The 2016 federal budget proposes to make good on the slew of Liberal election promises that resulted in a Liberal majority last fall. Fed up with the Tories, Canadians chose the Liberals as the preferred vehicle to drive the Tories out and move the country away from a decade of austerity, war and corruption, to the ‘sunny ways’ agenda of promised jobs, prosperity, democracy, and action on climate change. This budget does move away from the Tories’ draconian austerity policies, but it provides nowhere near the funding required to reverse a decade of catastrophic cuts, guts and losses. Nor will it provide the funding needed to address the critical issues of expanding universal social programs such as Medicare and the Canada Pension Plan, or create programs such as a universally accessible, affordable, quality public childcare program promised by the Liberals in 1993. Nor will it address the crisis of economic and social conditions on and off reserve for First Nations and other Indigenous Peoples, who will not see the largest part of the funds allocated before the next election, and maybe not then either.
This budget can’t deliver what’s urgently needed, because the government has not addressed the revenue side of the budget, at the heart of which is the issue of corporate taxation and progressive taxation based on ability to pay. Without a substantial corporate tax increase, the only way to finance investment is to privatize public assets and services, cut public sector jobs and wages, and/or to increase the deficit and the debt. In Ontario, the Wynne Liberals have done all three, after winning the 2014 provincial election on a platform of massive spending on infrastructure and transit, and creation of a new public pension plan.
The Tories’ trickle down economics resulted in massive tax cuts and super-profits for the corporations, and vanishing social programs, falling wages and declining living standards for working people and the unemployed. It’s also resulted in smaller government with smaller public treasuries.
To deliver the agenda that Canadians voted for and expect, the government would have – and should have – doubled the corporate tax rate in 2016 and then doubled it again in 2018, restored the capital tax and capital gains at 100% of realized and unrealized gains, introduced wealth and inheritance taxes on estates over $1 million, reversed corporate tax cuts, collected billions in deferred corporate taxes, and closed corporate tax loopholes like the one on CEO stock options (worth $1 billion annually to the federal treasury) which the government has declined to close (or collect) in this budget. The government should also have cut the bloated military budget (worth more than $20 billion annually), not simply deferred new spending.
This is why the banks and corporate Canada like this budget. For them, nothing much changes.
That’s because the government has decided that the cost of this budget will be paid for by the public, by working people and the unemployed, and not by Big Business – now or in the future.
And that’s also why the expenditures in this budget are so small, relative to the expenditures that need to be made and that the Communist Party advocates and continues to fight for:
• create good jobs and raise wages, pensions and living standards; raise the minimum wage to $20;
• expand the CPP to substantially increase pensions and lower the age of voluntary retirement to 60 with a full pension;
• close the tarsands and guarantee current and laid-off tarsands workers new jobs and equivalent wages in a publicly owned and environmentally sustainable energy and resource sector;
• develop an environmentally responsible industrial strategy for Canada and protect and expand value added manufacturing and secondary industry including mass public transit;
• scrap corporate trade deals like CETA and TPP in favour of mutually beneficial trade with all countries;
• cut the military budget by 75% and redirect $15 billion to civilian spending including for refugees and immigrants;
• build 1 million units of affordable social housing across Canada, for rent and for sale, on an emergency basis;
• restore door-to-door delivery at Canada Post and expand service to include postal banking
• expand EI to cover all the unemployed, including first time job seekers, for the duration of unemployment, at 90% of previous earnings;
• introduce a Guaranteed Annual Living Income;
• introduce progressive taxation based on ability to pay that puts the load on the corporations and the wealthy ;
• restore universality and expand Medicare to include pharmacare, vision and dental care and long term care; renew the federal/provincial Health Accord with 50/50 funding for healthcare; enforce the Canada Health Act;
• expand universal social programs, reverse privatization, and establish a universally accessible, affordable, quality public childcare system;
• make post-secondary education universally accessible by eliminating tuition fees, abolishing student debt, and adequately funding post-secondary education;
• immediately provide, on an emergency basis, the funds needed to raise the living standards of Indigenous Peoples for health, education, housing, and jobs, to preserve Indigenous cultures and languages, and to establish a relationship of Indigenous sovereignty and self-determination with the Canadian government
• adequately fund the CBC and Radio Canada
Instead of this kind of fundamental change, the 2016 budget will deliver some patchwork of public investment and funding in some sectors, with the largest number of dollars promised set aside for delivery after the next election.
Medicare has been virtually by-passed in this budget, with transfers to provinces pegged at 3%; exactly half of the minimum requested and required by the provinces. Promises to renew the federal provincial health accord, providing stable funding for healthcare, are barely mentioned in the budget, leaving the door open for more privatization.
The Canada Child Benefit will provide some funds for low-income families with children, who need help with childcare and who are food insecure. But the program is means-tested, is not universal, and will not lift millions of children and their families out of poverty.
Restoring the pension age to 65 from 67 and an increase in benefits to the poorest seniors collecting GIS will not alter the deep poverty in which seniors collecting the GIS will continue to live. It won’t change the reality where many seniors who don’t have private pension plans, have to choose between food and prescription drugs on a daily basis.
While the budget puts some funds towards affordable housing and homelessness, it does not come close to meeting the needs of more than a million people on waiting lists for affordable social housing across Canada. As a result, most of the funds allocated will go to repair existing housing and provide more shelters for the homeless. Urgent and necessary, but inadequate on its own. Funding for new social housing – which is equally urgent – won’t kick in until after the next election, and it is inadequate to meet current needs.
The budget also makes changes to EI, reducing the wait time to one week from two, and expanding the number of weeks for benefits to between 5 and 20 additional weeks. But it only applies in some parts of the country, and not anywhere in Quebec, NB, or NS which held the largest protests against Tory cuts to EI last year. And it will only help 50,000 people, when 60% of the 1.4 million unemployed have been excluded from collecting any benefits. Further, the budget removes $6.9 billion from the EI fund to be used to fund other parts of the budget. But this money is insured deferred earnings that belong to the workers who contributed to the fund. The government has no right to ‘remove’ it. This should be illegal.
Funds for aging infrastructure – long overdue, including for housing and municipal transit, are likewise back-ended, with the largest part held back until after the next election. In the meantime, some funds for water and sewage system repairs and replacements will be available, though the federal requirement that funds for public transit must be used for P3 projects – for private companies and banks in other words – remains.
The investments for Indigenous peoples and communities are likewise inadequate to meet the crisis situation that exists. The funds being delivered for water and sewage treatment, public and secondary education, and for the Inquiry into Missing and Murdered Women is a very small down payment on what is needed, what has been promised, and what has been taken from Indigenous Peoples in lost lives, lost culture, and lost children, youth, and women.
Now that the budget is on the table, the labour and people’s movements must mobilize to hold the Liberals’ feet to the fire, to:
• deliver all the funding in this budget in 4 years, not 10, and to reverse a decade of austerity
• double the corporate tax rate, rescind corporate tax cuts, restore the capital tax and capital gains taxes at 100% of the gain, introduce wealth and inheritance taxes on estates over $1 million, and collect deferred and unpaid corporate taxes, and
• cut the military budget by 75% and redirect $15 billion to civilian spending
That would put some gas in the tank. That would be a move towards the real change that Canadians want and need now.