by Shauna MacKinnon and Lynne Fernandez
Although there seems to be a collective sigh of relief that the Conservative’s first majority-government budget was not as bad as those that came down in the 1990s, it is important to remember that Canada still hasn’t recovered from that “age of austerity” and that this is the first of 4 budgets this government will deliver. Moreover the following points explain how this government is dancing to the same tiresome tune composed by the Liberals.
Changes to the OAS/GIS are completely unnecessary. There’s a lot of fearmongering around how OAS/GIS payments will increase, but spending will only increase from 2.3% of GDP in 2010 to 3.1% in 2030. After 2030, the ratio will go back down to 2.6%. This small, temporary increase is very manageable.
Canada’s greatest success story on the poverty front has been the reduction of seniors’ poverty. Changing OAS/GIS access will begin to reverse that significant gain. This move will see healthcare costs increase: low-income seniors who have to choose between buying medicine or food will end up using the healthcare system more.
Under changes to EI, of note is new spending of $387 million that will “reduce disincentives to accept available work”. This money would be better spent to increase the number of workers eligible to collect EI, the amount they receive, and the duration of benefits. This new move continues the anti-worker sentiment from the 1990s that culminated in the drastic transformation of UI to EI.
In these volatile economic times, the litmus test for this budget is what it will do to create not just jobs, but decent jobs. Unfortunately, it does not pass the test. This government continues to claim that its unprecedented tax cuts (another favourite dance move from the 90s) over the past 6 years is the best way to stimulate economic growth and jobs. We know that this is not true, and it has not worked so far. This budget contains no real plan to help grow jobs – in fact, it missteps badly on this front.
This government is determined to drag the Canadian economy back into one of resource extraction, pitting the development of the tar sands against our manufacturing sector/green economy/and/or the IT sector. It waters down environmental reviews and skips public/community consultations. By insisting on letting mostly foreign-owned oil companies drain oil to foreign markets before even taking advantage of any value-added processing that would create hundreds of well-paying jobs, this government is overlooking any possibility of creating a national energy strategy or conserving our resources. At the same time, it is going to try to quickly push through environmentally dangerous projects. Insistence on making Canada an energy superpower causes our dollar to overheat, making it difficult for Manitoban exporters to compete globally.
The only concrete job-creation idea we could find the extension of their temporary hiring credit for small business (maximum $1,000/employer). Do they really believe this is going create permanent, decent jobs for the already unemployed and the 70,000 soon-to-be unemployed as a result of this budget? Total spending on this questionable policy is $205 million, money that could be better spent on helping Aboriginal Canadians.
For example, the $205 million could allow the government to reinstate much needed healing programs for generations of Aboriginal Peoples who have been negatively impacted by Canada’s system of residential schools.
Finally, continuing the trend of the 1990s to download financial responsibility to the provinces, this budget’s plans to make both OAS and EI less accessible will ensure that Manitoba will have to pick up the tab to protect our most vulnerable citizens.
This is clearly a budget that does not address the serious inequality situation in Canada. In fact, it will only make things worse.
To be fair – but not too fair – the "grants" in question are actually annualized rebates of the entertainment tax still collected on tickets at those facilities; they just get reported in the grants section of the budget even though they aren't discretionary in the same way the WAC grant is. So "hybrid user-fee rebate-subsidy" or similar gobbledygook might be a better description, since every dime spent in these "grants" ultimately comes from someone who bought a ticket at those facilities. For the record, I personally oppose the use of the entertainment tax in this way since it basically pins the blame for higher ticket prices for the facility owners on the government for no good reason. It's a fat gift to TN, since a ticket charge that looks like a non-negotiable tax to a touring band is effectively a management fee once all is said and done. And it's possible – ? – that the transfers are also treated different from a tax standpoint, but I don't know that for sure. However, the tough part is that (a) the City had agreed to keep levying and rebating the tax unless it removes it on all three facilities, and (b) the Selinger govt is a partner in a 100% publicly-financed football stadium plan – which I'm sure the CCPA hates just as much as I do, right? And that plan is funded in part by entertainment tax revenues at the new facility. So these "grants" are likely to continue for some time to come, since taking down the tax at all three sites will be more complex.On the discretionary grant side (e.g. shelters), better grant decisions might be made if there was a more transparent, predictable, public process – as I noted in a recent Free Press column. There's nothing stopping the CCPA-MB from pushing councillors to propose these reforms. So I hope to see you do so in the very near future.