scale of the damage.

Regardless of any plan, the theme of the current international response is the same as the response to the banking collapse — a massive public spending program by most governments to mitigate losses and continue employment where possible.

The report also suggested an ongoing dialogue between government and various sectors of the economy about the potential for a pandemic and on guidelines for how to prevent and control them.

Fourteen years after it was submitted, that’s likely going to come to pass in a big way. We’ll be talking about this for the rest of our lives.

[email protected]