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Charting a way forward in Budget 2022

Opening remarks to the House of Commons Standing Committee on Finance regarding the 2022 federal budget on Feb. 3, 2022

February 4, 2022

3-minute read

I'd like to thank the committee for their invitation to speak today. I would refer members to our 2022 Alternative Federal Budget, which lays out, in much more detail, the items that I'll speak about today and provides you with other costed proposals for your consideration.

If COVID-19 in general, and Omicron in particular, have taught us anything, it is that there will be future waves of this pandemic. The federal government has played a critical role in buffering both households and provinces from the worst economic impact of COVID-19. But we need to move to longer-term resiliency against future waves so that we can all resume some sense of normalcy in 2022 and beyond.

The health care system, in particular, must be able to withstand future waves. We need a deeper bench in hospitals so future waves can be absorbed without shutting down the rest of the health care system. This has to do with capital, to some degree, with respect to more intensive care beds, but it mostly has to do with staffing—I’m thinking of professions like nurses.

Provinces need longer-term commitments to bolster their own systems. This should be through a federal workplace strategy for health care workers, but it should also be through a long-term reorientation of health care transfers, in terms of federal commitments reaching 35% of total provincial health care costs up from the pre-COVID level of about 23%.

I think Budget 2022 needs to keep in mind the atrocious long-term care death rates that we saw in Canada. This has to do, certainly, with improved pay and more personal support workers, but that's only part of it. New national standards are necessary to ensure that seniors’ care is universal, public, comprehensive and portable, and that these be conditions for new federal funding with the provinces.

We need to move to longer-term resiliency against future waves so that we can all resume some sense of normalcy in 2022 and beyond.

We also need to improve worker supports in Budget 2022. In the January labour force data, I think what we're going to see is the immense impact on workers due to sick leave as workers take time off due to Omicron. Health and the opening of the economy are not in competition. The health of workers is a prerequisite for a properly functioning economy.

Coverage of the self-employed that did not exist prior to the pandemic through the EI system has been roughly ongoing throughout the pandemic, first via CERB and CRB and more currently through the Canada Worker Lockdown Benefit. These programs have been haphazard, halting and constantly changing. Looking forward to 2022, and in the budget, I look forward to seeing a more comprehensive plan on how the self-employed can be more fully integrated into the EI system.

Longer term, though, the federal government needs to be more involved in the payment of the EI system, particularly once unemployment goes over a certain level. The Canadian system is somewhat unique in that only workers and employers contribute to it. Generally, in other developed countries, governments themselves also contribute to the employment insurance system. Over the past two recessions the federal government has stepped in to bolster the EI system, but the support should be more institutional—where the federal government is constantly contributing to the EI system, not just in times of crisis. This will allow for much needed improvements in the system, like a higher replacement rate, or a floor on what the unemployed receive—something like the $500-a-week that we saw during the CERB and CRB periods, as well as a lower threshold for hours of entry into the system. Direct transfers to households helped keep poverty rates in 2020 and 2021 down. It's likely that poverty rates were lower than they were in 2019, and we'll see that when the full data comes out. This is in large part due to CERB and the changes to EI but also to one-time transfers.

I think we need to build on that by better insulating, particularly adults, from poverty in Canada through two new programs. One is the Canada Disability Benefit, and the other is the creation of a new Canada Livable Income. The Canada Disability Benefit was initially proposed in the 2020 Speech from the Throne. Substantial empirical work has been done since that point and into how this could be implemented, at the levels that would be needed. And these are mocked up in our Alternative Federal Budget. We show that the various criteria of benefits, whether they be federal, provincial or private insurance, for definitions for disability can be unified in a common $11,000-a-year benefit, improving the lives of Canadians with disabilities while saving the provinces substantial money.

When it comes to a Canada Livable Income, substantial basic incomes already exist in Canada for families with children and for seniors. However, adults in the middle of the age range who don't have high incomes are left out from supports. The one support that they might be able to access, the Canada Workers Benefit, has received several significant changes in recent years, although it only covers workers with working income. One of the reasons why people live in poverty is because they don't have working income for some reason. So the Alternative Budget, and I hope the federal budget, will consider a Canada Livable Income that will replace the Canada Workers Benefit, provide coverage for more Canadians, particularly those without working income, and provide a floor of $5,000 a person or $7,000 a couple per year.

Thank you very much for your attention and I look forward to your questions.

*These remarks were edited for clarity.

Watch the full committee meeting here.

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