The federal government introduced its 2023 budget at an important crossroads. The recovery phase from the COVID-19 global pandemic was concluding, as persistent and growing uncertainty about the global economy loomed.

Budgets are defined not just by what they include, but often by what they ignore. This budget is no exception. Absent is a credible articulation of equitable post-COVID rebuilding of the economy to address the cleavages and disparities exposed during the pandemic.

One important revelation stemming from the COVID-19 pandemic was the exposure of the often-ignored racial gap in Canada. Recent studies and reports shed light on disparities faced by racialized populations across the country. Area-based studies concluded that the COVID-19 mortality rates are significantly higher in low-income neighbourhoods as well as in those with high ethno-cultural composition compared with neighbourhoods of high income or lower ethno-cultural composition.

One report co-authored by the Wellesley Institute and Ontario Health revealed the impact of the pandemic was highly racialized. By examining race-based data collected between June 26, 2020  to April 21, 2021, it found that racialized populations faced COVID-19 infection rates up to seven times higher than white Ontarians. Similarly, mortality rates for Latino, South-East Asian, and Middle Eastern Ontarians were reported 7.7, 6.6, and 5.3 times higher than those for white Ontarians. Such disparities cannot be explained based on biological determinants alone.

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These gross disparities existed long before COVID-19. They are the manifestation of cumulative deficiencies and persistent inequalities in many outcomes in income, health care, housing, education, and justice between racialized and white Canadians. Significant barriers remain entrenched along racial and gender lines, an Institute of Policy Alternatives study, Canada’s Colour-Coded Income Inequality, concluded. More significantly, it found the income gap is persistent with little change occurring between 2006 and 2016. This inequality is demonstrated by wealth indicators as well, not just strictly by income. One in five racialized families lives in poverty compared with one in 20 non-racialized families.

Similarly, there is huge disparity along racial lines in housing accessibility. A 2019 report by the Canadian Mortgage and Housing Corporation (CMHC) showed a fifth of visible-minority households either did not have access to affordable housing or had inadequate housing, double that of white households. Unaffordable housing rates were especially high among those of Middle Eastern, North African, East Asian and South Asian ancestry.

Black Canadians and Indigenous Peoples continue to face significant disparities in almost every socioeconomic indicator. The pervasiveness of anti-Black racism appears in education, employment, healthcare, and policing. The picture is even more troubling for Indigenous Peoples. First Nations communities face a $30-billion infrastructure deficit for housing, roads, water treatment, internet access, health centres and schools, according to estimates in a recent report.

These statistics provide vital context and depth. At the core of this narrative is the fact that racism, once normalized, becomes self-perpetuating through racial profiling that permeates all forms of interactions. Once embedded in institutions, discrimination becomes systemic and perpetuates a position of disadvantage for racialized persons and communities.

This racial gap, if ignored, will become even more pronounced with far-reaching consequences for the social and economic health of the country. In the past 50 years, Canadian society has undergone the most drastic demographic shift since Confederation. For example, in 1961, more than 96 per cent of Canadians traced their ancestry to Europe. In 2021, one in four, or 26 per cent of Canadians, are part of racialized groups.

This ratio is projected to increase to more than 40 per cent by 2041. The Indigenous population is projected to increase by 50 per cent and reach close to three million. Therefore, this increase in the Canadian population among non-white groups means disparities will become even more acute if the root causes of these disparities are not addressed.

The second factor is a failure to adapt to these demographic changes. As the country has become more diverse, it has outgrown its policy frameworks without adapting to the new reality. Persistent racial inequalities exist because programs were never designed to offset racial disparities. This is a central point made by Keith Banting, a Queens University fellow in the school of policy studies and research chair emeritus in the department of political studies, and Debra Thompson, associate professor of political science and research chair in racial inequality in democratic societies at McGill University.

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The analysis of Daniel R. Meister in his book The Racial Mosaic, which was a finalist for the 2022 John W. Dafoe Book Prize and the 2022 Wilson Book Prize, provides context and historical evolution of this point. In it, he exposes how systemic discrimination has been excluded from Canadian narratives around pluralism and multiculturalism.

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This may explain why disparities that coincide with race have yet to become a national priority despite their prevalence. Recently, the federal government issued a three-year anti-racism strategic plan and established an Anti-Racism Secretariat to lead a pan-governmental effort. A 13-member task force was also convened to review the Employment Equity Act. And the Government of Canada has very publicly committed to reconciliation with Indigenous Peoples. While these are positive steps, their impact is yet to be seen, and alone they are unlikely to be adequate solutions for a deeply entrenched social and economic problem.

In the meantime, what remains missing is a national conversation and bold political leadership to challenge the status quo. There is a need to chart a new course toward an inclusive economic and social model that is more responsive to demographic shifts and global economic forces.

Such an undertaking will be neither easy nor quick. As a first step, we can draw from our rich history of nation-building over the past century for inspiration. The Rowell-Sirois Commission of 1937 is one example. It was established by the federal government in the context of the Great Depression. It is significant because of its remarkably original approach to analyzing the state of the federation, as highlighted by historians Robert Wardhaugh and Barry Ferguson in a book published in 2021. Notably, the commission addressed fiscal imbalances in federal and provincial program delivery. Employment Insurance and the equalization transfers are two key legacies that play crucial roles in the functioning of the country to this day.

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A similar commission with a broad mandate could be as instrumental in constructing a transformative new vision. By exploring innovative ways to level current economic disparities and address social deficits all while increasing economic productivity and competitiveness. Such an examination could seek a new role for the government as an active market shaper that delivers sustainable and inclusive growth. Imagine a model whereby community wealth creation and social innovation become drivers for economic growth and output?

At the same time, Canadian multiculturalism should be reinvented into a lever that helps reverse disparities and inequities by removing discriminatory barriers and institutional biases. Inclusion becomes the focus by mediating tensions between anxieties of the majority and the aspirations of racialized minorities. Canadian citizenship needs to be about belonging rather than mere tolerance and accommodation. This inclusion and belonging should be benchmarked by robust economic and social mobility indicators.

Societies are not shaped by accident. As Canada continues changing, it is important that new imagining is done to reflect a new mosaic. Equally, strong political leadership is required to articulate a vision for a fairer and more equitable society. In the words of the former chief justice of the Supreme Court, Beverley McLachlin, this can be achieved by “expanding our sense of ourselves by including a commitment to respect for all kinds of differences in an unknowable future.” That future will be both more prosperous and more just in the absence of racial disparity.