Federal election primer:
Investing in public services edition
Election 2019 is shaping up to be highly contentious and it’s going to be hard to cut through the competing narratives. On the key issue of the economy, the aggregate data looks quite strong. Employment is up, average wages are finally rising, economic growth is positive. Yet we know that many individuals and families still struggle.
The high cost of essential goods like housing, food, energy and child care weighs heavily on low- and middle-income families. In Vancouver and the Greater Toronto Area, recent CCPA research has shown that a minimum wage worker has to work over 80 hours a week just to afford an average one-bedroom apartment. And the picture isn’t much better in other communities.
Not everyone or every region or every sector is benefiting from current prosperity. In Canada, profound disparities undermine health and thwart opportunity for far too many. Our report, produced in collaboration with the AFN and Upstream, found that about half of First Nations children live in poverty, just as they did a decade ago. That’s two and a half times the national rate, and more than 250,000 children at risk.
This blog post is the third in our series of election primers. It looks at three key issues—child care, housing and employment insurance—and what’s at stake in Election 2019.
Are we there yet?
In 2015, a new government was elected in Ottawa on a wave of public desire for more—more empathy, more investment, more acknowledgement that we can and must do better for each other and especially for the most vulnerable in our society.
Since then, the federal government has made several important moves to rebuild Canada’s social infrastructure, including investments in housing, clean water and children’s services for First Nation communities, increasing the Canada Child Benefit and the Guaranteed Income Supplement for single seniors, and advancing a gender equality agenda in its foreign policy and development assistance programs.
It has committed to implementing the 2030 Agenda for Sustainable Development and its Social Development Goals (SDGs), promising to “build economic growth that works for everyone, advance gender equality and the empowerment of women and girls, take action on climate change, and narrow persistent socioeconomic gaps that hold too many people back.”¹
But these actions do not get us nearly close enough to the goal of more equally-shared prosperity nor do they reflect the government’s capacity to act—both federal program spending and federal revenues as a proportion of GDP are near all-time lows.²
Much of the current debate is narrowly focused on individual gain. Rebate programs and tax cuts are offered up as effective ways of increasing individual purchasing power while households are encouraged to save for education, health care or a first home.
What proponents aren’t saying is that these strategies are just another form of privatization—leaving families to cope on their own with illness, job losses and caring responsibilities—all at huge personal expense. (An OECD report estimates that poor families would have to spend three-quarters of their income on essential services if they had to purchase them directly).
What we do need is a more equitable and sustainable way of meeting our common needs and tackling the pressing threats of poverty, precarity and climate warming together.
In the end, policymaking, like budgets, is about choices and values. And the choices we make today will determine the long-term sustainability of our society and our economy for generations to come. As the Alternative Federal Budget sets out, better choices are available, as are the mechanisms to fund them.
1) Reform of the Employment Insurance
Employment insurance (EI) is a vital part of Canada’s social safety net, but successive federal governments have made the program less equitable and much harder to access. Since 2015, the federal government has made some progress in improving the program by including the definition “suitable work”, reducing the waiting period for benefits, and introducing more flexible parental leave options and a new Parental Sharing Benefit.
These changes are welcome, but no substantive action on fundamental reform has been taken to update the system for today’s labour market and explicitly address issues of access and systemic bias (as one example, research from my CCPA-Ontario colleague Ricardo Tranjan has found that the EI program is failing to support low-wage and precariously-employed workers).
Indeed, the government has undercut the ability of the program to respond to pressing needs, by reducing premiums from 1.88% in 2015 to 1.66% in 2018. This change will reduce revenues for the EI fund by $3.6 billion per year over the next seven years.
Immediate action is needed to expand access to the program and to enhance the support on offer to the unemployed, new parents, caregivers, or workers coping with illness. This includes instituting a lower uniform entry requirement for benefits, lowering thresholds for accessing benefits of maximum duration, increasing income replacement rates, and setting a higher maximum insurable earnings level.
EI should help level the playing field for low-wage workers who are at greatest risk, but currently fails to do so. One potential way to address this inequality is to set a minimum floor (e.g., $300/week) for benefits for everyone.
2) Child Care
Canada also stands at the bottom of the league with respect to support for early learning and child care. Canada spends an estimated 0.5% of GDP annually on child care—half what most comparable countries spend—and much of this spending is concentrated in one province, Quebec.³
In 2017, the federal government announced an investment of $7.5 billion over 11 years and subsequently negotiated agreements with all provinces and territories to enhance their child care systems. The agreements claim to adhere to the principles of accessibility, affordability, quality, flexibility and inclusivity, but these principles are not operationalized.
These efforts have produced mixed results. Some groups—such as infants, children with disabilities, new immigrants, rural communities, and parents working or studying part-time or nonstandard hours—continue to be poorly served.
To make real progress, the federal government must assert a leadership role in building a comprehensive system of child care for all in the next and subsequent phases of bilateral agreement negotiations with the provinces/territories. This will involve boosting Canada’s Early Childhood Education and Care (ECEC) budget significantly and negotiating ECEC agreements with the provinces and territories that expand public/non-profit services, establish affordable fees and invest in child care workers.
Shelter is a basic need, yet for too many Canadians, lack of affordable housing means finding a place to live is a stressful ordeal. Many more are at risk of homelessness because of the very high cost of shelter coupled with low stock of affordable housing, inadequate incomes, and family violence and illness.
The federal government’s long-overdue National Housing Strategy (NHS), announced in 2017, promises $11.2 billion over 11 years to cut chronic homelessness in half, remove 530,000 families from housing need, and invest in the construction of up to 100,000 new affordable homes.⁴
It takes time to plan, finance and build housing, but the glacial pace of new construction is troubling. Much of the federal money that was announced is contingent on cost-sharing with the provinces and territories, the level of government directly responsible for housing. At the end of 2018, only three bilateral agreements had been concluded—and people in critical housing need continue to wait. They continue to wait as the vast majority of the NHS funds are back-loaded, and only $15 billion of total planned spending and financing is new money.⁵
Additional investment is sorely needed to make any kind of dent in the supply of affordable housing in the private, public and nonprofit sectors—and to provide needed supports for vulnerable populations such as Indigenous peoples living off reserves, women fleeing violence, people with disabilities, and frail seniors.
Better than nothing isn’t good enough
Canada can afford to be a leader in meeting the vision and goals set out in the 2030 Agenda—at home and abroad. With a stronger, more equitable fiscal foundation, Canada will be in a much better position to tackle economic, social and environmental challenges head on, while investments in housing, child care and income security will ensure that all benefit from shared prosperity.
¹ Government of Canada (2018), Canada’s Implementation of the 2030 Agenda for Sustainable Development: National Voluntary Review.
² Finance Canada (2018), Fiscal Reference Tables.
³ Early learning and child care: How does Canada measure up? International comparisons using data from Starting Strong II. (2006) BRIEFing NOTE. Toronto: Childcare Resource and Research Unit.
⁴ Government of Canada (2017), Canada’s National Housing Strategy: A Place to Call Home.
⁵ A total of $42 billion has been set aside to fund the NHS over the next 11 years, including $11.2 billion to cut homelessness and increase the number of affordable housing units. The rest is either loan funding (to finance renovation and new development), or existing funds. [Provincial and territorial] cost sharing is expected to contribute another $7.4 billion. Centre for Urban Research and Education. Cited in Patrick Gossage (2018), “Good review (mostly) for the National Housing Strategy,” Policy Options, Feb. 22, 2018.