Service Canada received nearly 1 million applications last week for employment insurance, which is 33 times more than the same week in 2019. I haven’t seen the numbers broken down for Alberta, but given that Alberta has 12% of Canada’s population, there’s a good chance that a significant number of those applications came from Alberta.
Between July 2019 and February 2020, Alberta experienced a net loss of over 50,000 full-time jobs. And that was before the province implemented emergency measures that ended up shutting down businesses, forcing people out of work. Plus, with the huge drop in oil prices and the stock markets, unemployment has probably skyrocketed in the province. Alberta already had tens of thousands of people out of work, and the COVID-19 crisis likely pushed that number into the hundreds of thousands. We won’t know for sure until the employment numbers are released in early April.
Regardless, it’s clear that the working class has been hit hard by the crisis. Public facilities have closed, putting public sector employees out of work. Self-isolation and social distancing policies enacted by the province have forced people to primarily stay in their homes, driving down demand for products and services provided by businesses. These businesses have had to close or at least restrict staff hours.
Workers have less money to spend, and businesses have less money to spend. Some workers have no money to spend. And all this simply amplifies the problem.
For some of the working class, this affects more than just their discretionary spending. Some people are worried whether they’ll be able to afford groceries, rent, or any of their other bills.
Clearly we need solutions. And with so many businesses shut down, any real solutions likely won’t come from the private sector. Which means any solutions to the financial strain the working class is under must come from the government.
Which leads me to the response of the Alberta government.
While the provincial government has enacted several policies directed at restricting the spread of COVID-19 and mitigating the effects of the infection, I want to focus on the policies specifically intended to help the working class deal with the financial fallout.
Emergency isolation support
The first programme I want to highlight is emergency isolation support.
This is a one-time payment of $1146 designed to tide people over until federal emergency payments begin in April. While this sounds like a good measure, it’s restricted to only those who must self-isolate, who either have the disease or meet high-risk criteria, such as returning to Canada after being away.
This programme is not available to workers laid off because their employer closed their doors or workers who had their hours significantly reduced. Nor is it available to self-employed workers, such as me, who have lost all their clients.
Utility payment deferral
Another programme the province is offering is 90-day deferral on utilities. This means that those who are struggling financially because of the crisis can arrange for payment deferral with their utility providers. These are not payment cancellations. Workers will still need to make their payments; it’s just that they can put it off for three months.
It’s unclear what that will look like in the end. Will workers have to pay it all back after the three months, or will they be able to make smaller payments each bill?
My own utility bill is over $200 every month. Will that mean that if I take advantage of payment deferral, I’lll need to pay over $800 in the fourth month? For some people, that will be nearly impossible.
Credit payment deferral
This programme is the same as the utility payment deferral, except it applies to student loans, other loans, lines of credit, and mortgages. The same issue exists. Workers will still need to pay the deferred payments back, and it’s unclear if all that money must be paid at once, following the deferral period.
One credit payment deferral programme is for 6 months. I can’t imagine how difficult it would be for some workers to have to pay back 6 months of mortgage payments all at once. That would be over $5,000 for us if we qualified for that specific programme.
Education property tax freeze
Another initiative—announced just this past Monday actually—is that the province is reversing a 3.4% increase to the education portion of property taxes.
The province estimates that collectively, this will “save” households $55 million.
Keep in mind that this is not a 3.4% reduction in property taxes. This is a cancellation of a planned increase that had been announced in Budget 2020. Property taxes in April will be the same as they were in March. Functionally, nothing will change for working taxpayers. They aren’t actually saving $55 million, at least not in any meaningful way.
But even if we play along with the UCP rhetoric and agree that households are saving $55 million, we have to remember that there are over 1.5 million households in Alberta. That means the average household will “save” about $37.
That’s not going to go far in helping the working class pay their rent or buy groceries.
Plus, this doesn’t directly help members of the working class who rent, who don’t directly pay property taxes. For them to benefit from this “saving”, their landlord would have to pass those “savings” on to them, and I’m not sure how likely that would be.
Clearly, the measures announced by the provincial government are not designed to help workers. Very few workers will benefit from these measures. They’re smokescreens, engineered to make it seem as though they’re helping while doing very little to make a functional difference.
Workers need help now. Workers need money. Workers need income increased and expenses decreased. Workers need a universal basic income. Workers need the government to pay their non-discretionary spending costs.
Doing so will prevent workers from going hungry, from losing their homes, and from going further into debt. Plus, it’ll boost the economy. Something Alberta sorely needs now.
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