The Liberals Are Returning To The Status Quo Ante, Not “Building Back Better”

On October 23, the Justin Trudeau Liberals officially shuttered the Canada Recovery Benefit (CRB), cutting off funds to the more than 800,000 unemployed workers still dependent on this vital program. The Liberals have heeded the calls of the business lobby and reconfigured pandemic support to aid low-wage employers and punish the remaining unemployed. 

The CRB, a pared down version of the former Canada Emergency Response Benefit (CERB), was paying up to $500 per week to those still unemployed but ineligible for Employment Insurance (EI). At its peak, the CRB was supporting 1.2 million unemployed workers — largely made up of the solo self-employed. Applications for the CRB dropped in July when the benefit was cut from $500 to $300 per week. However, at the time of cancellation, more people were receiving CRB than at the same time last summer. 

This clearly indicates that employment levels and the general health of the economy haven’t returned to pre-pandemic levels — indeed, long-term unemployment remains especially elevated. Yet, Trudeau and Finance Minister Chrystia Freeland have chosen to pull what remains of an already tattered rug out from under the feet of unemployed workers. By doing so, they are also extracting a good deal of spending power and demand stimulus out of an economy that is still struggling to get back to some semblance of normalcy. 

In general, cancelling the CRB is a premature and economically foolish measure. 

Although originally scheduled to end along with the CRB, two other pandemic supports received guaranteed extensions until November 20, with a proposed extension until May 2022. The Canada Recovery Sickness Benefit (CRSB), targeted at those who have contracted COVID-19, are quarantining or are caring for someone with the virus, and the Canada Recovery Caregiving Benefit (CRCB), aimed at those unable to return to work because of caregiving responsibilities due to the pandemic, were both extended. 

Yet the CRSB and the CRCB have had relatively low levels of uptake and paid out much lower total funds than the CRB. The federal sickness benefit has effectively served as a partial and overly bureaucratic substitute for employer-paid sick leave. Because paid sick days are a matter of provincial employment standards legislation — and nearly all provinces don’t mandate them — some emergency alternative measure had to be maintained after the CERB was cancelled. At its peak, only approximately 68,000 people were receiving the CRSB; the latest figures suggest only around 14,000 workers are currently eligible. 

Utilization of the CRCB, which was largely designed to support parents taking care of children who were at home because of school or daycare closures, has also steadily declined. With most kids back in school, approximately 54,000 people remain eligible for this benefit. 

It is therefore difficult not to conclude that maintaining the CRSB and CRCB, while ending the much larger CRB, is nothing more than window dressing. The former two programs will not meaningfully assist those about to be harmed by the loss of CRB benefits. 

In place of the CRB, the Liberals announced a new Canada Worker Lockdown Benefit (CWLB). However, only those living in a province or city that has imposed a lockdown are eligible for the new CWLB. As it stands then, literally no one is eligible for this “alternative” benefit. 

All of this toying with emergency worker support benefits, of course, results from a still broken EI system wherein the vast majority of unemployed workers don’t qualify for benefits. The Liberals are currently holding public consultations for a planned overhaul of EI that, hopefully, will correct at least some of this problem in the feature. But for workers who were depending on the CRB, EI reforms that are more than a year away are no consolation.  

The Liberals had introduced a one-time “credit” of 300 insurable hours through EI after COVID-19 struck, bringing the number of required insurable hours down from the regular 420 to 700 (depending on your region). They also raised the minimum benefit to $500 per week (it’s back down to $300 as of September). But even these necessary modifications to the eligibility rules and benefit levels at the height of the pandemic weren’t enough to meet the needs of the unemployed. Moreover, they were only temporary. Future reforms need to end variable hours requirements all together and increase benefit levels well beyond the regular 55 per cent of lost wages. 

The recent changes to worker pandemic benefits were also accompanied by a reconfiguration of the aid programs directed at businesses. The Liberals ended both the Canada Emergency Wage Subsidy (CEWS), the somewhat contentious employer payroll subsidy, and the Canada Emergency Rent Subsidy (CERS). However, the way that the Liberals have reconfigured these pandemic aid programs is telling. 

The CEWS was, by far, the most expansive and expensive pandemic benefit program. At its peak, nearly 300,000 employers were receiving CEWS funds, and projections from December 2020 put the total cost of the subsidy program at nearly $100 billion. 

However, tightened eligibility rules had brought employer applications down over the past several months. As David Macdonald at the Canadian Centre for Policy Alternatives (CCPA) reports: “The number of businesses accessing CEWS support declined from 170,000 at the end of July to 59,000 at the end of September. If those trends hold, there will likely be 40,000 businesses that might qualify for continued support but won’t receive it after the program ends on October 23.”

CERS aided fewer employers and had been declining in use, though not as quickly as the CEWS. Around 75,000 businesses drew the benefit by the end of September, down from 140,000 in August. Notably, businesses could also receive both subsidies simultaneously because the CERS was subsidizing rent, not payroll (at least on paper). 

The federal government has replaced these two broader, large employer subsidy programs with two smaller, more targeted initiatives, the Tourism and Hospitality Recovery Program and the Hardest-Hit Business Recovery Program. 

It’s clear the Liberals have heard the calls from particular sections of the business class — particularly low-wage employers in tourism and hospitality — and are both maintaining government subsidies for these sectors and ending worker support in an ill-informed bid to address the supposed “labour shortage.” As with the CEWS, very few “strings” seem to be attached to these new targeted business subsidies. For example, the union UNITE HERE, which represents workers in these industries, has been calling on provincial and federal governments to ensure recall rights for laid-off hotel and restaurant workers. No such stipulations are attached to this new funding. 

Moreover, recent research out from the CCPA suggests that employers in these “hardest-hit” sectors of food and accommodation are likely to experience labour shortfalls well into the future unless wages are raised significantly. Interestingly, the CCPA shows that rather than workers staying home, labour shortages in food and accommodation are the result of workers moving into other, better-paying industries and positions. In fact, the unfulfilled vacancies in food and accommodation are nearly entirely accounted for by this phenomenon of workers “moving on.” 

The temporary respite that better unemployment benefits provided to workers gave many the opportunity to upgrade skills or simply hold out for better pay and conditions elsewhere. This is exactly what worker-friendly unemployment benefits should do: give workers the economic breathing room to improve their individual bargaining position. 

It’s fair to surmise that the above is not the position of the governing Liberals. Freeland, in fact, claims that we’ve reached a point in the recovery where pandemic support needs to be more tailored and less generous. During a news conference announcing the benefit changes, she said: “Today, our support needs to be more narrow, more targeted and less expensive and we need to look forward to the day, now not too far off, when we will be able to bring it to an end entirely.” 

As many socialists and progressives have warned, this government, despite rhetoric about “building back better,” intends to do no more than return to the status quo of February 2020. With this past week’s pandemic benefit changes, they have given every indication that that is their objective. Despite objections from the labour movement and others, they withdrew vital support from unemployed workers, leaving the latter to fend for themselves in a completely broken EI system that won’t get legislative attention until at least January 2023. 

Returning to a pre-pandemic economy that wasn’t delivering for many workers isn’t good enough. We need to fight for the creation of good-paying, stable jobs — for a re-commitment to full employment. We need an unemployment insurance system that works for everyone, that doesn’t necessitate ad hoc emergency measures any time there is a crisis, and that gives workers and their families the economic leverage to make meaningful decisions about their lives and careers. 

But the Liberals aren’t going to do these things for us. Only an organized and militant workers’ movement can “build back better.”  

Adam King is a union researcher. He earned his PhD in Sociology from York University.