Thank you, Mr. Chair and members of the committee, for the opportunity to join you today.
COVID-19 has not hit all Canadians equally, whether in terms of health or economic effects. My remarks today will focus on two such forms of inequalities that I think are particularly relevant to the work of this committee: those in information and those in household financial resources. These have mattered during the crisis and they will continue to matter during the economic reopening and eventual rebuilding.
Too many Canadians find government programs confusing, and they are confusing. Online FAQs and call centres are no substitute for personalized information and guidance. I don’t have to tell you, as MPs, how important it is that Canadians have access to local, accessible and accurate help to use government programs. You and your constituency teams have been playing a vital role in connecting people to the help they need, but you can’t do it all—no one network can. We need to build a properly resourced web of non-profit services to answer questions, problem-solve and advocate for clients who can’t do it themselves. As I said to your colleagues at the standing committee on human resources, I would encourage the committee to look at the Citizens Advice bureaus in the United Kingdom or the Financial Empowerment Centers in the United States for ideas of the kinds of networks that could be possible.
One-third of Canadians came into this crisis without enough liquid financial savings to pay for even a poverty-line standard of living, let alone their usual level of consumption, for even a month. A bit of additional liquidity in the form of mortgage and tax deferrals will have helped some, but part of the rebuilding phase is going to have to be rebuilding household finances. I hope members of this committee will work with colleagues to find better tools to help households reduce debt and build emergency savings. Passive tax incentives alone will not work, nor will austerity. In fact, austerity will only further reduce consumer confidence and demand among households with the greatest marginal propensity to consume.
Let me close with some observations on the temporary income support measures as we enter a new transition phase. This committee will have heard from senior officials in government that there is much we can’t do as quickly as we should be able to do, or even at all, because our government IT systems cannot handle rapid changes or fine-grained exceptions to general rules. Many Canadians are going to continue to need income support for the next while because reopening is gradual and is going to be uneven by region, by sector, and frankly, by gender. We have to hope that the emergency wage subsidy will mean that some share of layoffs won’t become permanent. I am concerned by the lower than projected uptake of the subsidy so far, but I am pleased that the government has extended the eligible period for this program. That is the right thing to do. We want to incentivize work but only if that work is safe to do.
The CERB will have to be wound down gradually and adjusted for differences in labour market opportunities. The same challenges of coverage and speed in processing that plagued EI at the start of this crisis have not been magically resolved in the intervening time. When thinking about this next phase of financial support, I worry that we will again be faced with trade-offs between making speedy payments with minimal variations and making payments more slowly but adjusting for individual differences in labour market earnings.
We can, however, try to reconcile speed and variation in individual payments if we trust Canadians and accept declarations and attestations, with strong backstops in file review and recovery of funds, instead of holding payments until records of employment and other traditional forms of third party verification are received. Going forward, investments in systems such as e-payroll or better access to real-time economic and financial data would reduce the reporting burden on Canadians, address fears of fraud and allow public programs to be far more nimble and responsive.
Thank you, and I look forward to your questions.