The crisis we and the world continue to confront seriously affects public health and our social and economic well-being. There will be no quick return to normal, nor should there be. While it remains to be seen how well Canada will fare in comparison to other countries in its management of the pandemic, the crisis has starkly spotlighted longstanding cracks in our social and economic foundations. The next budget must focus on immediate needs – public health and income security – but it must also set a course for fundamental change based on a vision of a fair, green, and just recovery for all.
Long before the pandemic, we faced serious problems: entrenched inequality and racism, declining democracy, social fragmentation, the threat of catastrophic climate change, and the decline of the public sector and policies driven by the search for the public good. COVID-19 has amplified these problems just as these problems made us more vulnerable to the virus from the start.
The lack of eligibility for existing income supports such as Employment Insurance (EI) for many of the newly unemployed left the government scrambling to come up with new programs on the fly. Crowded, understaffed, and under-regulated long-term care homes led to multiple waves of unnecessary deaths among seniors. The lack of paid sick leave for many resulted in workplace COVID outbreaks as workers felt obliged to go to work even when they were ill. Parents with young children have faced impossible choices as schools closed and no options were available for affordable child care.
In Canada, those most likely to suffer poor health outcomes, whether from COVID-19 or other diseases, are Black, brown, and Indigenous people, who earn low wages and have little wealth. Their economic status is deeply intertwined with systemic racism. Democracy is incompatible with inequality and with leaving important social choices to the market or a privileged class rather than to the collective.
The key to meeting the intersecting challenges of systemic racism, inequality, climate change and democratic decline is to disrupt the current concentration of wealth and power in our economy and to turn sharply toward economic growth that supports an equitable, inclusive, healthy, and resilient society.
Our solutions lie in a mixed public/private/not-for-profit social economy with high levels of public provision to meet key needs, protection against poverty and insecurity, and effective public interest-driven regulation of banks and large corporations. We need to renew the capacity of governments to shape the economy in the national and public interest, to lead innovation toward a shared vision of the equitable future, to distribute resources to achieve more just outcomes, and to increase the bargaining power of workers vis-à-vis employers. The market and the private sector are important tools, but governments must shape the economy to secure fair and inclusive society.
Solution 1: Federal leadership in upholding economic and social rights
In 1999, the federal government, provinces, and territories ratified the Social Union Framework Agreement, a rule book governing how these levels of government would work together to uphold economic and social rights flowing from section 36 of the Constitution as well as the International Covenant on Economic, Cultural and Social Rights. Central to the general concept of Canada’s social union is the responsibility of the federal government to ensure that all Canadians have access to these rights regardless of the province in which they live. Federal leadership has been an important force behind the development of what are considered to be foundational aspects of Canadian society – health care and social insurance programs to name two.
While many social programs fall under provincial jurisdiction, the federal government has played a major role through shared-cost funding, complementary federal social programs, and the equalization program.
A new social union framework to be negotiated over the next two years should include:
- Expanding Canada’s public health care to universal coverage of prescription drugs, long-term care for the elderly, and mental-health services as discussed in our report “Medicare 2.0”. We also need to rebuild and renew public health infrastructure – the system of hospitals, health centres and other public facilities that maintain community well-being and are critical during health crises.
- A national child care and early-learning program that guarantees high-quality, accessible, and affordable care in every province and territory.
- An environmental and climate crisis partnership to carry out aggressive action on clean energy, green transportation/infrastructure, energy efficiency, reversing nature loss, and protecting habitat (see below).
- A justice partnership to end systemic racism and transform Crown-Indigenous relations based on self-government and recognition of rights and title as set out in the UN Declaration on the Rights of Indigenous Peoples.
- A new fiscal partnership covering equalization and social and health transfer payments, support to municipalities, an Indigenous fiscal framework, and comprehensive tax reform. In particular, local governments must be able to weather the fiscal crisis and renew community infrastructure through more stable and fair sources of revenues.
Solution 2: A clean and caring economy
Canada needs a quick transition to a clean economy guided by comprehensive regulation and led by public investment. A new green investment bank should be established to fund clean, green investments in ways that promote the interests of Canadian communities and workers, not just those of private financiers and shareholders.
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Health care, education, child and elder care, and social services are the key pillars of the caring economy. They meet a multitude of social needs while providing a great many jobs, and they rely on leadership and investment from governments to work. Canada needs to reform and expand our long-term care system, create a national child care and early-learning program that delivers affordable and accessible services to families across Canada, and invest in all levels of education to help students recover from the pandemic’s disruptions to their learning and well-being. We must recognize that much of the undervalued and precarious work in the caring economy is disproportionately done by women and racialized Canadians, and we should seek to rectify this through decent and well-paid work.
Solution 3: Decent work and income security
During the pandemic, precarious employment has put workers at risk in multiple ways. The federal government should institute a model labour code that establishes fair standards relating to hours of work and health and safety, a national minimum wage, pay and employment equity for women and racialized workers, paid sick leave, and promote recognition of unions. This code should apply to all federal workplaces and employers who contract with or receive financial support from the federal government. Provinces and territories should be strongly encouraged to adopt the new code, particularly the provision of at least seven days of employer-paid sick leave a year.
EI needs to be quickly reformed to provide a decent minimum income benefit based on a common hours requirement by region, extending coverage to employees disguised as self-employed contractors while creating a parallel program for the genuinely self-employed. In co-operation with the provinces, a new wage supplement benefit should be created to top up low wages due to insufficient hours of work and in the longer term Canada should move toward a basic income guarantee.
Solution 4: Fair taxes
We cannot build a just and inclusive Canada without collectively paying for it through a transparent progressive tax system. Over the past few decades, the tax burden on the richest and highest-income Canadians has been cut by the reduction of the corporate tax rate; special tax breaks applied to income deriving from capital, such as capital gains and stock options; a decrease in top income tax rates; and by the growing use of offshore tax shelters. The equalizing impact of progressive taxes has been eroded, compounding the growing inequality of market income and starving the public and social sectors of needed resources.
We need tax reform to finance a recovery for all, and reduce large inequalities of income and wealth. This reform should include the creation of a wealth tax, raising the top tax rate on very high incomes, closing income tax loopholes favouring capital income over wages; closing corporate tax shelters, and instituting a tax on excess corporate profits earned during the pandemic.
Bottom line: Fundamental change
In short, we need to do more than simply survive this crisis and get the economy moving. We need a fundamental change of direction – not a “return to normal,” not a rhetorical and empty “reset,” not a narrow “stimulus,” but a true transformation. Any recovery plan will be short-sighted and ineffective if it does not repair the foundational inequities in our society and address the crisis of climate change. This is a moment for social democrats to fight for fundamental reform.
Edited excerpt from Setting a New Normal through a Bold Recovery, published by the Broadbent Institute.