Working Without a Net Rethinking Canada’S Social Policy in the New Age of Work

MOWAT RESEARCH #132 | NOVEMBER 2016

Working Without a Net Rethinking Canada’s social policy in the new age of work

BY SUNIL JOHAL & JORDANN THIRGOOD Acknowledgements

The authors would like to thank Elaine Stam for her design work on this report, as well as Michael Morden, Jamie Van Ymeren, Erich Hartmann, Reuven Shlozberg, Scott Perchall and Michael Crawford Urban for their review and contributions to the paper. Any errors or omissions are the sole responsibility of the authors.

Authors

Sunil Johal Jordann Thirgood POLICY DIRECTOR POLICY ASSOCIATE

Sunil Johal is Policy Director at the Mowat Since joining Mowat in 2015, Jordann has Centre. He oversees the Centre’s research contributed to a variety of projects on fiscal agenda and manages the Centre’s research federalism, the sharing economy, and the team. Previously, he was a Director with the impact of technological innovation on Canada’s Ontario Ministry of Economic Development labour market and social programs. Prior and Innovation and has also held senior to this, she spent two years working in the management and policy roles with the financial sector and ran a pro bono policy Cabinet Office, Ministries of Finance and consulting firm for non-profit organizations Intergovernmental Affairs and federal Treasury in the GTA. Jordann holds a Master of Public Board Secretariat. He holds degrees from the Policy degree from the University of Toronto, London School of Economics, Osgoode Hall and an Honours degree in International Law School and the University of Western Development Studies from the University of Ontario. Guelph.

MOWATCENTRE.CA @MOWATCENTRE 439 UNIVERSITY AVENUE The Mowat Centre is an independent public policy think tank SUITE 2200, TORONTO, ON located at the School of Public Policy & Governance at the M5G 1Y8 CANADA University of Toronto. The Mowat Centre is Ontario’s non-partisan, evidence-based voice on public policy. It undertakes collaborative applied policy research, proposes innovative research-driven recommendations, and engages in public dialogue on Canada’s most important national issues. ©2016 ISBN 978-1-77259-038-8 a

Contents

Executive Summary 1

1 Introduction 2

Understanding the New Economy 5 2 Long-term Trends 5 Emerging Issues 13

Implications for Canada’s Social Architecture 27 3 Employment Insurance & Training Programs 28 Public Pensions 30 Healthcare 32 Child Care 34 Affordable Housing 36 Employment Standards 38

Analysis & Recommendations 41 4 Policy Recommendations 42

5 Conclusion 53 Without the right approach, Canada could find itself in a long-term period of economic stagnation, with many Canadians on the sidelines of a chaotic, churning labour market. WORKING WITHOUT A NET WITHOUT A WORKING people tomeetthechallengesahead. Canada’s socialpoliciesandprograms willprove woefullyinadequatetosufficientlyinsure enough social architecture. Absenttransformational policychangetorecognize thenewworldofwork, technological factorsare creating agrowing numberofworkers withlittleornoattachmenttoCanada’s This report argues thatprevailing economicandlabourmarket trends combinedwithemerging labour patterns. permanence andsecuritymustalsobeconsidered asakey ofthetechnologicalwave part disrupting economy platformsincreating micro-tasks thatoffer more butless supplementalincomeopportunities and reporters are toseeautomationtake starting over routine functions. Therole ofdigitalsharing vehicles are already ontheroad, robo-advisors are dispensingfinancialcounselandeven lawyers These are vitalquestionsthatCanadiangovernments grapplingwithtoday. muststart Autonomous workforce? jobs emerge, andwilltheirnewroles make oftheever-expanding thempart precariously employed diminishes? Howlongwillittake themtore-enter thelabourmarket asnewtasksandtypesof What ifthey require ortheirabilitytoafford accesstomedicineormentalhealthservices, housing they have accesstorobust, effective trainingtore-skill andupgradetheirskillsfornewopportunities? onsocial assistance?Will unemployment benefits,drawingdowntheirpersonalassetsandsurviving What willhappentothepeoplecurrently holdingthesejobs?Willthey endupcycling through gigs. others couldseetheirfull-timepositionsreplaced temporary withshort-term, Millions ofCanadiansmightlosetheirjobstoautomationinthenextdecade.Hundreds ofthousands EXECUTIVE SUMMARY

1 | THE MOWAT CENTRE 1INTRODUCTION Canadians are facing an increasingly uncertain economic future. From the steady erosion of Ontario’s manufacturing heartland to the rapid downturn of Alberta’s oil and gas sector, challenges abound. Moreover, even if the price of oil does rebound, or manufacturing plants are reshored, how many new positions will be full-time with good benefits and how many will be replaced by automated processes, artificial intelligence or robots? There are no clear answers as to where and how the jobs of the future will be created, and if they will be as reliable or plentiful as the jobs of the past.

Increasingly, Canada’s labour market is characterized by:

» More part-time, precarious work » Marked income inequality Part-time positions accounted for 89 per cent of 3 million Canadians live in poverty; and the gap job creation in Canada between October 2015 between high and low earners continues to and October 2016,1 and more than half of all grow.4 Greater Toronto Area workers are employed in positions with some degree of precarity.2 These trends are not new, and they have many complex drivers. But there’s a high likelihood that » Anemic income growth these trends will accelerate and become more Between 2000 and 2013, median after-tax pronounced in the face of rapid technological income averaged 1.2 per cent real growth per change, as digital peer-to-peer platforms such year and only 1 per cent per year for the lowest as Uber and rapid advancements in artificial 3 10 per cent of earners. intelligence and robotics continue to come online. Taxi drivers and accountants have already realized their jobs are on the brink of disappearing in the face of digital progress. Bankers and doctors could be next.

1 Statistics Canada (2016) “Table 1: Labour force characteristics by age and sex – seasonally adjusted,” The Daily. http://www.statcan.gc.ca/daily-quotidien/161104/t001a-eng.htm. 2 Wayne Lewchuk et al. (2015) The precarity penalty, PEPSO, United Way, 4 Employment and Social Development Canada (2016a) “Towards and McMaster. http://www.unitedwaytyr.com/document.doc?id=307. a poverty reduction strategy.” http://www.esdc.gc.ca/en/reports/ 3 Statistics Canada (2015) “Income of Canadians, 2000 to 2013.” poverty_reduction.page; Conference Board of Canada (2013) “In- The Daily. http://www.statcan.gc.ca/daily-quotidien/151217/ come Inequality.” How Canada Performs: International Rankings. http://

2 | WORKING WITHOUT A NET2 | WORKING WITHOUT A dq151217c-eng.htm www.conferenceboard.ca/hcp/details/society/income-inequality.aspx. multiple gigs withnobenefits?What is the fall upontheshouldersof theworker juggling burdens ofthenew digitaleconomyshould risks generatedinsuchan environment. Which tough questionsabouthow tobestmitigatethe sudden dislocationofentire sectorsposes A future thatpromises and the uncertainty return to,isadauntingchallenge. fields, suddenlyoutofajobandwithnofieldto professionals withyears ofexperience intheir hundreds ofthousandsblueand white-collar changes totheway weworkandlive. Helping permanent, technologicallydriven structural These cyclical downturnsmay soonyieldto jobs intheirfieldsafteraspellofunemployment. were cyclical innature, andpeoplereturned to Many ofthejoblossesduringfinancialcrisis approaching. compared edgethatwecansee tothecliff’s like aspeedbumpforCanada’s economywhen retrospect, theglobalfinancial crisismightlook tax relief andcashtransfers toindividuals.In billions ofdollarsinstimulusoninfrastructure, the aftermathever since,spendinghundreds of Canadian governments have beendealingwith rate tojumpby over 2percent,to8.7cent. financial crisis,causingtheunemployment lost 400,000jobsduringthe2008-2009global tolookbackeightyears,necessary whenCanada churn couldmeantotheeconomy, itisonly To highlightwhatthisscaleofjoblossand realistic. and deliveries makes theseprospects worryingly second mostcommonoccupationformen),cabs to driverless technologyfortruck-driving(the a living,thepossibilityofquicktransition more than500,000Canadianswhodrive for rate touching12percent.Given thatthere are timeperiodwouldmeananunemployment short Losing even 1millionjobstoautomationwithina » Aseriesof recommendations forpolicymakers. change. relevance in the face of societal and technological architecture programs andtheirresilience and » AnassessmentofCanada’s existing social recently emerging technologicalissues. been occurringover thepastseveral decadesand » Anoverview ofkey economictrends that have The followingtopicsare covered: and don’t lag, rapid changes to the nature of work. ensure thatthey are designingpoliciesthatlead, to keep inmindasthenature ofjobsevolves to proposes key considerationspolicymakers need programs workers. andpoliciessupporting It market andtheadequacyofcurrent social technologies onCanada’s economyandlabour This report explores theimplicationsofnew spectrum. transformational changesacross thepolicy auniquewindowtoconsider political parties digital economy. Thisaffords governments and thosewhoaresupport beingaffected by the of more generous universal socialprograms to broad constituencyofthepopulationsupportive the incomeladdermeansthatwemay seea changes willunleashonCanadiansupanddown andfearThe economicuncertainty thatthese of achaotic,churninglabourmarket. stagnation, withmanyCanadiansonthesidelines could finditselfinalong-termperiodofeconomic economy. Withouttherightapproach, Canada could positionitselfattheforeground ofanew Canada the rightstrategies,skillsandsupports, technology onjobsrepresents anunknown.With For policymakers inCanada,theimpactof enforce fairground rulesforall? governments protect themostvulnerableand appropriate role Howcan forprivate industry?

3 | THE MOWAT CENTRE Policies and programs that are integral to the well-being of Canadians remain intimately tied to conventional ideas of employment, despite a new economy that demands new approaches. 4 | WORKING WITHOUT A NET4 | WORKING WITHOUT A UNDERSTANDING 2 THE NEW ECONOMY Canada’s economy and labour market are products of decades of technological advances, cultural changes, and demographic shifts. Many of these trends have gradually been occurring for decades and come to a tipping point in today’s digital era, including:

» unequal prosperity » increases in precarious work » declining unionization

In addition, other issues have emerged swiftly and as a consequence of returns from capital left governments, corporations and employers outstripping economic growth.5 Looking at scrambling to understand their impact, including: Canada’s experience, this argument appears to bear out across indicators including income » the unique nature of the digital economy inequality, corporate profits and wage growth. » technology’s impact on jobs » living in an on-demand society Canada’s income inequality has gradually crept up over the past 40 years, consistent with trends Assessing what these trends and issues mean in many other developed countries.6 Figure 1 for jobs and the economy, and how they might shows the change in Canada’s Gini coefficent, continue to unfold in the coming years is an a statistical representation of a nation’s income important first step to understanding the policy distribution that is commonly used to measure landscape. inequality. Over time, inequality has continued to grow by all measures of income, both before and Long-term Trends after government taxes and transfers.

UNEQUAL PROSPERITY Recent OECD studies highlight some other

Conversations about income inequality have indicators of inequality in Canada: come into the mainstream in recent years, » The share of total income belonging to the highlighted by the release of Thomas Piketty’s richest one per cent of Canadians rose from 8.1 Capital in the Twenty-First Century in 2013. per cent in 1980 to 13.3 per cent in 2007. His central argument holds that capitalism will systematically generate inequality and 5 Thomas Piketty (2014) “Capital in the Twenty-First century.” Belknap Press of Harvard University, Translated by Arthur Gold- concentrate wealth in a small number of hands hammer. 5 | THE MOWAT CENTRE MOWAT 5 | THE 6 Conference Board of Canada, 2013. 6 | WORKING WITHOUT A NET Canada’s GiniCoefficient(Measure ofIncomeInequality) FIGURE 1 » Thebottom10percentofCanadiansin2011 » Canada’s toponepercentofearnersheld15 per » Canada’s toponepercentofearnersaccounted a gamechanger?” OECDPublishing,Paris. cus ontop incomes andtaxationinOECDcountries:Was thecrisis inequality keeps rising.” OECDPublishing,Paris; OECD (2014a)“Fo- OECD Publishing,Paris; OECD (2011)“Dividedwestand:Why 7 OECD (2015)“Inittogether: Why lessinequalitybenefitsall.” Source: CANSIM Table 206-0033

cent ofCanadians. compared to24.2percentforthetop10 accounted forjust2.8percentoftotalincome, cent ofhouseholdwealthin2011. countries). exceeded by theUnitedStatesamongOECD growth between1981and2010(againonly overall income for 37percentofthecountry’s

7 2 2

Figure 2). has translatedintoreal wageincreases (see increased by 52percent, productivity (i.e.,real GDPperhourworked) 54 percentinreal percapitatermswhilelabour Between 1981and2015,theeconomygrew by prosperous economyover thepastfourdecades. At amacro level, Canadahas benefittedfrom a pling. andAndrew9 ErikBrynjolfsson McAfee (2015).TheGreat Decou- 8 CANSIMTables 380-0064,0051-0001,383-0008. wage growth, are nolongermarried. prosperity, theoverall growth oftheeconomyand Decoupling, asthetwohalves ofeconomic work. work. the formofnon-standard countries hasbeen in mid-1990s among OECD growth since the 60% ofemployment

Harvard Business Review, June2015. 2 8 2 Thistrend hasbeentermedtheGreat 22 2 2 2 2 2 2 althoughneither 2 2 2 9

Wages &SalariesasaPercentage ofGDP FIGURE 3 » InCanada,thewageshare ofGDPfell by 7.5percentbetween1981and2015.(seeFigure 3). Since the late 1970s, the percentage of GDP thatworkers receive fortheir labour has beensteadily declining: be attributed to this change in categorization,not substantial wage increases categorize employment changed in 1983and again 1997. The slight shift upwards after 1997 can partially Source: CANSIM Tables 281-0022, 281-0008, 281-0030. Note: themethod used by Statistics Canada to Real Wage Growth(Average HourlyEarnings,Adjusted) FIGURE 2 tives.ca/sites/default/files/uploads/publications/National_Office_Pubs/2007/Rising_Profit_Shares_Falling_Wage_Shares.pdf. Ellen RusselandMathieuDufour (2007) “Risingprofit shares, fallingwageshares.” 10 Canadian Centre forPolicy Alternatives. http://policyalterna- Source: CANSIM Table 380-0063 2 2 22 2 2

2 2

10 2 2 2 22 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 22 2 2 2 10 2

7 | THE MOWAT CENTRE 8 | WORKING WITHOUT A NET 15-20 percentinthesameperiod. fell industry bytransportation 16-17 percent,whilewagesinfinance,insuranceandreal estate rose by However, isnotthesameforallindustries.TheCCPA thestory studyalsofoundthatwagesinthe Canadians, makingitdifficulttomake endsmeetamidstrisingcostsofliving. an additional$10,000eachyear. additional $200ontheirpaycheck eachweek.For afull-timesalariedemployee, thiswouldamountto productivity, even ifonlyfrom 1991to2005,Canadianworkers wouldhave received anaverage of an A studyby theCanadianCentre forPolicy Alternatives notesthatifreal wagesclimbedwith Source: CANSIM Table 380-0078 Corporate Profits(AfterTax) asPercentage ofGDP FIGURE 4 » Over thesametimeperiod,corporateprofits aftertaxes asashare ofGDPincreased by 77percent. 12 Ibid. Ibid. 11

(see Figure 4). 2 2 2 11

Wage stagnationcontinuestobeadistressing problem formany 12

2 2 2 22 2 2 2 2 2 2 2 2 2 22 2 2 2 2 reflect thenewworldofwork. approaches. For policymakers, thismeansthinkingabouthowoursocialarchitecture canbetter intimately tiedtoconventional ideasofemployment, despiteaneweconomythatdemands Policies andprogramsthatareintegraltothewell-beingofCanadiansremain social supports. standard employment relationships,whichultimatelydrives awedgebetweenworkers andexisting on-demand economy. Thesetrendshave propelledashiftaway fromtheSERandtowardsnon- andthedevelopmentdeclining unionization,theriseofprecariousemployment, ofadigital increasingly rare.Thenatureofworkisnowcharacterizedby increasingautomationofindustry, Today, however, thetraditionalrelationshipbetweenemployee andemployer isbecoming to thenotionofSER. legislation foremployment standardsin1969.Itisnosurprise,then,thatthese programsweretied program cameintoeffectin1941,thepublicpensionsystem1965,andfirstcomprehensive unemployment insurance social programswereestablishedduringthistime:ourfirstmandatory collectively, refuseunsafework,andtake refugefromunfairtreatment. organization possible,andbothunionsgovernment policiesprotectedtherightstobargain cover unexpectedexpensesandretirementsavings. Thissecuritymadeadvancement inasingle afamilyalongwithbenefitsto or trades,earningafull-timewagethatwassufficienttosupport Standard Employment Relationship(SER).Theseworkers weretypicallymeninmanufacturing From thelate1940stoearly1970s,majorityofCanada’s labourforcewasengagedina Less Standard,MoreUncertain The StandardEmployment Relationship: 13 Wayne Lewchuketal.(2013) “It’s more thanpoverty.” PEPSO, United Way andMcMasterUniversity. http://www.unitedwaytyr.com/document.doc?id=91. Source: of Labour (2016), “Changing Workplaces Ministry Review: Special Advisors’ Interim Report” Wages andBenefits:Standardvs.Non-standardEmployment Access toEmployer Benefits FIGURE 5A

Median Wage FIGURE 5B 2 2 13 ManyofCanada’s core

9 | THE MOWAT CENTRE 10 | WORKING WITHOUT A NET benefits). precarity butreceiving (e.g.earningasalary no employed inajobwithsomecharacteristic of precariously employed, withanother20percent the Greater Toronto-Hamilton Area are (GTHA) University foundthat20percentofworkers in Ontario (PEPSO),UnitedWay, andMcMaster by Poverty andEmployment Precarity inSouthern the formofnon-standard work). mid-1990s amongOECDcountrieshasbeenin (60 percentofemployment growth sincethe Figure 6),andallmajorindustrialized countries Precarious workisontheriseinCanada(see work andare tiedtofew ornobenefits. which are oftenlesswell-paidthantraditional time, temporary, contract,andself-employment, non-standard typesofemployment suchaspart- instability inajob.Thetermtypicallyincludes and commonly associatedwithuncertainty forces behindthisshift.Precarious workismost was designed,andthere are numerous driving today thanitwaswhenoursocialarchitecture The nature ofworkisalsomore precarious RISE OFPRECARIOUSWORK 15 Lewchuketal., 2013. 14 OECD, 2015. Source: CANSIM Table 282-0087, CANSIM Table 282-0079 positions Canada’s temporary workforce:morepart-time, FIGURE 6 15 Thesefindingsare consistent with Temporary workers 14 8.6 in1997 A2013study 2016 interfering withtheir personallife, andtwiceas times more likely toreport anxietyregarding work cohesion, asprecarious workers are twotothree Job instabilitycansignificantlyweaken social development from theiremployer. and rarely receive benefitsortrainingandskills Such positionsare lesslikely tobeunionized 18 Lewchuketal., 2013. on.ca/english/about/pdf/cwr_interim.pdf. review: Specialadvisors’interimreport.” https://www.labour.gov. ofLabour(2016a)“Changingworkplaces 17 OntarioMinistry 16 Lewchuk,etal.,2015. $15 forthoseengagedinnon-standard work. wage is$24foraworker inanSER,andonly those inSERs:Ontario,themedianhourly Precarious workers earnsubstantiallylessthan on Canadiansbotheconomicallyandsocially. Precarious workcanhave damagingimpacts in theGTHA. has increased by 50percentinthepast20years three years. Theprevalence ofprecarious work employment fell from 50.2to48.1percentinjust the percentage ofpeopleworkinginstandard PEPSO’s follow-upreport, whichalsofoundthat cent report sometimesnotbeingpaidatall. These workers are oftenpaidincashand10per workersPart-time 16 12.5 in1976 2016 18 17

precarious positionsinbetween(seeFigure 7). that canbeentirely intelligence,withvarious completedby artificial ofaprogressionpart thatmoves from afull-timecareer toajob referred toasthe“unbundling”ofwork,andcanbeunderstood Deconstructing ajobandoutsourcing itsconstituenttasksis becoming increasingly commonplace. and piece-workisoftenreferred anditis toasthe“gigeconomy” Today,opportunities. jobs thistendencytoworkmultipleshort-term creating more ways work to connectpeoplelookingforshort-term easier astechnologyevolved throughout the1990sand2000s, such asoutsourcing, contractingandfreelancing wasmadeeven productivity andcutcosts.Thismove towards flexibleworkschemes staff couldthenbeavailable onanas-neededbasistoimprove instead focusontheircore competencies. tasks involving humanresources andinformationtechnologyto trend beginninginthe1970s,whencorporationsbegantooutsource The riseofprecarious ofalonger-term workcanbeviewedaspart a microtask onlyamedianof$0.05(perproject/task). makes apaycheck of$200,ataskreceives amedianpay of$5and Each reduction isassociatedwithadecrease inpay: afreelancer micro-task-based intelligence. jobsandhybridtaskingwithartificial andcontractjobs,toprojectto part-time andtask-basedjobs,to activities. school supplies,andgettingtheirchildinvolved inextracurricular a familyhave difficultyfindingappropriate childcare, paying for orraisingachild,butthosewhoare tosupport with apartner trying precariously employed populationismuchlesslikely tobeliving likely tofind itdifficulttomake endsmeetorrunoutoffood. 23 Ibid. horizons.gc.ca/sites/default/files/Publication-alt-format/2016-0265-eng.pdf. 22 Policy Horizons Canada(2016)“Canadaandthechangingnature ofwork.” http://www. rising-economic-insecurity-tied-to-decades-long-trend-in-employment-practices.html?_r=1 tices.” TheNewYork Times 21 NoamSchreiber (2015)“Risinginequalitytiedto decades-longtrend inemployment prac- 20 Ibid. 19 Ibid. instability andeventually apotentialthreat ofjobloss. jobs move through thisprogression, workers willseepay reductions, 20

, July122015http://www.nytimes.com/2015/07/13/business/ 21 Alarge of portion 22 Work isreduced 23 Asexisting 19 The Work” “Canada and the Changing Nature of Source: Policy Horizons Canada (2016), The UnbundlingofWork FIGURE 7

11 | THE MOWAT CENTRE 12 | WORKING WITHOUT A NET of legalchallengessurrounding therightsofan For example,there have beenagrowing number responsibilities becomelessclear. ofeachparty employees changes,theexpectations and As therelationship betweenemployers and this decline. manufacturing have factorsin beenimportant outsourcing traditionallyunionized jobssuchas private sector. between theagesof25-54,andthosein a declinemostnoticeableamongmen,workers per centin1981to28.82014,with The rateofunionizationhasfallenfrom 37.6 has beensteadilydecliningsincethe1980s. employed individualsthatare unionmembers) unionization rate(i.e.theproportion oftotal has notkept pacewithemployee growth: the has increased over timeinCanada,coverage While theactualnumberofunionmemberships benefits ofunionization. the gigeconomyposesnewquestionsabout employees nowengagedinprecarious workand workplace, buttheincreasing numberof longer relevant inthemodern ornecessary in Canada.Somemaintainthatunionsare no reasonable workday length,andsafe workplaces significant role inestablishingdecentwages, between thetwogroups. Unionshave played a of employers, andanavenue ofcommunication voice totheirmembers,acheckonthepower treatment ofemployees by providing acollective roleimportant inensuringfairandequal Historically, labourunionshave played an WORKERS? WHOISSTANDINGDECLINING UNIONIZATION: UPFORTODAY’S k-rates-taux-eng.htm. rates” http://www.statcan.gc.ca/pub/71-222-x/2008001/sectionk/ 630-x2015005-eng.htm; Statistics Canada(2015)“Unioncoverage Canadian Megatrends 24 StatisticsCanada(2016)“Unionization ratesfalling.” The Daily: 24 http://www.statcan.gc.ca/pub/11-630-x/11- Automation,globalizationand Jazeera America)tofollowsuit. (such asVice,theGuardian America,SalonandAl workers, whichtriggered otherUSmediaoutlets digital publicationtounionize afteravote from its for fairer treatment: Gawker becamethefirst beginning torespond totheirworkers’ demands regarding workers’ rights.Someorganizations are seems toindicatetheopposite-particularly casual nature ofthegigeconomy, thereality labour market entrantsprefer theflexibilityand Despite awidespread assumptionthatnew taxes andotherresponsibilities. their employees asaway ofside-steppingpayroll the claimthatcompaniespurposelymisclassify political representation, they are not unionsin offer somebenefits,insurancediscounts,and chapter underUnifor. the CanadianFreelancers Union,acommunity Canada, suchastheUrbanWorkers Project and precarious workers avoice forcollective actionin have recently emerged inanattempttogive Advocacy groups andlabourunionalternatives other industries. are somenotablecasesinCanadadealingwith companies suchasUberandLyft, althoughthere involvingUnited States,particularly ride-hailing on thisissuehave beenmore highprofile inthe vulnerable tomistreatment. Classactionlawsuits degree ofsecurityasanemployee, andcanbe contractors are notafforded thesamerightsor contractor inthegigeconomy. Independent employee versus therightsofanindependent Canadian Freelancers Union http://www.canadianfreelanceunion.ca. 27 SeeUrbanWorkers Project http://www.urbanworker.ca/ andthe 26 Policy Horizons Canada,2016. (2008); RennieandVIH HelicoptersLtd.,Re,236ACWS 637(2013). Review International(6); Braidenv. La-Z-Boy CanadaLtd., 238OAC 71 between independentcontractors andemployees.” Computer Law 25 AmyL.Groff. etal.(2015)“Platformslike Uberandtheblurred line 25 Thesecasestypicallyinvolve 27 Whilethesegroups 26

live, workanddobusiness. they have penetratednearlyallaspectsofhowwe are oftheeconomy– nolongersimplyaportion communication technologies.Digitalinnovations enabled ortransformedby informationand economic andsocialactivitiesthathave been The digitaleconomygenerallyrefers tothe DIGITAL ECONOMY TH Emerging Issues foothold intraditionallyunion-densesectors. increase, aswilltheirabilitytomaintainastrong development inthecomingyears astheseroles (e.g., forindependentcontractors)willbeakey they have historicallynothadastrong role Whether, andhow, unionsmove intospaces and policyisnotyet clear. the degree ofinfluencethey have onlabourlaw negotiate contractsonbehalfofemployees, and the traditionalsense.They or donotintervene full-impact-of-digital-capital. mckinsey.com/industries/high-tech/our-insights/measuring-the- impact ofdigitalcapital.”, July2013.http://www. McKinsey Quarterly 29 JacquesBughinandJamesManyika (2013)“Measuringthefull takes-to-succeed-in-the-digital-economy. Harvard BusinessReview. https://hbr.org/2016/03/the-4-things-it- things ittakes to succeedinthedigitaleconomy.” March 24,2016 Lindsay Wladawsky-Berger AndersonandIrving (2016)“The4 publications/3-policy-context-inquiry/concept-digital-economy; Digital Economy.” DiscussionPaper 79 28 Australian LawReform Commission(2013)“Copyright andthe » » following key features: new digitaleconomycanbecharacterized by the Low costsofreplication enable firms to quickly Small physicalinfrastructurefootprints easily reproduce contentfor re-sale and licensing. recognition). software upgrades,patents, userdataandbrand in, anddevelopment of,intangibleassets(e.g. to cloudcomputingandfocusedinvestment E UNIQUENATUREOFTHE 29 28 . https://www.alrc.gov.au/ Enterprisesinthis due and and » » » » » 500-whats-the-lifespan-of-your-stock. com/article/2651195-increasing-churn-rate-in-the-s-and-p- 500: What’sthelifespan ofourstock?” http://seekingalpha. 33 SeekingAlpha(2014)“Increasing churnrateintheS&P archive/2015/07/world-without-work/395294. 2015 issue. 32 Derek Thomson (2015)“Aworldwithoutwork.”, July/August 31 Ibid. OECD Publishing,Paris. key features.” inAddressing thetaxchallengesofdigitaleconomy 30 OECD(2014b)“Thedigitaleconomy, newbusinessmodelsand » Powerful networkeffects Powerful Multi-sided businessmodels Diversity ofrevenue models Rapid scalabilityasaresultofhighlevels of Fewer full-timeemployees dueto , inpart Low barriers to entry andconstantdevelopment Low barrierstoentry integration oflayered applications. from acriticalmass ofusersandvertical orplatform. intermediary in marketplaces andtransactingviaan several different groups are participating user data. subscriptions, contentlicensing,andthesaleof butalsothroughand services, advertising, earn returns explicitlyfrom thesaleofgoods markets. rapidly expandingtheabilitytoaccessremote andgoodsacrossaccess services borders, activities over longdistancesanduserscan organize outcomplexcommercial andcarry users, andbusinessfunctions.Businessescan mobility $370 billionwithonly55,000employees. Today, technologygiantGoogleisvalued atUSD $267 billion(adjusted)with758,611employees. most valuable USD corporationin1964,worth productivity. For example,AT&TwasAmerica’s technological advancements thatenablehigher 1935, butonly18years in2011. company ontheUSS&P500was90years in volatile markets. Theaverage lifespan ofa of newbusinessmodels The Atlantic forenterprises’intangibleresources, 30 . http://www.theatlantic.com/magazine/ canlenditselfto thatgeneratevalue : firmsnolonger inwhich 33 31 32 ,

13 | THE MOWAT CENTRE 14 | WORKING WITHOUT A NET progress. typesofjobsintheface oftechnological certain of key questionsaround thesustainabilityof expected. For workers, ithasraisedanumber normal where digitalchannelsandcontentare it hasmeantscramblingtoadaptanew transparency. and product qualityduetoincreased orservice much easierpointsofcomparisononpricing more tailored and accesstogoodsandservices For consumers,thedigitalerahasmeanteasier, of aneye isanunanswered question. monopoly andbackagainwithintherelative blink shifting betweenbalancedcompetitionand How authoritiescankeep upwitha landscape can make significantheadway inamarketplace. website meansthatjustasquicklyanewentrant downloading anewapporvisitingdifferent users, theeaseofshiftingtoacompetitorby like UberorAirbnbachieve acriticalmassof consideration. Yet, assuddenlyplatforms users, withmonetizationandprofitability alater market attentionintheform ofaudienceor Competition betweendigitalfirmsisoftenfor firms thatemerge quicklyandoperateglobally. seeking toregulate, atthelocalornationallevel, creates uniquechallengesforgovernments large capitalholdingsandinvestments. This leverage theirideasandalgorithmsinplace of scale thankstolowerbarriersentry. They can firms torapidlygainmarket share ataglobal Taken together, thesefeatures enabledigital digital-age. finance/our-insights/strategic-principles-for-competing-in-the- www.mckinsey.com/business-functions/strategy-and-corporate- competing inthedigitalage.”, May 2014.http:// McKinsey Quarterly andPaul Willmott(2014)“Strategicprinciples for Hirt 34 Martin 34 For incumbentbusinesses thinking humans–noonecanbesure. as machinesaren’t justout-musclingbutout- and nature ofinnovation isdifferent this time– Industrial Revolution. in factsuffer tremendously attheadvent ofthe tokeepimportant inmindthatmanyworkers did dismissed asthe“Luddite Fallacy”, thoughitis argument againsttechnologicalchangeisoften known instanceofthisreaction. Theend-of-work Industrial Revolution in Britainisthemostwell- frames andpowerloomsintroduced duringthe irrelevant. way ofthehorses”andbecomeeconomically with asenseofpanicthathumanswill“gothe enhanced prosperity have historicallybeenpaired is notnew. Successive waves ofinnovation and displace jobs–technologicalunemployment – The fear thatrapidtechnologicalchangewill THE ENDOFJOBS? AUTOMATION OFINDUSTRY: Journal of Economic Perspectives, Vol. 29No.3,pp.3-30. still somanyjobs?Thehistory andfuture ofworkplaceautomation.” creating machine.” DeloitteLLP;David Autor (2015) “Why are there etal.(2016) “Technology38 IanStewart andpeople:Thegreat job- dystopia.” Brilliant Technologies.” W. W. &Company;“Thecomingofrobot Norton “The SecondMachineAge: Work, Progress, andProsperity ina Timeof Digital Frontier andAndrew Press; ErikBrynjolfsson McAfee (2014) tion, DrivingProductivity, andIrreversibly Transforming Economy.” the Machine:HowDigitalRevolution isAcceleratingInnova- andAndrew37 SeeErikBrynjolfsson McAfee (2011)“Raceagainst 36 Thomson,2015. the way ofthehorses?” andAndrew35 ErikBrynjolfsson McAfee (2015)“Will humansgo losing thewaragainstmachines. direct andunavoidable consequenceofhumans Some firmlybelieve thatthelossoflabourisa rather thandestroy them. job creation andwillmore likely complementjobs technological innovation hasalways ledtooverall created. Empiricalstudiesemphasize thatpast in unforeseen ways andjobsare asnewservices eventually bere-integrated intothelabourmarket that even permanentlydisplacedworkers will Foreign Affairs. July/August 2015Issue. 35 TheLuddites’ destructionofspinning Foreign Affairs 36 38 Whetherthescale . July/August 2015Issue. 37 Othersbelieve specialized skill-sets. Whetherornotaskills gap and mathematics)thatrequire increasingly of STEMfields(science,technology, engineering true subject toaskills-bias.This isparticularly is likely tooccurwithinindustriesthatare job creation generatedby increased automation These trends are andfuture industry-specific, and employees. providersbottom-line costtoestablishedservice competition tooftenstagnantsectors,butata have given consumersmore choiceandajoltof that are piecemealinnature. Suchchanges withaseriesofsmallgigengagements services) travel agencies,taxibrokerages, cleaning independent contractormodels(e.g.,hotels, employer relationships andrelatively stable models have replaced traditionalemployee- enabled by web-basedplatforms.TheseP2P through theuseofpeer-to-peer(P2P)models has alsohastenedthetrend ofdisintermediation understated. Theadvent ofthesharingeconomy levels, butwithfewer employees cannotbe firms todothesamejob,oftenathigherquality The role oftechnologicaladvancements allowing Source: Maximiliano Dvorkin (2016) “Jobs involving routine tasks aren’t growing” Federal Bank ofSt. Louis Reserve US JobGrowth:Routinevs.Non-routine,Cognitive vs.Manual FIGURE 8 NUMBER OF JOBS (MILLIONS) 10 20 30 40 50 60 0

1983 1984 1985 1986 Non-routine Cognitive 1987 1988 1989 1990 1991 1992 1993 1994

1995 Non-routine Manual 1996 1997 1998 1999 2000 classified asmiddle-skilled. skilled workers and toalesserextent,workers reduced thenumberofhoursworked by low- worked by high-skilledworkers, butsignificantly densification didnotimpactthenumberofhours London SchoolofEconomics foundthatrobot from theCentre ofEconomic atthe Performance feeling theseimpactsintheUS.Arecent study is evidence thatlow-skillworkers are already the labourmarket isoftencontested,butthere exists inCanadaandtowhatextentitwillaffect arent-growing. org/on-the-economy/2016/january/jobs-involving-routine-tasks- growing.” Federal BankofSt.Louis Reserve 40 MaximilianoDvorkin (2016)“Jobsinvolving routine tasksaren’t dp1335.pdf. Discussion Paper No.1335 39 Georg GraetzandGuyMichaels (2015)“Robotsatwork.” CEP (see Figure 8). in theUSlabourmarket over thepast30years Federal inSt.Louishighlightsthistrend Reserve automated. Arecent studyby aneconomistatthe determining thelevel ofriskit facesofbecoming or non-routine tasksmay beakey factorin The extenttowhichajobispremised onroutine 2001 2002

2003 Routine Cognitive 2004 2005 2006

40 2007 Hisfindingssuggestthatthe 2008

. http://cep.lse.ac.uk/pubs/download/ 2009 2010 Routine Manual 2011 2012 39 2013 2014 https://www.stlouisfed.

15 | THE MOWAT CENTRE 16 | WORKING WITHOUT A NET a key factor indetermining the level ofrisk itfaces of non-routine tasks may be The extent to whichajob is premised onroutine or many otherregions. force, itsmethodology hasbeenreplicated in the studywasspecifictoAmericanlabour automation withinthenext10to20years. per cent)oftotalUSemployment isathighriskof occupations, they concludedthatnearlyhalf(47 the probability ofautomationforover 700 susceptible toautomationintheUS.Estimating Oxford University analyzed whichjobsare most An influential2013studyfrom tworesearchers at routine ornon-routine innature. than whetherthetasksinvolved are primarily of cognitive ormanualtasksmay belessrelevant have beenstagnant.Whetherajobiscomprised (e.g. construction,production andtransportation) administration) andmanualroutine occupations routine occupations(e.g.salesandoffice over time.Inthesametimeperiod, cognitive and assistance)have beensteadilyincreasing routine care, manualoccupations(e.g.service, professional sectorsandmanagement)non- number ofnon-routine cognitive occupations(e.g. the-computerisation-of-european-jobs/ (for Europe more generally). tion ofEuropean jobs.” Bruegel,Brussels.http://bruegel.org/2014/07/ men.pdf (for Germany);andJeremy Bowles(2014) “Thecomputeriza- presse/publikationen/ing-diba-economic-research-die-roboter-kom- ING DiBaEconomic Research. https://www.ing-diba.de/pdf/ueber-uns/ come: consequencesofautomation fortheGermanlabourmarket.” pdf (forFinland);CarstenBrzeski andIngaBurk(2015)“Therobots https://www.etla.fi/wp-content/uploads/ETLA-Muistio-Brief-22. threatens onethird ofFinnishemployment.” Brief,No.22. ETLA 42 MikaPajarinen andPetri Rouvinen(2014)“Computerization The_Future_of_Employment.pdf of Oxford http://www.oxfordmartin.ox.ac.uk/downloads/academic/ employment: Howsusceptibleare jobscomputerization?”University 41 CarlBenediktFrey andMichaelOsborne(2013)“The future of becoming automated. 42

. 41 While employees. higher, compared toonly12.7percentofhigh-risk low-risk employees holdauniversity degree or also tendtobelesseducated:45.6percentof less thanalow-riskjob.Employees athigherrisk $33,000 eachyear onaverage –nearly$29,000 those atlowerrisk.Higherriskjobspay around risk tendtopay significantlylowerwagesthan and education.Jobsidentifiedtobeathigh resultsstudy’s are placedinthecontextofwages Issues ofequalityare evident whentheOxford » Jobsatthelowestriskofautomationare in » Canadianjobsmostatriskofautomationare » 36percentofoccupationsare atlowriskof » Roughly42percentofCanadianoccupations the results were fairlyconsistent: given thesimilaritiesbetween twoeconomies, Canada’s labourmarket. applied themethodologyofOxford studyto A recent report from Toronto’s Brookfield Institute 44 Frey and Osborne,2013. MrRobotReport.pdf brookfieldinstitute.ca/wp-content/uploads/2016/07/TheTalented automation onCanada’s workforce.” Brookfield Institute. 43 Creig Lamb(2016)“Thetalentedmr. robot: Theimpactof education, healthandnursing. positions invarious industriessuchaslaw, management,andprofessionaland sport andculture,industries suchasarts recreation and utilities,administrationofficesupport. agriculture, manufacturing salesandservices, equipment operation,naturalresources and and in industriessuchastrades,transportation automation over thesametimeperiod. 20 years. are athighriskofautomationinthenext10to 44 . 43 Perhaps unsurprisingly, http:// - tasks. given occupationissimplyabundle ofindividual surrounding thefocusonoccupations,asany technology. Importantly, there hasbeenconcern actual speed,capability, andrelative costsof that increase labourdemand,aswellthe ignore macroeconomic feedback mechanisms Oxford study. Criticshave notedthatittendsto pitfalls around themethodologyemployed inthe toacknowledgesomepotential It isimportant insights/four-fundamentals-of-workplace-automation mckinsey.com/business-functions/business-technology/our- automation.” McKinsey Quarterly, November 2015. 46 MichaelChuietal.(2015)“Four fundamentals ofworkplace 45 Lamb,2016. through theautomationofselecttasks. occupations willbecomplementedby technology of redundancy, butratherthemajorityof many jobswillbefullyautomatedtothepoint Both organizations founditunlikely that estimating potentialjoblossestoautomation. discussion around task-basedapproaches to responded tothislastcriticismby initiatinga The consultingfirmMcKinsey andtheOECD Bureau of Labour Statistics, Mowat Centre calculations Source: Lamb (2016), Frey and Osborne (2013), CANSIM Table 282-0008,United States Comparing JobLossEstimates FIGURE 9 (Oxford) Frey &Osborne Institute) Lamb (Brookfield (OECD) Arntz etal. Study 45

OCCUPATION-BASED METHODOLOGY Estimated risk of job Estimated riskofjob TASK-BASED METHODOLOGY loss to automation loss toautomation over 10-20years Canada Canada USA USA http://www.

of workforce 46 . Percentage Percentage Usinga 47% 42% 9% 9% Number of Number of 68,031,090 13,027,230 than theoutrightdisappearanceofjobs. transformation, andskillsdevelopment rather be more concernedwithjobredefinition, business In thiscase,governments andbusinessesshould United States–inlinewiththeOECDaverage. risk duetoautomationinbothCanadaandthe that only9percentoftheworkforce isathigh task-based methodology, theOECDinsteadfound 48 Chuietal.,2015. dx.doi.org/10.1787/5jlz9h56dvq7-en. and MigrationWorking Papers 189 OECD countries:Acomparative analysis.” OECDSocial,Employment 47 MelanieArntzetal.(2016)“The riskofautomation forjobsin the newlabourmarket. fromadequate support government toadapt of transitioninwhichCanadianswillrequire but wedoknowthatthere willbeaperiod jobs inotherareas oftheeconomyisunknown, to whichthesejoblosseswillbeoffsetby new million jobsinthenext10to20years. Theextent these estimates,Canadacouldloseover 1.6 number ofjobslost.Even atthelowestendof approaches, andhoweachtranslatesintothe Figure 9outlinestheresults ofthesedifferent 7,537,572 1,615,194 jobs , OECDPublishing,Paris. http:// 48

17 | THE MOWAT CENTRE “Advancements in technology have given rise to ‘social robots’ that can communicate with people in a way that could put many human-centric jobs at risk.” 18 | WORKING WITHOUT A NET WITHOUT A 18 | WORKING Social Robots CASE STUDY 1 understood thatshewasarobot. carefully managedtheemotionsthey expressedcompared tothosewho ofsharingpersonalinformation,andmore morefearful less forthcoming, whobelievedparticipants shewascontrolledby apersonweremuch and toneofapatient’svoice. Arecentstudy proved Ellie’s worth: expressions andgestures,microphonestoevaluate theinflection Creative Technologies. Theirmodel,Ellie,usescamerastotrackfacial a realitythankstoUniversity ofSouthernCalifornia’s Institutefor psychology. Buttheuseofaphysicalrobotictherapisthas now become realityapproachestocognitive-behavioural computer-based orvirtual previously beenusedforsomementalhealthtreatments,including to challengesinmentalhealthfields.Interactive technologieshave More recently, socialrobotshave alsoemergedasapotentialsolution companionship. tasks toassistineldercare,fromhome-assistancetechnologies researchers aroundtheworldhave alreadyfoundvalue inautomating in away thatcouldputmanyhuman-centricjobsatrisk.For example, have given risetothe“socialrobot”thatcancommunicatewithpeople understand humanbehaviour. However, advancements intechnology empathy, trainingto goodcommunicationandusuallyyears ofexpert resistant toautomationandforgoodreason–jobsinthesefieldsrequire areestimatedtoberelatively Occupations inhealthandsocialservices https://www.psychologytoday.com/blog/media-spotlight/201411/the-rise-the-robot-therapist. 51 RomeoVitelli.“Theriseofthe robot psychologist.” Psychology Today, November 17 2014 technology/21612114-virtual-shrink-may-sometimes-be-better-real-thing-computer-will-see. computer willseeyou now.” August 162014 to disclose.” ComputersinHumanBehaviour 50 GaleMLucas humansincrease willingness etal.(2014)“It’sonlyacomputer: Virtual include-a-robot-helper. October 272014. 49 WillKnight (2014)“Your retirement may include arobot helper.” MIT Technology Review, difficulty withsocialcues. responsive tosocialrobotsthanhumantherapists,mainlyduea that individualswithAutismSpectrumDisorder(ASD) may bemore beforesymptomsescalate. Similarly,the military researchhasshown and treatingPost Traumatic StressDisorder(PTSD) inmembers of inanumberoffields,suchasdiagnosing seeopportunities Experts discussingdifficultemotionalissueswithanunbiasedparty.comfortable analyzed thetranscriptsofsessions,implythatpeoplefeelmore These findings,generatedby trained(human)psychologists who http://www.technologyreview.com/news/531941/your-retirement-may- 49

50 , Vol 37pp94-100;TheEconomist (2014) “The

http://www.economist.com/news/science-and-

19 | THE MOWAT CENTRE 2020 || WORKINGWORKING WITHOUTWITHOUT AA NETNET Robo-Advisors CASE STUDY 2 savings to meet aclient’sneeds. andseektax exchange-traded funds,rebalanceportfolios uses algorithmstoautomaticallytransfermoney tolow-cost service, scenario. Computersoftware,registeredasafiduciary 39,000, or12percent,since2008. morethan human financialadvisorsintheUShasdeclinedby the sametime,CerulliAssociatesestimatesthat numberof accounts. often incentivized tofreelyendorseexpensive andunsuitable legal obligationtoputclients’needsfirst.Instead,theyare meaningthey donothave services, a providing “fiduciary” However, are notalladvisorsintheinvestment industry and make recommendationsastohowyou shouldinvest. you wouldpay someonetocarefullyexamineyour finances assume financialadvisorstobeanexception. Traditionally, by a computer,administration couldbeperformed onewould While manyoccupationsinbusiness,financeand you inanindexfund” 52 BenSteverman andMargaret Collins(2015)“Therobots are comingto put could increase68percentinjustfive years to$2.2trillion. AT Kearny estimatethat assetsmanagedby robo-advisors attracted $2billioneachinclientmoney, andconsultingfirm Companies suchasWealthfront andBetterment have already advisory services have services grown4.9percentayear intheUS. advisory an estimateby researchfirmCelent,self-directedfinancial who arelikely tofavor Accordingto automatedservices. traditional advisorsseemtohave neglectedyoung investors having someonewalkthemthroughtheirdecisions.However, those withcomplexfinancesorwhofeelmorecomfortable The adviceprovided isgeneric,whichmay notbesuitablefor is right” 54 Ibid;MichaelPRegan,“Robo-advisorsto run$2-trillionby 2020ifthismodel 53 Ibid. index-fund/article25112108. com/globe-investor/investment-ideas/the-robots-are-coming-to-put-you-in-an- cerulli-advisor-headcount-idUSL1N0VL23920150211. Reuters 56 Reuters.“NumberofUSfinancial advisorsfell forfifthstraightyear -report.” kerage%20Platforms-Scivantage.pdf. http://info.scivantage.com/rs/scivantage/images/State%20of%20Online%20Bro- 55 IsabellaFonseca et al.(2015)“Thestateofbrokerage platforms.” Celent. right/article25022321. investor/investment-ideas/robo-advisers-to-run-2-trillion-by-2020-if-this-model-is- , February 112015 Globe andMail 52 Thecomingoftherobo-advisorcouldeliminatethis Globe andMail , June182015. http://www.reuters.com/article/2015/02/11/wealth- , June252015. http://www.theglobeandmail.com/globe- 53

56 http://www.theglobeandmail. 54 55

At At The Pace of Disruption

The sheer speed with which automation and artificial intelligence threaten to disrupt sectors is also worth noting. Agricultural workers steadily declined in Canada over the course of 130 years from 48 per cent to less than 2 per cent of the workforce, as a result of technological innovations, a shift to larger-scale commercial farming operations, free trade and social changes.57 By comparison, the 500,000 Canadians who drive for a living could see a similar proportional decline compressed into the relative eye blink of ten or twenty years as a result of autonomous vehicle technology (see Figure 10).58 agricultural jobs driving-related jobs

FIGURE 10 2 Decline of agricultural jobs (actual) and driving-related jobs (potential)

Actual Potential 2 2 2 2021 2031

A gr icult u ral job s a s o f w orkf or 2 ce 2% 2

Source: Statistics Canada Historical Data Series D1-7, 2011 National Household Survey

agricultural jobs driving-related jobs

57 Statistics Canada. “Table D1-7: Population of working Actualage and either gainfully occupied or labour force, in non-agriculturalPotential and agricultural pursuits, census years 1881 to 1971 (Archived).” 2 http://www.statcan.gc.ca/pub/11-516-x/sectiond/4057750-eng.htm#D1_7 2 2 2021 2031 58 Statistics Canada. “National Household Survey Data: National Occupation Classification (NOC) 2011 (691).”

2 CENTRE 21 | THE MOWAT

A gr icult u ral job s a s o f w orkf or 2 ce 2% 2

22 | WORKING WITHOUT A NET the needforstabilityandbenefitslessurgent. flexible workarrangementsmore appealingand diversity inlife-courses today, whichmay make to have children. There isalsoamuchgreater are more likely todelay marriageandlesslikely The labourmarket entrantsofthisgeneration employment relationship muchlessrelevant. have also,insomeways, madethestandard Demographic shiftsandculturalchanges protections andbenefits. employment relationships andtheirassociated home life thathastraditionallycharacterized erodesfurther thedistinctionbetweenwork and type ofgigworkisappealinginitsflexibility, it of whoisconsidered anemployee. Whilethis digital enterprisesoftenblurtheboundaries thesenew The businessmodelsthatsupport income. one-off taskwithanindividualseekingadditional a ride,renter withatouristseekingroom, ora and easilyconnectadriver withsomeoneseeking advancements have madeitpossibletoquickly in everyday transactions.Thesetechnological increasingly more affordable andubiquitous been crucialinthisevolution, theirusebecoming applicationshaveplatforms andsmartphone development ofanon-demandeconomy. Online precarious workare bothconnectedtothe Technological advancements andtheriseof LIVING INANON-DEMANDSOCIETY loads/2015/04/policy-horizons-2015.pdf Research onPublicPolicy. http://irpp.org/wp-content/up 59 Peter Hicks(2015).“Theenablingsociety.” Institutefor make mattersworse.To whatextentlife andjob employment security intherecovery may only for manyCanadians,andalackofincome in 2008,incomeandjobprospects suffered When theglobaleconomyfell intorecession simply beareflection oftougheconomictimes. Yet, unstableandcasualemployment may also . - 59

similar tasks)willintensify. pressure on thewagesofpeopleengagedin substitutability withhumanskillsputsdownward law” ofautomation(i.e.,thatarobot’s increased as someeconomistsmaintainthatthe“iron remain foralowerwage, workingintheindustry work elsewhere. Alternatively, apersoncould entirely,industry left unemployed andseeking machine andthey couldbedisplacedfrom that example, aperson’s jobcouldbetaken over by a could meanmanythingsforindividuals.For intelligenceandautomationofindustry artificial The on-demandeconomy, rapidadoptionof difficult todiscern. circumstance ratherthanpersonalchoicesis choices are beingmadeasaresult of economic robots-rules-the-world-1.pdf WorldIZA ofLabour 60 Richard Freeman (2015)“Whoownstherobots rulestheworld.” unemployment couldbecomemore commonand surrounding labour andleisure. Mass intermittent thinking about how this challenges cultural norms seems inevitable tobegin anditisimportant occupations andindustriesinwhichautomation thereDespite thesemanyuncertainties, are some cycle thatcanbe difficultescape. the normforCanadians,whooftenfallintoa of precarious work that are increasingly becoming an employee atall.Theseare thecharacteristics on-demand platform,they may notbeconsidered employers. Ifthegigsare completedthrough an they may notreceive adequatebenefitsfrom make endsmeet.Ifthesejobsare part-time, “gigs”inorder jobsortemporary to part-time may optforthescenarioofworkingmultiple or re-entry intothelabourmarket isdifficult,they employment change.Iftheirwageisnot livable In eithercase,manywillseethenature oftheir Vol. 5 http://wol.iza.org/articles/who-owns-the- . 60

» » in atransformedlabourmarket. to forecast whattheskillsoffuture look like and theWorld Economic Forum have attempted Organizations suchastheInstituteforFuture and theskillsthatwouldberequired forthem. that mightbemostrelevant intheneweconomy, toconsiderthetypesofjobs It isalsoimportant what jobsmightlooklike inthefuture. contemplating accompany thisshiftaswestart to ensure adequateinstitutionalsupports a valued memberofsociety, butitisimportant we thinkaboutworkandwhatitmeanstobe This couldresult inaradicalchangetheway translate intomore forinnovation. opportunity less stigmatized, andexcess leisure timemight 63 Davies etal.,2011. for theFuture. http://www.iftf.org/futureworkskills. revolution; da/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial- revolution.” World Economic Forum. https://www.weforum.org/agen - 62 AlexGray (2016) “10skillsyou needtoindustrial thrive inthefourth Foreign Affairs 61 NicholasColinandBrunoPalier (2015)“Thenextsafety net.” » tend toagree onkey areas: Adaptability, creativity, andadesireforconstant Computational andanalyticthinking Social andemotionalintelligence full benefitsofinnovation. toreapamounts ofdatawillbenecessary the solve complexproblems, andmanagemass new technology. Theabilitytothink critically, exceptionally incomplementing important “perpetual student” business acumen,andultimatelybecominga having adesignmindset,newmedialiteracy, economy thatischangingrapidly. Thisincludes learning people willbecrucial. coordinate withothersandmanage develop ability toprovide care, establishrelationships, that computershave notyet mastered. The Anna Davies etal.(2011) “Future workskills2020.” Institute will be of critical importance inan willbeofcriticalimportance , July/August 2015Issue. 63 . 62 Thesestudies are key skills are 61

nearly alldeveloped countries. income distributionshiftfrom labourtocapital in modern innovation. Thiswouldacceleratethe robots potentially becomethecapitalembodying capital holdingsandinvestment inrobotics, as to increase theconcentrationofwealththrough to bedevil society. may notnecessarilyspike, inequalitywillcontinue of education–implyingthatwhileunemployment those withhighwagesandrequiring highlevels innovation maintainsthatavailable jobswillbe Much oftheliterature surrounding technological inequality andwealthdistribution. The issuesthatariseinthisscenarioare onesof growth cancontinueonanupward trajectory. to generatelarge profits as aresult, economic increase productivity andcorporationscontinue if automationandtheon-demandeconomy writ large may wellcontinuetogrow. Infact, growth from wagegrowth suggests,theeconomy consumerism. But, asofeconomic the decoupling presumably shouldthreaten basisof thevery The movement towards alabour-lighteconomy and thenspendingitongoodsservices. prosperity relies onconsumersearninganincome currently functions–mosteconomicgrowth and Consumption iscentraltotheway oureconomy SUMMARY employers. as varied ascolleges,universities andprivate of government inCanadaandforstakeholders rethink ofprioritiesandexecution atalllevels these typesofskillswouldrequire afundamental Aligning educationandtrainingpolicytofocuson mist 64 TheEconomist (2015)“Theonrushingwave.” TheEcono 65 Freeman, 2015. Michaels, 2015. always-delivered-more-long-run-employment-not-less; briefing/21594264-previous-technological-innovation-has- January 182015. January http://www.economist.com/news/ 64 Similarly, automationislikely 65

Graetzand -

23 | THE MOWAT CENTRE 24 | WORKING WITHOUT A NET on oureconomyandsociety. Howongoing consumer value aswell asunforeseen effects continue tounleashtremendous convenience and for over twodecadesinvarious forms,andwill with. Thedigitaleconomyhasbeenwithus markets andeconomyneedtobereckoned fundamental changesinthenature ofourlabour Yet, thistrulydoesseemtobeanerawhere said tobeinthemidstoftransformative times. Canada’s labourmarket andeconomyare often our abilitytomanagethem. social andeconomicinequalitiesdonotoutpace will require policiesandprograms thatensure dramatically different thanthey oncewere. This the factthatemployment relationships are ensure thatbenefitsare stilladequatedespite be lightinlabour. Furthermore, governments must traditional markers ofgrowth andproductivity, but prosper inaneconomythatmay dowellon maintain asystemthatallowsCanadiansto Policymakers mustdecidehowtobuildand inadequate, ill-fittingsocialarchitecture. falling through the increasingly widegapsinour time jobs,toomanypeoplewillfindthemselves to sustainwell-beingcontinuestay tiedtofull- uncertain waysuncertain tomake endsmeet. while manyotherswillbeforced tofindnewand of individualswillfindsuccessandsecurity, along itscurrent trajectory, arelative handful inplace.Ifoureconomycontinues supports on innovative ideas,they musthave adequate and volatility, andifCanadiansare totake risks is inherently associatedwithrepeated failure must betempered by thereality thatinnovation innovative ideas.Butthisoptimisticperspective togeneratecreativityopportunities and and excess leisure time,there may besignificant jobs,longerspellsofunemployment, short-term If thefuture ofworkis,infact,characterized by 66 ColinandPalier, 2015. 66 Ifbenefits they dotoday. significantly different inthecomingdecadesthan industry, government andworkitselfwilllook however,What iscertain, isthatthefuture of nature ofthegigeconomy. waning powerofunionsandtheindividualized giventhis newlandscapeisalsouncertain, the question. Howemployees’ rightsare protected in are affected by technologicaltrends isakey trends inincomeinequalityandprecarious work If benefits to sustain well-being continue to stay tied to full-time jobs, too many people will find themselves falling through the increasingly wide gaps in our inadequate, ill-fitting social architecture. 25 | THE MOWAT CENTRE 25 | THE MOWAT 26 | WORKING WITHOUT A NET bottom oftheincome distributionscale Stagnant incomesat the Employment Standards Act 2 2

LIFE INSURANCE VISION DENTAL DRUG 2

3 work evolves: We explore sixkey socialpolicyareas thatwillfacesignificantpressures tomodernize asthefuture of throughnumber ofCanadiansthatcanaccesssupports ourexistingsocialarchitecture. to jobs.AsthenumberofCanadiansworkingintraditionalworkplacedwindles,sotoodoes traditional employment relationships are thenorm.Asaresult, eligibilityformanyprograms istied labour market challenges?ManyofCanada’s core socialprograms operateontheassumptionthat Are Canada’s existingsocialpoliciesandprograms fitforthetask ofmeetingtoday’s andtomorrow’s widen andposemore challenges forCanadians. complex. Iftrends continueontheircurrent trajectory, the gapsineachoftheseprograms appearsetto While someprograms may beintuitive intheways inwhichthey relate toemployment, othersare more

& Training Programs Employment Insurance Healthcare Public Pensions ARCHITECTURE CANADA’S SOCIAL IMPLICATIONS FOR

Employment Standards Affordable Housing Child Care

27 | THE MOWAT CENTRE 28 | WORKING WITHOUT A NET » EIalsoprovides employment trainingandskills » Anumberofspecialbenefitsalsoexistforthose » Canada’s Employment Insurance(EI)system KEY BACKGROUND and revenues. PublicAccounts Volumeof Canada 67 2015, of expenses II: Details towards various labourmarket policies. allocated roughly $3.6billioninspending 2015-16, federal andprovincial governments Fund andtheCanadaJobGrantAgreement. In funded by agreements suchastheCanadaJob out by theprovinces andterritories,inpart workforce. Mostoftheseprograms are carried a way toaidintheirtransitionbackintothe upgrading initiatives tosomerecipients as transferred toindividualsin2014-15. member. Over $18billioninEIbenefitswere adopted child,orcaringforaseriouslyillfamily who are sick,pregnant, caringforanewbornor benefits). job through nofaultoftheirown(i.e.,regular assistance forthosewhohave recently losta funding isdirected towards income temporary are temporarilyoutofwork.Thebulkprogram programs Canadianswho thataimtosupport consists ofasuitefederal contributory & Training Programs Employment Insurance 67 » EIisbasedonanoutdatedconceptionofthe HOW WELLISITHOLDINGUP? tecture.ca/wp-content/uploads/EmploymentSkillsTraining.pdf. Employment andskillstraining.” MowatCentre. http://social-archi - 71 Andrew Galley (2015)“RenewingCanadasSocialArchitecture: www.statcan.gc.ca/daily-quotidien/160324/dq160324a-eng.htm. (2016) “Employment Insurance,October 2015.” TheDaily. 70 CANSIMTables 267-0001and282-0087;StatisticsCanada www.statcan.gc.ca/daily-quotidien/160324/dq160324a-eng.htm. 2016.”(2016) “Employment InsuranceJanuary TheDaily. 69 CANSIMTables 267-0001and282-0087;Statistics Canada Work-online.pdf Centre.” of theMowatCentre Employment InsuranceTask Force: Mowat 68 MowatCentre (2011)“Makingitwork:Finalrecommendations » Mostemployment training andskillsupgrading workers receiving benefitsinOctober2015. in Ontario,withonly28percentofunemployed The lackofcoverage iseven more pronounced EI benefits,compared to82percentin1978. unemployed Canadianswere receiving regular grows: 2016,only39percentof asofJanuary who donotqualifyforregular benefitsrapidly employment, theproportion of Canadians the labourmarket shiftsaway from traditional poorly andnolongerworkwelltogether. labour market –itscomponentshave aged and disruptive economicforces. spells ofunemployment duetomore large-scale immigrants, andthosewitnessingextended market entrants,suchasyouth ornewlylanded programs. Thisisespeciallytruefornewlabour many peopleineligiblefortrainingandskills initiatives are tiedtoEIbenefits,whichleaves http://www.mowateitaskforce.ca/sites/default/files/MakingIt-

68 http:// http:// As 70 69

» Spendingonworkforce development asa ticle30880523 blue-collar-blues-why-canadian-men-are-worse-off-this-time/ar- theglobeandmail.com/report-on-business/top-business-stories/ are worseoffthistime.” GlobeandMail 73 MichaelBabad(2016).“’Blue-collar blues:WhyCanadianmen Harper_Record_2008-2015/11-HarperRecord-Wood.pdf. Centre forPolicy Alternatives. https://www.policyalternatives.ca/ 72 DonnaWood (2015)“Hollowing outthemiddle.” Canadian » While factory workers» Whilefactory whoexperiencedjob » Thecurrent systemwasdesignedtomost levels intheOECD. in Canada,andhasfallentooneofthelowest ofGDPcontinuestoshrinkeachyearportion of workers willbecomeeven more pronounced. effectively upgradeskillsfortensofthousands thequestionofhowtoquicklyand and services, automation takes holdinsectorssuchasretail fewer optionsfortheseworkers in2016. of energy andconstruction,there are simply transfer theirskillstoajobintheboomingfields to loss intheearly2000shadopportunity common. future andlongerspellsofunemployment are specific jobsare unlikely toreturn inthe declines ofentire sectors,where industry- unemployment thatarisesfrom structural programs are notwell-placedtoaddress the from economicdownturns.OurEI short-lived (i.e. transitional)andcyclical unemployment effectively dealwithfrictionalunemployment . 72

, July122016 http://www. 73 As

29 | THE MOWAT CENTRE 30 | WORKING WITHOUT A NET » Inadditiontothepublicpensionsystemare » In2014-15,thefederal government paidout » Canada’s publicpensionsystemhasthree KEY BACKGROUND gc.ca/en/reports/pension/cpp_2015.page ofthe Canadianpensionplan,2014-2015.”report http://www.esdc. 74 Employment andSocialDevelopment Canada(2016b)“Annual Retirement Savings Plan(RRSP). contribute voluntarily, suchasaRegistered through savings planstowhichindividuals privately through theworkplace,andotherwise Additional incomeissometimesprovided to asthe“third ofretirement pillar” income. private savings, andvoluntary oftenreferred retirement pensions. CPP programs, $29.58billionofwhichwere a totalof$38.75billionthrough various in GISpayments. Thegovernment transferred $33.5 billioninOAS payments and$10.1billion Supplement (GIS)tolow-incomeseniors. administers anon-taxableGuaranteedIncome revenues. Inaddition,thefederal government monthly payment fundedoutofgeneralfederal schemes, whereas OldAgeSecurity(OAS) isa Pension Plan(QPP)are pension contributory Pension Plan(CPP)andequivalent Quebec to thatoftheirworkinglives. TheCanadian living beyond retirement thatiscomparable Canadians inmaintainingastandard of fundamental componentsthataimtosupport 74

Public Pensions . » Bothprivate saving andvoluntary have HOW WELLISITHOLDINGUP? Mgmt/content/canada4/pdfs/personal/for-canada-report.pdf journeys, Canadareport.” https://www.hsbc.ca/1/PA_ES_Content_ 78 HSBC(2016)“Thefuture ofretirement: Generationsand ticle30951093 four-retirement-strategies-to-counteract-miserly-bond-yields/ar- theglobeandmail.com/globe-investor/retirement/retire-planning/ miserly bondyields.” GlobeandMail 77 IanMcGugen.“Four retirement strategies to counteract architecture.ca/wp-content/uploads/LowerRiskHigherReward.pdf. Canada’s retirement incomesystem.” MowatCentre. http://social- 76 Tyler Meredith (2015)“Lowerrisk,higherreward: Renewing cumstances_of_Canadian_Seniors.pdf?1455216659 ments/original/1455216659/An_Analysis_of_the_Economic_Cir d3n8a8pro7vhmx.cloudfront.net/broadbent/pages/4904/attach circumstances ofCanadianseniors.” Broadbent Institute 75 Richard Shillington (2016)“Ananalysisoftheeconomic » Two decadesoflowinterest rates have absence ofprivately sponsored pensions. faces great difficultysaving adequately inthe organizations, andthemedianCanadianearner especially intheprivate sectorandinsmall of workplacepensionshasbeenonthedecline, retirement income. sourceon publicpensionsastheirprimary of eroded over theyears, leaving manyto rely saving fortheirretirement. per cent)have orare notstarted currently not that nearlyhalfofworking-agedCanadians(48 analysis ontheFuture ofRetirement revealed nearly onethird. have increased thecostofasecure oldageby assets: plummetingbondyieldsforexample significantly reduced returns onanyretirement . 77 HSBC’smostrecent global 75 Theprovision andquality . July172016. 78

http://www. . . https:// 76

. - - » Recentfederal reforms toexpandtheCPP, employed workers?” 80 Andrew Harrison(2016). “WhatdoestheCPPmeanforself- 79 Ibid. » Contractors, temporary workers» Contractors,temporary andmultiple 82 Ibid. gc.ca/pub/75-511-x/2006001/ch/5203531-eng.htm. Frontiers ofResearch onRetirement, chapter19. http://www.statcan. on financialsecurityinretirement.” InStatistics Canada, 81 Leroy O. Stone. (2006)“Theimpactofprecarious employment article30611000 what-does-the-cpp-expansion-mean-for-self-employed-canadians/ globeandmail.com/report-on-business/small-business/sb-money/ increasing. contributions totheCPP–bothofwhichare required topay boththeemployee andemployer costs forself-employed individualswhoare expansion oftheCPPcouldcreate burdensome and newlabourmarket entrants. sponsored pensions,suchasyoung employees those whoare lesslikely toreceive employer- beginning in2019,are expectedtobenefit not required tocontributeontheirbehalf. to theCPPinthismanneriftheiremployer is job holdersmustalsooften‘doublecontribute’ even ifthoseearningswere high. earnings canloweroverall pensionpayments, periodsof period–temporary a contributory is paidoutbasedonaverage earnings over employees are oftendisadvantaged asCPP When theiremployer doescontribute,temporary . 80

Globe andMail , June242016 79 82 However, the http://www.the-

New 81

» Theexpansionwillnotbeofmuchvalue to 83 Ibid.andShillington (2016). retirement. as ahomemaker andnowlive inpoverty after not contributetotheCPPduringtheiryears proportion ofseniorwomeninCanadawhodid This scenariohasalready occurred withahigh after retirement intheabsenceofothersavings. pay intotheCPPatallriskfallingpoverty piecemeal jobspaidincash.Thosewhodonot the CPPinfirstplace,suchasthoseworking does littleforthosewhodonotcontributeto already beenretired forseveral years. Italso those retiring inthenearterm,orwhohave 83

31 | THE MOWAT CENTRE 32 | WORKING WITHOUT A NET » There are essentiallytwoparallelsystemsat » TheCanadianInstituteforHealthInformation » Healthcare provision isaprovincial KEY BACKGROUND 86 CanadianInstitute forHealthInformation,2015. content/uploads/ModernizingMedicare.pdf Competitiveness andProsperity. http://social-architecture.ca/wp- Canada’s social architecture: Modernizingmedicare.” Institutefor 85 SarahMcKenna and JamisonSteeve (2015)“Renewing ture-trends/nhex2015-topic1. spending-and-health-workforce/spending/national-health-expendi health expenditure trends, 1975 to 2015.” https://www.cihi.ca/en/ 84 CanadianInstituteforHealthInformation(2015)“National public andprivate funding. usuallywithcombined of allotherservices, andresidualservices, systemscomprised system thatincludeshospitalandphysician work inCanadianhealthcare: thesingle-payer cent isfinancedby theprivate sector. comes from thepublicsector, andaround 29per approximately 71percentoftotalspending CIHI’s NationalHealthExpenditure Trends, 10.9 percentofCanada’s GDP. per capita,representingin 2015,or$6,105 billion spending inCanadawillhave exceeded $219 (CIHI) estimatesthatoverall healthcare $32.1 billion during the 2014-15 fiscal year. in theCanada Health Act. The CHT was valued at providing that meet set criteria outlined services on the provincial andterritorial governments Transfer (CHT). Thesepayments are conditional federal fundingthrough theCanadaHealth responsibility butisinfluencedheavily by Healthcare 85 According to . 84

86 - » Gaps exist within both systems, particularly » Gapsexistwithinbothsystems,particularly HOW WELLISITHOLDINGUP? architecture.ca/wp-content/uploads/UnfilledPrescriptions.pdf. gap inCanada’s healthcare systems.” MowatCentre. http://social- 88 Lindsay Handren (2015) “Unfilledprescriptions: Thedrugcoverage Looking back,lookingforward.” HealthPolicy Vol 8No1,pp.14-23. 87 Steven G.Morgan andJamieR.Daw(2012) “Canadian pharmacare: » Whilesomemay have sufficientcoverage in coverage across thecountry. province ofresidence, resulting inwidevariation coverage dependsonhisorherage,means,and to whichanyindividualCanadianreceives provide somelimitedcoverage, theextent coverage. care withoutalsoproviding universal drug thatprovidescountry universal health Forservices. example,Canadais theonly those involving privately provided residual many low-incomeCanadians. insurance plans,whichmay notbeanoptionfor on eitherprivately purchased oremployer-based through thispatchworksystemare lefttorely who are ineligibleforpublicdrugcoverage barriers toaccessingpharmaceuticals.Those to meettheirneeds,manyfacesignificant 87 Whilemostprovincial governments 88

» Thoseengagedinprecarious employment tend » Workplace-provided health anddrugplans 92 Ibid. 2014. Ottawa by Dr. Christopher Simpson,President, November CMA, 18 needs anationalseniorsstrategy.” Address to theCanadianClubof 91 CanadianMedicalAssociation. “Codegridlock:WhyCanada Health Organization. the CommissiononSocialDeterminants ofHealth.Geneva. World through actiononthesocialdeterminants of health.” of Finalreport 90 CSDH(2008)“Closingthegapinageneration:Healthequity 89 Lewchuketal.,2013. » There isalsogrowing concernsurrounding the this regard. system doesnotprovide in adequatesupport growing concernthatourcurrent healthcare those workingsecure jobs,andthere hasbeen to have poorer mentalhealthoutcomesthan family needs. believe theirplansare insufficienttocover those whodoreceive somedegree ofbenefits vision, dental,drugandlife insurance. in Ontariodonotreceive anybenefitssuch as Over 80percentofjobsclassifiedasprecarious to beeligibleforprescription drugcoverage. in precarious workare significantlylesslikely permanent employment, whilethoseengaged benefits are typicallytiedtosecure, full-time are becomingincreasingly uncommon.Such 2031. nearly 60percentofallhealthcare spendingby remains stagnant,seniorswillaccountfor population: ifourcurrent healthcare system system toaddress theneedsofarapidlyaging preparedness andadequacyofourhealthcare $55 perday through homecare. can costnearly$1000aday, compared toonly https://www.cma.ca/En/Lists/Medias/Code_Gridlock_final.pdf. 91 Caringforthechronically illinhospital 90

89 92 Even care policyinCanada.” CanadianFederation ofNursesUnions. 94 Marc-André Gagnon ly/2015/03/16/cmaj.141564.full.pdf+html. » Manystudiesthatestimatethecostof Medical AssociationJournal sal publiccoverage ofprescription drugsinCanada.” Canadian 93 Steven G.Morgan etal.(2015)“Estimatedcostofuniver - approximately $958million. drug coverage couldcostgovernment savings. According to arecent study, universal in Canadaalsohighlightsignificantpotential establishing anationalpharmacare program current system. derived from eliminatingduplicatecostsinthe billion eachyear, with$1billionofthosesavings pharmacare program couldbeashighat$11.4 have indicatedthatsavings from anational 94 (2014) “Aroadmap to arationalpharma . http://www.cmaj.ca/content/ear 93 Otherstudies - -

33 | THE MOWAT CENTRE 34 | WORKING WITHOUT A NET » Provinces have agreat dealoffreedom to » Childcare fallsunderprovincial jurisdiction, KEY BACKGROUND Overview.” 97 CanadaRevenue Agency(2016) “Canadachildbenefit – Pains_ChildcareinCanada.pdf. Centre. http://social-architecture.ca/wp-content/uploads/Growing social architecture: Growing pains:Childcare inCanada.” Mowat 96 SunilJohalandThomasGranofsky (2015)“RenewingCanada’s gc.ca/hidb-bdih/initiative-eng.aspx?Hi=41&YrAn=2016. and childcare: Plans,spending andresults.” https://www.tbs-sct. 95 Treasury Board ofCanadaSecretariat (2015)“Earlylearning » There are alsoavariety ofchild-related policies. out, resulting inwidevariances inchildcare determine howsuchprograms are carried year. 10.4 percentofthetotalCSTduringthatfiscal this earmarked $1.31billion, amountwasworth child care, andchildcare spaces.In2014-15, early childhooddevelopment, earlylearningand CST isnotionallyallocatedtowards of support the CanadaSocialTransfer of (CST).Aportion funding totheprovinces andterritoriesthrough role ofthefederal government istoprovide out by municipalgovernments. Theprimary istypicallycarried delivery although service income-tested CanadaChildBenefit. cost ofchildcare, suchasthenewstreamlined federal level toindirectly assistfamilieswiththe initiatives andtaxprograms thatexistatthe affordability barriers. live elsewhere facesignificantaccessand universal subsidized system,Canadianswho 95 http://www.cra-arc.gc.ca/bnfts/ccb/menu-eng.html

96 WhileQuebec,forexample,hasa Child Care 97

. - 100 JohalandGranofsky, 2014. revised_dec2013.pdf http://childcarecanada.org/sites/default/files/CRRU_ECEC_2012_ care inCanada2012.” Childcare Resource andResearch Unit. Friendly,99 Martha etal.(2013)“Earlychildhoodeducationand https://www.unicef-irc.org/publications/pdf/rc8_eng.pdf. » Available regulated childcare spaceisdeeply » Childcare hasbeenidentifiedasanarea that HOW WELLISITHOLDINGUP? 98 UNICEF (2008) “Thechildcare transition.” I » Affordability isalsoanissue:theprice of to result inlongwaitinglists. ofspacestends families, althoughtheshortage childcare forqualifyinglow-income services children agedzero tofive years old. centre-based spacestocare for22.5percentof inadequate: asof2012,there were onlyenough standards forchildcare efforts. meeting onlyoneoutoftenrecommended last among25economicallyadvanced nations, time. A2008UNICEFreport ranked Canada needs improvement inCanadaforquitesome care. fees ashigh$1676eachmonthforinfant cities suchasToronto, where onecanexpect OECD country. trueinlarger Thisisparticularly percentage ofaverage incomethantheaverage in someareas, withCanadapaying more asa childcare canbeprohibitively services high 100 Mostprovinces doprovide subsidized . nnocentti Report Card nnocentti Report 98

8 . » Thecostofaddressing the“childcare gap” is » Theflexibilityofthegigeconomycould for $5billion. federal NDPpromised tocreate 1millionspaces costs, duringthe2015electioncampaign ratios. To give arough estimateofpotential on ahostoffactorssuchasstaffingmodeland and dependent spaces isdifficulttoascertain itself iscontested.Thecostofcreating new challenging toestimate,asthesize ofthegap Canadians holdinginsecure jobs. is needed,especiallyforlowandmiddle-income wages make itdifficulttoarrangecare whenit same time,unpredictable schedulingandlow flexibility andfree timetocare forachild.At the jobs thatcanbedonefrom homecanprovide children. hoursandtask-based Part-time beneficialforthosewith potentially bevery

35 | THE MOWAT CENTRE 36 | WORKING WITHOUT A NET » InCanada,affordable housinghashistorically KEY BACKGROUND targeting homelessness.” CanadianAlliance to EndHomelessness. andMarionSteele(2014).“Housing policy 102 JaneLonderville ture.ca/wp-content/uploads/AccesstoAffordableHousing.pdf cess to affordable housing.” MowatCentre. http://social-architec - 101 NoahZon (2015)“RenewingCanada’s socialarchitecture: Ac- » Despitemajorinvestments inaffordable private andnon-profit organizations. of initiatives atvarious levels ofgovernment, majority ofprojects are financedby apatchwork market rents. received from low-incomehouseholdsand landlords tocover thegapbetweenrent organizations, andcashsupplementsfor government housingagenciesornon-profit to-income unitsownedby provincial orlocal housing primarilyconsistsofrent-geared- Ourcurrentservices. approach toaffordable governments oftendeliver housing-related to theprovinces andterritories,municipal authority. Whilefederal funds are provided been agray area intermsofjurisdictional is setdisappearentirely by 2040. and itsoperatingspendingforsocialhousing capita in1993toonly$63per2013, Federal spendinghasdecreased from $98per subsidized housingprojects inthe1990s. federal government largely steppedaway from housing through the 1960sto1980s,the 101

Affordable Housing 102 Today, the . » The Canadian Mortgage andHousing » TheCanadianMortgage 104 Zon, 2015. (IAH).” https://www.cmhc-schl.gc.ca/en/inpr/afhoce/fuafho Housing Corporation(2016)“Investment inaffordable housing and 103 PublicAccountsofCanada,2015; CanadianMortgage » Canadadoesnothave along-termnational HOW WELLISITHOLDINGUP? were, intermsofbothbreadth anddepth. are significantlylessambitiousthanthey once However, newaffordable housingprograms has committed$1.9billionover 8years. provinces towhichthefederal government program, acost-matchingagreement withthe well astheInvestment inAffordable Housing the CanadaSocialHousingAgreement as funds totheprovinces andterritoriesthrough Corporation (CMHC) continuestotransfer some stock across thecountry. the severe ofaffordable shortage rental housing ownership promotion, andinsufficienttocorrect subordinate topoliciesgeared towards home approaches have generallybeenpoorlyfunded, strategy foraffordable housing.Ourcurrent 103 104

. » Affordability ismore ofanissueforrenters, » Thenewemployment landscapecanbe » HousingpolicyinCanadahashistorically 107 Ibid. 106 Ibid. utoronto.ca/pdfs/researchbulletins/CUCSRB38Hulchanski.pdf. Community Studies,Research Bulletin No. 38. owners, neglectingrenters.” University ofToronto Centre forUrbanand 105 David Hulchanski(2007) “Canada’s dualhousingpolicy:Assisting homeowners. who have onaverage halftheincomeof approval. rely onasecondearnerwithmore securityfor application process, andapplicantsmay have to are oftennotgiven muchweightduringthe jobs ortemporary Part-time a mortgage. employment canbeamajorbarriertoaccessing renters. For aspiringhomeowners,unstable problematic forbothhomeownersand fact, thishasworsenedover time. to treat homeownership andrenting equally;in accompanied by apolicyoftenure neutrality emphasis onhomeownershiphasnever been home ownershiprateofabouttwothirds. since the1970shave resulted inaconsistent purchase assistanceprograms implemented focused onownership:aseriesofhome available units. of then facedwithsurmountingtheshortage suchassubsidized housing,butaresupports who facethisdifficultymay qualifyforexisting obligations. Low-incomeindividualsorfamilies pay canmake itextremely difficulttomeetrent employed, sporadicshiftworkandinconsistent 107 For arenter whoisprecariously http://www.urbancentre. 106

105 This » Stagnantincomesatthebottomofincome 006-additional-property-transfer-tax-foreign-entities-vancouver.pdf. taxes/property-taxes/property-transfer-tax/forms-publications/is- Information Sheet2016-006. to foreign entitiesintheGreater Vancouver RegionalDistrict.” Tax transfer“Additional property taxonresidential transfers property article32223470/; com/real-estate/four-major-changes-to-canadas-housing-rules/ rules.” GlobeandMail (2016)“Four majorchangesto108 BillCurry Canada’s housing intervene. and governments are onlynowbeginningto Rising rental priceshave beenunrelenting, witnessed housingboomsinthepastdecade. as Toronto andVancouver, bothofwhichhave abundantly clearinCanada’s large citiessuch private market rental prices.Thishasbecome distribution scalehave beenoutpacedby 108 British Columbia Ministry ofFinance(2016) British ColumbiaMinistry , October 32016. http://www2.gov.bc.ca/assets/gov/ http://www.theglobeandmail.

37 | THE MOWAT CENTRE 38 | WORKING WITHOUT A NET » At thefederal level, IIIoftheCanadaLabour Part » Governments have role animportant insetting KEY BACKGROUND lated_industries.page gc.ca/en/jobs/workplace/human_rights/employment_equity/regu- “Federally regulated businessesandindustries.” http://www.esdc. 109 Employment andSocialDevelopment Canada(2016c). » For allotherindustries,workconditionsare Canadian employees. compliance forapproximately 6percentof dismissal, sexualharassment,andemployer of work,vacation andleave, terminationand The codesetsminimumstandards forhours as wellmarine,airandrailway transport. as banks,radiobroadcasting, postalservice, regulated businessesandindustries,such Code appliestothoseemployed infederally treatment intheworkplace. ensuring thatworkers receive fairandequitable catalystin has cometobeanimportant the federal andprovincial levels ofgovernment employers. Over time,labourlegislationatboth and responsibilities ofbothemployees and minimum standards anddefiningtherights scheduled breaks. pay rights toannualvacation intervals, and hours ofworkandovertime, minimumwage, similar tothoseatthefederal level, suchas at thesub-nationallevel includeprotections ministries. Generallyspeaking,employee rights regulated by provincial andterritoriallabour . 109 Employment Standards

» People several whoserve clientsratherthana » Aslabourconditionschange,gapsinprovincial HOW WELLISITHOLDINGUP? 111 Ontario Ministry ofLabour,111 OntarioMinistry 2016a. precedent-setting victory forprecarious workers intheprovince. Kitchens Ltd. ofAppealcase: 110 Seerecent OntarioCourt severance pay; andpremiums forEIandCPP. holiday pay; overtime pay; terminationpay; approximately 3.7percentofwagesforpublic legislation, suchas:4percentvacation pay; associated withcompliancelabour their workers inorder toside-stepdirect costs some employers topurposelymisclassify identified thisasapotentialloophole,allowing are atriskofunfairtreatment. contractor ratherthananemployee, and single employer are considered an independent protections in the ESA as it currently stands. number of Ontarians may not be entitled to various employment. This means that a growing of type changes, fewer peopleare engagedinthis engaged inanSER,butasemployment was designedtoprotect theaverage Ontarian many amendmentsover theyears. TheAct with thechangingnature ofworkdespite conceived in1968,hasfailedtokeep pace Standards Act(ESA),whichwasinitially the provincial level, Ontario’s Employment become evident. To take oneexampleat and federal labourlegislationcontinueto , 2016ONCA79,whichhasbeencited asapotential 110 Manyhave Keenan v. Canac 111 » Ontarioiscurrently reviewing boththeESA Ontario Ministry ofLabour(2016a). Ontario Ministry see findings canbefoundintheSpecial Advisors’InterimReport; While theChangingWorkplaces Review isstillongoing,preliminary review.” https://www.labour.gov.on.ca/english/about/workplace. ofLabour (2016b)“Thechangingworkplaces 112 OntarioMinistry relationships. rapid growth innon-traditionalemployment accelerating technologicalchange,andthe and tradeliberalization,workplacediversity, sector,as anexpandingservice globalization the impactsofrecent workplacetrends, such and theLabourRelationsAct(LRA)toexamine 112

39 | THE MOWAT CENTRE Our social insurance schemes, meant to spread risk among the population and prevent catastrophe from befalling the most vulnerable in society, are seriously challenged. 40 | WORKING WITHOUT A NET WITHOUT A 40 | WORKING 4 premised onsomekey assumptions: technology shockstothe labourmarket, are resilient policiesandprograms towithstand Our recommendations, designedto develop more jobs? are created oreliminatedandthequalityofthose recognizes impendingtectonicshiftsinhowjobs of lastresort. Isthere abetterway forward that to fallbetweenthecracksorrely onprograms typeofjob,andleavethose withacertain others in society, are seriouslychallenged. They insure catastrophe from befallingthemostvulnerable spread riskamongthepopulationandprevent Our socialinsuranceschemes,meantto even more tenuous. within Canada’s socialarchitecture will become contractors orloseouttoautomation,theirplace the gigeconomyofself-employed, independent and pharmaceuticals.Asmore peopleenter barriers toaccessingmentalhealthservices ofaffordableshortage childcare spacesor is unemployed workers ineligibleforEI,a and policiesare already evident, whetherit The fissures inexistingsocialprograms risks leaving manymore behind,andinrapidfashion. groups withinsocietywhohave beenleftbehindonthepath to prosperity. Technological progress now world viewusasafirst-choicedestinationtoimprove their lives. Yet, there have always beenpeopleand economy hasgrown steadily, people live longerandhealthierlives andmanypeoplefrom around the The tideofprogress hasleftCanadaasawholebetteroffinmanyregards inrecent decades–the RECOMMENDATIONS ANALYSIS AND in thistumultuous time. with basicneeds andpositionsthem for success forward withasocietythatprovides allcitizens insures itscitizens andhow webestmove up politicalspaceforarethink ofhowCanada from riskshastoberecalibrated. Thisopens the politicalcalculusofthosewhoare shielded The march of technological disruptionmeansthat » Nosectororjobiscompletelyimmuneto More frequent and large-scale ‘temporary’ » intelligence are» Automationandartificial » Manycorporationsandsomeworkers operate affected where they involve non-routine tasks. disruption, thoughsomeare lesslikely tobe incomes andlong-term employment prospects. expected and risk significant damage to workers’ displacements of workers within sectors can be labour emerge. near future, asnewusesanddemandsfor unlikely toleadajob-free landscapeinthe environment. as qualityoflife, taxregimes andregulatory their locationbasedonconsiderationssuch in aglobalmarketplace. They canandwillshift

41 | THE MOWAT CENTRE 42 | WORKING WITHOUT A NET should notbedeterminative. positionwithinsociety individual’s particular In sucharethink, thatan itisimportant 114 Ibid. Harvard University. 113 JohnRawls(1971) challenge isdaunting,andmustbeconsidered. factors whenfacedwithsuchatransformational are notoriouslyvexing. Overcoming theselimiting levels ofgovernment andmultipledepartments decisions. Majorpolicyresets across multiple from stakeholders thatinhibitsproactive conditions. They oftenfaceastatusquobias major, suddenshiftsineconomicandsocial both quicklyandthoughtfullywhenfacedwith at play –governments donotalways move There are alsoinstitutionalandculturalfactors be broad. coverage oftheprograms Canadians supporting the scaleoftransformationandscope technological disruptionisbroad, sotooshould As theconstituencyofthosefacedwith occupations upanddowntheincomescale. unpredictable andfar-reaching changesto toadoptsuchalens,given the opportunity Technology’s impactonjobscreates aperfect protections acceptabletoallinsociety. policies aswewouldstrive toensure afloorof in more progressive oregalitariandistributive position. Suchanapproach wouldlikely result each oneofuscouldpotentiallyendupinany positions withinsocietywere unknown,suchthat we, asasociety, wouldmake ifourindividual experiment couldbetoimaginewhatchoices A Theory ofJustice A Theory 113 Ausefulthought . BelknapPress of 114

governments. might hindersignificanttransformationsfacing address theculturalandinstitutional factors that Finally, wemake some recommendations to » Transformational initiatives thatreplace or » Targeted programs andpoliciesthatare » Foundational programs andpoliciesthatare categories ofpolicychanges: not impossibletofullyachieve. We outlinethree may make acompleteoverhaul challenging,if recognizing thatpoliticalandstakeholder realities recommendations take accountofbothoptions, back tothedrawingboard andbeginanew. Our tweaks toadaptchangingconditions,orgo course withexistingprograms andmake minor as labourmarkets continuetoshift.Stay the There isaclearchoiceconfronting policymakers Recommendations Policy reinvigorate traditionalapproaches. technological disruption. thoseimpactedby rapid designed tosupport in society. broadly universal in nature and will benefit many Canadians bebroad. the programs supporting and scopeofcoverage of scale oftransformation is broad, sotoo should the technological disruption of thosefacedwith As the constituency if theirhousing,childcare, pharmacare and would beinamuchmore stable,secure position platforms andwithhighlyvariable income A worker inthegigeconomybouncingbetween » Means-testedslidingscalemeasures that » Consequently, policymakers atalllevels of even fewer Canadianswillbeabletoaccesstheseprograms andservices. care, pharmacare oraffordable housing.Inanever more precarious, fluidlabourmarket, itislikely that Many Canadiansare unabletoaccessaffordable, highqualitychildcare, home mentalhealthservices, STRENGTHENING FOUNDATIONAL PROGRAMSANDPOLICIES building_blocks.pdf https://mowatcentre.ca/wp-content/uploads/publications/98_ investment insocialandaffordable housing.” MowatCentre. 116 NoahZon etal.(2014)“Building blocks:Thecaseforfederal “Early childhooddevelopment.” Royal CollegePosition Statement. 115 Royal CollegeofPhysiciansandSurgeons ofCanada(2014) system tofundthem universal programs,andamoreprogressive tax approach wouldsee simpler andlessadministratively burdensome parents makingabove $50,000).However, a a day childcare tocharging additionalfees to (e.g., Quebec’s move away from auniversal $7 should beconsidered foralloftheseprograms require thosewithhigherincomestopay more dollar invested inpreschool programs. investment ofbetween$4and$17foreach Studies intheUShave shownareturn on over $11billioninhealthcare costsperyear. would improve patientoutcomeswhilesaving alarming. Auniversal pharmacare program the costsofinactioncouldbeeven more fiscal costsinalloftheseareas are imposing, foundational programs costs andbenefitsofexpandingaccessto government needtocarefully examinethe attainment andreduced healthcare costs. domains includingemployment, educational would yieldspinoffbenefitsacross arangeof Investments insocialandaffordable housing . governments adopting . . Whiletheinitialupfront 115

116

» Thefederal government andprovinces » Rampingupinvestments inchildcare tomeet tasks more challengingtoautomate. technological limitationsthatmake non-routine of workingwithchildren andtheelderlyaswell be disruptedby technologygiven thesensitivity are alsounlikely to,inthemedium-termatleast, home care –are heavily reliant onlabour. They identify asfoundationalprograms –childcare and notingthattwooftheareasIt isalsoworth we play therole ofsocialinsurer mosteffectively. answer tothequestionofhowgovernments can across Canada.But,they are alsothecleanest strained fiscalcircumstances ofgovernments nature are challengingtoenvisiongiven the Broad, transformationalinvestments ofthis substantially addressed. other essentialneedswithhighcostswere considered, as wellasensuringlow-income increasing benefitsshouldbothbeclosely Broadening eligibilityrequirements and Canadians slidingintopoverty inretirement. Supplement Canada Pension PlanandGuaranteedIncome should these twohigh-needareas. of skillstrainingcouldbemobilized tomeet market forthefirsttimeaswellthoseinneed carefully considerhowthoseenteringthe labour and homecareworkers. Governments should the the impending“gray tsunami”,wouldrequire existing demand,andhomecare toaddress training ofthousandsnewchildcare continue toexaminereformsthe tomitigatetheriskofmore

43 | THE MOWAT CENTRE 44 | WORKING WITHOUT A NET does-cpp-expansion-help-low-earners. https://www.cdhowe.org/public-policy-research/pressing-question- tion: DoesCPPexpansionhelplow earners?”CDHoweInstitute. 117 Kevin MilliganandTammy Schirle(2016), “Thepressing ques- » A host of other supports administered» Ahostofothersupports through clawbacks. seniors aren’t adversely affected by GIS priorities. market orearnincomeshouldbepolicyrenewal creating disincentives torejoin thelabour a rangeoffederal andprovincial programs coverage (CCB), mustalsobe andthe CanadaChildBenefit Benefit (WITB), the taxsystem,suchasWorking IncomeTax concern. Canadians willcontinuetobeapressing public retirement incomesecurityprograms forall ofrobustpersonal savings, theimportance to workplacepensionsandstruggleputaway . Theunintendedinteractionsbetween 117 Asfewer Canadianshave access reviewed foradequacyand

» Policymakers shouldexplore » Boththefederal andprovincial governments the insuranceoflastresort formanyCanadians. recommendations becomeeven more pressing as investments aren’t made,thenthefollowing tomorrow’s labourmarket. Andifthesemajor workers andpositionthemforsuccessin that governments shouldconsidertoprotect programs, there are Even ifmajorinvestments are madeinuniversal POLICY ADJUSTMENTS TARGETED PROGRAMAND some-gig-economy-start-ups-already-paying-15-an-hour.html. mum wage.” CNBC News. alreadyHeesen Wee pay (2016).“Lookwhatstart-ups $15mini com/3058599/could-a-minimum-wage-work-in-the-gig-economy; the gigeconomy?”Fast Company. https://www.fastcompany. 118 SarahKessler (2016)“Couldaminimumwagework in wide minimumwages. platform,haveservice voluntarily instituted site- company,an Austindelivery andHelloAlfred, a income security. Someplatforms,suchasFavor, platforms wouldhelpprovide level acertain of Canadians workingthrough sharingeconomy example, provisions around minimumwagefor they have nottraditionallybeen afforded economy meritadditionalprotectionsthat independent contractorsinthenewgig traditional employer-employee relationships. training programs which are premised on cuts workers outofEIbenefitsandskills economy. This typeofmisclassificationalso and severance pay isimperative inthegig CPP contributions,vacation pay, termination obligations andfinancialcostssuchasEI contractor provisions toreduce benefit aren’t shuntingemployees intoindependent these classificationstoensure thatcompanies and employees. Clarifyingandmodernizing classifications ofindependentcontractors must establish clear guidancearoundthe http://www.cnbc.com/2016/04/05/ targeted policyadjustments 118 Extending other partial Extendingotherpartial whether . For - » ble-workers-final-report. precarious work:final report.” http://www.lco-cdo.org/en/vulnera 120 LawCommissionofOntario (2012) “Vulnerable workers and the-old-worker. buzzfeed.com/carolineodonovan/meet-the-new-worker-same-as- could meanforthefuture” BuzzFeed, June182016 119 Caroline O’Donovan (2016)“Whatanewclassofworker » Enhance theenforcementandpublicawareness Provincial governments should review existing to thebottom. preventing platformsfrom aclassificationrace contractors’ couldgosomeways towards requirements togigworkers whoare ‘dependent or fullemployment protections andminimum is notworking. employment standards legislationinOntario complaint-based approach whichunderpins of Ontarioreport notedthatthereactive, for employers. A2012LawCommission of employment standardsrequirements benefits). effective taxratesflowingfrom thelossof employment (inadditiontohighmarginal money they make from takingonadditional too often,strippeopleofsavings andclawback some level of savings. Current systemsinstead, quickly bouncebackintothelabourmarket with of governments shouldbetoenablethem or directly goal tosocialassistance,theprimary people transitionfrom EItosocialassistance, divestiture ofassetsorincomeclawbacks they arenotoverly punitive withregardsto social assistanceprogramsandensurethat dynamic. to helpbalanceouttheemployer/employee awareness ofworkers’ rightswouldalsoserve theirlegalrights.Greaterattempting tocurtail as independentcontractors,orotherwise game thesystemby misclassifyingworkers disincentiveas apowerful forcompaniesto investigation powersforauthoritieswouldserve 119 120 Stronger penaltiesand https://www. . As - » Temporary employment agencieshave long loads/2015/03/StillWorkingOnTheEdge-WorkersActionCentre.pdf. http://www.workersactioncentre.org/wp-content/uploads/dlm_up Building decentjobsfrom theground up.” Workers’ ActionGroup. Gellatly(2015)“Stillworkingontheedge: No. 1,pp.77-95.;Mary agency sector.” Policy andPracticeinHealth Safety, Volume 10, ing rulesandthedangerto worker safety work inthetemporary MacEachen etal.(2012)“Workers’ compensationexperiencerat- publications/Final%20Report%20(Precarious%20Work).pdf Ryerson University. http://www.ryerson.ca/content/dam/clmr/ immigrant women.” Centre for LabourManagementRelations, The healthimpactsofprecarious workonracialized refugee and 122 WinnieNgetal.(2016)“Apublichealthcrisisinthemaking: CCPA%20ON%20Basic%20Income_FINAL.pdf. publications/National%20Office%2C%20Ontario%20Office/2016/10/ tives. rethinking socialpolicy.” CanadianCentre forPolicyincome: Alterna - 121 AlexHimmelfarbandTrish Hennessy, eds.(2016)“Basic covenants. employment through‘temporary’ restrictive safety atriskandkeeps theminpermanently role inamannerthatputsworkers’ healthand useful function,they’ve oftenundertaken this a serving casual assignments.Whileintheory connected workers withjobsforshorter-term, restrictive. is oftencharacterized asoverly punitive and oftheprograms,the designanddelivery which Ontario receives about$8,000ayear) aswell social assistancerates(asinglepersonin challenges around theadequacy ofexisting perpetuate anegative cycle. There are broader and government willcontinueto support slide backimmediatelyontosocialassistance labour market footing,onlyto withanuncertain social assistancebrieflyandre-entering the thereboundOtherwise, effect ofthoseleaving enhances theefficiencyofmarketplaces. technology thatreduces transactioncostsand matchmaker, given theavailability ofplatform body couldmoreeffectively play theroleofjob explore whetheranon-profitorgovernment protection ofworkers. Governments shouldalso employment agenciestoensure temporary enhance enforcementandregulationof https://www.policyalternatives.ca/sites/default/files/uploads/ 121 122

Provincial governments should ; Ellen -

45 | THE MOWAT CENTRE 46 | WORKING WITHOUT A NET » Governments shouldalsonotignore their mbb/1/survol-overview-eng.html. Department.” http://www.tpsgc-pwgsc.gc.ca/apropos-about/cdi- chor_institutions.pdf https://mowatcentre.ca/wp-content/uploads/publications/109_an 123 Nevena Dragicevic (2015)“AnchorInstitutions.” MowatCentre recent immigrants). of precarious work(e.g.,young people,women, groups impactedby disproportionately therise totargetshould alsoprioritize opportunities their rolesaskey anchorinstitutions robust, fairlabourmarket practicesthrough Canada should government andthebroader publicsectorin nearly $10billionayear). (e.g., Ontariohospitalsanduniversities spend significantprocurementalso carry budgets while manybroader publicsectororganizations government alonespends$18billionayear, On thepurchasing side oftheledger, thefederal in universal programs. redundant. Thesesavings shouldbere-invested where necessary, letstaffgoiftheirjobsare to shiftpeoplebetweenjobs,retrain staffand, introduce greaterflexibility to re-examinecollective agreementsand need sector entitiesacrossthecountry impacted significantlyby technology. in Canada,andsomeoftheirroles willbe public sectoremploys over 3.6millionpeople own role asemployer andpurchaser. The ; PWGSC Canada (2016) “Overview ofthe ; PWGSCCanada(2016)“Overview explore opportunities todrive explore opportunities 123 tomake iteasier Alllevels of . They Public - » The lending. own savings, homeequityorcommercial unabletotapintotheir Canadians otherwise lending ratewouldprovide analternative to premium totheBankofCanada’s overnight Canada toprovide emergency credit atalow mandate oftheBusinessDevelopment Bankof need tomake endsmeet.Broadening the charging exorbitant interest rateswhenthey means are forced toturnpayday lenders employed. Too manyCanadiansofmodest assistance whileinbetweenjobsorunder- financial Canadians inneedofshort-term introducing emergencycreditlinesfor federal government shouldconsider still leave vulnerableworkers withoutsufficientprotections. unnecessarily lumptoomany typesofworkers together, orworse overly broadornarrowpolicyresponsesaren’t designedthat issue intherightway ischallengingbutcritical toensuringthat engage intheworkandstabilityofrole.Tackling thiskey Proxies forthenatureofworkcouldincludepay, willingnessto to cover thosegaps). receiving adequateEIcoverage, thenthegovernment couldstepin government action(e.g.,iftemporary, workers aren’t short-term and may make itclearerwheremarket gapsexistthatrequire labour andemployment issuesmay untanglesomethornyknots, towards a‘truepicture’ approachtounderstandingandaddressing Shifting paid graphicdesignersandmuchlower-paidUberdrivers. labelwhichisusedtoday wouldincludebothhighly contractor’ drivers andnannieswhilethe‘independent cleaners, delivery assignments forrelatively lowpay arelikely tocapturehouse may bemorerelevant –forexample,temporary, short-term than categorizationsofworkers, thenatureofworkitself employment andlabourlegislationisdesigned inCanada.Rather One possiblesolutiontothisissueisre-conceptualizehow choice’ workers. only layer andunwantedburdensonaffluent,‘by unnecessary that may benefitvulnerableworkers withinthisgroup may infact broad brushstroke. Therefore,providing additionalprotections cannotbepaintedwithasingle the ‘independentcontractor’) independent worker (includingmostnotablyinthegigeconomy This posesapolicyconundrumforgovernments, asthe cent earningsupplementalincome). incomefromindependentwork,and40per earning theirprimary per centitwasapreferredchoice(with30ofthisgroup independentworkoutofnecessity,were undertaking whilefor70 independent workers intheUSandEurope foundthat30percent variable. Arecentsurvey by theMcKinsey GlobalInstituteof and motivations forengaginginindependentworkarehighly working throughagenciestoindependentcontractors,theirneeds employeesself-employed doctorsandarchitectstotemporary The pictureofindependentworkers inCanadaisdiverse. From Challenge A Particular Regulating IndependentWorkers: employment-and-growth/Independent-work-Choice-necessity-and-the-gig-economy. gig economy.” McKinsey GlobalInstitute. 124 JamesManyika etal.(2016)“IndependentWorkers: Choice,necessity, andthe http://www.mckinsey.com/global-themes/ 124 cinsey lobal nstitute necessity preferred choice

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» radically different approaches aswellinnovative, yet untestedapproaches. Theseinclude: market andeconomy, there are somelessonstobelearnedfrom internationaljurisdictionswhichhave If Canadianpolicymakers wanttobeboldandcompletelyrethink existingapproaches tothelabour TRANSFORMATIONAL CHANGES aspx?DataSetCode=LMPEXP. on LabourMarket Policy.” https://stats.oecd.org/Index. 126 OECD. stocks “Publicexpenditure andparticipant great-recession. EU. http://voxeu.org/article/flexicurity-danish-labour-market-model- (2011) “TheDanishflexicuritymodel intheGreat Recession.” Vox denmark.dk/en/society/welfare/flexicurity ofForeign125 Ministry AffairsDenmark.“Flexicurity.” http:// Adopt a‘flexicurity’approachtolabourmarket new approach inCanada. pointforconsiderationofa be acriticalstarting underpinning ofDenmark’ssystemandwould appealing. Strong from support unionsisakey new labourandthosesheddingpositionsis and more fluiditybetweensectorsrequiring of incomereplacement for unemployed workers head, thebenefitsoflonger-term,higherlevels approach toemployment protections onits While thismodelwouldturnmuchofCanada’s systems. response thanCanada’s existingEIandtraining bureaucratic, more state nimbleandsupportive always looming,thismodelprovides aless globalized worldwithtechnologicaldisruptions skills supports. and highlevels ofinvestment intrainingand income replacement forunemployed workers sector switchjobsevery year), upto90percent employees (25percentofDanesintheprivate providing flexiblerulesaround hiringandfiring fromexit andentry thelabourmarket by Denmark’s flexicuritymodelpromotes fluid policy modelledontheDanishsystem available by thismeasure. out of31OECDcountriesforwhichdatais (0.22 percent)isstark,andCanadaranks27th (1.91 percentofGDPin2014)andCanada’s investments inactive labourmarket programs 125 ThegapbetweenDenmark’s 126 Inanincreasingly ; Torben Andersenetal. . » » loads/files/content/upload/Portable_Benefits_final2.pdf. The AspenInstitute. benefitsinthe 21stcentury.”127 David Rolfetal.(2016)“Portable Introduce work-sharingschemessuchas Introduce ‘portable benefits’forgigeconomy Introduce ‘portable considered in conjunctionwithgovernment- off employees. Thisapproach shouldalsobe asked toscalebackhoursrather thanlaying be longer-termbenefitstoworkers ifthey are result oftechnologicalchanges,there may face theprospect oflarge-scale layoffs asa cyclical downturns. Where sectorsandfirms more flexibilitytoreduce workers’ hoursduring Germany’s Kurzarbeit employment relationship. unduly harmedby theabsenceofastandard workers canbenefitfrom flexibilitybutnotbe would beafirststeptoensure thatgig options available toindependent,gigworkers but bolsteringtheprotections andinsurance existing approaches totraditionalemployees companies. between gigsandrequire contributionsfrom employment relationships, buttransferable workers thatare nottiedtospecific market becomesmore turbulent. become more ofanimperative asthelabour that peoplere-skilling orup-skillingrequire will the individualized, outcomes-focusedtraining benefits statusbuttightlyfocusedondelivering that isagnosticastoaperson’s employment or assistance recipients. Moving towards asystem the spectruminCanada,from EItosocial of government-sponsored skillstrainingacross This modelwouldalsorequire areassessment 127 https://assets.aspeninstitute.org/content/up Maintainingandstrengthening , whichgive companies

basic incomefor Ontario.” https://mowatcentre.ca/pilot-lessons 129 Evelyn Forget etal.(2016)“Pilot Lessons: Howto designa can-benefit-from-work-sharing-program. news.ca/news/2665589/feds-double-length-of-time-employees- work-sharing programs.” GlobalNews (2016). “Feds doublelengthoftimeemployees canbenefitfrom gc.ca/en/ei/employers_workforce_reduction.page force reduction program dueto downsizing.” http://www.esdc. 128 Employment andSocialDevelopment Canada(2015) “Work » Consider theintroductionofaguaranteed foundational supports. Providingfoundational supports. $15,000ayear broadly basedgovernment investments in A GAIshouldnotbeasubstituteformore GAI wouldbeofnetbenefittorecipients. and affordable whethera housing itisuncertain programs orforegoing investments inchildcare if fundingwere offset by reductions from other social assistancewouldreduce costs, though for theworkingpoorandthosecurrently on expenditures. Ameans-testedannualincome a year, ornearlydoubleallfederal government $500 billionifevery Canadianreceived $15,000 truly universal GAIwould beprohibitive: roughly benefits. voluntarily reduce theirhoursare eligiblefor the jobsofco-workers oremployees who employees wholeave theirjobstopreserve reduction andwork-sharingprovisions where Canada’s EIsystemincludesworkforce employed and/ortoseeknewemployment. workers timetoupgradeskillswhilestill gradual rampoutofemployment wouldgive to workers whoare stillemployed. Amore sponsored skillstrainingbeingmadeavailable and policymakers. to Ontario,anddiscussedby advocacy groups contemplated by governments from Finland of thepopulation. segments annual income(GAI)forparticular employment andhours. on employees tomake decisionsaround their in theirapplicationandtypicallyputtheonus 128 Theseprovisions are relatively rigid ThenotionofaGAIisbeing 129 However, thecostsofa , April272016. ; Caley Ramsay http://global . - » cloud-att-tells-its-workers-adapt-or-else.html. www.nytimes.com/2016/02/14/technology/gearing-up-for-the- workers: Adapt,orelse.” NewYork Times 130 QuentinHardy (2016).“Gearingupforthecloud,AT&T tellsits

Canadian corporationsmusttake theleadin has taken training through theinitiative. Approximately workforce halfofthecompany’s with afocusonpracticalonlinelearning. up to$8,000towards tuitionforemployees, transformational trainingprogram thatprovides environment. Asaresult, itintroduced a inanew,perform more complex operating its workers don’t have therequisite skillsto of itsworkforce redundant andthatmanyof that technologycouldsoonmake onethird futures. AT&TintheUnitedStatesrecognized investingalso needtostart intheirown in thisregard, butprivate sectorcompanies intensive private-sector trainingisonestep government toincentivize interventions more re-training theirownworkers. Calibrating anticipating futurelabourmarket shiftsand the needsofmany. hands ofthefew, whoare taxed toprovide for in ajob-free future, where capitalresides inthe GAI wouldbecomeamore realistic alternative affordability generallyforallofthoseneeds.A unlikely towork,absentgreater accessand childcare istheoretically elegantbutinpractice food, pharmacare, retirement savings and to peoplemeetbasicneedssuchashousing, significant investment and efforts. significant investment andefforts. the private sector mustcometothetablewith butforCanadatosucceed inthefuture,short, whereand supplementtheseefforts they fall their ownworkers. Governments can support own sectorsandtounderstandhowtrain positioned toanticipatefuture trends intheir upgrading theskillsofworkers. They are best leadership role infacingthechallenges of Canada’s private sectorwillhave acritical , February 132016. 130

http://

49 | THE MOWAT CENTRE 50 | WORKING WITHOUT A NET » org/ctp/beps-reports-2015-information-brief.pdf. project.” https://www.oecd. InformationBrief,2015FinalReports. 132 OECD(2015)“OECD/G20base erosion and profit shifting european-commission-corporate-tax-avoidance-proposals.htm. www.oecd.org/ctp/oecd-secretary-general-angel-gurria-welcomes- European Commissioncorporatetaxavoidance proposals.” http:// GeneralAngelGurriawelcomes 131 OECD(2016)“OECDSecretary »

Canada shouldcontinuetoengagein Canada’s federalandprovincial governments tax avoidance measures. toshareefforts informationandhaltcommon behaviour by corporations tominimize taxevasioninternational efforts trends thatwillmeanlimitedbenefitsfrom constrained prospects given demographic many otherG-20nationswillbefacedwith spectre oftaxincreases. However, Canadaand revenues through growth, alongwiththe in practice,thisleaves theoptionofboosting program redesign, whichtendstobeelusive cost-saving measures through transformational Absent major investments insocialsupports. fiscal situations will needtohave anhonestappraisaloftheir individualsandgray economyactivities. worth avoidance behaviours, includingbothhigh-net tocrackdownonindividual-levelefforts tax $240 billion. corporate taxrevenue, orUSD$100billionto between 4percentand10ofglobal from theseprofit shiftingtechniquesare The OECD estimates that losses to governments arrangements andaccountingpractices. shelter theirprofits through complexoff-shore marketplace where companiescaneffectively but are elusive tocapture inaglobalized taxes offer analternative source ofrevenue, fund socialprograms inrecent years. Corporate an unwillingnesstoraisepersonaltaxes to are expensive, andgovernments have shown with acost.Universal programs, inparticular, the recommendations outlinedabove willcome 132 Canadashouldalsoredouble anddeterminehowtofund 131 andbuildonrecent Funding anyorallof

» March-251.pdf wp-content/uploads/2015/03/Career-Ready-Ken-Coates-final- Canadian CouncilofChiefExecutives. a nationalstrategyforthemobilization ofCanadianpotential.” 134 Seeforexample,Ken Coats(2015)“Career ready: Towards long-term-global-growth-be-saved. www.mckinsey.com/global-themes/employment-and-growth/can- save theday inanagingworld?” McKinsey GlobalInstitute. 133 JamesManyikaetal.(2015)“GlobalGrowth: canproductivity The federalgovernment shouldtake thelead could improve isdifficulttojustify. assess andremediate theareas where Canada labour market of2025,noteven attemptingto competencies willbemosthighlyvalued inthe knowwhichskillsand we cannotwithcertainty growth fallto0.8percentfrom 1.9percent. compared to3.1percent),andcapitaGDP compared totheprevious 50years (1.5percent growth halved over thenext50years as employment growth. Canada couldseeGDP apprenticeships andentrepreneurship. ontraining,education, strategy toalignefforts Stakeholders have longcalledforanational unions andotherrelevant stakeholders. institutions,theprivate sector,post-secondary Skills Strategy on developing andimplementingaNational proposals. of rationalself-interest) foranytaxincrease more sympatheticaudience(ifonlybecause means thatgovernments may have amuch affected by technologicaldisruption,however, The broad constituencyofpeoplewhomay be programs withoutconcurrent boostsinincome. mean Canadiansfacinghighertaxratestofund exacerbate Canada’s historicproductivity woesalso . thechallengesahead,andcould inconjunctionwithprovinces, http://www.ceocouncil.ca/ 134 While http:// 133

» » » can’t. But,they canandshouldmove aheadwiththefollowingadviceinmind: can ourgovernments tacklesuchalong,expensive list ofreforms allatonce?Inlikelihood, they for theirownandcross-cutting issuessuchassocialassistance andjobtrainingprograms. But,how heaviest responsibility liesatthefederal level, withtheprovinces andmunicipalitieseachresponsible The scopeandnature ofthesereforms isdauntingandcutsacross alllevels ofgovernment. The TRANSFORMING SYSTEMS EFFECTIVELY ANDEFFICIENTLY Transforming Canada’s SocialArchitecture FIGURE 11 Collect morerobustandgranulardataonjobs Work collaboratively acrosslevels of Deploy pilotprogramstoassesswhatworks order totarget more interventions precisely. market) thanthecurrent LabourForce Survey in and thosewhoare lightlyattachedtothelabour and employment but tightlyfocusedonclientresults. jurisdictional battlesover budgetsandcontrol level outcomesthatare agnostic towards issues suchasskillstrainingtowards system- government andharmonize approaches unproven approaches onawidescale. what successlookslike), ratherthanrolling out proven success(withaclearunderstandingof and howtobestmobilize basedon efforts Current Status (e.g.,lookingatgigworkers on

» » Introduce atechnologylensonallmajor Carefully considerwhichuniversal programs obsolescence. done toimmunize decisionsfrom technological consequences andwhat,ifanything,canbe technologies mightaffect downstream decisions government program,policyandinfrastructure economic challenges). on housingwouldmitigateotherhealthand maximize impact(e.g.,whetheraninitialfocus inthoseareasCanadians, andfocusefforts to asthebestbasisforsuccess would serve todeterminehowemerging State Future for

51 | THE MOWAT CENTRE 52 | WORKING WITHOUT A NET ever before. ever before. relevant than politically much more looming and architecture is Canada’s social transform reassess and imperative to and the The opportunity 5 and disruptions. Canadians are well-placedtobenetbeneficiariesof ongoingandfuture technologicaltransformations with abroad sweepofpolicyresponses thatanticipateandprepare forthesechangesandensure that markets andeconomyinsignificantways. Governments mustquicklyandefficientlymove forward friends andrelatives. Yet, toreshape forallitsbenefits,technologyhasalsosubtlystarted ourlabour purchase from goodsandservices around theworld,dotheirjobsmore efficientlyandconnectwith Canadians seethebenefitsoftechnologyevery day, asthey andcomputersto usetheirsmartphones near future. was considered anationalcrisisin2009,yet 3to5per centleapsare relatively easytoimagine inthe other Canadiansmakes reform aneven more criticalissue.A2percentjumpintheunemployment rate pressing concern for manyCanadiansdecades. That these gaps willpotentially be feltsoon by many Moving aheadwithfundamentalchangestothecore planksofoursocialarchitecture hasbeena is loomingandmuchmore politicallyrelevant thanever before. andtheimperative toreassessCanadians. Theopportunity andtransform Canada’s socialarchitecture the insecuritiesfelt through theeraofglobalizationwillbleedupincomeladder toaffect more traditionally blue-collarandwhite-collarjobs.For andgovernments political parties thismeans Technological disruptionwillpotentiallyimpactthecareers andlivelihoods ofCanadiansinboth left withsmallerpiecesoftheeconomicpiehaven’t always hadtheclout tocompelchange. dissatisfaction attheballotbox. Political andstakeholder realities have traditionallymeantthatthose people can’t meettheirbasicneedsthrough gainfulemployment, they willnaturallyexpress their Canadian governments have always paidcloseattentiontopeople’s economicsecurity. When inequality andprecarious work,anddeepentheirpunitive impactsabsentstrong policyinterventions. major factorbehindtheseshifts,butnottheonlyone.Itmay alsoaccelerateongoingtrends inincome More peoplewillbefacedwiththethreat ofjoblossesandprecarious employment. Technology isone The shiftsinCanada’s labourmarket inrecent years canonlybeexpectedtocontinueandpickuppace. CONCLUSION

53 | THE MOWAT CENTRE 54 | WORKING WITHOUT A NET Notes Notes

55 | THE MOWAT CENTRE