Just the other day, I was asked an interesting question by a concerned Scarborough resident who knew that I had worked in social policy with the provincial government.
She also knew that I was someone who had studied and had written about the effects of social policy in Scarborough since I left government.
“What will be the effect of the COVID19 crisis and how will we come out of it in Scarborough?”
I was actually surprised by my reply as I had not yet put the question to myself.
Here is what I said as I thought through the question:
First, you have to remember that Scarborough has more poverty than the rest of the City of Toronto, the GTA, and much of the rest of urbanized Canada.
We have a working poverty rate of almost 10% (the highest in urban Canada) and we have a population of 13% of who are non-working poor.
That’s 23% of Scarborough living in poverty and that is comparatively high.
Social assistance recipients comprise 10.6% of our population while the percentage is 6.7% for the province and 5.2% nationwide.
Scarborough also has the lowest percentage of working age adults age 18-64 in the labour market at 65%. The figure for the Toronto census metropolitan area is 74%.
The ‘isolation dividend’ vs. the ‘isolation deficit’
What all this means is that Scarborough is likely going to suffer more than other districts as we go into the worst part of the pandemic.
The reason is that ‘higher income people’ with stable income will have an ‘isolation dividend” and ‘low income people’ will have an ‘isolation deficit’.
What does this mean?
As I said on Twitter with over 67,000 engagements:
“Please understand that staying at home increases the expenses of the poor while decreasing expenses of middle and higher incomes. The poor miss out on food banks, meals and drop in resources while higher incomes save on gas, home meals and entertainment.”
More people in Scarborough will have an ‘isolation deficit’ and fewer people will have an ‘isolation dividend’.
There are fewer people to give and more people who will be in need.
Having a ‘fixed income’ used to be a bad thing.
Suddenly, it’s become a good thing as some with market incomes are losing their income and people with income fixed through good jobs and government through pensions and benefits are not seeing losses.
For Scarborough, this means that fewer people will have extra money to donate to local causes while more people will need help.
Our charities will get less money while more people will be relying on them.
That’s the first round.
The second round is different and we do not have all the answers yet.
I must admit that I was dumbfounded that I could not answer a very obvious question as to how Scarborough will do in the crisis. The reason I could not answer is that we still don‘t know the answers to what I call ‘back end’ vs. ‘front end’ eligibility.
Back end vs. front end eligibility
Front end eligibility is easy.
For example, the Canadian Emergency Response Benefit (CERB) has a few understandable ‘front end’ rules. You have to:
- Have at least $1,000 in earnings (earlier it was $5,000)
- Be COVID19 positive or be caring for someone who is; or
- Have lost your job because of COVID19 and have no upcoming earnings of significance.
The back end seems to be readily transparent. It’s a taxable benefit meaning that if you have high enough income to pay income taxes, then you will have to pay some of it back.
This seems to be simple enough for Scarborough and everywhere else and possibly better for Scarborough because if Scarborough is poorer (which it is), fewer people will have to pay part of the CERB back to the government
This also goes for all the other new benefits like:
- The various loans programs to businesses
- The time limited GST credit boost
- The time limited Canada Child Benefit boost
- The new housing benefit that is due this month; and
- Any one of a number of new funding programs that postdate this post.
The problem is that ‘back end eligibility’ for programs is really important and is defined by what we think of as ‘clawbacks’.
Clawbacks are defined by how other programs react to the CERB and we don’t know yet what is going to happen.
Will they claw back or won’t they?
Let’s start with a good example:
In BC, social assistance recipients will be able to keep all their money and get the CERB on top of what they already receive. Indications from Manitoba and Newfoundland are that the CERB will be clawed back from social assistance meaning most recipients will lose not just their monetary benefits but also their pharmaceutical and other medical benefits.
Ontario has yet to make a decision but if it claws the CERB back, then Scarborough will suffer much more than other municipalities. With over 10% of its population receiving social assistance, those who can meet CERB eligibility would be no better off and for some, they would be worse off.
If some of Scarborough’s almost 60,000 social assistance beneficiaries – many disabled and children – are worse off, then Scarborough itself is worse off.
- Fewer dollars are flowing to Scarborough businesses and most of those businesses are small.
- More Scarborough residents will be forced out of their homes to find food and other necessities as they will have no choice even though our community health depends on them staying inside.
- Our poorest residents – already facing large price increases in foods and other necessities – will be poorer; and
- All of us will be less safe.
But that’s not the only problem.
Social assistance recipients are also recipients of EI, CPP, Workers’ compensation and veterans’ benefits.
All of those people have those benefits 100% confiscated by social assistance programs.
And if the CERB is confiscated too, many will be ineligible for all the benefits they would get as part of social assistance:
- Medical transportation
- Incontinence supplies; and
- Special diets
And those in subsidized housing might see rental increases amounting to $2,400 each.
The CERB is $8,000 over 4 months and rent geared to income at 30% equals $2,400 in extra rent.
Most of us don’t pay more rent when we get CERB but they might.
And there are poor seniors and there are more low income seniors in Scarborough.
If they get the Supplement called GIS (Guaranteed Income Supplement), then it may be that they will lose 50 cents on the dollar through the GIS clawback.
$8,000 becomes $4,000.
And if they live in subsidized housing, that senior loses another $2,400 in rent increases up front.
And if they get GAINS-A – a provincial program that was just doubled by Ontario – they will lose another 50 cents on each dollar.
They could easily lose more money on the back end of CERB than they got on the front end.
And the people who lose the most are the poorest.
They are racialized and mostly women.
They work as part time cleaners and peer support workers.
They have no pensions and they have little to look forward to in the future.
Now the pandemic is here and they have front end eligibility for a few more dollars as their expenses quickly rise.
But it all could be taken away.
If the clawbacks on CERB and other programs happen as appears to be happening in Manitoba, Newfoundland and Alberta, the poorest among us will be hurt.
Rest assured that they will not self-isolate because they can’t.
They will have less.
Their expenses will be higher.
And communities like Scarborough will hurt the most.
Federal Minister Carla Qualtrough said that provinces should not claw back the CERB:
Will provinces heed her call?
If they do, Scarborough could be spared the worst. If not we will feel the worst of it.
We will soon know and the answer is not just a matter of a few poor people getting poorer.
It’s life and death.
And it may be our life and death.