CERB Creating Less Workers And Higher Prices

May 5, 2021


While there may be no doubt that the introduction of the Canada Emergency Response Benefit during the COVID pandemic was well intentioned, the program’s long-term damage could outweigh any positive impact as a short-term solution.

CERB is becoming somewhat of a swear word for employers, who are finding it increasingly difficult to get workers to come back to their jobs, since they’re making $500 per week, or $2,000 per month, for staying home. Why wouldn’t people take advantage of a system that pays them more to do nothing, than to do something? Do the math.

While governments introduce various measures to try and stem the tide of COVID, they inhibit the ability of businesses to do what they do – create wealth through providing products and services. The typical environment in which they normally conduct commerce doesn’t exist, so extraordinary actions should be taken to replace those income opportunities.

CERB is anesthetizing Canadians from the true economic pain and damage this pandemic is inflicting. Politicians and government workers have continued to receive their paycheques, unabated, during the pandemic. CERB is the main reason why most Canadians aren’t writhing in pain and rioting in the streets, since it enables them to cover their basic needs.

But what happens when people won’t go back to work? The supply chain gets crimped, and it increasingly apparent that inflation is not only on its way, but has indeed arrived. The price of lumber has shot through the roof, with 2×4’s that went for just over $2 a year ago now costing upwards of $8 each. Check your restaurant receipt after purchasing a meal – yes, takeout included. It’s much higher than it was a year ago.

To business people, this is not a surprise. Somehow, they must recoup the investment they’ve made in their people and premises. If their costs go up, the prices must rise also. Ultimately, the consumer pays, and if those increased costs can’t be passed along at the till, the company won’t survive.

That’s what happens when the government hikes the minimum wage, making it more costly for restaurants to operate. It is reflected in their pricing. And when manufacturing plants can’t get workers to produce their products, scarcity results, meaning the firm must raise prices on what it can get out the door to recoup their operating costs and maintain profitability. It is supply and demand in its most basic form.

A recent article in Business in Vancouver noted an April 6 survey of farm workers conducted by the Canadian Agricultural Human Resource Council found than 41 per cent of producers could not recruit a sufficient number of workers in 2020, and that “71 percent of employers (farmers) who reported labour shortages cited fewer Canadian applicants.”

The study found that Canadians weren’t willing to do physical work on farms, even when they’re unemployed and jobs are available. Applicants that did inquire wanted to maintain low enough working hours to continue qualifying for CERB.

For example, the BIV story noted that a vegetable grower from Quebec received 80 names of possible workers, 25 of which showed up and stayed for more than 24 hours. “All of the others basically did not want to work. . .did not want to work more than 19 hours (so that they could keep their CERB). They did not want to work early in the morning or late at night, and they did not want to work on weekends.”

That’s a problem. Combine that with the difficulty that exists in getting migrant workers into this country through immigration hurdles, and there’s a serious problem brewing on our country’s farms. Which will manifest itself at grocery store tills with higher prices for fruit and vegetables.

Somebody has to work and produce goods and services, and, ultimately, pay taxes that gives government real money to spend.

CERB, and subsequent conversations about Guaranteed Incomes, regardless of their intentions, are really the manifestation of socialism, where people get paid to stay home and not work. A lot of voters will like that.
We haven’t even broached the subject of Canada Pension Plan recipients receiving “just” $1,203.75 per month – after a lifetime of work. That’s almost $700 less than CERB recipients.

These are real, long-term problems.

Mark MacDonald is President of Communication Ink Media & Public Relations Ltd. and can be reached at mark@communicationink.ca


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