Budget 2010 falls short by staying the course.

The recession has had a tremendous impact on Canadians. Job losses and a faltering safety net have added hundreds of thousands of people to the population of Canadians living in poverty. Economic stimulus and deficit spending are most certainly required to confront this vulnerability. Measures to create and sustain jobs and to build a strong and healthy country are needed. But this cannot be done at the expense of those on the margins, excluded from mainstream society.

As CPJ stated in our pre-budget submission, Building an Economy of Care, “budget decisions are moral decisions: they reveal our values, affect how resources are allocated, and shape our common future as Canadians.” If we are to live up to our reputation as “a decent and generous people,” we must promote the dignity of all Canadians and citizens of the world, as well as the well-being of the earth.

This requires a comprehensive federal plan for poverty elimination that links to and supports current and future provincial and territorial poverty action plans. It requires ensuring that everyone is contributing their fair share to Canada’s tax base, by rolling back recent corporate tax cuts and GST cuts, so that sufficient funds are available for social infrastructure programs such as childcare and Employment Insurance (EI). It requires living up to our commitments to increase aid levels to the donor country average. And, if this is all to be sustainable, it requires that we take action to address climate change.

As we noted following the presentation of the 2009 federal budget, “Canada’s Economic Action Plan” provides only modest stimulus and does little to promote public justice and dignity for all Canadians. More of the same will most certainly fall short.

“We need to keep helping those who need a hand up.”

In 2007, 9.2% of Canadians – approximately 3 million people – lived in poverty (according to the after-tax LICO from Statistics Canada). Given the historical correspondence between unemployment and poverty, it is estimated that the poverty rate has risen to 11.7%, an increase of over 900,000 Canadians.

There is growing support across Canada for government action on poverty and yet the measures introduced in Budget 2010 fail to address the tremendous challenges facing far too many Canadians.

• The Universal Child Care Benefit (UCCB): Budget 2010 includes minor changes to the taxation of the UCCB for single parents, but offers no improvements to the Canada Child Tax Benefit which provides greater support to parents of small children. Despite the difficulties many families (particularly those with low to modest incomes) face in finding quality childcare, Budget 2010 provides no support for early childhood education and care.
• Social Housing: We are pleased to see follow-through on the $2 billion committed to social housing in 2009. Still, low-income Canadians continue to experience an affordable housing crisis. Rents are consistently rising more quickly than inflation and shelters are struggling to meet demand. Investments in new social housing are desperately needed.
• Official Development Assistance: While announcing increases to foreign aid this year, the Conservative government also announced it will freeze development spending in 2011. In doing so Canada is reneging on past international commitments and falling even further from the target of 0.7% of GDP.

In the presentation of Budget 2010, Minister Flaherty said, “We take the same approach that Canadian families take in managing their household budgets. We are spending what is necessary to meet an emergency.” Yet, his government fails to recognize that millions of Canadians have no emergency funds. Not only do they suffer from income insecurity, but also from food insecurity and precarious health due to a lack of resources and supports.

Canada desperately needs a federal poverty elimination plan. This plan must address the many different aspects of poverty, including those mentioned above, as well as homelessness, education and training, labour standards, EI, health and disability supports. This plan must also address the particular needs of vulnerable populations, including Aboriginal Canadians and newcomers.

Not only would a proactive poverty elimination strategy respond to the needs and respect the dignity of all Canadians, it would contribute to a healthier society and offer a solution to social exclusion that is more cost-effective than the current tangle of programs.

“Jobs—good jobs, now.”

From October 2008 to October 2009 over 400,000 jobs were eliminated, causing the unemployment rate to increase from 6.3 to 8.6 per cent. By January 2010, it had dropped only marginally to 8.3 per cent, leaving many Canadians vulnerable.

In keeping with the economic stimulus laid out in Budget 2009, the government has promised to invest $4 billion in job creation and EI. “Since July 2009, over 130,000 jobs have been created,” and EI benefits were extended for several weeks.

But are these changes enough to really help the most vulnerable Canadians?

The government plans to create 220,000 jobs in two years. This only accounts for half of the jobs lost in the first year of recession.

In addition, most of the jobs created since the beginning of the recession have been part time or temporary. This means less income, lower wages and fewer benefits.

The extension of the work-sharing program may offer mixed results. While this measure has proven to maintain jobs, it presents significant risks to employees in the event of eventual termination as fewer hours worked means lesser compensation under EI.

Finally the EI extensions introduced last year are only for five weeks. With so many jobs lost and fewer full time jobs being created, it can expected that many who have qualified for EI (which only accounts for about 51% of the unemployed to begin with), will not be able to find new employment before their benefits expire. It is estimated that as many as 500,000 Canadians have seen their benefits expire at the end of 2009 and beginning of 2010, without being able to find new work.

“We will continue reducing taxes.”

Budget 2010 stays the course on taxes, committing the government to continuing corporate tax cuts. But are these tax cuts a wise investment?

In Budget 2009 the lost revenues resulting from all of the tax measures introduced since 2006 were projected. The GST cut and corporate tax cuts combined result in a reduction of government revenues of $20.8 billion in 2010-2011. In other words, tax cuts account for 42% of our deficit for the coming fiscal year! At the same time, we are being told that as Canadians we need to tighten our belts and expect cuts to much-needed government services. In this light, these tax cuts are not only unwelcome, but irresponsible.

The situation will only grow worse as the projected loss of revenues continues to climb, costing the government $47.7 billion over the next four years. Imagine what contribution this income could make to reducing our deficit and investing in people through social services and infrastructure.

The government says that these tax cuts are necessary in order to make Canada economically competitive and attract investors to create new jobs for Canadians. Yet on the Global Competitiveness Index, Canada is well behind other countries with much higher corporate tax rates.

Low corporate tax rates have also not worked to create new jobs for Canadians so far. Canada still has a serious jobs deficit resulting from the recession, and, as noted above, most of the new jobs created have replaced full-time permanent jobs with part-time and temporary work. Government investment in job creation would accomplish far more for unemployed Canadians than corporate tax cuts.

“We are at a key moment in history.”

We may indeed be at a key moment in history, making it all the more incredible that the Budget Speech was so deafeningly silent on the environment.

The Speech From the Throne promised to make Canada “a leader in green job creation.” Yet, there was no mention of how the budget would advance this laudable aim.

Leaving the actual speeches aside, one had to work through the entire budget document to find some hint of green. And to be fair, there were a few hidden nuggets. $190 million in new environmental spending measures were announced, with $80 million for the popular home energy program. The only commitment to renewable energy was $25 million, and all of that to increase efficiency in one sector – forestry. Unfortunately, Budget 2010 provided nothing for the continuance of current programs to support renewable energy – such as wind – even though Ontario just recently announced massive support for the innovative and cutting-edge industry there.

The 2008 Throne Speech included a promised to generate 90% of this country’s electricity from sources that don’t produce green house gas emissions by 2020. And compliance with the Copenhagen Accord requires that Canada provide up to $300 million in each of the next three years to allow poor countries to adapt to climate change. On both counts – silence.

“Let us move forward, hopeful and confident.”

In light of this budget that prioritizes economic growth over the dignity of Canadians and the well-being of the earth, it is difficult to find much hope or confidence. Still, we will find the courage to move forward and to offer a faithful response to God’s call for love, justice and stewardship.