Testimony at Finance Committee April 2020

by Kevin Milligan

I’m appearing at the House of Commons Finance Committee at 1pm PDT on Friday April 24th. The topic is “GOVERNMENT’S RESPONSE TO THE COVID-19 PANDEMIC: Panel on Students, Workers and Unemployed.”

My comments are below:

 

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Thank you for the invitation to appear.

My brief comments will first address some data, followed by thoughts about the future.

Data

I analyzed the March Labour Force Survey with economists Tammy Schirle and Mikal Skuterud for the C.D. Howe Institute. Already in March at the beginning of this crisis we can see a huge impact of COVID on work.

More than 2.2 million Canadians shifted out of work. But it is important to emphasize that you can’t just look at unemployment. Some did move to unemployment. But even more shifted to some kind of furlough; keeping their job but with zero hours worked. Overall, hours worked dropped by 18 percent in March compared to February. The hardest hit occupations were in cultural work, education, and food service. It was low-wage earners, women, and young people. For example, women earning less than $15 an hour saw a drop in total hours worked of 30%.

That was in March. What’s happening now?

The answer is hard to know because we lack timely data. Large business, small business, charities and families are making big decisions about their futures every day, and they need fresh data in this fast-moving economy.

Statistics Canada has reacted effectively by expediting GDP numbers and putting out innovative and timely data products. In addition, we now have administrative data on CERB applications three times a week—so we know that 6.82 million Canadians have now applied for CERB.

But we need more data to guide Canadians with crucial decisions:

  • provincial breakdowns of CERB administrative data
  • When available, administrative data on other emergency programs like CEWS, CEBA, and CESB.

The future

To close, I emphasize that even in the middle of this emergency, we need to keep our eyes on a plan for the future.

We need to consider how the emergency benefits we are now designing and implementing will serve Canadians in the partially-open economy that may be with us for some time.

We need to give employees and workers clear signals about how we will transition away from the emergency benefits at the appropriate time. Clear advance signals about the transition are needed so that everyone can plan.

Finally, we need to ensure we learn lessons from this crisis about how we support unemployed workers, and how we support our public service who deliver the programs that are needed when a crisis hits.

Thank you.