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This is not the time for austerity, says Asper prof

April 19, 2020 — 

In an editorial on CBC News, Dr. Shiu-Yik Au, assistant professor of finance at the UM Asper School of Business, says that a pandemic is not the time to introduce austerity measures.

Au, whose research focuses on the impact of intangibles such as corporate culture, innovation, and ethics on corporate outcomes, explains that the Manitoba government should “break the vicious cycle of reduced spending and income by leaning into the wind and spending more in times of crisis.”

He advises that the Pallister government should put in place protective and supportive measures that would help the homeless, youth, single parent families and others in socio-economic difficulty:

“The province’s existing programs could be enhanced temporarily to expand employment and income assistance, the Manitoba child benefit, rent assist, and 55 Plus, etc., to a larger group of individuals. Further, the province could replicate some of the better programs from other provinces, such as emergency loans to small businesses or reducing payroll taxes. These temporary enhancements would help Manitoba weather this crisis and avoid a long-lasting recession or even a depression.”

Au says that Manitoba is in a good position to increase its debt during this time and then decrease spending and eliminate the debt during the next several years. This would help Manitobans and maintain a relatively stable economy.

Read Dr. Au’s entire editorial here.

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