Patching up Canada’s income security net: Lessons from the pandemic

The big question now for Canada is whether, by design or default, we will revert to the “same old, same old” after the crisis.

November 22, 2021

5-minute read

The pandemic has been called the great revealer. I would argue that the reality of patriarchy, racism, ableism and colonialism have always been readily evident. That said, COVID-19 has graphically “revealed” the ways in which inequality is baked into our economy and institutions.

The pandemic also blew open our social safety net, “revealing” the flawed income security programs for those needing to take leave from work to look after themselves or family members, the precarity of services such as market-based child care, and the exploitative character of migrant worker programs that literally locked up migrant care workers in the homes of their employers.

For its part, the federal government concentrated its efforts on mobilizing financial resources to stabilize financial markets and household incomes through a combination of direct measures targeting businesses and individuals, transfers to other levels of government for health care, schools and shelters, as well as infrastructure investment and liquidity supports.

At the same time, there were critical gaps in the pandemic response resulting from, among other things, jurisdictional conflict and mixed messaging, a history of neglect and privatization that has systematically undermined Canada’s public services. There was also a deep-seated gender bias (more evident in some jurisdictions than others) that assumed that women would just step back from employment and take up this work.

This pattern of neglect was amply illustrated in the refusal of provinces to introduce paid sick leave for all workers. More than half of workers in Canada (58%) do not have employer-paid sick leave and, among this group, 74% earn less than $25,000 per year. Canada’s disjointed provincial job-protection laws and federal income support for short-term sick leave failed miserably to protect their lives and families’ well-being.

Learning the lessons of COVID

It is no exaggeration to say that the past 18 months have presented a profound threat to gender equality in Canada, especially among marginalized women and others caught on the wrong side of the pandemic. If we have any hope of “building back better”, we need to learn the lessons of COVID-19. This is especially true as we turn our attention to income security reform. Here are some key take-aways that are important to ensuring an inclusive recovery.

Plug the gaps in our current income security system for working-age people

Much has been written about the Canada Emergency Response Benefit (CERB) and its successor programs—and their potential as a model for a basic income or guaranteed livable income. There is a good deal of debate about the desirability and design of such a program, but there can be no argument about the impact that access to a stable income had for people struggling with pandemic losses.

Had it not been for these programs and other one-time payments, Statistics Canada estimates that the poverty rate (based on market earnings) would have risen to almost 40% last April. As it was, low-weekly earnings were more than offset by government pandemic relief benefits, with the poverty rate (as measured by total income) falling below the February 2020 level (23%) and holding steady at an average of 17% in earlier 2021.

These programs were especially important for racialized and Indigenous workers. The poverty rate among racialized people, for instance, was effectively cut in half from May through August last year.

One important feature of the CERB program was how it allowed low-wage workers to earn up to $1,000 per month. This criterion effectively captured a large group of female workers in the low-wage labour force. This group would not have qualified for Employment Insurance (EI) benefits and would certainly not have qualified for $2,000 per month in benefits.

Over half a million CERB recipients, mostly women (55.9%), lost out with the transition to the next phase of support in fall 2020. Former CRB recipients are now staring down the same future—waiting on promised EI reforms that are more than a year away—fearful that social assistance (which has fallen off the radar during the pandemic) might now be their only option.

The Canada Workers Benefit, as currently designed, does not provide much of a bulwark against poverty.1 And it certainly does not extend support to the many who must rely on precarious, irregular, or unstable work.

The CCPA’s Alternative Federal Budget contains two new proposals to help fill this glaring gap in our safety net: a new Canada Livable Income benefit for Canadians aged 18 to 62 who do not have children and a new Canada Disability Benefit. These two programs, along with expanded eligibility and a new income floor for EI, would go a considerable way to providing an assured income guarantee for all working-age Canadians.

Acknowledge and support caregiving as the essential activity it is

The pandemic has also given us the opportunity to rethink supports for caregiving and, in particular, what changes are necessary to balance the demands of employment and care. The CERB and then the Canada Recovery Caregiving Benefit were hugely important innovations for women—extending crucial support to families who otherwise would have had no options or related job protection to meet the caring needs of family members or to cope with school closures—because so few have access to employer-paid leave.2

These programs, along with CRB and the Canada Recovery Sickness Benefit, reached a larger segment of the workforce, including both employees and the self-employed. There were no minimum hours requirement or waiting periods. Beneficiaries received a flat $500, a benefit level that was higher than what many would have expected under EI.

And the benefit was targeted to individual workers and not, unlike many other federal benefits, subject to a family income test. This ensured that female workers affected by COVID-19 were not excluded from receiving support, particularly in instances where there was a sizable difference in income between spouses.

To be sure, these benefits were only available to those who could demonstrate labour force attachment. And claimants had to have lost at least 50% of their average weekly income to qualify (and 60% under the CRCB). But it threw open the door to doing things differently. 

In provinces where families struggled with prolonged lockdowns and school and child care closures, where governments turned a blind eye to the chaos of women’s lives, it made a huge difference. We see this in the disproportionate take up of the CRCB in Ontario and the western provinces—as compared to women’s share of the labour force.

By contrast, in Quebec, the relative strength of the child care system there helped to offset the impact of first wave employment losses, whose participation rate had rebounded by the fall of 2020. Its take-up of the CRCB was relatively low. For example, in August 2021, women in Quebec accounted for 22.4% of the total female labour force but only 16.1% of CRCB applicants.

The CRCB has been extended until next May—an acknowledgement that the pandemic remains a threat, certainly to the well-being of young children. This is precisely the time to take stock and consider systemic reform of existing employment standards and the benefits on offer to support caregiving across the life course.

***

Soon-to-be-former German chancellor, Angela Merkel, said last year: “The virus punishes half-heartedness.” The big question now for Canada is whether, by design or default, we will revert to the “same old, same old” after the crisis. Or will we learn the lessons of the pandemic and seize the opportunity to build back better?

[1] The CWB’s maximum payout (only $1,400 a year or $2,400 for a couple) is small and far lower than benefits for seniors or families with children.

[2] My colleague, David Macdonald has estimated that employers paid for only 23% family responsibility leaves and 38% of sickness or disability leaves in 2019.

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