Canada and COVID-19: One Year Later

Download complete version (pdf format)

Katherine Scott*
Canadian Centre for Policy Alternatives (CCPA)

The COVID-19 pandemic exacerbated fundamental inequalities in Canada, made worse by an inadequate, inconsistent and disjointed approach to safeguarding the well-being of the most vulnerable across the country. Significant financial support has been extended to businesses and households, providing a lifeline over the past 18 months, but profound gaps in Canada’s social infrastructure and income security programs continue to undermine these efforts. Meanwhile, the trend toward greater privatization and financialization proceeds apace.

This report looks at the impact of the pandemic in Canada and at the government's response since March 2020. The big question is whether Canada, by default, will revert to the “same old, same old” after the crisis. Or will it seize the opportunity to build back better, recognizing that this last mile will be the hardest.

COVID-19: The great revealer

The deck was stacked against marginalized people going into the pandemic. A year later, the challenges are even greater in Canada’s highly unequal society. The inequities that were baked into Canada’s system have been graphically exposed and exacerbated by the COVID-19 pandemic.

When the pandemic struck, Canada was initially slow to take action, waiting until mid-March to close the borders to foreign nationals and restrict non-essential travel, failing to heed the warnings from the scientific community that COVID-19 was not going to be easily contained. Governments began the scramble to secure needed supplies, medication, and personal protective equipment due to low stockpiles—the result of years of neglect—and precarious supply chains. As Canadian families left the country for March Break vacations, confirmed cases were on the rise.

The first wave of infections began to level off in June, not before more than 8,000 people had died, the vast majority of whom were in long-term care homes. Canada had a measure of success flattening the curve through the early summer but failed, again, to heed the warnings of health experts to take proactive measures to contain the emergence of a second and then third wave of COVID-19 infections.

As of July 2021, over 1.4 million cases of COVID-19 have been confirmed, with at least 26,500 dead1 —an increase of over 20,000 deaths since July 2020. This figure is likely a significant undercount of those who died2 and does not reflect the steep rise in fatalities related to the opioid crisis and delayed medical procedures.

As elsewhere, the burden of the illness has fallen most heavily on vulnerable communities. Research confirms that COVID-19 mortality rates, for instance, have been much higher in neighbourhoods with larger numbers of racialized residents compared to those with fewer racialized residents.3 No one is even sure how many people with disabilities have fallen ill or been vaccinated because these data aren’t being collected.4

COVID-19 Rates by largest ethno-racial groups, City of Toronto, June 2020-1 – March 2021
(Reported COVID-19 infection rate per 100,000 population)

Who paid the price?

On the economic front, a recovery is underway from losses reported most recently during Canada’s third wave of lockdowns—notably in Ontario and western Canada. The June 2021 jobs report from Statistics Canada revealed an increase in employment as provincial economies opened up, recouping 84% of losses reported in April and May.5 Young people, in particular, finally began to pick up (largely part-time) employment after a devastating year.6

This follows a difficult year. The initial rebound in economic activity in spring 2020 was rapid but the pace of growth stalled in fall—edging upward and falling downward with successive economic lockdowns. In June 2021, economic activity (-1.7%),7 levels of employment (-1.8%)8, and aggregate hours worked (-4%)9 were still below pre-pandemic levels, as was the number of active businesses, notably in tourism (-7.4%), arts and recreation (-7.1%), accommodation and food (-4.4%) and other services, such as hair salons (-5.8%).10 The rate of unemployment was 7.8%, roughly two percentage points above pre-crisis levels,11 and the group of long-term unemployed grows larger by the month.12 Almost 700,000 workers were still struggling with pandemic-related employment losses or substantial reductions in working hours while another 230,000 (72.3% of whom were women) have left the labour force altogether.13

What these headline statistics don’t reveal is who has been caught on the wrong side of the COVID-19 pandemic. Three million Canadians lost their job and another 2.5 million lost between 50% and 100% of their working hours between February and April 2020—roughly three out of every 10 Canadian workers.14 These shocking Depression-level job impacts were required to flatten the curve of COVID-19’s spread. But the economic burden was not equally shared. Employment losses were the highest among those employed in precarious jobs and those in the lowest hourly wage bracket. In the first two months of the pandemic, 30.2% of temporary workers lost their job, almost double the average loss of 15.7%. Four out of 10 employees earning less than two-thirds of the 2019 median hourly wage (38.1%) lost work, as did one in four of those paid by the hour (25.1%).15

Like the downturn, the recovery has proven to be as unequal, demonstrating “the brutally unfair concentration of this recession on the backs of those who can least afford it.”16 Some groups of workers recouped their employment losses quite quickly last summer (most working from home didn’t skip a beat at all), but those working in low-wage, front-facing sectors, such as accommodation and food services and retail trade, have been on an economic roller coaster. By July 2021, the level of employment among female workers earning less than $17 per hour was still -9.1% below February 2020 levels, while the gap among men in this earnings bracket was -8% below pre-pandemic levels. Other survey research over the last year has demonstrated persistently high levels of financial stress among Indigenous17 and racialized households18, as well as among people with disabilities.19

Jobs and majority hours lost among workers (15+ yrs) by top and bottom earnings quartiles relative to February 2020, by gender

Source: February 2020 – April 2021 Labour Force Survey PUMF, calculations by D. Macdonald. Seasonally adjusted.

Women have faced unique challenges, forced to step up to shoulder a huge increase in unpaid labour and educational support, many stepping out of employment altogether. School closures and the demands of virtual learning,20 reduced access to child care21 and the suspension of many community supports, such as recreational programming22 and attendant care services for children and adults with disabilities, exacerbated the already unequal division of labour in the home—threatening to undermine hard-won gains in women’s economic equality.

Canada’s pandemic response: Hits and misses

The pandemic blew open the significant holes in Canada’s health care system and social safety net. At the same time, it shone a bright light on its dysfunctional governance structure and fiscal arrangements. Despite Canada’s experience with the SARS outbreak in 2003, public health infrastructure was not up to the task of detecting nor acting decisively to contain a threat such as COVID-19. Nor did the federal government impose a coordinated public health response, as it might have done if it had invoked the Emergencies Act. Rather, it watched from the sidelines as the provinces and territories adopted their own disparate and, in many instances, ineffectual approaches to managing the pandemic and mobilizing the health care response.23

Early cooperation quickly gave way to well-rehearsed disputes over jurisdiction and funding as governments attempted to sidestep blame for second and third waves of community infection. For their part, municipalities struggled to head off the potential disaster in community services, such as those serving the homeless and victims of violence, as sources of revenue for public transit and the like collapsed. Individuals and families were effectively left on their own to respond to often confusing and contradictory public health directives. Families struggled to navigate virtual schooling and child care closures. People with disabilities, and others in need, struggled to access needed supports. Migrant workers were stranded without access to income security or employment protections.

For its part, the federal government concentrated its efforts on mobilizing financial resources to stabilize financial markets and household incomes through a combination of direct measures targeting businesses and individuals, transfers to other levels of government for health care, schools and shelters, as well as infrastructure investment and liquidity supports. The government was able to marshal its considerable spending power to this end, taking advantage of historically low interest rates and a manageable debt-to-GDP ratio. The total value of federal and provincial government measures related to COVID-19 now stands at almost $620 billion for the three-year period starting in 2019-20. Of this, the federal government accounts for 86% of total COVID-19 spending.24

The scale of Canada’s response is significant compared to peer countries—a reflection of both the severity of the pandemic and its economic fallout. The International Monetary Fund estimates that the Canadian measures implemented in 2020 represented 14.6% of GDP in additional spending and foregone revenues and another 4% of GDP via liquidity support measures.25 While transfers to businesses (e.g., the Canada Emergency Wage Subsidy) is and remains the largest category of support, Canada stands out among other high-income countries for devoting an above-average share to households26 —a crucial strategy that worked to mitigate the immediate financial impacts of the crisis on low-income individuals and helped fuel economic recovery.

Government Fiscal Support in Response to COVID-19, 2020-21
(percent of 2020 GDP)

At the same time, there were critical gaps in the pandemic response, resulting from a lack of political coordination, jurisdictional conflict and mixed messaging, and a history of neglect and privatization that has systematically undermined Canada’s public services. Canada’s public and non-profit sectors massively stepped up during the pandemic, working gruelling hours to ensure that COVID-19 patients received care, that the unemployed were supported, that the homeless had a safe place to stay. In too many instances, however, these same essential workers did not have the resources and tools needed to keep everyone safe and supported. This work, including the cost and labour, was downloaded onto individuals and families—and the women within them—compounding the isolation and stress of the pandemic.

The lack of an explicit and intersectional focus on poverty and the reality of marginalized communities, as well as the varied and/or non-existent responses from some governments at different jurisdictional levels remain among the largest stumbling blocks to Canada’s pandemic response and its prospects for a just recovery. Social assistance recipients—the poorest of the poor in Canada27 —have been effectively left to navigate the pandemic on incomes that are substantially below the poverty line in all provinces and territories.28 For the hundreds of thousands of people with disabilities who are forced to rely on welfare, the experience has been harrowing as they tried to secure scarce PPE and access to needed medical care, safe transportation and workplace accommodation during the pandemic.29

The same pattern of neglect was amply illustrated in the refusal of many provinces to introduce paid sick leave for all workers—a fundamental support in the context of a pandemic. More than half of workers in Canada (58%) do not have employer-paid sick leave and among this group, 74% earn less than $25,000 per year.30 This group of workers experienced some of the highest levels of exposure to COVID-19, with no safety net. Canada’s disjointed provincial job-protection laws and federal income support for short-term sick leave failed miserably to protect their lives and well-being.

The response to the crisis in care, and its disproportionate impact on women, has been hit and miss as well. Canada’s child care system was already vulnerable before the pandemic hit; its stock of regulated, affordable and inclusive care insufficient to meet the needs of children and families.31,32 When the pandemic hit, public health directives forced the closure of thousands of centres and family-based child care providers. Even as restrictions eased, child care services dependent on parent fees struggled financially to deliver service in the face of rising program costs, staff shortages and declining enrolment.33 The loss of child care capacity, along with rotating school closures, impacted women greatly, contributing to a precipitous drop in women’s labour force participation. Between February 2020 and January 2021, mothers were more than 10 times more likely than fathers to leave their job to care for children—and these rates were higher among racialized and immigrant women.34

A just and sustainable recovery for all

Millions of low-wage workers and other marginalized groups now face tremendous financial uncertainty as emergency benefits wind down. Some workers won’t have jobs to return to in the fallout of the pandemic. Community organizations and businesses that have been holding it together with the help of expiring federal wage subsides may well close, which would deal a huge blow to workers and the communities that they support. Other workers have yet to return to full-time work. Some are tied down by care obligations, many are fearful of health risks involved with rising levels of community infection, others are holding out for better employment opportunities and better wages—understandably reluctant to commit once again to the grind of precarious, dangerous work.35

The COVID-19 pandemic exacerbated fundamental inequalities in Canada, made worse by an inadequate, inconsistent and disjointed approach to safeguarding the well-being of the most vulnerable across the country. Significant financial support has been extended to businesses and households, providing a lifeline over the past 18 months, but profound gaps in Canada’s social infrastructure and income security programs continue to undermine these efforts. Meanwhile, the trend toward greater privatization and financialization proceeds apace.

The federal government marshalled one of the largest responses to the pandemic among high-income countries, with an increase in spending in 2020-21 of 75% over the previous fiscal year, taking on public debt to protect households and businesses from mass bankruptcy and deprivation while extending crucial support to other levels of government to respond to the crisis.36 Canada must now step up to finance a just and sustainable recovery that will close the huge gaps in our social safety net, set the economy on an inclusive course, pursue reconciliation and justice relations with Indigenous Peoples, and deal with the existential threat of global warming.

The big question is whether Canada, by default, will revert to the “same old, same old” after the crisis. Or will we seize the opportunity to build back better, recognizing that this last mile will be the hardest? A hope and a prayer aren’t going to be enough to strengthen Canada’s social safety net and dismantle systemic barriers that are holding back marginalized communities. This will require a plan with clear goals, timelines and a division of labour; a plan that centres the voices and experiences of marginalized people and that includes the long-term investments needed to make it a reality.

Notes: