The 2022 federal budget is a product of the Liberal-NDP pact that promised to deliver pharmacare, denticare, affordable housing, and action on climate change, but in fact has delivered very little of these urgent policy commitments -urgent that is to working people across Canada.
But this budget certainly delivers for Big Business and the military, with new subsidies and tax breaks for the oil and gas sector, a $9 billion cut to spending including a $6 billion cut to program spending over 5 years, and deficit reduction plans that hinge on a “booming” economy to eliminate the $113.8 billion deficit by 2026.
Almost a third of Finance Minister Chrystia Freeland’s budget speech was devoted to justifying $8 billion in new military spending, $500 million for “missiles and money” for Ukraine, $19 billion for fighter jets, and $875 million for cyber security. Spending on NORAD, which US President Biden demanded in his first visit to Canada, plus NATO, will cost $6 billion. This is money set aside for a Canadian foreign policy that’s being written in Washington, and that is all about regime change, aggression, and expanding US imperialism’s interests and control around the world.
While Freeland talks about defending democracy and peace, the budget is funding an undeclared war against Russia which is being fought on the battlefield of Ukraine, with Ukrainian civilians the victims of this blood-thirsty policy that could yet expand into a broader – and possibly a nuclear war.
Instead of funding NATO expansion, NORAD “modernization”, and the current undeclared war against Russia, Canada should be striving for peace and a political settlement in Europe, and global disarmament and mutual security of all states and nations.
Funding for war should be transformed into funding for strong social programs like universal pharmacare, denticare, long-term care, vision and mental health care – none of which are in this budget – and for action to stop climate change.
In fact this budget will provide the oil and gas industry $2.6 billion in tax write-offs, to fund carbon capture schemes that are not a safe solution, are more expensive than reduction of carbon emissions, and that will allow the oil and gas companies to continue to extract, transport and export fossil fuels across Canada and the world, despite the UN’s warning regarding climate change last week that the world is at the point of no return. To make matters worse, the government has given the green light to the deep-sea oil extraction project off the coast of Newfoundland, expanding Canada’s greenhouse gas emissions in fact.
The budget will also provide $4 billion in tax credits to mining companies’ exploration for ‘critical minerals and metals’ needed for, amongst other things, batteries for electric cars.
These decisions on energy and mining make the government’s commitment to truth and reconciliation with Indigenous peoples and nations patently false. These decisions fly in the face of the UNDRIP legislation which requires Indigenous’ nations free, prior and informed consent before any development can take place affecting their land.
They also make the government’s commitment to stop climate change patently false, whenever corporate interests conflict with the public interest in arresting climate change. This is evident in the $9 billion cost associated with the clean-up following disastrous flooding in BC last year, compared to the costs of pre-emptive action to stop climate change and the flooding and fires that it brought to BC last year, and that will accelerate in the future. In Canada today, government financial support for fossil fuels is 14.5 times greater than support for renewables. This compares to the average among G7 countries of 2.5 times the financial support for fossil fuels as compared to renewables. Canada is at the back of the line in terms of real action to reduce climate change today and the budget has just confirmed that standing once again.
As Freeland noted, the days of government support for the unemployed and under-employed, who now constitute 35% of the eligible workforce, are over. Job creation is all left to the private sector, while there is little or no support for public services and social programs, or for frontline workers who risked their lives during the pandemic to serve the public for poverty-level wages – and who continue to do so through this sixth wave. For the many women and girls working in these jobs, this is hardly the “women’s liberation” or “feminist economics” that Freeland crowed her budget would deliver.
The dental program is not a universal social program; it is means tested, limited to the treatment of cavities only, and further limited to children under 12 this year, and to seniors and youth under 18 next year, with no promises to make it part of Medicare as called for by the Romanow Commission 20 years ago. This means it could be repealed at any time by a future government. To become permanent, denticare, along with pharmacare, long-term care, vision and mental health care must be included as a part of Medicare, and covered by the Canada Health Act.
There is just $2 billion in this budget for healthcare funding for delayed surgeries during Covid; and nothing for long term care and Canada-wide standards, and nothing for healthcare workers whose real wages have been cut by inflation and by wage caps imposed by provincial governments, and who were “healthcare heroes” across the country but not in the budget.
There is nothing about enforcing the Canada Health Act and reversing privatization of healthcare services, though this has been widely demanded, most recently by provincial Federations of Labour across the country.
There is nothing about pharmacare in this budget though seniors and the poor continue to have to choose between food and drugs on a daily basis.
The budget acknowledges the crisis in housing across Canada, but has no proposals to deal with the financialization of housing across the country which is the main source of the problem, and the source of enormous profits for builders, developers, and corporate landlords. Currently Canadian banks own 20% of all housing in Canada through REITs. The government will provide funds to builders, developers and corporate landlords to build for-profit housing, with only the tiniest amounts to non-profits and co-ops which provide affordable social housing.
What is clearly missing – and urgently needed – is direct government action to build a minimum of a million units of affordable social housing across the country now. Instead Minister Freeland points her xenophobic finger at foreign buyers, with the implicit suggestion that ‘foreigners’ are responsible for the housing crisis in Canada. In fact, it’s government neglect, and worse, collaboration with the banks, developers, builders and corporate landlords over decades that has led to the current crisis. Similarly the plan to create Tax Free Savings Accounts for first-time housing purchases will not bring down housing prices, but will increase bank profits.
Tenants urgently need federal rent control legislation and rent roll-backs so that none pay more than 20% of income for shelter, instead of the over 50% paid by tens of thousands of tenants today. But there is nothing for tenants in this budget.
A windfall profits tax of 1.5% will be added to banks and insurance companies that have made record profits of over $1 billion, but excludes the oil and gas companies, pharmaceuticals, grocery chains, and others that have also made record profits, and which should be paying at least double the current low corporate tax rate of 15%. There is no tax relief for working people, who are vastly over-taxed relative to the grossly under-taxed corporations in Canada.
There are important issues not dealt with in the budget. These include urgent action to raise wages and incomes, including substantially increasing pensions and reducing the age to 60; introducing a Guaranteed Annual Livable Income; expanding EI to include all the unemployed for the full duration of unemployment at 90% of previous earnings, and to make EI non-contributory; raising the minimum wage to $23 across Canada.
This also includes urgent action to introduce price controls and roll-backs on food, fuel, and housing which are essential costs for all residents of a northern country like Canada. This would make life more affordable, and would increase consumer spending and tax revenues.
Progressive tax reform based on ability to pay would shift the burden onto the corporations and the wealthy, while reducing the burden on working people and small business. The corporate tax rate should be doubled at a minimum, the capital tax should be restored, and capital gains should be taxed at 100% of the gain. Wealth and inheritance taxes on estates over $2 million should be introduced, while taxes on incomes under $40,000 should be abolished, along with the HST/GST and sales taxes.
These are some of the measures urgently needed by working people in Canada.
What working people don’t need, and what the NDP should have opposed, is the almost $9 billion in new military spending, jet fighters, NATO, NORAD and war materiel, which can only be used for war and destruction. In a world loaded with nuclear weapons, what’s needed are political solutions to political problems, the dissolution of military pacts, mutual security, peace, and strong international bodies such as the UN.
Central Executive Committee, Communist Party of Canada
April 8, 2022