A closer look at the BC COVID-19 Action Plan
Less than two weeks have passed since the World Health Organization declared COVID-19 a pandemic and the fast-spreading virus has already led to large-scale economic disruptions and layoffs. Hundreds of thousands of workers, families, businesses and non-profits across Canada are reeling from the tremendous pressures on their lives and finances as a result. It was encouraging to see the BC government announce a sizeable initial economic relief package this week, working within timeframes previously unimaginable for policy-making on this scale—and we are looking to see further actions rapidly follow as the situation continues to unfold.
BC’s initial $5 billion economic relief package is extensive in scope and significant in size, but given the unprecedented nature of the crisis it will need to be scaled up and soon. It includes $3.5 billion in immediate support to individuals, businesses and key services and $1.5 billion set aside for a medium-term economic recovery package to be developed over the coming months in collaboration with business and labour leaders. The immediate support measures have been designed to complement the federal economic package released last week, with BC stepping in to address some of the gaps in the federal plan and to provide additional support in key areas that fall within provincial jurisdiction, including direct health care and social service delivery, social assistance and employment protections to name a few. Details are still forthcoming on many of the measures but here are some initial thoughts on where the BC COVID-19 Action Plan hits the mark and where it will need to be improved.
The good news
Both the Premier and the Finance Minister clearly signalled that this package is only the first step and it will be expanded as the situation evolves.
It is good to see that the BC government’s initial package is a combination of wide-ranging emergency measures along the lines of what CCPA-BC’s Shannon Daub and Alex Hemingway advocated for last week, namely:
- Putting money into the pockets of people, small businesses and community organizations that have lost much or all of their work and incomes/revenues and that don’t have the financial capacity to absorb those losses; and
- Providing direct aid to people who are particularly vulnerable due to poverty and existing inequalities.
The biggest single measure in the provincial plan for immediate relief is a one-time $1,000 payment to British Columbians whose ability to work and earn income has been reduced by the pandemic, valued at $1.1 billion or a third of the immediate relief package. It’s great to see the BC government not waste time in designing elaborate new income-testing measures for this payment and instead making it available widely to enable faster processing at time when speed is of the essence. The payment will be tax-free (which is an odd policy choice considering that taxing people on it next year would allow those who didn’t need government support because they still made good incomes for 2020 overall to return part or all of it at a time when government revenues will be precious). Further income support will be delivered later in the year in July with an increase in the BC Climate Action Tax Credit, an income-tested benefit that goes to the majority of British Columbians (over 80 per cent will benefit according to the BC government).
Also notable is the $1.7 billion invested in critical services, including shoring up the capacity of key services—the health care system, housing and shelter supports, and service-delivery agencies that are scrambling to help already-vulnerable British Columbians to cope with the pandemic—as well as investments in social assistance and disability programs, which we hope will translate into increases to welfare and disability rates.
Other welcome immediate measures for individuals include:
- Job protection for workers who are sick or self-isolating with COVID-19, and those caring for family members exposed to or sick with the virus, including those unable to work because they are caring for young children at a time of widespread school and child care closures.
- Pressing pause on outstanding provincial student loan payments for six months without penalty.
- While BC’s COVID-19 Action Plan did not include concrete support for renters beyond a ban on evictions for not paying rent in BC Housing funded buildings and work to extend that to non-profit providers of subsidized housing, Premier Horgan promised additional support for renters, the details of which will be announced on Wednesday.
What else is urgently needed
Income supports need to be expedited and boosted
Unfortunately, the new $1,000 payment will not help people worried about their rent due in a week, or even the next month’s rent at the end of April, as it is not expected until May. The speed with which this crisis hit calls for us to find creative new ways to put money into people’s pockets sooner and BC should work to expedite this payment, make sure the application is as straightforward as possible and that the payment is available to all who need help, including to those who receive disability and income assistance, and temporary migrant workers who are currently in BC. This simpler the eligibility requirements are, the faster it will be to process applications and the quicker the money can reach those who need it.
The BC Climate Action Tax Credit is a great mechanism for getting money in people’s hands over the medium term as we have recommended here and here, but the top-ups announced will need to be at least tripled or quadrupled if they have any hope of keeping families out of poverty. The current one-time top up of to $174.50 per adult and up to $51.25 per child (clawed back based on taxable income in 2019) are tiny and will not stretch very far.
Social assistance and disability rates should be immediately boosted to at least 75 per cent of the poverty line, providing crucial support to many individuals and single-parent families who will not receive much help from the federal emergency income supports, which are largely targeted to workers and the recently-unemployed.
If bans on events and stay-at-home advisories last more than a few weeks, many more people will find themselves applying for income assistance. The application process needs to be simplified and streamlined, and the asset tests and work-search requirements waived for the duration of the public health crisis.
Further, the BC government should advocate for stronger federal income support measures, including further improvements to the Employment Insurance as I have recommended here.
Direct aid for renters to ensure nobody loses their housing during the pandemic
BC was in the midst of a serious housing affordability crisis before the pandemic hit, and many workers are facing expensive rent and mortgage bills at a time when they suddenly find themselves with little or no income. The last thing we need in the middle of this public health crisis is a large number of people looking to downsize or becoming homeless due to economic hardship. We should put in place a full moratorium on evictions and foreclosures for the duration of the crisis in addition to the ban on evictions for non-payment of rent already announced for those living in BC Housing-funded housing.
The BC government will reveal its renter support package on Wednesday and we will have more to say at that time. So far, we know that it will include expansions of the two provincial rental subsidies, the Rental Assistance Program and Shelter Aid for Eldery Renters (SAFER) program, which we have advocated for here. Importantly, these expansions need to include making the programs available to more households that they currently reach (which is about 25,000 senior renters and fewer than 10,000 families).
My colleagues Shannon Daub and Alex Hemingway also make the case for a temporary cancellation of rent payments, along with stronger protections for residential mortgage holders .
Support for service-delivery agencies and community-based non-profits that will do the heavy lifting supporting vulnerable British Columbians through the crisis
It is likely that much of the $1.7 billion announced for critical services will go towards expanding the capacity of health services, including testing, information-sharing and costs for extra protective equipment for front-line healthcare providers. These are essential services at a time of a public health crisis and should be fully funded. In addition, we need to expand our capacity to shelter those who are currently homeless, and those who are unsafe in abusive homes and need support to flee sexual and domestic violence. Emergency grants for existing shelters and transition houses are a first step but other creative measures should also be on the table, including making use of empty hotel space at a time when tourism has taken a nose-dive to provide housing to those who have no other safe place to self-isolate or practice social distancing.
Additional money must be made available to Indigeneous communities and to urban Indigenous organizations to assist them in developing and implementing their response plans. Similarly for the community agencies that provide critical services during the pandemic, such as shelter, food, health, mental health supports, legal advocacy to those in crisis and support navigating the application systems for various federal and provincial supports (many of which require separate applications) for people in complex situations and those on the other side of the digital divide. This will require scaling up the initial $1.7 billion envelope.
Further job protections for workers
Job-protected sick and family care leave for workers impacted by COVID-19 without a doctor’s note is a welcome step. However, at least a portion of the newly legislated leave should be paid and its provision expanded to cover workers who can’t report to work due to any illness or injury, not just COVID-19. Further, some form of recall rights should be legislated for employees temporarily laid off during the crisis who do not have the protection of a union. .
Stricter regulation on payday lenders will be required to ensure that unscrupulous lenders don’t prey on desperate British Columbians at a time when it would take until mid-April or even May for provincial or federal emergency relief moneys to get into people’s hands. Expanding emergency low- or zero-interest credit programs for lower-income British Columbians should also be on the table to prevent people from maxing high-interest credit cards.
Ensure all residents have access to health services
It’s encouraging to see BC waive the 3-month wait for eligibility for free public health care in BC for Canadians and permanent residents. However, health care services should be available free of charge regardless of citizenship, including for migrant and undocumented residents and families who are in BC at this time. This would allow issues to be treated before they become emergencies and free up emergency services for COVID-19 patients. Further, everyone should be able to afford their medications whether for COVID-19 or for other illnesses to keep pressure off the health care system. This can be done by waiving deductibles and co-payments to people eligible for Fair Pharmacare for the duration of the crisis (i.e., those with income under $45,000) and expediting the processing of new applications.
A ban on all utility and telecom disconnections due to inability to pay during the crisis
BC Hydro and ICBC have already expanded their payment deferral programs. All utilities should be required to provide penalty-free deferrals and crisis assistance options at this unprecedented time. Social distancing advisories will likely last months, not weeks. Learning, working, home-schooling children and maintaining social connections from home is only possible with access to technology and the Internet. This is even more true at a time when public libraries are closed. The current crisis is magnifying the large digital divide that already exists in BC and has made it abundantly clear that phone and Internet connection are basic utilities for life in the 21st century, not unlike electricity and hot water. We need the BC government to strongly advocate for federal measures that require telecom providers to offer crisis assistance options for those unable to pay bills so that nobody gets disconnected.
More generous supports for small businesses to prevent unnecessary bankruptcies and layoffs
The BC Economic Action Plan included about $0.7 billion support for business, the majority of which is a 50 per cent cut in commercial property tax for the year 2020 which would flow $500 million into the pockets of commercial landlords and businesses that own their own space. Commercial tenants on triple net leases would see the savings flow through directly but for many that are not, it seems very unlikely that commercial landlords will pass on any savings. The remainder $200 million is the estimated value of deferring various provincial tax credits. More generous wage subsidies for small businesses, such as those offered in countries like New Zealand and Denmark, could potentially save some jobs or bring jobs back sooner. Further, a freeze on evictions and foreclosures to protect small businesses unable to meet their immediate rent or mortgage payments should also be considered, as well as a ban on utility disconnections for small businesses that can’t pay their bills on time.
This is just an initial list of ideas to improve the BC COVID-19 Action Plan that will evolve and grow as the crisis unfolds. A crisis of this scale calls on all of us to work together across sectors more collaboratively than we ever have, and it also highlights the essential need for governments to step in quickly and do the heavy lifting to manage the health crisis and provide immediate support to people, businesses and non-profit organizations that need it most.
Topics: COVID-19, Economy, Employment & labour, Housing & homelessness, Poverty, inequality & welfare