Local economy will need a decade to recover: Groom
By Medicine Hat News on January 29, 2021.
A local political scientist says it will take a decade for the local economy to recover from the pandemic and it will be different.
Jim Groom, political science instructor at Medicine Hat College, first suggested the 10-year time frame in July after the lockdown had ended and businesses were just starting to reopen.
He says at that stage he was thinking the recovery would mean a return to “normal.”
“Everything is going to be so different,” said Groom this week.
In addition to the long-term impact on local businesses and some that will not survive, it is the habits of consumers that have changed and will likely not return to pre-COVID ways. He uses the example of online shopping and says people are likely to continue this trend.
The Medicine Hat & District Chamber of Commerce received 500 responses to a recent survey of local businesses.
Executive director Lisa Kowalchuck told the News that 70 per cent of respondents are still being impacted by COVID restrictions. Three-quarters of them have already had four months in the last year when they could not operate due to the lockdown and other restrictions.
“We also know that 30 per cent of our businesses can’t survive at this level of economic activity,” said Kowalchuck.
Groom suggests there will need to be some government grants to encourage new business ventures as part of the economic recovery.
Some businesses have already changed how they operate or they began meeting a different need – tailored to the pandemic – and have done well, Groom said.
The travel industry is still struggling but Groom thinks it will come back in a big way when the “OK” is given to resume travelling.
“I think the flood gates will open and it will boost the economy significantly,” said Groom.
Not only will people here be buying flights and holidays but there will be tourists from around the world spending their money and boosting the economy, he said. The opening of the U.S. border will see American money spent here.
The roll-out of the vaccine could hasten this development and also impact the political fallout from the pandemic, said Groom.
Premier Jason Kenney is in a tough situation because his “bread and butter” has been small business – the people who have been devastated economically – and an election will loom, said Groom. Those who advised the UCP to take a harsher approach to COVID restrictions will not be happy and neither will those who wanted fewer restrictions.
Groom says if the vaccine rollout is complete before the election campaigning even begins, there is a chance people may put this behind them.
“He (Kenney) may be able to benefit off of that and even pat himself on the back … ‘We survived because of our leadership’,” said Groom.
There is also the possibility of a spring federal election and if that happens the dynamics of a minority or majority government would significantly impact a provincial election too, said Groom.
