Matthew Mendelsohn is Visiting Professor at Ryerson University and a co-creator, with the Ryerson Leadership Lab and the Brookfield Institute for Innovation + Entrepreneurship, of First Policy Response.

This commentary is based on remarks delivered to the Recovery Summit hosted by Canada 2020.

 

We have learned over the past decade that prosperity – as measured by GDP or unemployment rates or stock market valuations – is not enough.

It is not enough to provide working people with the economic security they require and it is not enough to avert the collapse and unravelling of democratic societies.

The current federal government ran in 2015 on shared prosperity, on inclusive growth.

It was exactly the right goal then; it remains so today; and it was resisted five years ago by the same people who are today resisting addressing well-known policy shortcomings that leave working Canadians vulnerable to a variety of systemic risks.

Five years ago they said: don’t run a deficit; don’t increase transfers to low- and middle-income families; don’t take away benefits from upper-income people; don’t increase taxes on the wealthy; don’t increase premiums to more generously fund the Canada Pension Plan. The op/ed pages of our national newspaper chains were littered with analysis about how each of these would be a fiscal disaster, a political calamity or a practical impossibility.

They were wrong then, and the forces of the status quo ante are even more wrong now. It is often the same people writing the same things for the same publications today.

But the shared prosperity agenda needs to be deepened today with actionable, practical policies and programs that can deliver more economic security to working people.

I have two pitches: one about public policy and income security, one about public administration.

On policy, if progressives want to capitalize on this moment, we must keep things simple, use existing tools that deliver a real impact on people’s lives, and not indulge in magical thinking.

My policy pitch is that there are three things that will deliver economic security far better than pursuing a Universal Basic Income (UBI), which is not a viable way to seize this moment, and turn ideas into programs that make a difference in people’s lives over the next 12 months:

1. Targeted cash transfers: We can use existing mechanisms that already function like a UBI for most Canadians to get cash to people in a targeted way – the Canada Child Benefit, the Canada Workers Benefit, the Guaranteed Income Supplement, the Canada Student Grant, disability supports. The current government has reformed each of these in the past five years to make them more progressive and improve their impact on things that matter, such as child poverty, seniors’ poverty and post-secondary participation for students from low-income families. And as we saw with the rapid deployment of emergency income supports earlier this year, each of these mechanisms can be quickly increased based on circumstances. These mechanisms are elastic. They are deliverable. And they already exist.

The most important “new” thing to add is the formalization of a Canada Emergency Response Benefit or Canada Recovery Benefit-type vehicle to act as insurance for those outside the Employment Insurance (EI) system because childless, working-age adults are really the only group of Canadians that does not have a program that functions like a UBI. There are off-the-shelf models for this, including one from the Mowat Centre EI Task Force.

2. Improved social and community services: We should provide more access to more public services. These serve as a social wage and make life more affordable and more secure. Prioritize by choosing one or two. My three preferences are for free public transit, real investments in a childcare system and reform to our long-term care system, in partnership with community and civil society organizations, and perhaps supplemented by wage subsidies. Other people may prioritize pharmacare and dental care or ramping up our investments in purpose-built affordable rental housing. But we cannot do all of them immediately.

3. Legislation that improves the quality of work: We must act on ensuring that low-wage workers have better quality employment. It is a moral and democratic imperative. Progressive provincial governments have made progress on employment standards, the right to organize, minimum wage, the misclassification of gig workers and other issues, but low-wage workers remain under threat. And federally, there are off-the-shelf solutions in the form of the Expert Panel on Modern Federal Employment Standards report that can be implemented. We need to focus on adaptable, existing solutions that can be scaled and calibrated and complemented in targeted ways – and that will last.

When it comes to my second pitch, on public administration, addressing our policy challenges is more difficult because of a pathology in public budgeting and finance: we only count how much things cost.

If we spend $1 billion on early childhood education or literally take $1 billion worth of 100 dollar bills and set them on fire, they are both reported the same way: We spent $1 billion.

We need more sophisticated understanding of outcomes – of social and economic returns on investment and longer-term impact.

The current federal government has taken some steps in this direction with gender-based budgeting. The Gender-Based Analysis Plus (GBA+) framework explicitly recognizes that a positive impact on GDP is not good enough if it has negative impacts on vulnerable communities.

But the point of GBA+ that has not received sufficient public attention is that in order to understand whether a measure has a differentiated impact on different groups, you first have to know its impact, not just its cost. And impact is not usually a part of budgeting.

So to summarize and tie my two pitches together: If we fail to improve our capacity to understand the longer-term economic and social returns of our spending – if we only count the immediate costs of things like early childhood education – it will be much more difficult to deliver real shared prosperity. But if we look at the longer-term impacts of our choices and investments, not just their cost, we cannot deny that we need to address the long-standing policy gaps that we have known about for years and that this moment has starkly revealed.

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Matthew Mendelsohn is Visiting Professor at Ryerson University and a co-creator, with the Ryerson Leadership Lab and the Brookfield Institute for Innovation + Entrepreneurship, of First Policy Response.