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Social Policy, Now: Next steps for income support and income insurance in Canada

September 1, 2020

Three next steps for social policy involve: 1. Maximizing auto-enrollment and just-in-time program delivery; 2. Offering full income support with engagement; and 3. Offering broad income and earnings insurance with agency. In this post I introduce the detailed discussion of these proposals that you can also download.

 

On March 24th, 2020 the Government of Canada Tabled Bill C-13, “An Act respecting certain measures in response to COVID-19,” in the House of Commons, and the next day the Bill received Royal Assent, unleashing the most extensive and quickest change to Canadian social policy in living memory, if not in the history of the country.

The Canada Emergency Response Benefit is the most notable part of the Bill, offering $2,000 of income support every four weeks to all working age Canadians who made at least $5,000 in the previous 12 months and lost their source of income due to the COVID-19 crisis.

Almost immediately the public policy discussion turned to “what’s next?” Certainly this was so in the short-term as the government and the public service became fully engaged in meeting the evolving needs of citizens and businesses in response to the most serious health and economic crises the country has experienced since World War II.

But increasingly, as the weeks and months passed, it was also so in the longer term: What’s next for the design of social policy in light of the needs and the gaps that the COVID-19 crisis has revealed?

This is the question I address in a detailed presentation that you can download.

In this post I introduce the issues and options for discussing the next steps for social policy, the word “Now” in the title having three meanings that guide this approach.

First, “Now” refers to the sense that there is an urgency and an opportunity right now for social policy reform

There is widespread agreement that things will need to change. An open letter to the Prime Minister, Deputy Prime Minister, and Minister of Finance spearheaded by Senators Lankin and Pate, and signed by close to 50 members of the Senate begins:

This is a unique moment in our history – a moment when Canadians from across the political and economic spectrum have seen before them the value of a program which would not require complicated application and qualification processes, but which would be there for people in times of need. As members of the Senate of Canada, we are writing to you to thank you and urge a further evolution of the Canada Emergency Response Benefit.

The opening sentence of the Lankin-Pate letter underscores what was all too obvious to the government, the opposition parties, and the public service in developing and quickly passing Bill C-13, the need to respond in a timely way to the needs Canadians are facing in real time.

The second meaning of “now” refers not just to timely policy, but also policy appropriate to individual challenges and needs

At the same time “Now” also refers to an important aspect of social policy, a yawning gap in our current programs COVID-19 starkly highlighted: the need that policy should meet Canadians where they are, offer support that is timely and that foster agility and agency among citizens.

The letter goes on to say: “People in need require support today.” But what goes along with this is the need to also accept that government cannot fully appreciate, anticipate, and assess the evolving needs of Canadians in all walks of life.

It means realizing that one-size-fits-all policy, or policy targeted with heavy-handed regulations, rules, and restrictions, falls short of meeting individuals and families trying to manage dynamic and evolving risks that are often unknowable to government in either an individual-specific or a timely way.

COVID-19 is also calling for timely policy that fosters the agency of citizens to make choices best suited to their situation.

All this said, there is clearly not a universally shared view about what to do next.

The third meaning of “Now” refers to the way in which reform should proceed

Big steps forward like a Basic Income have been both advocated and derided by Canadians engaged with public policy. The call for radical reform is in some sense understandable, moments of social crisis and challenge have historically been occasions for re-writing the social contract and the introduction of bold new policies.

Indeed, the very roots of Canada’s welfare state are in the challenging times of the interwar period, and the worrisome decade that followed. These spawned the Marsh Report, the founding document of Canadian social policy, which in turn was informed by the Beveridge Report, written for the British government. The first of William Beveridge’s guiding principles was that:

… any proposals for the future, while they should use to the full experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world’s history is a time for revolutions, not for patching.

My approach is both in accord and dis-accord with this view. There is a need to boldly go forward, but not necessarily to where we have not been before.

And this is the third meaning in our use of the word “Now”: now, in the sense that reform in the wake of COVID-19 should take social policy as it exists right now as a starting point and build incrementally from current or past precedents, taking significant steps toward a better system of income support and social insurance.

The challenge and the opportunity as I see it is to emphasize and strengthen those aspects of social policy that already speak to the evolving economy and changing demographics, to re-introduce pertinent past practices that have fallen by the wayside, and to de-emphasize vestigial designs that speak to a past that is less relevant.

There is much more scope for moving social policy forward incrementally than Marsh or Beveridge imagined because the past and present of social policy is so much richer in our time than during theirs.

Now is the time for reform, to meet citizens where they are right now, building on what we have now

My review of the changes in the labour market and the social policy gaps revealed by the COVID19 crisis leads us to suggest three broad recommendations for the conduct of public policy.

1. Maximize auto-enrolment and just in time program delivery
2. Offer full income support with engagement
3. Offer broad income and earnings insurance with agency

I also suggest a need for “market shaping” policies that lean against growing insecurities and inequalities in jobs and pay. A prelude to social policy involves a host of reforms that strengthen ethical wage norms and offer workers greater voice.

Download the full presentation, and give me your feedback.

One Comment
  1. Andrew Jackson permalink

    I generally liked your piece, Miles. Not sure quite where you end up prescriptively. You asked for a response so here are some quick thoughts.

    I agree feds should effectively take over social assistance as a big bang reform. The quid pro quo should be enhanced/more secure provincial funding for social services and employment supports, as happened with child benefit reform. There are concerns re how to neatly separate income and other supports.

    I agree new income supports should indeed build on EI rather than fold it in – important to distinguish a social insurance program for individuals to stabilize income from family income tested anti poverty programs. I think EI should have a low entry threshold, but duration of benefits can reasonably be set on the basis of local labour markets. I would like to see a more generous EI program in terms of the maximum benefit given that insecurity is growing at all income levels – could be financed from higher premiums.

    Agree we need to build on existing– very low’… wage supplement and re need to ensure floor of decent minimum wage. Agree re need for negative income tax instruments for working poor and persons who cannot work.

    Seems to me a crucial element is real time data to CRA so that additional employment income sees supplements vary or phase out on a month to month basis. CRA gets monthly income of employees, but not self employed, gig workers etc.

    We probably need two federal supplement programs – one assuming rather little employment to replace social assistance, and one for those with more or less steady employment but at irregular hours and/or low wages.

    Extending benefits to the self employed with fluctuating incomes is needed, but fraught with difficulties and moral hazard. There should be regular (monthly)(quarterly) rather than annual declaration of income, backed up by strong audits. I hear CRA are working on this.

    As you are well aware, the more generous a wage supplement and the more slowly it is phased out, the higher the cost. Just ensuring a deep poverty line for sa recipients would be costly depending on how it is phased out. See modelling by Wolfson and Shillington. A lot of the anti poverty community thinks they would be better off if priority was affordable housing.

    In short, how much we are prepared to spend is key to how progresive reform would be.

    I think we have to press hard for employment programs, especially green jobs, to make an anti poverty income security reform affordable, as with Beveridge and Marsh on full

    Thanks for your piece… Best

    Andrew Jackson

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