Over the past two months, the Government of Canada acted swiftly to support businesses and individuals across the country impacted by COVID-19 income loss.
The facts
The federal government announced supports through various short-term policy measures such as the Canada Emergency Response Benefit (CERB), Canada Emergency Wage Subsidy (CEWS), Canada Emergency Business Account (CEBA), and additional support to cost-share wage top-ups for essential workers.
To date, 7.5 million Canadians have applied to CERB and received more than $35 billion from the federal government. Meanwhile, 110,000 businesses have applied for the 75 per cent Canada Emergency Wage Subsidy, receiving $73 billion. CEBA has also disbursed loans of up to $40,000 to 545,000 businesses across Canada, accounting for $13.7 billion in government spending.
What now?
As we begin to move from crisis to recovery and provinces start to reopen their economies, how effective have these short-term policy measures truly been? With expiration dates on short-term COVID-19 support programs looming, what comes next?
On May 19, First Policy Response convened a virtual panel of policy experts and practitioners to unpack what we learned from this historic injection of support for Canadian individuals and businesses, discuss how these policy tools can and should evolve as we move from crisis to recovery, and analyze how these supports will impact the economy’s reopening.
We were joined by Brian Dijkema (Vice President, External Affairs — Cardus), Dr. Monika Dutt (Acting Medical Officer of Health — Central and Western Newfoundland), Mike Moffatt (Senior Director, Policy and Innovation — Smart Prosperity Institute), Jennifer Robson (Associate Professor, Political Management — Carleton University). Karim Bardeesy of First Policy Response moderated the town hall.
Prioritizing speed over perfection
Canada had to “put the economy in a medically-induced coma” in order to keep people from interacting and spreading the virus, Robson said. Normal income supports such as Employment Insurance and sickness benefits would not be enough to help people cope with a shutdown of this size, so the federal government had to deliver income supports that could help as many people as possible, as quickly as possible. CERB and CEWS were launched in record time for policy development. CERB money has flowed quickly, matching with labour force unemployment numbers. So far, CEWS has had a lower uptake.
While most employment benefits are designed with a strong “pro-work” element to them, the government also had to grapple with the additional challenge of delivering supports that encouraged people to stay at home, Dijkema said. Moffatt added that he believes most workers will likely want to return to work once they are able.
Putting care at the core
What happens if someone wants to go back to work but their household situation (e.g. caring for children or elderly relatives) prevents them from doing so? COVID-19 has highlighted the hidden and critical role that caregivers — who are primarily women — play in a household. It’s necessary to put care at the core if we want to restart the economy. Dijkema noted that prioritizing only the economy will come at the cost of the family, because childcare is critical for economic growth. “Childcare should be thought of as the care of the child,” he said, “and the economy should be at service of the family.”
We’ll also need to think deeply about the structures we’ve built around social care, such as our long-term care centres, workers and labour supply. The crisis has also exposed gaps in mental health support and coverage — public health has “largely neglected the brain,” said Moffatt.
Help needed for struggling industries and companies
Commodity-based sectors like agriculture will be troubled. They will have a hard time attracting workers, as the industry employs many Temporary Foreign Workers. “Canada will now have to find those skills in the domestic economy,” said Moffatt, “and pay people at a wage in which they won’t be undercut by American agriculture.”
The government also recently announced the Large Employer Emergency Financing Facility (LEEFF) to help large firms (more than $300 million in revenue) stay solvent. One of the conditions of loan eligibility is environmental disclosure, which has raised debate over whether the feds should put environmental conditions on loans or just stick to economic conditions. Moffatt argued that “these environmental conditions are an economic condition” because showing environmental responsibility will likely make them more attractive to investors.
Which magic bullet program should we retain?
Long story short — there is none. Dutt said: “There are many things broken in the system we have, and we’re trying to patch it up in pieces. Unless we actively try to make changes, we’re going to fall into the same traps we were in before, created by centuries of oppressive systems.”
We’ll need multiple points of intervention and system redesigns in the post-coronavirus recovery era. Dijkema pointed out that there will also be non-financial costs associated with being out of work, as it impacts our mental health, social systems and more. Dutt also predicted a decline in quality of life due to reduced health-care and elective surgeries during the pandemic.
Dutt suggested a guiding question for shaping policy responses: “How do we create healthier communities?” COVID-19 has highlighted and deepened the disparities that underserved populations have been experiencing all along. “Health” and “economy” should not be considered two separate priorities because they clearly relate and intersect. Dutt also advocated for universal publicly-funded pharmacare, both to serve people who could never afford it and those who lost their employer-based coverage plans.
What next?
There are still many questions that remain unanswered. How do we support people who do not want to return to return to unsafe workplaces? Could this crisis be an opportunity to reimagine cooperative federalism? What will be the implications of the first recession in recent history that’s based on health rather than economics?
Moffatt left us with a sobering note: “This is not a ‘restart.’ It is a ‘mountain climb.’”
