Friday, March 30, 2012

Federal Budget Drops the Ball on Jobs


The Federal budget finally appeared – two days before the end of the Federal Government’s fiscal year.   I guess they wanted to put off the bad news for as long as possible.

We were looking for a budget that emphasizes job creation and the needs of working families: a budget that would support the fragile economic recovery by continuing with job-creating stimulus investments in infrastructure; a budget that doesn’t put the economic recovery at risk by making deep depending cuts to services; and a budget that protects the services that working families rely on.

But, what did we get?

Instead we got a budget that makes deep cuts to the front-line services that working families count on.  It closes every youth jobs centre in Canada (the $6.5 million savings are about half the $12 million that the Harper government is spending to advertise this budget); it will cut the number of centres that process Employment Insurance claims from 120 to 20; and within 5 years, front-line health care will begin to suffer from the budget’s commitment to slash federal health transfers to the provinces.

How will this budget impact working families? 

This budget means the middle class will continue to shrink as almost 20,000 good, family-supporting jobs are cut.  It will hurt the middle class that has been the engine of our economic prosperity since the Second World War. 

This budget means working families will be more on their own in saving for retirement.  People 53 and younger will have to wait two more years before they become eligible for Old Age Security and the Guaranteed Income Supplement. Federal civil servants will have to make up for cuts to their pensions.

The budget also means more injuries in federally regulated workplaces.  The Harper government has already cut the number of inspectors who enforce workplace health and safety rules by 15%.  That’s why federally regulated workpalces are the only workplaces in Canada where the average injury rate is actually getting worse.  This will just get worse with federal job cuts.

Harper the Vindictive reappeared in this budget.  During the last election Conservatives insisted they had no plans to cut the Canadian Broadcasting Corporation’s budget.  But a media outlet that actually does its job and looks beyond the government news release and points out the reality of what’s going on is just too tempting a target for Conservative cuts.  There’s an easy $115 million to pluck and the bonus for Harper is that it will silence one of the few reliable media voices that doesn’t swallow Harper’s guff holus bolus.

I’m glad to see there are going to be new investments in running water and education for First Nations communities.  That’s a good step forward but it’s not nearly enough.
Clearly the deficit needs to be addressed, but let’s be sensible about it.  The approach in this budget could actually make it worse. As we have seen in recent months, the global economic recovery is very fragile and leading economists have cautioned Canada not to put it at risk by making deep cuts in federal spending.   Just look at Europe where country after country is slipping back into recession because they took their foot off the stimulus pedal too soon.

The best way to restore balance is to get Canadians working again. When the economy is operating on all cylinders, tax revenues go up and spending on services comes down. That’s how you get back to balance.

Deep cuts will only hurt the recovery and reinforce the economic pressures that caused the deficit in the first place.

Our top priority should be economic recovery and getting Canadians back to work. With the global economic recovery at risk I would have expected a renewal of the federal stimulus program to invest in job creating infrastructure projects.
Instead of deep cuts to front-line services, I would have closed tax loopholes and breaks for corporations and high-income Canadians.   When Canada’s highest paid CEOs cash in stock options, they should be taxed at the same rate that other working Canadians are taxed. This loophole costs the federal government $750 million/year. We can’t afford that anymore and it’s not fair.

We need to put a stop to Canada’s failed corporate tax cut experiment. Canada’s corporate tax rate is now far below the US rate, yet instead of reinvesting their tax savings into job creating investments, Canadian corporations have stockpiled more than $500 billion in cash. We could support public services and stay competitive by letting the corporate tax rate rise to at least the US rate.

Canada needed a budget that prioritizes jobs and services for working families. Instead we got front-line service cuts and layoffs that will put the fragile economic recovery at risk.