Free Money: CERB-Like Programs in Post-Pandemic Canada

Opinion by Jordan deWever.

Canada now owes over $1 trillion dollars as the COVID-19 pandemic saw Parliament approve large stimulus packages such as the Canadian Emergency Recovery Benefit, commonly known as CERB [1]. This program sent money directly to citizens and ultimately costed taxpayers 71.3 billion dollars [2]. Opponents of such a large amount of spending, state that the government’s approach to COVID-19 and pandemic support is unsustainably increasing the deficit. However, a reality without the CERB would have likely caused substantial financial damage to the hundreds of thousands of individuals who accessed the program.


As we move forward and wind down pandemic supports, COVID-19 is not the only financial burden on Canadians; rather other expenditures such as rent, groceries, and accumulated debt all put an individual’s financial stability into question. For this reason, our post-pandemic recovery should include a permanent stimulus package like the CERB to help alleviate the financial burden felt by Canadians.


How did COVID-19 impact Canadians’ Finances?


When COVID-19 first landed in Canada, unemployment rose to an outstanding 7.8 per cent in a matter of days [3]. As a result, Canadians were forced to think about how they were going to pay for everyday necessities such as food, transportation, rent, and utilities. The Canadian government, in response implemented a program called the CERB. This program meant that for Canadians, essential needs became less of a worry and therefore, individuals could turn their attention to the other complications of living during a pandemic.


While the pandemic is temporary, financial instability for many is not. As revealed, a large proportion of Canadians who accessed the CERB were female, racialized and of a lower-income background [4]. For reference, low-wage workers, described by the federal government as those in the bottom 10 per cent of the hourly wage distribution saw working hours drop 45.5 per cent [5]. As well, visible minorities make up 40percent of workers in sectors harder hit by COVID-19 [6]. These are not just statistics, rather, these figures give insight into which segments of our society are more vulnerable to financial instability.


Issues comparable to COVID-19 such as housing affordability, food prices, childcare, and pharmaceutical coverage will continue. The pandemic may end, but financial instability without intervention will not.


How Canada Should Work to Reduce Poverty


A practical solution to poverty would Universal Basic Income program (UBI), like the CERB. UBI is defined as a guaranteed set amount of money deposited directly to citizens each month [7]. While the specifics of how much is given out, or who gets it varies from policy to policy, the basics remain the same.


Why Should UBI be Implemented?


An organization called the Ontario Living Wage Network looks at the cost of living for necessary expenses in a given city which they then use to calculate a living wage. Their calculation includes food, clothing, shelter, childcare, transportation, medical expenses, recreation, and a modest vacation [8]. Using these metrics, the living wage calculated for Ottawa is $18.42 an hour [9]. However, this baseline is in stark contrast to the minimum wage in Ontario, which is not only striated but equals $14.35 for the general populace [10]. The difference between the living wage and the minimum wage means low-income earners are forced to forgo some of the necessities listed. A universal basic income that would cover the rest of the expenses would mean low-income earners no longer have to decide between paying for transportation or putting food on the table.


UBI’s Impact on the Deficit


As mentioned above, opponents of the CERB cited the high cost of the program. These same individuals also oppose implementing a program such as a universal basic income. They argue that a UBI would increase the deficit to dangerous levels and would ultimately leave future Canadians with the bill. However, research has shown that universal basic income is not only tangible, but not as expensive as one may think. A study done by the Canadian Centre for Economic Analysis shows that a universal basic income could grow the economy, and in turn, increase government revenues [11]. As well, the UBI Works website put together a large list on how we could pay for it. This includes increasing taxes for the wealthiest Canadians, putting a tax on luxury items, as well as eliminating fossil fuel subsidies [12]. In short, UBI is an affordable option.


Want to Get Involved?


As we move into the post-pandemic world, now more than ever is it necessary to help the most vulnerable Canadians move ahead and afford to cover their expenses. As an unfortunate study sample, the CERB helped hundreds of thousands of Canadians during the pandemic. A universal basic income can benefit many Canadians the same way. If you’re looking for ways to learn more about what universal basic income is, UBI Works has some great resources to show Canadians how we can benefit and pay for such a program. If you want to get involved, you can email your member of parliament, or sign a petition to show that Canadians stand in solidarity in the fight against poverty [13].

 

Bibliography


[1] Robinson, Mia. 2021. “Canada’s debt set to cross $1 trillion mark as Liberals extend COVID-19 aid in budget.” Global News. https://globalnews.ca/news/7768619/federal-budget-2021-liberals-covid/.


[2] The Canadian Press. 2020. “Eight more weeks of CERB to cost $17.9 billion budget officer says.” Canadian Broadcasting Corporation. https://www.cbc.ca/news/politics/cerb-extension-pbo-1.5623507


[3] Statistics Canada. 2020. “Labour Force Survey, March 2020.” Statistics Canada. https://www150.statcan.gc.ca/n1/daily-quotidien/200409/dq200409a-eng.htm


[4] Statistics Canada. 2021. “Workers receiving payments from the Canada Emergency Response Benefit Program in 2020.” Statistics Canada. https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00021-eng.htm.


[5] Statistics Canada. 2021. “Workers receiving payments from the Canada Emergency Response Benefit Program in 2020.” Statistics Canada https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00021-eng.htm.


[6] Statistics Canada. 2021. “Workers receiving payments from the Canada Emergency Response Benefit Program in 2020.” Statistics Canada https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00021-eng.htm.


[7] UBI Works. 2021. “New Report: Basic Income can speed up Canada's recovery and grow the economy.” UBI Works. https://www.ubiworks.ca/groweconomy.


[8] Ontario Living Wage Network. n.d. “What is the living wage?” Ontario Living Wage Network. https://www.ontariolivingwage.ca/what_is_the_living_wage.


[9] Ontario Living Wage Network. 2020. “Living Wage by Region.” Ontario Living Wage Network. https://www.ontariolivingwage.ca/living_wage_by_region.


[10] Government of Ontario. 2021. “Minimum Wage.” Government of Ontario. https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage#section-0.


[11] Canadian Centre for Economic Analysis. 2020. “Potential Economic Impacts and Reach of Basic Income Programs in Canada.” Canadian Centre for Economic Analysis. https://assets.websitefiles.com/5f07c00c5fce40c46b92df3d/5fcf8ed17fb77568bd94cfcb_Potentialpercent20Impactspercent20andpercent20Reachpercent20ofpercent20Basicpercent20Incomepercent20Programspercent2020201203percent20FINAL.PDF.pdf.


[13] UBI Works. n.d. “UBI is affordable, and your income taxes don’t have to go up” UBI Works http://www.ubiworks.ca/howtopay.


[14] Basic Income Now. n.d. “We are for a Basic Income Now because it is Urgent, Effective and Affordable.” Basic Income Now https://www.basicincomenow.ca/.