Budget 2014: NDP Pre-budget
Consultation Supplementary Report
Building a fairer, greener,
more prosperous Canada for all
Introduction
As Canada continues to grapple with the impacts of the most
severe economic downturn since the Great Depression, Canadians are looking to
their government to propose real solutions. As elected representatives, Canadians
expect us to work together to help make life more affordable; to help families save
and invest for their retirement; and to help create good, middle-class jobs.
New Democrats believe that with an approach that’s balanced, sustainable and
fiscally responsible, we can do just that.
The majority report contains many important summaries of
witness testimonies. Regrettably, however, the recommendations contained within
the committee’s main report fail to present comprehensive solutions to the
important issues raised in these hearings. Like successive federal governments
before it, the current government has watched as a generation of middle-class
jobs have continued to disappear, without doing anything to create the next
generation of middle-class jobs. The committee’s main findings have failed to
present a clear path forward to meet the challenges we face. Therefore, we respectfully
present this supplementary report.
Apart from substance, several witnesses also raised
objections with respect to process. Consultations conducted by the Standing
Committee on Finance are one of the few opportunities Canadians have to
influence many of the most important initiatives the government will undertake
in a normal fiscal year. Yet, once again, they find that the format for
submissions has been made unnecessarily limiting, both in terms of the questions
posed and length of the submissions permitted. Limiting interventions to this
extent does not allow for Canadians to participate in the Budget process in the
fullest and most comprehensive fashion. This is a concern that the NDP shares.
Finally, New Democrats remain gravely concerned with regards
to the transparency and accountability of the budget process as a whole. We
call on the federal government to introduce more transparency to the budget
process as recommended by the Parliamentary Budget Officer. We renew our call
for legislation to establish the Parliamentary Budget Officer as a fully
independent officer of Parliament.
Growing Economic Uncertainty
Canada’s economy continues to underperform.
- Unemployment remains stubbornly high hovering
near 7% across Canada, while youth unemployment remains nearly twice that high.
Several provinces still have double digit unemployment and the total unemployed
still number over 1.3 million – nearly 300,000 higher than before the
recession.
- Household debt has reached dangerously high
levels and continues to worsen. In September of this year, Canadian household
debt hit a record high of 166% of disposable income, and Canadian household
debt now stands within hailing distance of U.S. levels just before the crash of
2008. The Bank of Canada has called household debt the “biggest domestic risk” to
the Canadian economy.
- Just as global economic threats have showed some signs of easing,
Canada is facing new challenges at home. The IMF has downgraded its growth
forecast for Canada in 2013 and said that Canada now has the most over-valued
housing market in the world.
- At a time when families are struggling to make ends meet, hundreds
of thousands of Canadians are being forced to rely on part-time and precarious contract
work when they would rather have full-time, permanent jobs. A recent study
found that in Toronto alone, as much as half the working population can’t find
a stable, full-time job.
- The job vacancy rate has worsened dramatically in
the last year, up from 5.2 unemployed workers per available job in August, 2012
to 6.4 unemployed workers per available job in August of this year.
- Many witnesses noted the weakness of the job market pointing
out that, in light of population growth, there has been no increase in the
employment rate and that the recovery has stalled.
- The government’s job creation strategy is
unbalanced and limited. The oil & gas sector accounts for an important 6%
of our economy; however, the government has put virtually all of its emphasis
on this extractive industry and exports while neglecting both the development of
other sectors and the creation of value added jobs within the resource sector.
- The austerity measures introduced by the Conservative government
undermine the economic recovery, slow the level of economic activity and
therefore exacerbates the vulnerability of Canadians.
- The government must guarantee the fiscal
sustainability of the federal government in a manner that does not jeopardize
the economic recovery or the sustainability of the provinces.
- Canada has pledged to balance
the budget by 2015-1016 and reduce the federal debt-to-GDP
ratio to 25% by 2021. A policy criticized by
former PBO, Kevin Page, who said a race to a balanced budget is not relevant
unless this ratio [debt-to-GDP] gets out of control, which is not the case in
Canada. Once again, the Conservatives are putting their political agenda ahead
of sound economic management.
- The
Conservatives have also pushed on with cuts to the EI program and in August hit a historic record low in the percentage
of unemployed Canadians able to access EI benefits. At the same time they have
abolished the independent Canadian Employment Insurance Financing Board and are
on track to once again use EI funds to cover their deficit. It is imperative
that Employment Insurance funds must be there for those who contribute in it,
not to serve the government's political needs
- Rather than developing the skills of Canadian
workers and matching our unemployed to these vacancies, the government has put
the emphasis on recruiting Temporary Foreign Workers (TFW)—even going so far as
a failed attempt in last year’s budget process to allow Temporary Foreign
Workers to be paid as much as 15% less than Canadian workers doing the same
job. This has the effect of undermining pressures to increase wages for
Canadians in high-demand occupations.
- Poverty also remains unacceptably high in Canada,
with over 15% of Canadian children living in poverty and over 833,000 Canadians
currently using food banks on a monthly basis. This is a national disgrace.
- At the same time, the government is downloading
massive costs to provinces and individuals through its $36 billion in cuts to
provincial health care transfers and by raising the age of eligibility for OAS/GIS
from 65 to 67. As a result, provincial governments
will have difficult choices to make in respect of social programs and public
healthcare.
Moving Forward with Solutions
While a thriving private sector will always be at the heart
of Canada’s economy, New Democrats believe there is a common sense role for
government in providing basic services on which Canadians rely: investing in
infrastructure, education and innovation; providing tax credits to small and
medium-sized businesses that create jobs; and working with provinces, municipalities
and Aboriginal communities to build a Canadian economy that thrives in the 21st
century.
Investing in innovation, economic
development and high quality, middle-class jobs
-
Work with the private sector to help Canadian
businesses strengthen and grow, create jobs and improve export performance in
glob markets.
- Continue to build on the existing job creation
tax credit for small and medium-sized businesses.
- Develop a comprehensive strategy to deal with
persistent structural youth un- and underemployment and implement a youth
hiring and training credit to help businesses create jobs for young Canadians.
Crack down on the abuse of unpaid internships to ensure that young people are
paid for the work that they perform.
- Reverse the damaging cuts to tax credits for
credit unions and labour-sponsored venture capital funds, given their important
roles in the Canadian economy.
- Work with the provinces to build a long-term
skills training strategy to fill the skilled job shortages and to bring
provinces, employers, labour and educational organizations together to improve
existing Labour Market Development Agreements.
- Provide stable and predictable funding for the
successful Aboriginal Skills and Employment Training Strategy (ASETS) model and
for other programs to help First Nations and other Aboriginal groups fill the
skilled job shortages.
- Fix the Temporary Foreign Worker program: improve
monitoring – with the participation of the provinces – of issues relating to
rights and compliance. HRSDC and CIC must be able to deny employer Labour
Market Opinions and withdraw work permits and must set out a path for
citizenship for TFWs.
- Improve supports for voluntary labour mobility
within the country – where there is a short or long-term need that a Canadian
worker can fill.
- Provide explicit, transparent criteria for the
“net benefit to Canada” test in the Investment Canada Act, with an emphasis on
assessing the impact of foreign investment on communities, jobs, pensions and
new capital investments.
- Conduct a study into methods to encourage
value-added domestic production in the energy sector.
Infrastructure & communities
- Immediately begin to address Canada’s staggering
infrastructure deficit by reversing the $5.8 billion in cuts to local
infrastructure enacted in the last budget.
- Work with the provinces and territories to
address the erosion of the municipal tax base by developing a stable,
long-term infrastructure plan for urban, suburban and rural communities.
- Set aside proceeds from the upcoming 700mhz
Spectrum auction for strategic reinvestment in the deployment of broadband
infrastructure in Canada`s rural and remote regions.
- Simplify the process for rural communities to
apply for and receive funding for infrastructure projects.
- Take action to address Canada’s growing
productivity gap with the United States by investing in modern infrastructure
by doubling the gas tax transfer to municipalities from $0.01 to $0.02.
Investment in the 21st century, clean-tech
economy
- Restore the ecoEnergy energy efficiency home
retrofit program.
- Support renewable energy sectors to help Canada
grow and succeed in a new global economy.
- Help industry capture the benefits of clean
technology markets by supporting green R&D.
- Commit to an action plan to eliminate the current
$1.3 billion in fossil fuel subsidies.
-
Support skills training to prepare Canadian
workers for the clean technology jobs of the future.
- Conduct a study into methods to encourage
value-added domestic production in the energy sector.
- Provide better access to information and greater
transparency regarding the application of, and respect for, environmental laws.
Helping Canadians save and invest for
their retirement
- Immediately reverse the federal government’s plan
to raise the retirement age for Old Age Security and the Guaranteed Income
Supplement to 67.
- Move forward on proposals from provincial and
territorial finance ministers to increasebasic public pension benefits under
the Canada and Quebec Pension Plans, and implement a plan to begin phasing in
such an increase without delay.
Making life more affordable and reducing
household debt
- Implement strong regulations to stop abusive
practices by banks, lenders and credit card companies including ensuring that
all Canadians have access to at least one low rate credit card with an interest
rate capped at prime plus 5%, prohibit pay-to-pay billing practices and cap ATM
fees at $0.50 per transaction.
- Require all banks and credit unions to utilize
the dispute resolution mechanism of the Ombudsman on Banking Services and
Investment;
- Crack down on the abusive practices of payday
lenders.
- Simplify, clarify and standardize mortgage
documents to make it easier for customers to understand the implications their
mortgage options.
- Working with the banks to develop a mandatory
code of conduct on lending and create an independent body to recommend measures
to end anti-competitive practices.
- Work with provinces to improve debt counselling
services.
Providing the services that Canadians rely
on
- Reverse the devastating decision to cut
provincial healthcare transfers by $36.
- Reverse changes to the Employment Insurance system
including damaging new rules requiring Canadian workers to accept as much as a
70% reduction or risk losing benefits.
- Develop consistent and effective mechanisms to
maintain the “insurance principle” of the EI regime, set fair and effective contribution
rates and protect the monies in the fund.
- Allocate sufficient resources to recover the
estimated billions of dollars of lost revenue resulting from tax evasion, tax
avoidance and the use of tax havens and to prosecute more tax evaders.
- Close tax loopholes including the stock option
deduction tax loophole that is costing the federal government over $700 million
annually.
- Develop a national housing strategy as expressed
in bill C-400 (MC Morin).
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