COVID-19 has Exposed Major Gaps in our Social Safety Nets: In a Post-COVID World Will these Gaps be Closed?

Hugh Stephens
Vice Chair, Canadian National Committee on Pacific Economic Cooperation (CANCPEC)
Distinguished Fellow, Asia Pacific Foundation of Canada
Executive Fellow, School of Public Policy at the University of Calgary

The onset of the global COVID-19 pandemic has brought into question many long-held assumptions about how we interact socially, conduct business and deal with marginalized segments of our society. Policy makers have faced a series of challenges from first trying to ensure the health and safety of citizens to then dealing with the economic fallout of the social distancing and self-isolation measures that have been widely imposed to fight the pandemic. There has been much speculation on how COVID-19 will impact our policy settings as the world emerges from total lockdown and moves into what may the first of several post-COVID phases. While much of the focus has been on economic measures, in Canada the sudden arrival of COVID-19 has exposed holes that already existed in our social safety net. Governments in Canada¹ have moved to deal with these gaps out of necessity as part of the requirement to contain the epidemic, but the real question will be the extent to which these interim response measures will remain in place once the threat of COVID-19 subsides.

Every economy’s situation with respect to the pandemic is somewhat different and each government’s response has been tailored accordingly, but I think the Canadian experience is worth sharing as it could have some resonance in other settings. Some economies have been more successful than others in containing the spread and impact of the virus, but one thing they all have in common is the imposition of movement restrictions and social distancing measures to minimize contact. This has had widespread negative economic impact as small businesses have had to close, the tourism and travel industries have imploded, and millions have been thrown out of work. Governments have taken a variety of measures but some form of income support for idled workers is a common response.

In Canada, the federal government has established an income support program (known as the Canada Emergency Response Benefit, or CERB) to provide $500 a week for up to 16 weeks for workers or self-employed persons who have lost work because of COVID-19. Unlike stringent requirements to access employment insurance benefits, the eligibility requirements are quite relaxed and almost one-third of the workforce has applied so far. The need to provide a basic income support to families became apparent as soon as measures to close down the economy were contemplated. Since the institution of CERB, other programs have been rolled out to deal with issues such as summer employment for students, rent relief for small businesses, subsidies to allow businesses to keep employees on the payroll even if not working, and even industry-specific measures. However, the biggest impact will be the experiment in what is very close to a minimum basic income program, a social measure that has been discussed for years but never put into effect. Suddenly a modified version of guaranteed basic income has been rolled out within weeks. While it almost certainly will not outlast the resumption of economic activity, Canadians will have tasted the effects of a guaranteed basic income program, and this demonstration effect is likely to fuel further discussion of the merits of such a social support measure.

Another social issue highlighted by the fight to contain COVID is the underpayment of workers, usually mostly female, in certain sectors of the economy. In Canada, extended care and senior’s homes have been hard hit with a disproportionate number of COVID deaths occurring in these facilities. Most of the homes are operated by for-profit corporations, with governments often leasing set numbers of beds in the facilities. In the past, governments often operated these care homes but a wave of privatization has changed the face of the industry, with costs being driven down by private sector operators. Health care and support workers in these homes are notoriously underpaid, and as a result often work in multiple facilities to make ends meet. This has resulted in the rapid transmission of the coronavirus from one facility to another with predictable results. To prevent the continued retransmission of the virus between care homes, provincial governments (who have responsibility for regulating the sector), have had to impose restrictions to prevent workers from working in more than one facility. But it is not enough to simply deny workers the ability to hold down more than one job when they need to do so in order to survive economically. The remedy is to pay a decent living wage to workers in this important sector, and that is exactly what has been legislated in two Canadian provinces so far. It is hard to see this being rolled back once COVID is over.

Another hole in the safety net concerns paid sick leave for hourly-paid workers. British Columbia has done a good job of keeping COVID outbreaks under control generally but one of the biggest outbreaks has occurred at two local poultry processing plants. Workers who were clearly not feeling well continued to report for work. Why? They were living close to the edge and could not afford to stay home in the absence of paid sick leave. If as a society we are to expect workers to stay home and self-isolate, we cannot penalize them economically for doing so. This issue is now being closely looked at by governments.

If hourly paid workers find it difficult to stay home and self-isolate, imagine the situation of those with no home to go to. While a wealthy country, Canada unfortunately (like many developed and developing countries) has a homeless problem, a drifting population of individuals—some with addiction and mental health issues—who have no fixed address and who often congregate in temporary tent cities. This has been an ongoing problem for years but only when the presence of these people threatens the health and safety of all is government moved to act. That at least is the case in British Columbia where the provincial government has enacted measures to close down the tent camps and move the homeless into hotel and motel accommodation, with social and health support provided. Without COVID this almost certainly would not have happened. Will it continue after COVID is contained? The intervention measures are costly but the cost of doing nothing is arguably worse.

Temporary migrant workers are yet another category of people who often fall through the safety net, and who are seldom given much thought (at least in Canada). It has suddenly become apparent to many Canadians that crops cannot be planted and harvested without the participation of thousands of temporary workers who come to Canada each summer from Latin America and the Caribbean. Yet these workers might be carrying the virus and since they are typically housed in dormitories providing only the basic necessities, if the virus takes hold it will spread rapidly as has happened in Singapore. Suddenly quarantine and health measures have to be applied to temporary workers, meaning better housing and health checks. Canada is not the only economy facing this issue; Singapore, the US and Japan among others in the Asia Pacific Region face a common need to deal with the welfare of migrant workers in order to protect their own residents.

COVID-19 has brought into relief a number of social issues that had been festering below the surface for years, and which could be conveniently ignored when there were other priorities. In Canada, the sudden overriding need to provide health and economic support to everyone has brought these issues into the open, whether it is the experiment with basic income support, a “living wage” for workers in the long-term health care sector, paid sick leave for hourly workers, measures to address homelessness or fairer treatment for temporary migrant workers. For now, these gaps in the social safety net are being closed and it is hard to imagine that the “new normal”, post-COVID, won’t take some of these lessons into account. To what extent the Canadian experience will be replicated in other Asia Pacific economies will be interesting to see.

PECC has always advocated for sustainable, inclusive economic development. The COVID pandemic is forcing PECC economies to focus on, among other things, gaps in social safety nets from a health, income and housing perspective. Canada is a case in point. How economies respond to identify and fix these gaps will be one of tests of their response to the pandemic. PECC can help by playing a thought leadership role in advocating for more balanced social programs emerging from a post-COVID economic recovery.

Hugh Stephens is Vice Chair of the Canadian National Committee on Pacific Economic Cooperation (CANCPEC). He has written numerous commentaries for the Asia Pacific Foundation of Canada, where he is a Distinguished Fellow, and for the School of Public Policy at the University of Calgary of which he is an Executive Fellow. His work can be accessed here and here. He also writes a weekly blog on international copyright issues. (www.hughstephensblog.net).

1. I use the term “governments” given the role of both the federal and provincial governments in both health and economic issues. The Government of Canada has full authority to act in some areas but in others primary responsibility rests with provincial governments and provincial responses, while similar, are not uniform across the country. In some instances, such as health care, responsibility is shared with the federal government having responsibility for health policy while the provinces are responsible for delivery of health care.