No, not the virus. It is already very real.
2.1 million Canadians have applied for EI. On Monday, the doors will open for applications for the CREB. Real estate is crashing. A lot of small businesses are closed and there is a real question as to whether many will be coming back if this goes on until, say, May 15th.
Here’s the thing: to this point people have been able to get by on savings, informal loans and scraps of income. Not well, but ok. That will not be the case for much longer.
On Monday there is going to be the mother of all internet swarms as people try to apply for the CREB. Part of that process is, apparently, setting up a “My Account” with the CRA. My younger sons have been trying to do just that since the Prime Minister suggested it on Wednesday. They have failed because the CRA system is giving them error messages when they try to fill in their information. Not at all an encouraging sign.
My boys will be fine and my older son filed for EI a week and a half ago so he should be ok.
However, if half a million Canadians crash the CRA on Monday, many of them will not be fine. They will be dead broke with no obvious path forward.
How long will that situation remain calm?
The “application” process for the CREB is an unnecessary bottleneck which may turn out to be a break point for the system overall.
Is there a Plan “B” in case the CRA can’t handle the volume. There should be and it should be simple and get money to people who need it.
I have suggested this in a variety of places but I will suggest it again.
A smart, decisive government would have looked for every possible way to get money into the hands of the unemployed, the stay at home moms, the older adults and the welfare recipients by the end of March. No questions asked, no applications required. The Canadian government, through its various programs and the Canadian Revenue Agency, has the name and bank account information for millions of Canadians. Simply sending $2000 to people who receive the Child Tax Benefit, the GST rebate and CPP/OAP would kick start the process. Sending $2000 to every single one of the EI applicants currently in the system, without looking at eligibility would be a solid move. Then coordinate with the provinces to send $2000 to every welfare recipient.me, a week ago
The whole point of the CREB is to get money into the hands of people who need it. The whole application/eligibility thing just gets in the way. So does the insane requirement that people re-apply every month.
The Federal and Provincial governments have decided that Covid-19 is serious enough that it warrants shutting down the Canadian economy. (I am not sure this is actually the right response but it the response we have for now.) By doing this the governments have created an obligation to ensure that their citizens have enough money to sustain themselves as long as the shut down is in effect. This will be insanely expensive and likely deeply inflationary. But that is a “down the road” consideration. The key concern right now needs to be getting as much money to as many people as possible as soon as possible.
For the next month it likely makes sense to continue with the social distance/stay at home measures currently in effect. More and more people are masking up. By May we should have a) a useful five minute test to determine if a person currently has CV-19, an anti-body test to find out if a person has had CV-19 (and is therefore presumed immune), spreading use of hydroxychloroquine and other treatments which help speed recovery. We will have, we hope, flattened the curve so that the number of cases stay within our hospital’s capacity to treat.
However, by the end of April we should also be looking at how we can begin to re-open the economy. At the moment we are treating everyone as a potential carrier as well as a potential patient who would have a significant chance of dying if they caught CV-19. With experience, we should be able to be more granular in our approach.
We will also be in a better position to do a cost/benefit analysis of the restrictions government imposes. At the beginning of March, when CV-19 was first seen as a serious problem, the magnitude of the problem could not be pinned down. That meant that virtually any restriction could be justified as the potential cost of not imposing the restriction was, more or less, infinite. In principle, the CV-19 epidemic could have killed us all so stopping it was worth pretty much everything.
Now we know a lot more about CV-19 and what can be done to lessen its impact. It may turn out that a simple cotton mask, (much denigrated by Canada’s Chief Health Officer, Dr. Tam) may have a significant role to play in reducing the spread of CV-19. Cheap, potentially effective and, realistically, masking might allow the resumption of some business activities.
We know that the virus is nasty to older people and often fatal to the many over 80’s in our communities. We know that care homes are susceptible because the virus spreads in communal settings more easily than through casual contact. We know that young children and teens, while they can get CV-19, almost always have light cases.
The more we know the more we can tailor solutions which will allow a bit of a return to normal or a version thereof.
If we had infinite money we could sustain our current restrictive measures for a year or two until we had a vaccine. But while we can print money by Direct Deposit, that money comes with costs. And remember, money is not actually anything at all. You don’t eat money, you eat eggs. Those eggs come from somewhere and there is a supply chain which gets them to the store.
The challenge right now is to control the virus without killing the supply chains which we all rely on.
Let’s see how our Federal government does on Monday.