COVID-19: It’s a different story for high-income earners
Employment-wise the pandemic was over for Canada's high-income earners last summer
There is a lot of money in this country, much of it in Ontario. Unfortunately, COVID-19 has redistributed it upwards.
With the Ontario budget just around the corner, it’s the time to fund better income supports, stronger public services and a jobs strategy underpinned by public investment.
The problem is that Doug Ford has shown no interest in such an approach.
His government has consistently underfunded public services while at the same time reducing the taxes that pay for them.
So now we have, broadly speaking, two groups in Ontario – low-income earners and high-income earners – with vastly different experiences of COVID-19.
The pandemic didn’t take money directly from low-income earners and give it to high-income ones, but it might as well have: the effect has been the same.
Since last March, the federal government has stepped up to keep food on the table and stave off eviction for millions of out-of-work Canadians. Still, the $500-a-week Canada Emergency Response Benefit was less than half the wage of an average worker, and many CERB recipients had no savings to speak of and took on more debt despite the federal help.
It’s a different story for higher-income Ontarians.
After the initial shock of the first lockdown, incomes of the top quarter of wage earners in Canada bounced back. By last summer, many were working more hours, on average, than before the pandemic. Employment-wise, for them, the pandemic was over.
Their incomes didn’t change much, but their spending habits did. High earners working from home were spending less on gasoline and transit fares; less on movies, concerts and restaurant meals; and less on travel. With less to buy, their savings piled up, and they paid down their debts.
Meanwhile, the country’s ultra-rich have been having their own party.
In the first six months of the pandemic, Canada’s top 44 billionaires saw their wealth surge by $53 billion. And as thousands of small businesses fight to survive, big corporations are still paying dividends.
Ontario can do better.
Higher taxes on individuals and corporations who are better off as a result of the pandemic have a key role to play.
While our premier may oppose tax hikes because “people are hurting,” this is a smokescreen. Anyone who has watched luxury cars drive past a homeless person knows Ontario was a highly unequal place long before the pandemic. COVID-19 has made it worse.
Not counting COVID-19 spending, base funding for public services is set to fall short of the need until at least 2023, according to the Financial Accountability Office.
A return to pre-pandemic “business as usual” can only lock in inequality at a new and more desperate level. It can only divide Ontarians even further into haves and have-nots.
Randy Robinson is Ontario Director of the Canadian Centre for Policy Alternatives. @RandyFRobinson.