News

Canada's $1B Coronavirus Plan Abandons Gig Workers

If you work part-time or juggle a bunch of side hustles, move along. Justin Trudeau’s social safety net probably won't help you.
March 11, 2020, 8:17pm
Justin Trudeau's coronavirus economic plan ignores gig workers
Photo by Toronto Star contributor Steve Russell via Getty Images

Prime Minister Justin Trudeau announced a $1 billion plan to deal with the economic impact of the coronavirus outbreak. But if you’re stringing together contract, freelance, or gig work, it likely does nothing for you.

Trudeau’s “comprehensive” package is, according to the PM, “pulling out all the stops to make sure Canadians stay safe, healthy and supported.” He went on to say that “No one should have to worry about their job if they have to be quarantined. No employer should feel like they have to lay off a worker because of the virus."

The federal government’s plan includes $5 million to speed up access to Employment Insurance (EI) by waiving the one-week waiting period. That’s great if you’re a full-time employee. But if you are a food delivery courier or freelance photographer, you may not eligible for EI because Canada doesn’t recognize you as an “employee.”

The EI system fails

According to the Canadian Centre for Policy Alternatives (CCPA), a think tank, only 42 percent of unemployed workers qualified for EI in 2017. Support for the poorest was ultra-low; just 28 percent of workers earning $15 an hour or less were eligible for benefits.

To access EI, there is a complicated set of rules, including a minimum number of hours worked in a year (between 420 and 700, depending on where you live). Those requirements make it hard for people who work less than 35 hours a week, juggle multiple part-time jobs, or have erratic schedules, to qualify. You also need to have paid into the program ahead of time, which many gig workers don’t.

Nura Jabagi is a PhD candidate in business technology management at Concordia University. Her area of expertise is gig workers who connect with clients through apps—Uber, Lyft, Skip The Dishes, Fiverr.

Uber and Lyft announced plans to financially compensate drivers affected by coronavirus, but Jabagi says corporations can’t be trusted to look out for gig workers—that’s our social safety net’s job. She said the coronavirus outbreak highlights the long-overdue need to overhaul a system that ignores a growing number of precariously-employed workers.

According to Jabagi the government needs to prioritize creating a better system to classify different types of gig workers in order to protect them. “I think they will find that many so-called ‘independent’ gig-workers are actually employees and should be allocated the same benefits as employees,” she said.

Even if you are one of the lucky ones, a barista making minimum wage for example, you won’t get much—the maximum benefit is 55 percent of your income. Pam Frache, a coordinator at Fight for $15 and Fairness, a workers’ rights group, said “When you’re only getting a portion of a minimum wage that is already below the poverty line that is simply devastating for workers.”

Paid sick days needed during an outbreak

The problem, according to labour experts, is that paid sick days are what precariously-employed and low-income workers need during the coronavirus pandemic, because people who are ill or have been exposed should stay home. The recommended quarantine time is 14 days.

The federal government has mandated the first three of up to five paid sick days for federally-regulated workers (10 percent of the workforce), but most people fall under provincial labour laws when it comes to sick days. Only Quebec has two mandatory paid sick days for employees. Fight For $15 and Fairness is calling on federal and provincial governments to institute at least seven paid sick days for all workers.

Armine Yalnizyan is an economist and the Atkinson Fellow On The Future Of Workers. She says paid time off for those who don’t currently have enough is urgently needed to prevent further COVID-19 contagion. “Social distancing and allowing people to self-isolate are the top priority right now,” she said.

Some gig workers like writers and designers, already work remotely. But many, including the lowest-paid, such as drivers, bike couriers, and aspiring artists, don’t have that kind of flexibility.

Trudeau left the door open for more help and said the government is “exploring additional measures” such as income support for people who don’t get sick days or access to EI.

Domino effect

Frache calls this a “wake-up call” to Canada, highlighting the urgent need to simplify the EI system which she calls “a dog’s breakfast” because it’s so complicated.

“The employment insurance system fails to protect workers adequately, and fails to be an economic stabilizer for the entire country. It’s supposed to be a cushion so that when there’s a crisis, it doesn’t have a catastrophic effect as workers lose income, as hours are cut back, therefore cascading the problem,” said Frache.

Yalnizyan says the government needs to figure out how to support gig workers and the most vulnerable fast and $5 million to make EI more accessible isn’t enough. If the outbreak continues, she says the economic domino-effect could push people to default on their mortgages or be unable to make rent.

“For people who get sick and are barely making ends meet, defaulting on your shelter costs is a huge risk,” Yalnizyan said. Housing is the single biggest expense for most households and is in jeopardy if people are suddenly making significantly less money.

She points to Italy, which is on lockdown and suspended mortgage payments this month. The Italian government had a similar “debt holiday” policy during the financial crisis in 2008. She wants to see similarly creative solutions rolled out in Canada.

“You can see how a massive contagion changes our sight lines of what our social safety net requires of us,” said Yalnizyan. “We don’t want to make more people homeless as a result of this and that’s what’s at risk if we don’t stabilize income.”

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