When newly named Finance Minister Chrystia Freeland and Justin Trudeau appeared together earlier this week to give a preview of their lofty, optimistic vision for the future, Freeland used that phrase that is music to so many progressives’ ears: “build back better.”
It was an allusion to the grand vision that environmentalists are pushing here in Canada and that progressive leaders, including U.S. Democratic presidential candidate Joe Biden, are promoting around the world – an aspiration to recover from the pandemic in a way that is greener, more equitable and more prosperous. For the federal Liberals, it will be the driving policy focus behind their throne speech in September and their upcoming budget decisions.
But so much of getting there depends on how successful they are right now in keeping the economy afloat from one day to the next.
Freeland and Employment Minister Carla Qualtrough announced their fix for income support on Thursday, a package that will affect more than four million people still out of work and how they make ends meet over the next few months.
They’re making a $37-billion bet that by enhancing the Employment Insurance system and setting up parallel benefits for the self-employed, sick leave and people who need to take care of their kids or parents, they will put a floor under the economic damage done by the pandemic shutdowns. And from there, they hope to launch their bigger plans for the future.
“Building back better” requires the people who were hit hardest by the pandemic economy to be on solid ground first. Unless income support is designed to make sure low-income families and precarious workers don’t fall through the cracks, the foundation of any building-back-better initiative will be too weak for it to succeed.
So many of the aspirational proposals eye environmentally friendly construction of infrastructure and emissions-reducing retrofits of homes. One coalition of environmentalists in Canada, for example, proposes federal spending of $109 billion over the next 10 years, which would leverage about seven times that amount from the private sector to invest in retrofits, electric vehicles, electricity infrastructure and environmentally friendly urban infrastructure. Millions of jobs would flow from there, and emissions would drop.
Those all sound like fabulous ideas, but the reality is that more than four million people are still collecting the Canada Emergency Response Benefit, and many of those people aren’t equipped to work in construction or manufacturing. More often than not, they worked in service-oriented industries, or they’re struggling to take care of their children and can’t figure out how to return to work full time. Retrofitting homes won’t help.
The path from here to there, the federal Liberals hope, is made easier by the $37-billion package that would transition unemployed Canadians from the emergency response benefit back into the regular Employment Insurance system.
The package is certainly broad and generous. It plugs some of the holes in the antiquated employment insurance of pre-pandemic days, is easier to qualify for and is flexible enough to allow for working while on claim so that there’s no penalty for taking a part-time or low-paid job.
But will it actually be the launch pad for more jobs and a sustained resumption of economic growth? That depends partly on politics, partly on the private sector, and partly on what else the Liberals have up their sleeves to help parents trying to work from home.
On politics: The $37-billion package won’t become a reality unless at least one opposition party votes in favour of supporting legislation set for the end of September. The Liberals argue they won’t have a problem getting the votes they need, and they’re probably right, but why take the chance and subject these measures to minority-government brinksmanship instead of keeping the House of Commons running through the summer and passing them right now?
On the private sector: Companies need to hire back their workers for a true recovery to take hold. As a bonus for employers, Thursday’s package included a freeze on Employment Insurance premiums and modifications to minimize any disincentives to go back to work. But the Canadian Federation of Independent Business was quick to say the benefits are too generous and will encourage workers to stay home. Let’s hope that’s not the case.
On parents: The package is designed to tide over dads and mainly moms who suddenly need to take care of children, but it’s not designed to help them find safe, affordable care or schooling for their kids so they can get back to work. Freeland was quick to recognize that problem on Thursday and hinted heavily that there would be a lot more to come on that front. But school starts next week in Quebec and next month elsewhere, even as parents fret about class size, contagion and whether it’s responsible and safe to send their kids back.
“Watch this space,” Freeland said.
Parents, and anyone who wants to see a build-back-better attempt succeed, are certainly watching.
Heather Scoffield is a columnist for Torstar Syndication Services.