Winnipeg Free Press
These days no one should need convincing that our economic well-being can be affected by unexpected shocks.
Sometimes these shocks are due to big events, such as the coronavirus pandemic or the great recession in 2008. Sometimes they are due to changes in personal circumstances, such as illness, job loss or the death of a provider.
Individuals can try to plan, but many Canadians are financially strapped at the best of times and do not have the financial margin necessary to support strategies for weathering economic shocks.
After all, as of 2017, the latest year for which data are available, 5,869,110 Canadians lived in poverty (census family low-income measure, after tax).
Prime Minister Justin Trudeau has just announced a basic income for Canadians this past week. Well, he didn’t call it that, and yet that’s exactly what happened – at least temporarily.
A basic income ensures everyone an income sufficient to meet basic needs and live with dignity, regardless of one’s work status.
Basic income, in Canada, would look similar to the Canada Child Benefit.
That is, as wages increase the benefit declines, but it declines progressively – not dollar for dollar.
During the Great Recession a decade ago, a meme went around echoing the words of renowned economist Milton Friedman. He said that when a crisis hits, the response depends on the ideas lying around.
Canada’s COVID-19 stimulus package
is just that, an anything-goes grab bag of ideas that happened to be lying around. There’s a new Emergency Support Benefit for those who lose their jobs to the virus; an increase to the Canada Child Benefit; a wage subsidy for businesses impacted by the virus; expanded financial support for exporters; and on and on.
In all, it amounts to $27 billion in direct stimulus spending, plus $55 billion in tax deferrals meant to give households and businesses breathing room until the fall, for a total cost of $82 billion.
"Be fast and have no regrets."
That was the defining quote from the March 13 COVID-19 briefing at the World Health Organization, spoken by Dr. Michael Ryan, the World Health Organization (WHO) executive director of health emergencies. "Speed trumps perfection," he added. "The greatest error is not to move."
It's a piece of advice that is worthy of consideration not just in the health policies Canada is putting forward to combat the effects of coronavirus, but in economic policy as well.