We won’t see a painful welfare surge post CERB if we deal with poverty now

Most of us who follow these programs know we are in the eye of an income security storm anesthetized by the Canada Emergency Response Benefit (CERB) and its newly announced extension through the summer of 2020. 

What happens afterwards is anybody’s guess but CERB is such a massive program, its demise will cause more earthquakes than tremors.  

In just a few months, the CERB has become Canada’s largest income security program estimated to spend as much as $71 billion.

What is even more amazing, this new program is about to either disappear or become something very different. If the CERB morphs into something else, we need to be vigilant as to what that will be. It could be a Universal Basic Income (UBI) as some would hope but the CERB is no forerunner of a UBI.

From a design perspective, the CERB takes us further away from a UBI as it increases the role of earnings replacements as opposed to a guaranteed floor income for all and is regressive in most respects. With clawbacks and rent charges on the CERB, the poor fare least well under the CERB as do poorer communities with the most residents suffering clawbacks. 

Just because the government proved that it can blow tens of billions out the door in record time – and the sun still rose in the morning – this does not bring us closer to a UBI.

However, if the CERB replacement becomes the much smaller program that we expect, we may see a huge upsurge in social assistance (welfare) recipients and homelessness.

And you can bet on welfare bashing happening again if we don’t do something different this time round.  The stigma of welfare never heeds its origins whether economic or pandemic.

In Ontario today, social assistance recipients now account for 6.7% of the provincial population – about 1 in 15 Ontarians. At that level, welfare bashing is almost non-existent.

No one wants to repeat the massive relief lines of the Great Depression.  In the 1930’s, over 15% of Ontario’s population collected direct relief – about 1 in 7 – when 35 year old Liberal Minister David Croll created a cash relief program in 1935. After an unhappy Premier Mitch Hepburn relieved Croll of his duties, he made himself Minister and became the architect of relief rate cuts of up to 25% in 1938.  

Let’s remember what Mitch Hepburn said about relief recipients:

“There’s a growing impression among the taxpayers of this province that they are being drained of their money to provide a living for idlers… We will pay the municipalities a lump sum each month… In other words, we will say to them: ‘Here’s the alimony, you raise the children.[1]

Similarly in the early 1990’s, the percentage of Ontario’s population comprised of social assistance recipients rose to 13.9% in March 1994. These numbers were partly responsible for public sentiment that allowed Mike Harris to reduce social assistance rates by 21.6% in October 1995.

And here is what Mike Harris had to say after workfare and rate cuts were implemented:

“There was rampant fraud and welfare abuse… it was inconvenient for people to have to go down to offices to pick up cheques so we mailed them out and we found out that mail was being re-directed to other provinces and even other countries…We had to re-adjust rates and give incentives for those who were able-bodied to go out and get into what we called ‘workfare’ or ‘educationfare’ or ‘get-off-your-duff-and do-something fare.’   So, ‘workfare’ – … and other policies in combination were a huge success.”

What you see here is a Liberal and a Progressive Conservative Premier indulging in extreme welfare bashing of a sort that stops us in our tracks.

The oft-repeated admonition from Santayana warns that those who do not learn the lessons of history are condemned to repeat them. So let’s not go back to relying on welfare solutions or you will hear some future Premier saying things as dreadful as Hepburn and Harris.

We don‘t have to repeat a painful history if we start to reduce poverty now while ridding ourselves of the complex set of rules and culture of suspicion that plagues social assistance.  It costs about $35 -$40 billion for a reasonably well designed program to end poverty in Canada. For half the current CERB price tag, Canada could replace welfare with a housing benefit and refundable credits paid in advance like the CERB.

While many have their post CERB gaze fixed on a Universal Basic Income, ending poverty and homelessness is a far better short to medium term choice.  

For people with disabilities, we could champion the more modest goals of keeping the current ODSP definition of disability, soften the Disability Tax Credit definition and place an adequate floor income at the federal level for all people with disabilities in a way that integrates well with the income security systems that we have in place now.

Let’s not wait – Let’s design a replacement to social assistance and better support for people with disabilities and the working poor before it’s too late.  If we don’t, we will reprise the needless surveillance and suspicion of the past.

[1] James Struthers, The Limits of Affluence, Welfare in Ontario, 1920–1971, University of Toronto Press; 1994. P95

[2] https://fcpp.org/2003/07/30/mike-harris-ontario-premier-1995-2002/