Newly appointed minister of finance Chrystia Freeland faces the daunting task of putting Canada on the path to a more sustainable and equitable future. Inevitably, even while rightly continuing to run a large deficit for now, she will have to make some tough choices between competing, urgent priorities.
What the economy needs is not so much fiscal stimulus in the conventional Keynesian sense of a temporary increase in demand as a plan to boost jobs and security for the long-term in a highly uncertain world. Unfortunately, we cannot count on a swift recovery or an effective vaccine, and must deal with a probable ongoing loss of activity and jobs in such hard-hit sectors as oil and gas and a wide range of private service industries such as retail, entertainment and tourism.
As of July, employment in construction was at 92% of the February level, but had recovered to only 75% of the February level in accommodation and food services. As widely noted, women and racialized minorities in already precarious and lower-paid jobs have taken the biggest hit.
The federal government, again quite correctly, has provided massive income support to the unemployed and under-employed and plans to segue to a temporarily much more generous employment insurance program buttressed by programs for those who cannot access EI.
Income support and protection against evictions is essential, but must, at a minimum, be complemented by targeted job creation and training initiatives.
The vast majority of the victims of the pandemic want to return to decent employment, right-wing fears of creating “disincentives” to work notwithstanding. But it will be easier to finance a modernization of our badly-stretched income support programs if new jobs are being created.
Two huge opportunities lie at hand -expansion of public services, and green jobs.
Canadians are now acutely aware of the crisis in elder care, particularly in for profit residential homes, and increasingly support the long-standing call for inclusion of home and residential elder care in the public health care system.
They are also more aware than ever that lack of a national not for profit, affordable child care and early learning program is bad for children, especially those in need, and a major barrier to the equal participation of women in the paid work force.
At a very general level, we need to expand public caring services to meet compelling needs, to create more and better jobs in care services, to lift the unfair burden of care in the home on women, and to expand employment opportunities for women.
Strikingly, according to the OECD, just 18% of Canadians are employed in public services, compared to 29% in Denmark and Sweden. The difference is even greater when it comes to jobs for women. The Scandinavian model achieves more equal pay, higher quality caring services, and better jobs for women.
The budget should set forth a plan to bring care into public services, on the basis of federal funding for high quality provincial programs which meet broad national standards. Deficits are fine for now, but a permanent expansion of public social services must come with a fair tax plan for the future, including a serious tax on wealth.
As noted, we need more than a conventional Keynesian stimulus program so as to create not just more jobs, but also better and more sustainable jobs for the future. A key challenge is to green the economy and to transition away from the carbon extraction economy over the near and medium-term.
This will require major investments in energy conservation and renewable energy, especially in the resource-dependent provinces. To ensure that new jobs are available to displaced resource sector workers, a green jobs strategy must be tied to Canadian procurement of needed machinery and equipment.
Manufacturing must also be part of the plan, for example by building Canadian capacity in the production of electrical vehicles in almost idled facilities such as GM Oshawa, and production of needed medical equipment and supplies in Canada. Training programs must be tied to new investment to open up good new jobs to women and racialized groups.
A green jobs strategy should also include retrofitting and construction of new, highly energy-efficient affordable housing.
Minister Freeland seems to share the desire for economic and social renewal, at least to a degree. But she must be bold enough to seize the moment for transformational change.
Andrew Jackson is the former Chief Economist of the Canadian Labour Congress and the Senior Policy Advisor to the Broadbent Institute.
