On March 18, the federal government announced an aid package to help workers and businesses affected by the COVID-19 pandemic. The package includes $27 billion in wage supports and enhanced benefits, and $55 billion in deferred income tax payments. It is supposed to ensure that workers and small businesses have the financial support they need to follow public health advice and stay home.
- Read about what’s in the package in this CUPE backgrounder
To be effective, the funds must flow quickly into the bank accounts of as many people as possible. The sooner affected workers can make the financial decision to stay home from work, the more effective public health measures will be in slowing the spread of COVID-19.
Is it big enough?
The part of the package that flows directly to households is a reasonable size (1.2 per cent of Canada’s Gross Domestic Product, or GDP). It is a good first step but will need to be supplemented in the coming weeks, and we look at how below. Several other countries have put together much larger packages for workers, ranging from two to six per cent of their GDP. The good news is the federal government has said this is an initial package, and they are willing to do more. CUPE is calling on Prime Minister Justin Trudeau to go big to support Canadian workers through the unprecedented crisis caused by the COVID-19 pandemic - and to take action now.
Is it fast enough?
Most of the benefits going directly to workers won’t flow before April 1, when many workers will face rent or other monthly expenses. For some workers making the decision to self-isolate or stay home without sick pay, this is not soon enough.
The Finance Minister has said the Emergency Care Benefit and the Emergency Support Benefit should be available in two to three weeks, which means early April. Parliament will be recalled to pass legislation with a reduced number of MPs. All opposition parties say they will cooperate to fast track these measures. Finally, the one-time lump sum through the GST credit and Canada Child Benefit (CCB) is expected to arrive in May.
The federal government had already announced priority processing for sick leaves related to COVID-19. EI sick leave processing can take over a month in normal times. We don’t know how quickly Service Canada will be able to approve leaves and get benefits to workers under the current circumstances. There will be a significant increase in layoffs that will likely overwhelm the current capacity of Service Canada to process claims quickly.
The one-week waiting period has also been waived for COVID-19 related sick leaves, which means that workers will be eligible for benefits from the first day of their sick leave. The waiting period has not yet been waived for other benefits, meaning workers will have no income replacement for the first week of their unemployment.
Can we do better?
Economists are nearly unanimous in their assessment: there is no practical limit on what the federal government can spend to get us through the next few months. The old rules don’t apply. Now is not the time for tinkering around the edges of our current policy instruments, it is the time for bold action that rises to meet the scale of the human crisis in front of us. If the federal government cannot or will not get money out to workers faster, then we need provinces to step in and fill in the financial and public service gaps.
Where are the gaps?
This package aims to ensure workers can follow public health advice and still be able to put food on the table and cover rent. But there’s more to do.
- Low income people and First Nation, Inuit and Métis communities: The announcement makes some first steps to support people experiencing homelessness or gender-based violence, to reduce costs for pensioners, and to meet the critical needs of all Indigenous communities. It’s clear more is needed, and we will push for that in the weeks ahead.
- Renters: While the federal government has worked with lenders to ensure a six-month payment deferral for mortgages, there are no specific supports for renters. None of the federal wage supplements available to workers will be in place before rent is due April 1.
- Child care for essential workers: While the package includes support for those who need to stay home and care for children, it didn’t deliver any support for parents who are essential workers and must be on the job when schools and child care centres are closed. The federal government should work with the provinces to fund this critical emergency care.
- Employers who want to keep workers on payroll: The 10 per cent wage supplement and the Work Sharing announcement are good measures that may help businesses that experience moderate losses due to the slowdown. Work Sharing allows employers to reduce the number of hours of work per employee instead of laying workers off, and workers get a wage top-up from EI. It works well when there is a temporary slowdown. But neither of these programs are enough for many employers that have closed completely or have seen dramatic drops in revenue. Expect targeted announcements for some of these sectors to come shortly.
- Community service organizations: The package doesn’t look at reducing poverty or supporting organizations that deliver critical services in our communities, such as food banks. CUPE will need to continue to press all levels of government to provide additional resources. Many community organizations were already operating at capacity before the pandemic and are likely seeing increased demand.
- Fix EI: Employment Insurance was already failing too many workers and will be insufficient even for many who qualify. It’s too soon to know how many workers will be laid off in the next few weeks, but over 500,000 workers applied for EI the week of March 16. We could potentially see the unemployment rate double in April. Unions have been united in calling for lower entrance requirements, longer sick leave benefits, a minimum benefit level, and higher replacement rates that make EI more accessible to precarious and low wage workers. This would be an appropriate time for the federal government to listen to workers and repair this critical lifeline.
Finally, there was nothing in the announcement about a stimulus package. In the coming weeks, we expect to see a stimulus package and infrastructure plan to help create good jobs for workers, and help communities rebuild once the public health crisis has passed. The crisis has revealed many pre-existing gaps in our current public infrastructure, both physical and social, that we will need to address.
What don’t we know right now?
A lot. We don’t know how long the current public health advice will be in place, so we don’t know how long schools, libraries, recreation facilities, child care centres, or affected businesses will be closed. We don’t know how many people will be unemployed and in need of financial support in the coming weeks and months.
We are also waiting for more details on the income support that the federal government has announced. The government hasn’t confirmed if these benefits are based on income. If they are, they will leave low-income, precarious workers without enough to cover the basics. We don’t know what other targeted measures might be coming to help workers in airlines and other deeply affected industries, rather than to corporate bailouts that never trickle down.
We do know that the federal government and the provinces seem to be working together effectively, and governments are being fast and creative in their responses. Many provincial governments have taken quick action to update legislation to ensure workers have job-protected leave, and some, such as Quebec, have put in place emergency payments and guaranteed child care support for emergency workers.
Lessons for a better world
When the pandemic has passed, we will have learned that another world is possible. One where we come together to take care of each other, where we realize that cleaners and child care workers are the backbone of a well-functioning community, where resources are mobilized to serve the common good, and where no-one is left behind. We cannot risk forgetting this lesson.
Many of us know the current system is broken and prioritizes profit over people and their well-being. The pandemic is making those cracks clear. The response to the pandemic has shown that the government has the capacity to act in the public interest on a massive scale – job-protected paid sick leave for all workers was not on any government’s agenda before last week. We will need to carry that urgency to build a better society with us into the recovery, to ensure that we do not return to “normal.”
CUPE will be continuing to monitor the situation, and will strongly advocate for all workers to get the support that they need to make it through this crisis. We’re in this together.