Canada and countries across the globe face a daunting challenge with the advent of COVID-19, the novel coronavirus. The World Health Organization (WHO) has declared a pandemic, as countries the world over try to contain the spread and health authorities race to treat casualties under incredible pressure.
These are not normal times.
Several provinces have implemented mass closures of educational institutions, child care centres and community centres; some have cancelled large events and requested people returning from travel to self-isolate to try and slow the spread of COVID-19. Social distancing being recommended, in pursuit of containment.
We are entering uncharted territory, as the combination of COVID-19 and a global oil sell-off threatens not only public health and safety, but also the stability of our economy. Now is a time for social solidarity, government leadership and expedient, non-partisan co-operation to do everything it takes to protect the public.
The federal government has announced a $1-billion financial package divided between research, provincial and territorial supports, and employment assistance. This is an unprecedented response to a situation that continues to evolve. But is it enough? While the 2003 appearance of Severe Acute Respiratory Syndrome (SARS) led to new investments in public health, that funding dwindled over time. And because we are only as strong as our weakest link, ongoing investments in disease prevention, health promotion and protection are critical—something the COVID-19 pandemic makes starkly evident.
Every year, the Alternative Federal Budget (AFB) maps out a fiscal plan to ensure public health, safety and well-being, reduce poverty and income inequality, and foster greater inclusion. AFB 2020 is no exception, though the rapidly changing reality of COVID-19—and the necessity for fluid government responses—means the plans laid out in this roadmap should be considered a baseline. Bolder fiscal measures will most likely be required in the weeks and months to come.
AFB 2020 has ready solutions to combat the present crisis along three timelines: short term, medium term and long term. Our AFB 2020 COVID-19 emergency plan would address the immediate needs of workers, shore up the resilience and responsiveness of social programs and ensure that the needs of vulnerable communities are adequately addressed.
The economic impacts of this crisis on workers and Canadian households could be severe. The federal government’s most responsive tool for income supports is employment insurance (EI), which has the capacity to respond rapidly to emerging economic impacts on workers. Unfortunately, many unemployed workers can’t access the system and its supports, and even when they do, benefits are low. COVID-19 is exposing the inadequacy of Canada’s EI program. To address these issues the AFB will:
- Reduce the number of working hours required to qualify for EI to 360 hours for regular and special benefits (like sickness leave): $510 million.
- Increase the benefit replacement rate of EI from 55% to 60% of insured wages, though the crisis would merit an even higher replacement rate: $1.7 billion.
- Double the EI sickness benefit from 15 weeks to 30 weeks: $645 million.
- Create a $300/week floor on benefits for low-income claimants to EI: $900 million.
- Create a separate emergency fund for workers who need to quarantine but don’t qualify for EI. This approach was employed during the SARS outbreak, but in a limited manner for health care workers. Given the rise in precarious and gig economy workers since then, it should be expanded to all workers, with similar payouts as those who qualify for EI under current regulations.
- Double the Canada Child Benefit (CCB) for a month. The CCB is paid monthly and the next payments go out on March 20 and April 20. Simply doubling this benefit would forego any complex redesign and expediently support parents whose children are out of school who may have additional child care costs or be missing shifts. This would provide an additional $564 a month to families with young children at a time when they need it most: $2.1 billion per month.
Over the coming months, the Canadian economy will likely be pushed into recession by the economic impact of the coronavirus and the oil sell-off. One way to expediently help Canadians weather the blow is through income transfers. To that end, the AFB will:
- Implement the Dignity Dividend: $4.6 billion
- Improve transfers to low-income seniors: $5.7 billion
- Expand the Canada Housing Benefit to support self-isolation: $250 million
- Eliminate interest on loans received through the Canada Student Loan Program: $650 million
The COVID-19 crisis will severely test our social infrastructure over the coming months and years. It will also highlight how decades of funding inadequacies through inadequate investment, cost-cutting, and austerity budgeting have diminished the public system’s ability to respond in times of crisis. The following substantial reforms must be made to our social infrastructure:
- Boost the health care escalator: $600 million
- Implement a National Seniors Care Strategy for long-term care and home care: $800 million in first year
- Create a poverty reduction transfer to provinces: $4.5 billion
- Invest in child care: $1 billion
- Address the just transition for energy workers and communities: $1 billion over 10 years
- Restore fiscal capacity, including by closing tax loopholes, so we can pay for these priorities: $52.6 billion in new revenue
A global pandemic is a sobering reminder that public priorities matter, that governments have an active role to play in ensuring the public’s health and safety, and that we need to act in social solidarity, to invest in lasting changes that will make us more resilient, improve community well-being, ensure that inequality is addressed, support the most marginalized and disadvantaged, and improve the quality of life of all Canadians.
The priorities in the AFB have always addressed both the basics and the big picture. They target assistance and support to the workers, families, communities and sectors that need it most, and support a robust public sector with broad programs that improve sustainability and equity on a socially transformative scale. In times like this, the AFB’s prescription is the cure.
Housing and food insecurity are critical determinants of health, and we’ve underinvested in strategies to tackle these challenges for far too long. The AFB provides meaningful investments to address both.
Education and social inclusion are also key determinants to a healthy society and resilient, cohesive communities. The AFB outlines provisions to ensure newcomers get the support they need and advances a progressive vision for cradle-to-grave education. Its investments in early learning and child care, youth supports and post-secondary education and training provide young people and students of all ages with the foundation they need to thrive.
The AFB proposes necessary policy changes to address the rise of low-wage, precarious work—from the gig economy to the creative sector—and its disproportionate impact on women and racialized workers. As a result, the AFB rapidly accelerates the government’s poverty reduction goals of cutting poverty in half by 2030. We can do it in 2021.
The AFB also sets out a bold plan to address issues that have been neglected for more than a generation: poverty; declining infrastructure; the lack of potable water, decent housing and other infrastructure in Indigenous communities; and the immediate and urgent need to address the climate emergency. It demonstrates an international trade agenda that enshrines workers’ rights and protections while protecting the environment.
COVID-19 has presented political representatives, policy-makers and the public with an unprecedented point of reflection on the society and economy we have built, who has been left behind, and what needs to be improved. Since 1995, the AFB has set out a plan to address inequality while investing in social programs and infrastructure to ensure their efficacy and long-term sustainability. It addresses the scourge and the racialized and gendered impacts of low-wage, precarious work while meeting our commitments to the environment, reconciliation and the elimination of poverty. And its proposals provide a clear roadmap to address the immediate and medium-term impacts of COVID-19—or any crisis of this magnitude—while providing long-term solutions to strengthen our society and economy going forward.
The CCPA thanks Trish Hennessy for her help in drafting this post, which is included as a preface to AFB2020. The Alternative Federal Budget 2020: New Decade, New Deal is available for download at www.policyalternatives.ca. For more information and interviews, contact: Alyssa O’Dell, CCPA Media and Public Relations Officer, at 343-998-7575 or email@example.com.
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