Stock markets & sick days: Let’s talk about how to enable all Canadians to be resilient

Feb 7

A recent analysis by the Canadian Centre for Policy Alternatives (CCPA) found that “while millions of Canadians lost their jobs because of the COVID-19 pandemic, “the country’s top 20 billionaires have amassed an average of nearly $2 billion each in wealth”[1]. It’s not only the ultra-rich that are doing well. Those of us with jobs are not spending our money on gas, 407, evenings out or holidays. In addition, if we have wealth generating assets - we have mostly seen an increase in their value. Average Canadian home prices were up 17% in December 2020 vs the same period in 2019[2] and although the S&P/TSX Composite Index dropped 37% during the year, it climbed back up to finish the year with at 2.17% gain[3] while the S&P 500 delivered a 16% return over the previous year[4]. This indicates that lower income Canadians without financial or real assets are bearing the brunt of the economic consequences associated with COVID-19.

In parallel, we are seeing an economy that over the years has evolved to enable the richest 20% to own over 67% of all wealth[5]. Through a variety of policies, programs, business model and strategy evolution, we have collectively grown the power of those with resources and eroded the resilience of those without. This is starkly evident today in our global pandemic. Only 42% of Canadians and an appalling 10% of low-wage and front-line workers have access to paid sick leave[6]. This is but one of the mechanisms working against everyday Canadians and negatively impacting our society. As Richard Wilkinson says in the Spirit Level, inequality has “pernicious” effects on societies. In eleven different health and social problems ranging from physical and mental health to education, violence, teenage pregnancies, and child well-being, outcomes are significantly worse in more unequal rich countries”. [7]

There is a need to step back and look at how we might design policies, programs, incentives and business strategies to enable all Canadians to succeed. How might we create incentives for companies to offer paid sick leave to hourly and part time employees? How might we ensure that gig economy workers are protected and have the ability to take sick leave? What mechanisms might we use to enable living wages to be the norm for low-wage workers? Consider that executive pay has been increasing with Canada’s 100 highest paid CEOs making 227 more than the average worker[8] while hourly wages have barely budged in the last 40 years[9].

In conjunction, how might we ensure that disability and other benefits provided by governments are sufficient to live on? Canada’s $2,000 a month CERB brought to light just how inadequate ODSP is at a maximum of $1,169 a month[10]. This is particularly evident in markets like Toronto where the average 1-bedroom apartment is over $1,800 monthly[11].

If we want to enable all Canadians to be resilient, we need to invest in addressing the full breadth of elements that challenge resiliency. A Canada where everyone is resilient needs incentives for companies to provide sick pay to low wage workers and living wages to all employees. It needs to recognize the characteristics and implications of the gig economy. This means redesigning programs like the unemployment system to work for all workers. It needs supports for persons with disabilities that are sufficient to live on.

Most importantly, such a Canada needs to recognize that current efforts will give us current results. If we want a resilient socially just future, we need to own creating it - we need to invest in it. Without this investment, we will continue to have more than half of all Canadians living paycheque to paycheque[12].

[1] https://www.policynote.ca/billionaires-wealth/

[2] https://www.cbc.ca/news/business/canada-home-sales-1.5874577

[3] https://www.bnnbloomberg.ca/we-re-33-tsx-ekes-out-gain-in-pandemic-ravaged-2020-1.1542686

[4] https://www.washingtonpost.com/business/2020/12/31/stock-market-record-2020/

[5] https://www.broadbentinstitute.ca/_the_wealth_gap_is_worse_than_you_think

[6] https://www.cbc.ca/news/canada/toronto/ontario-paid-sick-leave-1.5868581

[7] https://www.equalitytrust.org.uk/resources/the-spirit-level

[8] https://www.policyalternatives.ca/newsroom/news-releases/high-ceo-pay-shatters-previous-records-now-227-times-more-average-worker-pay

[9] https://globalnews.ca/news/3531614/average-hourly-wage-canada-stagnant/

[10] https://www.cbc.ca/news/canada/ottawa/covid19-odsp-wage-benefits-1.5552060

[11] https://rentals.ca/national-rent-report

[12] https://www.theglobeandmail.com/business/commentary/article-the-pandemic-has-exposed-the-precarious-economic-situation-of-many/