I was sadly in a meeting when the Speech from the Throne was being read, so I am just catching up on the details. I gotta say anyone saying this is not an exciting SFT, which for me are always an eye rolling affair, must not be a women, a parent, a low-income person (working hard to join the middle class), Black, racialized, indigenous, a person with disabilities, and any intersectionality of these. I am hopeful and somewhat inspired, well as best as an economist can be.
The framing is important. “This is our generation’s crossroads.” “This is an opportunity to…build back better, together.” This is the signal many of us have been waiting for, that we finally get that Canada has left many behind, that we can’t continue to paper over the gaps we have in our society and economy, and that we have tackle inclusive growth head on. Right on, man!
To solidify this, the SFT says clearly “This is not the time for austerity.” High Five, sister! We cannot let fear mongers and pearl clutchers worry us into taking action that is only going to allow the gaps in our society and economy to fester any longer. Let’s focus our spending on addressing these and, not said in the SFT but which I hope we see, is lets stop spending in those areas that are not focused on the clear vision set out in this SFT.
What are clear calls to action that are important to this?
First, reforming the EI System of for the 21st century. EI still reflects the work environment of the 1960s and not that of 2020. We should re-envision the EI system to be a better safety net for workers. Because of huge gaps in the EI system, the provincial income assistance systems have to long been the only support that workers not covered by EI or related programs to fall back on. But our income support systems are actually not really designed for workers. Let’s use the right tool for the job, and a comprehensive worker support program is it.
Now if I were the government thinking of blowing up the EI system, I would also think strategically about how we can make changes to employment system that will actually make a huge difference to our tax and transfer system as well. I wrote about this here. Currently, information on tax filers and their income is only received once a year, at tax time when individuals file a self-assessed tax return for the previous calendar year by April 30. This means there is no regular reporting of information to ensure that benefits can be responsive to within year income shocks. This means all means tested benefits are delivered as refundable tax credits and not a negative income tax. Could the system be changed for more regular reporting, like monthly? Yes. Currently, most employers in Canada report aggregate information on wages, withholding, and payroll taxes to CRA regularly, yet in Australia, Ireland, and the UK, for example, employers report this information in real time to the tax authority on an individualized basis . This enables the real-time interaction of tax and benefit systems, which, in turn, ensures that income supports are modified as income changes. And that is what a negative income tax is. Canada cannot currently deliver a negative income tax and all those calling for a negative income tax type basic income are not presenting details on how this can be done. It can only be done if we change and we should change our reporting system regardless of whether a basic income is implemented or not.
How does this relate to EI? While such a system could be argued to increase the ‘red tape’ and reporting requirements of employers, you could entice employers by giving a quid pro quo of eliminating EI premiums and funding a comprehensive worker support program through other revenue tools. I’d bet that would end any grumbling employers would have.
Second, we are going back in time to dust of the early learning and childcare agreements from Paul Martin’s time in power, bringing that up to 2020, and build a Canada-wide early learning childcare system. They note clearly that the focus is on high quality and accessible ECE, learning from the mistakes of the Quebec childcare model. Yes! Let’s do it. And yes, let’s bring Alberta kicking and screaming into a world where most parents work and where education is understood to be am essential public service!
Third, we are going to create an Action Plan for Women in the Economy using an intersectional lens. OK, I am going to urge the government here is drop GBA+ and move to a intersectionality based policy analysis framework that addresses the benefits that comes from mainstreaming intersectionality. That is, stop doing GBA+ at the end of the policy process, and instead ensure our entire approach from designing our institutions, to identifying problems, to considering the trade offs among our options, from an intersectional lens. Fantastic.
Fourth, we are going to move forward on a basic income for people with disabilities. I actually have a lot to say here, but I can’t, not yet. But if the feds do this right, with a broad definition of disability as in place in B.C. (and does not use the definition of disability under the DTC or CPPC) then holy hell this is fantastic and I hope will ensure that persons with disability no longer have to rely on horrible provincial governments like the one in Alberta to ensure they are treated with respect and have the resources for social inclusion.
Fifth, near and dear to my heart, is that the government will introduce free, automatic filing for simple returns to ensure citizen receive the benefits they need. Those not knowledgeable about the tax system do not understand that only people who actually owe money to the government are required to file taxes. As I and coauthors laid out in this piece, relying on tax filing as as trigger for benefit eligibility is bad policy as it risks missing many eligible recipients. While on average, 12% of working age-adults do not file taxes, the incidence of non-filing is even higher among the most vulnerable: 97% of the homeless population do not file their taxes, 33% of social assistance recipients do not file their taxes, 40% of eligible first nations families do not receive the Canada Child Benefit because they don’t file taxes. Therefore in the in the context of benefit delivery deemed filing and auto assessment, as has been done in Estonia, Denmark, and the United Kingdom, is needed. This is a method of tax filing that transfers the onus of tax filing from the individual to the tax administrator, as well as to ensure that all citizens are auto-assessed for income support benefits. This makes me feel heard. That all my shouting on this blog and on twitter and in my research matters! Fuck yah!
And finally the SFT acknowledges that systemic racism exists. Sorry white dudes, your lived experiences do not match those we are not white. And the pandemic hit nonwhite Canadians much harder than white Canadians. See for example this Statistics Canada piece. Now what I hope is that the government see that if it moves to a real intersectionality based policy analysis framework then there is a lot more that can be done that what is outlined in the SFT. I would have liked to have seen a real commitment to UNDRIP in the SFT and that is a real lost opportunity.
So overall a lot of people in Canada are going to see hope here. And some people in Canada are going to be the usual naysayers and fretters as though none of this is important. I’ll be many of those folks are white men. Yah Dudes this is what it is like to be left out of policy making in this country. I’ll get choked up over that in about 150 years.
*This is an SFT. There is no funding committed. There are no revenue estimates. There are no details. There never are. I’ll wait for the economic update in a month or two before I get overly wound up here. I hold out hope, as I alluded to above, that we can get rid of spending that does not move us on this vision. Call me a dreamer, but I am not the only one ;-).