July 16th, 2020
Who will pay the piper?
There’s no doubt that the pandemic has hit finances hard. That’s true for households and governments alike, so there was little surprise when last week’s fiscal update indicated we were on pace for the biggest deficit since the Second World War. The immediate response from much of the pundit class was that we would have to enter into a period of austerity down the road to make up for the spending. These opinions were offered without any acknowledgement of the role austerity played in creating the conditions that left too many of us vulnerable and averaging $200 away from debt in recent years.
Instead of asking how we can ensure more people have livable incomes, the questions have turned to how can we rush back to normal - the arrangement that brought us precarious employment, little or nothing in the way of benefits and sick pay for an ever-growing portion of our work-force, widening income equality and a host of undesirable societal outcomes. The lack of imagination is obvious, and the only concerns seems to relate to a narrow band of economic indicators instead of concern for how people are faring. Additionally, there has been little consideration of the investments we will have to make to address climate change, which still remains the more serious issue we face as a species.
The pandemic exposed our problems for all to see. Millions of people across the country have been struggling to pay bills, feed their families and keep a roof over their heads. They’ve relied on federal supports to get by and, in a lot of instances, what has been identified as a minimum is more than people got by on pre-pandemic. If you’re wondering how we can afford to cover these costs, the first item on the list has to be the free-pass given to the super-rich who avoid paying their fair share with big tax giveaways, loopholes, and ferreting money into offshore tax havens. This goes for Canadian companies too, who have hidden an estimated $25 billion in offshore accounts
While we need to get people to back to work and children back to school, we can’t wish our way to that goal. Canadians can’t go back to work without a plan. We know this is especially true for women who lost work disproportionately when the pandemic hit. For them, the snag is often child-care. National child-care would help. Quebec’s program has borne fruit as more women entered the work-force which covered the cost of the program in short order. It’s proven smart and it’s time for Canada to follow suit.
It’s also clear that the government will have to be pushed to do the right thing. The CERB is only in place because of NDP pressure to shelve the government’s original plan to use Employment Insurance which 60% of Canadian workers aren’t eligible for. Now, instead of waiting until the last minute to develop their revenue plan, we are challenging them to find the courage to introduce a wealth tax.
The idea isn’t new or unique to the NDP. It is also important to note the problem isn’t limited to Canada. Even famous billionaires like Warren Buffet and Bill Gates are calling for a tax regime that doesn’t favour them at the expense of everybody else. They understand that the preferential treatment given to the super-wealthy is only creating conditions that undermine the stability of society.
Yes, we will have to pay the bill for our pandemic response, but it won’t be worth it if we return to the normal of undesirable outcomes for most of the work-force and sweetheart deals for a fortunate few. The idea that austerity will grow the economy is among the first that needs to be abandoned if we are to emerge from the pandemic with the ability to address climate change in more than symbolic ways. That investment may dwarf what we are doing now, so we will be well served to increase our revenue stream by asking those who can clearly afford it to pay their fair and full share. By taxing the ultra-wealthy, repatriating money hidden in offshore havens, and taxing web giants like Amazon, we could have an extra $10 billion a year to help all of us understand how wealthy we are as a country. It’s only fair.