So many decisions, so quickly.
First, it is important to re-state how breathtakingly quickly governments have mobilized and adjusted in real-time to the greatest economic shock we have ever experienced. Even if we disagree with their choices, we should all be grateful for the work of politicians, their staff and the public service.
As people on the frontlines of the health crisis try to stem the pandemic, we have now put the economy on life-support, as well. Where are we, three weeks into the greatest public policy improvisation in our lifetimes?
What problems are being addressed?
The three biggest immediate issues that needed to be addressed have been.
- To help them get by, people need money. Changes to Employment Insurance and the creation of the Canadian Emergency Response Benefit will provide many Canadians with the cash they need. There are legitimate disagreements on the best policy tool to get money into people’s hands quickly, but the government has chosen a lane — this week will be a crucial delivery test.
- To help them survive, many businesses need money. With the creation of two different wage subsidies (one at 10%, one at 75%, with different eligibility criteria) along with the Canada Emergency Business Account, many businesses will be able to get through the next few months. The Business Credit Availability Program will provide access to capital to many more established businesses that need it.
As a whole these programs are designed to keep Canadians attached to the labour market generally and their employer in particular. They are designed to stabilize the economic lives of Canadians and businesses. They are designed to be a bridge to the other side of the public health emergency. They are all likely to be at least somewhat successful in addressing the challenges for which they are designed.
- Not-for-profits need money, to keep operating, as well as to provide more or new services to their constituents and clients. The government has been providing organizations with cash to deliver necessary programs – including food banks, domestic violence shelters and mental health supports – and clarifying that the community sector can also take advantage of the 75% wage subsidy.
All of this is good and provides short-term stability for many people and organizations that need it.
Getting your cheque – what people need vs what government is designed to do
The federal governments have whipped up these new benefits programs to get money to people – programs that weren’t even imaginable, let alone designed, a month ago. The pressure on the federal government departments that get these benefits to people and businesses – the Canada Revenue Agency, Service Canada, Human Resources Employment and Social Development Canada; Innovation, Science and Economic Development – is immense.
As the windows to apply for these programs start to open this week, we should not expect seamless delivery. Governments are simply not designed to do what they are trying to do – create new income and business support programs in a few days.
To even say those words underscores how surreal the whole process is. Heck, in ordinary times it can take a year to get a Treasury Board Submission approved for a relatively small and simple program.
But the creativity has been commendable. Canadians are being counselled to apply for programs based on the month of their birth – an unthinkable idea in an era of normalcy. This shows that the federal government is using the trust it has (or thinks it has) to work with Canadians so that money can indeed get out the door, without crashing the system.
Who are we missing?
And yet, the policies themselves are still nowhere near perfect.
We are concerned about renters – both commercial and residential. Provincial prohibitions on evictions are a good step, but more needs to be done. The federal government could consider accelerating the roll out of the Canada Housing Benefit to support renters.
We are concerned about students and gig workers. Sunil Johal starkly lays out the issue for gig workers in this new piece for First Policy Response. They are being asked to carry an unfair burden and many will not benefit from the programs thus far announced. These Canadians need to be supported.
And we are concerned that some businesses will not be helped by the existing initiatives, as David Skok outlines here in The Logic. No one will want to see the decimation of Canada’s vibrant start up tech sector. Businesses at the beginning of their growth cycle need government support as well.
Encouragingly, the Prime Minister acknowledged yesterday that ‘gaps’ still remained in Canada’s emergency wage subsidy programs and that the government is working to fix them.
What structural issues need to be addressed?
Municipalities will not be able to deal with the waterfall of catastrophe on their own. They continue to provide necessary services, but their fee-for-service revenue is down and their property tax revenue will take a hit. Many are restricted from running deficits. The federal government will need to help. This could include assuming municipal debt or flowing additional funds to municipalities through existing mechanisms, such as the Gas Tax Agreement.
Many small and medium-sized businesses do not want to take on more debt. This is entirely reasonable, given that some are being asked to make personal guarantees in order to access new funds. Pools of capital need to be made available to the local businesses that make up the backbone of many communities in ways that don’t create new excessive burdens on Canadians entrepreneurs.
And we are concerned about individuals’ Canadians debt. Payday loan companies and banks continue to charge their ordinary interest rates. Federal and provincial governments should act. We are all in this together. Financial institutions – including the predatory payday loan companies – must also bear their fair share of the burden.
What’s next?
The principles that have structured the government response so far have been scale, simplicity and speed. We need to get cash to people and organizations quickly, with as few rules and as little process as possible. The programs will not be perfect, but that is the price of dropping cash into communities.
Having said that, the principle of equity must also govern our collective choices. As governments roll out programs quickly, it is becoming clear that some are being left out and some are carrying an unfair burden.
Perfect equity is not possible. Still, over the next two weeks, we have to keep evolving in real time to adjust and help those who are not benefiting from current programs yet.
Governments across the country have shown a willingness to adapt — and so platforms such as First Policy Response will continue to offer commentary and solutions on how to make Canada’s policy response to COVID-19 both fair and sustainable.
This piece for First Policy Response was written by Karim Bardeesey of Ryerson Leadership Lab, Sean Mullin of the Brookfield Institute for Innovation + Entrepreneurship, and Matthew Mendelsohn.
Karim Bardeesy is Co-Founder and Executive Director of the Ryerson Leadership Lab and co-director of First Policy Response.
