FINA February 3, 2022

2022-03-01

On March 1, 2022 the following discussion happened in the Standing Committee on Finance over Basic Income (Guaranteed Livable Basic Income).

David Macdonald

[^S-187] 15:35

Thank you, Mr. Chair.

I'd like to thank the committee for the invitation to speak today.

I would refer members to our 2022 alternative federal budget, which lays out in much more detail the items I’ll speak on 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's that there will be future waves of this pandemic. The federal government has played a critical role in buffering both households and the provinces from the worst economic impacts 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 that 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%.

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

We also need to improve worker supports in budget 2022. In the January 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, which did not exist prior to the pandemic through the EI system, has been roughly ongoing throughout the pandemic, first via CERB and the CRB, and more currently through the Canadian worker lockdown benefit. These programs have been haphazard, halting, and constantly changing. Looking forward to 2022 in the budget, I look forward to seeing a more comprehensive plan of how the self-employed can be more fully integrated into the EI system.

Longer term, 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. That is de facto what has happened over the past two recessions, where the federal government has stepped in to bolster the EI system, but this should be more institutional, where the federal government is constantly contributing to the EI system, not just in times of crisis. This would 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 to keep poverty rates down in 2020 and 2021. In fact, 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 was 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 to better insulate adults in particular 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 into how this could be implemented, the levels that would be needed. These are mocked-up in our alternative budget. We show that the various criteria for benefits, be they federal, provincial, or private insurance 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 come 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 their age range and 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 people live in poverty is that they don't have working income for some reason.

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 per person or $7,000 a couple per year.

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

Daniel Blaikie (Elmwood—Transcona)

[^S-188] 16:24

Thank you very much.

To Mr. Macdonald with the CCPA, I know that in your alternative budget you're recommending the establishment of a Canada livable income program and a Canada disability benefit. I just wondered if you might be able to speak to some of the ongoing challenges as Canadians try to find work and get enough hours in pandemic-affected industries, and some of the cracks that folks have fallen through, particularly since the Liberals made access to pandemic benefits much harder. Could you speak about how the establishment of benefits like this would help with that, both now in the pandemic context but also as we look down the road towards economic disruption as a result of climate change.

David Macdonald

[^S-189] 16:25

Certainly when it comes to coverage of workers in the omicron wave and in future waves, this isn't necessarily the federal government's fault but there is this ongoing problem of paid sick leave, particularly for low-income workers. This is not just generally provincial policy. The federal benefit, the CRSB, has been a failure, frankly, because the take-up rates have been so low. That wasn't really the best approach. The best approach is to have this legislated provincially. I think the federal government could certainly do more to push for these types of sickness benefits being incorporated within provincial labour law, such that low-income workers have access to them, whether they have COVID-19 or any other illness.

Certainly when it comes to the coverage of self-employed workers, what's interesting is that the best coverage they had was at the very start of the pandemic, and the coverage has gotten progressively worse over the course of 2020 and 2021. The sequence of events started with the CERB, which was very easy to access for both people who were eligible for EI and those who weren't—who were self-employed but weren't eligible for EI. Those benefits were capped under the CRB and limited to $300 a week. Those ended at the end of October and then we saw the creation of the lockdown benefit, which seemed like it wasn't a real benefit until lockdowns happened again and then all of a sudden we had to put the websites together. It seems like the federal government wasn't prepared.

This is a benefit that is and will be accessed by self-employed people who don't have eligibility under the EI system. There does appear to be a commitment to include self-employed workers within the EI system by January, essentially by this time next year. I look forward to those details. I know those consultations are ongoing. That certainly was one of the big lessons of COVID-19, the lack of coverage for self-employed workers. Many of them are part of the gig economy, and part of the problem is just straight misclassification, a problem that could be rapidly addressed by the federal government, which is to say that workers who look like they're self-employed but who really don't have choice in what they're taking—I think of an Uber driver—be correctly classified as employees and that the employer contributes to the EI fund. That would be something that could be rapidly addressed.

There are certainly employees who are legitimately self-employed and are not presently covered by EI. Hopefully changes in the EI system that we'll see over the course of this year will help to address that.