Last month, it was announced that the government would begin the recovery of Canada Emergency Response Benefits (CERB) from recipients that the CRA considers ineligible.
“Letters from federal departments going out to millions of mothers … will confirm that pandemic benefits will be confiscated from their ongoing child benefits,” stated John Stapleton, Principal and Founder of Open Policy in a recent press release from Campaign 2000: End Child and Family Poverty.
Hardest hit will be mothers with larger families who require child benefits the most. A mother with four children earning $33,000 annually, would normally receive the maximum Canada Child Benefit (CCB) payment. Instead, she could see that benefit reduced by up to $3,000 for the coming year.
A brief history of Campaign 2000
For the past two and a half years, Campaign 2000 has been organizing a CERB Amnesty Working Group. Membership is made up of community organizations, policy analysts, community legal clinics and people with living expertise of poverty, disability and other intersections of marginalization.
They have been monitoring the effects of CERB on the incomes and the lives of people with low and moderate incomes. According to analysis by Open Policy, this round of clawbacks will primarily affect mothers, despite commitments from the federal government to advance gender equality and feminist policy.
In 1989, Ed Broadbent, federal NDP leader, put forward a resolution to end child poverty by the year 2000. The resolution was unanimously passed by parliament.
But by 1991, child and poverty organizations realized there were no investments, targets or even programs in place to bring the resolution to fruition. In fact, child poverty was getting worse.
Several organizations convened in Ottawa and wrote the first national report card on child poverty. That gave rise to Campaign 2000, a coalition of 120 partners committed to addressing child and family poverty and who still believe the federal government has a responsibility to honour the resolution.
Leila Sarangi, Director of Social Action with Family Service Toronto, is also the National Director of Campaign 2000.
“When it was the 30-year anniversary in 2019 of the passing of the resolution, we were like, we’ve missed one generation of kids who could have benefitted from this vision,” said Sarangi in a recent interview with rabble.ca.
Help is (still) badly needed
During the pandemic, income insecurity increased for many families with children. Some found themselves unable to pay their rent and had to move into motels. But the financial insecurity is about to become even more problematic thanks to the clawback of CCB.
“The problem is that the benefits were received months ago – and in some cases over a year ago. Families have spent that money on what it was intended for, that was to stay safe and shelter at home … In the context of rising inflation, families, including those on moderate incomes, are depending on government transfers like the Canada Child Benefit to make ends meet.”
CERB, the three recovery benefits and the lockdown benefits, all count as taxable income and can affect eligibility for refundable tax credits like CCB. Pandemic benefits pushed some low and moderate-income families over the tax credit threshold resulting in clawbacks.
According to Sarangi, “No one was expecting that. People knew it was taxable income and they paid income tax on it. But they didn’t realize the next July it was going to get counted into benefits they would get in the future. Families have not been able to plan for this.”
CERB was spent on necessities during the pandemic and in a time of high inflation. It also brought some relief from the psychological stress that chronic financial insecurity harbours.
Since the floor for receiving CCB is a combined family income of $33,000, those hardest hit will be families with moderated incomes who depend on the monthly payments to make ends meet.
At the end of the day, the federal government will clawback $1.45 billion of child benefit payments over three years. Sarangi suggests using a targeted approach to ensure families receiving CCB payments are not included in the sweep.
Jasmine Ramze Rezaee, Director of Advocacy and Communications at YWCA Toronto said in an interview with Rabble, “The CERB clawbacks feel punitive. They are disproportionately impacting lower and medium income women-led households with multiple children.”
It’s well documented that 40 per cent of children in single-women-led households live in poverty. Ramze Rezaee said:
“In advocacy, we were really hoping for greater leadership on behalf of all orders of government. We actually saw CERB as a step in that direction of governments recognizing income security is, in some respects, contingent on so many environmental factors, social forces, economic forces and there’s a role for the government to play in ensuring income security and not just letting the market control or dictate certain livelihoods.”
A different, but related, issue centers on mothers who have been retroactively deemed ineligible for CERB based on the documentation they provided. These women are now being asked to repay CERB as well.
Instead, Sarangi wants the federal government to, “Look at people’s incomes and what they can and can’t do. We need to be targeting low and moderate-income moms and providing them with a CERB amnesty. That means, stop pursuing them for repayments and make sure there’s no future clawbacks in the way they did with the Guaranteed Income Supplement (GIS) – they legislated no future clawbacks related to pandemic benefits received. No future clawbacks and refunding the clawback amounts for anybody who’s incomes are low or moderate.”
In May, Sarangi presented to the House of Commons Finance Committee. At that meeting, NDP MP Daniel Blaikie, Critic for the Treasury Board, addressed the fact that the federal government has allocated spending $260 million over four years to administer CERB repayments from individual Canadians.
While the Canada Revenue Agency and Minister Qualtrough’s office have said they will be flexible and work with people, Sarangi maintains, “What we know is that $10 a month, $20 a month, $30 a month — it’s not there when people are budgeting down to the dime or to the dollar. It’s just that money doesn’t exist.”
Poverty caused by the ongoing legacy of colonialism
It’s also incredibly frustrating when ‘financial experts’ with little to no knowledge of living with chronic poverty victim blame those being victimized the whole CERB repayment situation.
That victim blaming agenda buys into the mythology that poor personal choices led to this life of poverty when in fact it can be traced back to systemic inequalities and racism.
“It’s systemic racism. It’s systemic ableism. It’s ongoing impacts of colonization, gender-based violence and not having the housing and the work opportunities women need to find safe housing and move on with their lives. There are so many systems at play here,” observes Sarangi.
And, from a return-on-investment perspective, the money that is being clawed back is such a small amount it will have virtually no impact on federal revenues.
This is a feminist issue
Sarangi points out the differential treatment happening between the different types of pandemic benefits. The Canada Wage Subsidy program was intended to help corporations maintain levels of employment during the pandemic. However, many of those companies continued making profits throughout the pandemic.
Some of that pandemic relief money went to Chief Executive Officer (CEO) bonuses instead of to workers who were putting their lives on the line on a daily basis. In an era of historically low corporate taxes and in the absence of a pandemic windfall tax, that is truly reprehensible.
“It’s completely inappropriate and we call it antithetical to a feminist economic policy approach that the federal government has committed to,” said Sarangi.
Rezaee says at the onset of the pandemic, there was some hope that the gaps in services, precarious nature of work, and some of the systemic inequities in society would be addressed. Now, that hope is fading.
To ensure a feminist recovery, Rezaee says there needs to be more robust and sound pro-woman, pro-worker, anti-poverty, housing and income security policies. That will create a society that addresses the growing inequalities and is more resilient to future pandemics.
The fight continues to end family poverty
Sarangi believes that an income security program that catches everybody and raises the minimum floor is needed. To that end, Campaign 2000 promoted transforming the Canada Social Transfer (CST), the block funding the federal government provides to provinces and territories.
That money funds social assistance, disability assistance programs, education and child care. There’s currently a cap in place limiting the funds the federal government can invest in the CST program.
The issue is that there is no accountability on the part of the provinces and territories. So, while provinces and territories receive billions of dollars there is no requirement to report back on the number of people reached or how folks were helped.
“Our recommendations, Campaign 2000, is that that money should be helping to advance our commitments to our human rights obligations and advancing the end of poverty through a human rights framework and that Canada Social Transfer is a really important mechanism to be able to do that,” explains Sarangi.
The coalition would like the federal government to remove the cap and increase CST funds by $4 billion. Sarangi then wants the federal government to hold provinces and territories accountable for their spending in order to ensure human rights obligations are being met and advanced. Improved accountability would also show whether income securities programs are driving incomes up to the low-income measure.
Rezaee believes, “Moving away from means-tested programs, putting cash into people’s pockets can make a big difference.”
Have you, or someone you know, received a letter from the CRA, lost benefits or had deductions made to benefits like social and disability assistance, rent supplement, Guaranteed Income Supplement (GIS), child benefits, worker benefits or Goods and Services Tax (GST) credits because of getting CERB or CRB?
Then Campaign 2000 would like you to share your story.
You can hear the full interview between Doreen Nicoll and Leila Sarangi on the latest episode of rabble radio.
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