Budget 2015: NDP Pre-budget
Consultations Supplementary Report
Choosing a Fairer and More
Prosperous Canada
1. Introduction
As Canada begins to turn the page on the most severe economic
downtown since the Great Depression, Canadians are faced with a choice. Canadians
must choose between a Conservative government that intends to drain the fiscal
capacity of the state through reckless handouts to the wealthiest Canadians and
a New Democratic government that will bring a balanced, evidence-based approach
to Ottawa that is both environmentally and fiscally sustainable. Canadians want
a government that will take their everyday challenges seriously. They want a
government that takes an active role to improve their lives by making life more
affordable, to ensure their financial security in retirement, and to help
create good jobs, particularly in the many struggling regions across the
country. New Democrats intend to take up these challenges.
The pre-budget consultations majority report is an imperfect
document, although it does include a great deal of important
content from the dozens of witnesses who were able to appear before the
committee. Unfortunately, many of the majority’s recommendations are
self-congratulatory and fail to address the challenges that we face. We note that few of the recommendations include the
kind of progressive measures that Canadians are looking for to build a fairer,
greener, and more prosperous Canada. As a consequence, the New Democratic
members of the Standing Committee on Finance have chosen to respectfully
present this supplementary report.
2. Global Economic Uncertainty and the Canadian Economy
- Ongoing weaknesses in the European economies and
weakening growth in major developing countries such as China are suppressing
international demand and pose a continuing and significant risk to the Canadian
economy and its inconsistent recovery.
- The significant decline in the price of oil may
lead to substantial revisions in provincial and federal revenues, which must be
accounted for in Budget 2015.
- The recent uptick in the American recovery
presents an opportunity to jumpstart the Canadian economy. In particular, as
the primary destination for Canadian exports this progress in the United States
offers an opportunity for Canadian exports to finally rebound from the
recession.
3. Domestic Economics Challenges
- Although Canada’s unemployment rate has declined
in recent months, over 1.2 million Canadians remain out of work and there are
still more than 200,000 additional unemployed Canadians than before the
recession.
- In particular, Canada is continuing to struggle
with persistently high youth unemployment, which has hovered around double the
national average.
- Whole regions of Canada have been left behind in
what has remained a relatively modest national recovery. Since the Conservative
Government took office in February 2006, approximately 375,000 manufacturing
jobs have been lost across the country. This has been particularly devastating
for the cities that comprise our industrial heartland.
- Even with recent more positive jobs numbers, aggregate
employment growth has been a meager 1% over the last year. Even worse, 56% of
the jobs that have been created over that time period are in part-time work.
- Although the Federal Government is now in a
fiscally sustainable position, it has been achieved on the back of the
sub-federal governments that are now in a fiscally unsustainable position.
4. The Failure of the Government’s Response
- The Conservative Government has made a decision
to place ideology over evidence-based policy. From the elimination of the
long-form census to the regular denial of information to the Parliamentary
Budget Officer, the government has decided to limit the role of evidence in
decision-making.
- The decision to move forward with an unfair
income splitting scheme that will primarily benefit the wealthiest Canadian
families and drive thousands of Canadians out of the labour force is a clear
result of this ideological policy-making. By driving thousands of women out of
the labour force, this policy will only exacerbate the problems facing our
country as we seek to grow our economy while supporting an aging population.
- The Conservatives' inadequate and uncosted “Small
Business Jobs Credit” is another example of their preference of ideology over
evidence. The impacts of this tax cut were apparently not reviewed or costed by
the professionals at Finance Canada. As a result, this measure, costing a total
of $550 million dollars, will only create a mere 800 jobs according to the PBO.
We are also concerned that the cost of this poorly designed measure would be
borne by the Employment Insurance account – misdirecting funds that should be
exclusively devoted to support EI benefits.
- Access to EI has deteriorated significantly under
the Conservatives, continuing a trend of restricted accesss that began under
the previous Liberal government. In January, 2006, 45.7% of unemployed
Canadians were able to access EI benefits. By September 2014, this figure had
fallen to just 38% - meaning that fewer than 4 in 10 Canadians are able to
access EI benefits when they need them most.
- The Conservatives are banking on surpluses in the
EI Account in order to fund their return to budget balance -- at the same time
that they continue to restrict access through the implementation of their
regressive EI reforms.
- The Conservatives have hampered Canada's economic
recovery by enacting billions of dollars in cuts that have directly and
indirectly eliminated tens of thousands of jobs. Along with slowing economic
growth, this has had a direct and significant impact upon the services that the
Government provides to Canadians. This includes deep cuts to food safety
inspection programs, rail oversight, and the closure of veterans offices.
- The cuts introduced by the Conservative
government have been implemented without regard for the success or failure of the
programs at issue, as confirmed by the Parliamentary Budget Officer. This
further demonstrates how their ideological approach and political self-interest
have trumped sound policy making.
- In addition to the broad departmental budget cuts
announced by the Conservatives – and they still refuse to release detailed
information about these cuts – the Conservatives have lapsed billions of
dollars in planned spending each year – funds that were approved by Parliament
for use but left unspent.
5. Practical Steps to Take Canada Forward
The committee heard testimony underlining the significant
challenges facing Canada and the need for greater government action to address
social, environmental, and economic issues. Many witnesses urged the government
to use expected surpluses to invest in programs that will make Canada more
competitive and equitable rather than giving further tax breaks to the
well-connected and wealthy few.
New Democrats believe that the federal government has an
important, common sense role to play both in providing services to Canadians
and ensuring that the conditions to foster economic growth in the private
sector are present. Below, we detail some of the measures or practices that the
Government should adopt to meet this goal:
5a. Child Care
- The Government should work with the
provinces and territories to implement a national universal affordable
childcare program to provide quality early childhood education and child
care spaces available for a maximum of $15 per day.
5b. Retirement Security
- The Government should improve retirement
security for all Canadians by working with the provinces to boost Canada
Pension Plan and Quebec Pension Plan benefits and by reversing its planned
$10.8 billion cut to Old Age Security and restoring the age of
eligibility to 65.
5c. Income Inequality
- The Government should reinstate the federal minimum wage for federally regulated sectors and incrementally raise it
to $15 per hour.
- The Government should consider increasing
the value of the Working Income Tax Benefit, as recommended in FINA’s study
on income inequality, in order to combat poverty and decrease income
inequality.
5d. The Environment
- The government should enshrine the polluter
pay principle in law and put a price on carbon to help meet our
international climate obligations and encourage investment in green energy
technology.
- The Government should announce a clear
timeline to eliminate outstanding fossil fuel subsidies.
- The Government should restore investment
in home energy efficiency retrofits to help Canadians reduce energy
consumption and home energy bills.
- The
Government should strengthen the review process for major resource projects by ensuring broad consideration of environmental impacts, honoring the duty to
consult and accommodate First Nations, and removing arbitrary limits on public
participation.
- The
Government should take advantage of current opportunities for Canada to become
a world leader in the development and export of clean energy by
supporting investment in this burgeoning sector.
5e. Taxation
- The federal government should increase
efforts to recover the estimated billions of dollars of revenue lost to tax
evasion and tax avoidance through the use of offshore tax havens and treaty
shopping – including reversing cuts to the number of senior auditors in the
International Audit Program and the Aggressive Tax Planning Program at the
Canada Revenue Agency.
- The federal government should engage in
a comprehensive review of Canada’s tax code in order to simplify the
administration of and compliance with tax laws to enhance the fairness and
efficiency of our tax system.
5f. Evidence-Based Policy
- The Government should reinstate the long-form
census and reverse its devastating cuts to Statistics Canada.
5g. Refugees
- The Government should reverse cuts to healthcare
coverage for refugee claimants that the Federal Court has called “cruel and
unusual”, and should abandon proposed modifications to restrict access to
social assistance for refugee claimants.
5h. Health Care
- The Government should take concrete action
to improve affordability and access to medications.
- The Government should immediately
reverse its $36 billion cut in health transfers to the provinces and
reinstate the 6% CHT escalator.
- The government should establish, in collaboration with the
provinces, territories and health experts, a national strategy on mental health
and dementia.
5i. Education
- The federal government should improve
access and affordability of post-secondary education in Canada.
5j. First Nations
- The Government should provide stable and predictable funding
for the successful Aboriginal Skills and Employment
Training Strategy (ASETS) model and for other related programs to help First Nations and other Aboriginal
groups fill the skilled job shortages.
5k. Employment Insurance
- The Government should protect Employment
Insurance funds from further misuse and fix the EI program so that it works for
unemployed Canadians – including improving access to benefits and
addressing the significant backlog of EI appeals before the Social Security
Tribunal.
5l. Responsible Budgetary Practices
- That the Government establish a
permanent Federal-Provincial-Territorial working group to study
intergovernmental issues that could affect government economic sustainability,
including but not limited to such issues as the equalization formula,
transfers, and pensions.
- The Government should introduce more
transparency to the budget process as recommended by the Parliamentary
Budget Officer and should enact legislation to establish the Parliamentary
Budget Officer as a fully independent officer of Parliament.
5m. Youth Employment
- The federal government should take
concrete action to reduce soaring rates of youth unemployment, including
the introduction of hiring incentives to encourage businesses to hire and
provide training to individuals between the ages of 18 and 25.
- The federal government should protect
interns working in federally regulated industries by amending the Canada
Labour Code to extend basic workplace protections and to prevent the abuse of
unpaid internships.
5n. Infrastructure
- The Government should reverse cuts to infrastructure
funding and instead increase investments and simplify application processes
to ensure that long-term predictable funding is accessible to communities of
all sizes without undue delays or procedural burdens.
- The Government should work with the
provinces, territories and municipalities to develop and implement a national
transit strategy that will include long-term, predictable, sustainable
funding for public transit infrastructure.
5o. Affordable Housing
- The federal government should take immediate
action to address the affordable housing crisis facing Canadian municipalities
by renewing social housing agreements and working to develop and implement a
national housing strategy as proposed by Bill C-400.
5p. Veterans
- The Government should ensure Canadian
veterans receive the support they need, including by immediately reversing
budget cuts to Veterans’ Affairs Canada and reopening the veterans services
offices that it has closed.
5q. Affordability
- The Government should implement strong regulations to stop
abusive practices by banks, lenders and credit card companies including
measures to ensure that all Canadians have access to at least one low-rate
credit card with an interest rate capped at prime plus 5% and cap ATM fees at $0.50 per transaction.
- The Government should crack down on the abusive practices of
payday lenders.
5r. Labour Rights
- The Government should take concrete actions
through the Canada Labour Code and public sector labour legislation to protect
workers against workplace retaliation for engaging in union activities.
- The Government should reverse its damaging
changes to health and safety laws that limit the ability of workers to
refuse unsafe work.
5s. Manufacturing
- The government should support the maintenance and
creation of well-paid manufacturing jobs, beginning by ending delays in
the delivery of funding promised in the Advanced Manufacturing Fund.
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