11 steps for Budgets ‘22 and beyond toward a more just society : Policy Note


Aug 25, 2021


By David Green, Lindsay Tedds, Rhys Kesselman and Daniel Perrin



As a fourth wave of COVID-19 ramps up, the impact of the pandemic on the economy, policymaking and budgets has not gone away. More broadly, government responses to the pandemic at both the national and provincial levels have generally been seen as a success. Much like in WWII, this appears to have led to a re-awakening to the idea that we can use the power of government to accomplish great things. Also like at the end of WWII, there is a feeling that the crisis revealed structural problems in our society that should be addressed, in part, to justify the sacrifices made during the crisis. Together, these considerations have generated an expectation that policy should be used to build a better society.

We very much agree with the idea of using the pandemic as a catalyst for policymaking to build a better society. In this note, we describe 11 concrete steps the BC government can take over the coming year that can be accomplished within existing budgetary resources and prepare the way for more fundamental change in future budget cycles. To be clear, these steps are not, for the most part, ends in themselves. Real action will ultimately require these fiscally minimalist steps to be followed by real expenditures. We are the members of a recently completed BC government panel considering a basic income and other policies, and in our report for the BC government: “Covering All the Basics: Reforms for a More Just Society,” we recommend and describe a comprehensive set of integrated reforms.

Real action will ultimately require these fiscally minimalist steps to be followed by real expenditures.

The 11 suggestions in this note are just the first steps in realizing that vision. We see them as a bridge between the practicalities of recent budgets and aspirational (but achievable) goals for a more just society.

A justice-based approach

In addition to answering the question “Should BC implement a generally applicable basic income as the foundation of its social and income support system?”—our answer was “No”—our report proposed a comprehensive set of policy reforms. Those recommendations target the most vulnerable, make current programs more accessible and respectful and fill gaps in the safety net.

Our recommendations are embedded in a framework built around the goal of “moving toward BC being a more just society.” Almost all theories of justice aim to provide the bases of self and social respect—providing people with the means for making autonomous decisions but recognizing that we are social animals. Our feelings of self-efficacy, dignity and control over our lives are intricately related to our social relations and the respect we get from others. Thus, we can choose steps toward being a more just society with considerable agreement if we focus on supporting self-respect through providing resources both for individuals and communities.

In practical terms, we argue that just policies are characterized by adequacy, accessibility, security, responsiveness, opportunity and social connection. But policies and programs also need to be seen as fair both by those most in need and by those who will pay taxes to support the systems. Only a system built on reciprocal respect in this sense will withstand the political cycle. Together these characteristics provide not a definitive set of answers but a process and a direction, recognizing that making just policies involves a never-ending striving to find a better balance.

11 first steps

Here are steps BC can take right now to set the stage for progress in future years:

1) Set up a human rights–based approach to engagement with those affected

This step (recommendation 65 from our report), would focus attention on the kind of engagement that is needed for just policy implementation. Policies need to be generated, implemented and continually reformed in a manner that treats all involved with respect. Those most affected by a policy should not only be consulted; they should have a continual means of being heard about the functioning of programs that affect their lives so directly.

Based upon the approach taken in the federal National Housing Strategy, and building upon the spirit of the establishment of the BC Poverty Reduction Advisory Council (PRAC), we propose establishing a Poverty Advocate within the office of the Human Rights Commissioner. This would acknowledge Canada and BC’s obligations under international human right conventions to give “the right of everyone for an adequate standard of living…including adequate food, clothing and housing.” The Poverty Advocate would work with PRAC to prepare reports regarding progress on poverty reduction to be tabled in the legislature.

2) Prepare to enhance financial and support services for young adults

An especially urgent area for reform is youth aging out of care. Despite efforts made by the Ministry of Child and Family Development and others, the outcomes for these youth remaining strikingly troubling: low high school graduation rates; high teen pregnancy rates; and extremely high mortality rates. Our recommendations 31 to 44 would create a wrap-around system, including a targeted basic income for these youth and well-resourced community organizations which the youth themselves help to form.

As a first step we propose to develop needed supportive communities from the bottom up with the involvement of former youth in care. Because over 60 per cent of youth aging out of care are Indigenous, the direct involvement of Indigenous communities is crucial. A second step would enable a single ministry to take the lead and begin preparatory work in earnest. Efforts to date have been scattered across ministries and no ministry has a clear mandate.

3) Reform Disability Assistance eligibility and administration

Recommendations 1 through 13 represent a major reform of the Disability Assistance (DA) program to make it fairer and more accessible, to reduce barriers to working, and to make benefits more adequate. Among those are six recommendations (1­–3 and 6–8) which would increase dignity and respect by making eligibility standards more objective and changing the delivery mechanism to a targeted basic income disbursed by the Canada Revenue Agency.

The direct changes that could be initiated this year are as follows: A) Set up a formal advisory council consisting of a mix of people living with disabilities, representatives of the organizations that support this community and people with policy expertise. This would formally enshrine the principle of “nothing about us without us” that the government recognized in its recent policy on disability and human rights; B) Convert DA payments to a basic income. This involves a change in the income test that would make it easier for recipients to move on and off benefit as well as initiating discussions with CRA to deliver benefits through the tax system; and C) Begin work on changing eligibility standards and professionalizing the adjudicators.

4) Prepare to lower the welfare wall between Income Assistance and work

Many features of the IA system and how it is administered create barriers to moving into work—a “welfare wall.” Among others, IA recipients face higher effective tax rates on earnings than anyone else in society—over 100 per cent in some cases. There were also elements introduced in policy re-designs in 1996 and 2002 that are intended to reduce access to benefits but have the perverse effect of making people leaving IA fearful of not being able to get supports back when they need them.

Recent reforms have made real improvements in helping people with the application process, reducing job search requirements and increasing earnings exemptions. Recommendations 14 to 22 would move further in this direction. Significant preparatory work is required to design the changes in detail, not to mention the extensive consultation we believe is so crucial. We believe the Ministry of Social Development and Poverty Reduction is embarking on some of that work this year, and more is needed.

5) Prepare to implement a dental services benefit for all low-income British Columbians

Our report recommends an income-tested system of health supplement services covering all British Columbians with an implementation approach modeled on Fair Pharmacare (recommendation 24) as a medium-term proposal. This would replace some health and general supplements which are primarily limited to current and recent IA recipients, creating a more just system and lowering the welfare wall. The first step should be dental care. Poor dental health is not only painful but also affects people’s general health, their sense of self-respect and their job prospects. Even this first step will require preparatory work on administration and service delivery and the government should get to work on these this year.

6) Consolidate and improve supports for people fleeing domestic violence

Recommendations 42 and 43 of our report propose a wrap-around system for women and children fleeing domestic violence that involves monetary, housing, employment and health supports. There has been progress in this area in recent years but much of what has been created is scattered across different policy areas. A complete system that is well publicized will make it clear to those who need to escape violence that support is available.

BC Budget 2021 makes a start at what will be an ongoing need to increase short- and long-term housing for those fleeing violence. More is needed, especially in rural areas.

Recommendation 43—a wrap-around, three-tiered program—would consolidate and enhance existing supports. It could be developed and phased in starting this year, with an estimated annual cost of $20 million and fitting within existing budgets.

7) Refocus the BC Child Opportunity Benefit

In 2020, BC expanded its cash transfer program for children and renamed it the Child Opportunity Benefit. The COB nearly tripled the annual funding to $400 million and extended benefits for children through age 17 in eligible families. However, a realignment of the COB’s benefit structure could yield significantly more support for low-income families with children—particularly for sole-parent families, the group with the second-highest poverty rates in BC—without any increase in total cost.

The COB could be refocused as a more effective poverty reduction policy simply by redesigning how benefits phase out with a family’s income and its number of children (recommendation 30).  We suggested several ways in which this could be done, better mirroring the approach in other provinces and in the federal Canada Child Benefit. The immediate steps are to select the preferred benefit structure, introduce the requisite legislative revision and direct the CRA to make the change.

8) Prepare to enhance labour regulatory protection for precarious workers

Given the amount of time we spend working and the importance of work for people’s feeling of self-respect, having effective policies supporting firms to offer good jobs is an essential component of a just society. This is an area where the government has made considerable progress in recent years. Recommendations 44 to 51 in the report propose next steps in further reforming labour market regulation.

Recommendation 44, to develop gig work employment standards, would reduce current uncertainties about whether gig workers are employees and what standards apply to them. While the gig model can provide flexibility, it has the potential to leave workers unprotected by labour regulation. We propose proactively defining who is an employee so both firms and workers understand the playing field and designing appropriate employment standards—rather than awaiting the results of litigation—through a consultative process that includes businesses and workers associated with both disruptive and traditional business models or work arrangements.

Recommendation 47, to strengthen employment standards, would improve jobs for employees who work in a facility not operated by their legal employer, such as long-term care employees and temporary workers. Those jobs are associated with low wages and incomplete employment standards protection. We recommend government build on recent employment standards legislative changes to better protect these workers through a consultative process with broad terms of reference.

While the gig model can provide flexibility, it has the potential to leave workers unprotected by labour regulation.

In both cases, at least the required engagement can take place this year in preparation for legislative change.

9) Establish a revenue-neutral, BC-specific earnings supplement

Recommendation 23, to expand the earnings supplement, is intended to specifically address the group with the highest poverty rates in BC—single adults under the age of 65 without children. The data show that approximately two in ten of these people, mainly women, work more than 40 weeks per year and another three in 10 work less intensively. This is a group that could be significantly helped through an earnings subsidy that supports them in their clear desire to work. The first step, which could be implemented at no fiscal cost, would be to reconfigure the Canada Workers Benefit (CWB), a refundable federal tax credit. Such a change is permitted by the program. While this reconfiguration would have small impacts on BC low-wage workers in itself, it would form the platform for BC to implement effective top-ups with a provincial contribution in future years. Combined with changes to the CWB in the federal budget, this could bring real help to the working poor.

10) Prepare to introduce a BC Rental Assistance program

The BC government continues, in Budget 2021, to build upon recent progress in increasing the supply of supportive housing and other housing options for lower-income British Columbians. BC also has a rental subsidy that provides assistance to some low-income renters. However, access to these supports is limited, with the critical omission being non-elderly renters without dependent children. Recommendations 25 to 27 are intended to provide housing support to all low-income renters, particularly recommendation 27 (BC Rental Assistance refundable tax credit), a medium-term proposal with a substantial fiscal cost. However, implementation will require considerable preparation, as the tax credit will replace some existing programs and may need to be integrated with others. We propose preparatory work in the form of analysis of necessary institutional and legislative changes, as well as consultations with relevant stakeholders, begin this fiscal year.

11) Implement short-term measures to improve benefit delivery

Under the heading, “Improve the way benefit delivery platforms function,” recommendations 52 to 64 could be implemented, or at least prepared for, during the coming fiscal year within available resources. They include both federal and provincial measures that will enhance a wide range of programs, address governance issues and improve access to administrative data for policy development and evaluation. The changes are highly technical but are vital to having a well-functioning system, and all will help prepare for more substantial changes in future years. The federal government made a first step by announcing the roll out of e-payroll in Budget 2021.

Conclusion

Our report provides more details on these policy options. Most importantly, it includes ideas on how to implement the policies in ways that support and enhance communities. These and other policy recommendations are part of a longer-term vision. We do not view the steps outlined here as a realization of that vision. Real action, such as our recommended increases in IA and DA benefits, will require increased spending. But we believe that these steps will position the BC government to undertake further, more substantive reforms over the next few years, placing BC solidly on the path to being a more just society.


Topics: Children & youth, COVID-19, Economy, Employment & labour, First Nations & Indigenous, Housing & homelessness, Poverty, inequality & welfare, Provincial budget & finance, Transparency & accountability