Canada faces massive unemployment – reaching 10.9 percent in July. There is an urgent need for policymakers to act to help people return to work as soon as possible. We need to connect working parents with childcare and the unemployed with jobs. A new solution would offer income to the jobless and childcare to working parents.
In order for parents to return to work, many families require childcare. Existing childcare centres are constrained by new health and safety requirements, including limits on the number of children that they can accommodate. In the fall, parents will particularly struggle in jurisdictions where schools do not fully re-open. Families who normally rely on their elderly relatives for assistance with childcare may be reluctant to do so if those elderly relatives have pre-existing health conditions that make them more susceptible to COVID-19. Parents are struggling to return to work in an environment where childcare needs are growing and spaces are more limited.
Childcare is not the only barrier limiting people's ability to return to work. Another barrier is the current structure of the Canada Emergency Relief Benefit (CERB). CERB pays out $2,000 every four weeks to anyone earning $1,000 or less in the same four-week period, but pays nothing to those earning $1,001 or more. Under this framework, many Canadians could be worse off financially if they return to work, especially if their only option initially is part-time work.
Families facing a fiscal crunch will have no choice but to say "no" to available work opportunities if they would be left worse off as a result. People should never be put in a position where starting to return to work leaves them less well off financially.
In order to respond to this problem, Conservatives have proposed a "back-to-work bonus," to ensure that no one is made worse off by accepting work while they are on CERB. This proposal is about moving to a system where benefits decline gradually as people return to work, instead of disappearing entirely when they cross a certain low threshold.
The back-to-work bonus solves one obvious problem in the structure of these benefits. But it also solves another problem in a less obvious way. Implementing the back-to-work bonus could open a significant new supply of childcare spaces.
Suppose two neighbours have been laid off, and then one neighbour is given an opportunity to return to work. She would like to take the job that she is offered but cannot do so because of a lack of available childcare due to current health regulations. She then identifies a simple solution. She asks her neighbour, who has kids about the same age, if she can pay him to watch her kids while she works. Perhaps all of these children have already been playing together and isolating together in a cohort. The person returning to work can give her still-unemployed neighbour an opportunity to earn a little bit of extra income by caring for her children.
Unfortunately, this potential cooperation breaks down when we consider the fact that an unemployed person who offers paid childcare to a friend or neighbour would quickly lose their CERB due to the newly earned income. In this case, without the back-to-work bonus, the unemployed neighbour would almost certainly decline to watch his neighbour's kids, not wanting to be financially worse off as a result. And without this help, the first neighbour would perhaps not be able to return to work due to a lack of childcare, and also continue to collect CERB.
If only CERB were more flexible–designed with more of a sense of Canadians' actual situations and needs–then those who are unemployed could help address the childcare gap by offering childcare to a friend, neighbour, or family member in return for a little extra income to help them meet their own needs.
At a time when there is a significant need for childcare, the inflexible nature of CERB prevents those who are unemployed from offering childcare services in a way that would facilitate an easier return to work for others. That makes absolutely no sense.
Conservatives have always favoured choice in childcare, having been the first party to champion direct payments to parents over the state-run one-size-fits-all structure proposed by Liberals. The government should take our advice today and move quickly to ensure that nobody is penalized for offering childcare services to friends and neighbours in response to the current need, or for opting to accept any other type of available work.
Garnett Genuis is a Conservative Member of Parliament for Sherwood Park—Fort Saskatchewan.
Pierre Poilievre, MP, Carleton is a former Minister, a five-term Member of Parliament and the Conservative Shadow Minister of Finance.