Federal budget 2019 & equity – How far did we get?

5 MIN READ

By Rhonda Bradley

Senior Advisor, Public Affairs at United Way Ottawa

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On March 19, 2019, Finance Minister Bill Morneau read into record his final budget proposal prior to the upcoming federal election. The defining feature of this budget was its consideration of Canada’s current economic picture. On the one hand, Canada is posting a $324-million surplus when a deficit of $18.1-billion was projected. At the same time, all economic forecasts suggest that Canada is still in a period of economic uncertainty due to national and global factors with no signs we are close to being “out of the woods.”

It’s the perfect scenario for new program spending in areas that are intended to drive economic growth.

National employers are beginning to feel the implications of multiple converging trends – a shrinking labour pool, the integration of artificial intelligence and global competition for talent. According to this week’s Globe and Mail:

“Despite a hiring boom that’s driven the jobless rate close to an all-time low, Canadian employers are struggling to hire enough workers. The percentage of companies reporting labour shortages has risen to a near 10-year high, according to the Bank of Canada’s business outlook survey. Moreover, the number of national job vacancies topped 550,000 in the third quarter of 2018, based on the most recent available data, an increase of 36 per cent from two years earlier.”

In an effort to be responsive, the federal government has identified skills training as a key priority with this budget, and today introduced new measures aimed at helping older Canadians boost their job skills.

This is good.

It will go a long way to helping Canadians who are nearer to retirement stay in the labour market longer – particularly when it’s reported that “almost half of Canadians 55 years and older say they are not on track with their retirement planning.” With life expectancies rising, we need to get more Canadians ready to retire and that means ensuring their final earning years are productive.

There remains a lot of room to do more in in the area of untapped talent, however.

Canada has made great strides in closing the employment gap between newcomers and Canadian-born workers in recent years. According to a December 24, 2018 report from Statistics Canada, the immigrant unemployment level is at its lowest since 2006, when the agency first started collecting data in this area. The unemployment rate for working-aged immigrants in Canada is 6.4 per cent as of 2017. In contrast, the unemployment rate for Canadian-born people was five per cent in the same year.

The numbers shift however when you look through the gender lens. Immigrant women in Canada face greater employment barriers and earn less money than both male immigrants and Canadian-born women. In its 2019 budget, the government outlines that the participation rate for recent immigrant women was 20 percentage points lower than that for men (61 per cent versus 81 per cent) and that indeed, the gender wage gap is highest among recent immigrants.

It also acknowledges that “selection policies for immigration programs are not tailored to capitalize on the economic value of female immigrants.” The data shows similar employment barriers also exist for the children of immigrants – especially those whose parents are visible minorities. This is even when they achieve higher levels of education than Canadian-born children. “Children of immigrants from nearly all visible minority groups earn less than their Canadian-born peers.”

This tells me that inequity and bias is multi-dimensional and we are not doing enough to address it.

We need a similar strategy for women and youth with disabilities.

Canadians living with disabilities continue to be sidelined from our economy. The latest stats reveal that about 59 per cent of working-age adults with disabilities were employed compared with around 80 per cent of those without disabilities. That is a big gap, and it translates into lower personal income levels for all people with disabilities.

Here again however, women and youth face even greater barriers. For example, women with disabilities, aged 25 to 64 years, had median after-tax personal income that was 24 per cent less than their male counterparts and 13 per cent less than women without disabilities. The unemployment rate for youth with disabilities in Ontario was 30.1 per cent in 2012, compared with 18.0 per cent for youth without disabilities.

If we really want to stimulate the economy, and help employers fill labour market gaps we need to do two things: invest in skill developments and examine where we lag in terms of untapped talent.

To do better, Canada needs to move from its more generic approach to labour market integration to targeted investments in strategies aimed at unique segments within our untapped labour pools. I’ve mentioned immigrants and people with disabilities above, but Indigenous labour market inclusion, particularly for Indigenous youth is yet another important example. The unemployment rate among Indigenous Canadians is still 19.1 per cent. The Centre for the Study of Living Standards found that if their exclusion can be properly addressed, Indigenous people would contribute as much as a fifth of the growth in the labour force over the next 20 years.

The government’s budget proposes a number of investments, starting in 2019–20, to ensure Indigenous students have better access to post-secondary education, and more support to ensure they can succeed during their studies. That is essential, but as demonstrated in the case of immigrants and people with disabilities, education alone will not help Indigenous peoples break down barriers to inclusion and employment.

Equity will not be achieved by approaching all things equally.

I know the government knows this. For example, under the new Social Finance Fund, a minimum of $100 million will be allocated towards projects that support greater gender equality—targeting existing philanthropic and private sector funds towards this purpose in order to help reduce the social and economic barriers faced by diverse groups of Canadians of all genders.

This budget allocates a significant amount of effort and money into data collection on equity and to support future planning, but it appears we have a way to go before we see targeted, best-practice strategies in action at the national level.

Overall, there is a lot of good news for United Way Ottawa’s priorities within this budget: investments that will help new Canadians and people with disabilities find employment opportunities and increase their earning power, support for our aging population to keep them out of poverty as they age, and focus on helping youth and women get ahead in an economy that often leaves them behind.

That said, for a government that understands equity is good for the economy and examines budget proposals through a policy lens that includes gender, age, ethnicity and sexual orientation and more, the absence of a more defined and aggressive equity approach to labour market inclusion remains an outstanding item – particularly in light of the growing labour shortages reported by Canadian employers.

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