Budget 2013, released yesterday by Finance Minister Jim Flaherty, makes it is clear that the federal government is continuing on the same trajectory. This budget provides little hope for people concerned about poverty and the environment. Economic growth and job training are the top priorities, unfortunately at the expense of almost all else.
This is most visible in what has happened with the Canadian International Development Agency (CIDA). Budget 2013 folds it into the Department of Foreign Affairs (DFAIT) into a new department called the Department of Foreign Affairs, Trade and Development, a change that clearly alters the meaning of ‘development.’
The gutting of CIDA heralds the intent to move Canadian aid policy away from the needs of the poor and towards the needs of the market – the same trend we can identify in domestic policy. Perhaps it’s no wonder Canada recently slipped down to 11th place on the human development index.
Labour Market
First, some good news. Budget 2013 brought some welcome investments aimed at supporting the employment of marginalized groups, namely people with disabilities, Aboriginal Canadians, and newcomers. Recognizing the disproportionate number of young people facing unemployment, commitments were also made to assisting Canadian youth enter the workforce through more paid internships and increased support for apprentices.
Consistent with recommendations contained in CPJ’s pre-budget submission, Budget 2013 includes measures to improve labour market integration of immigrants. These include immigration reforms and training programs, as well as a “commitment to improving foreign credential recognition.”
While we commend the government for these steps, we remain concerned about their single-minded focus on labour market solutions. Such focus communicates a decided lack of understanding of the broader social needs of Canadians (as well as a refusal to acknowledge the damage done by the systematic erosion of federal financial resources brought on by far-reaching tax cuts).
Better aligning jobs and training will not address the situation of people working in precarious, low-wage jobs that don’t provide enough for them to make ends meet. Nor will it respond to fundamental issues of human well-being – which go far beyond financial well-being.
Housing
CPJ and Dignity for All: the campaign for a poverty-free Canada worked hard over the past few months to put affordable housing and homelessness programs on the federal radar. The concerns of faith communities and others across Canada were clearly heard and at least partly addressed in today’s budget.
As widely expected, the Homelessness Partnering Strategy (which currently funds various shelters, addiction, and social programs), which was set to expire in 2014, was renewed at $119 million per year for the next five years. The funds have been explicitly targeted towards a “housing first” strategy, something that has been proving effective at assisting people – particularly chronically homeless individuals with mental health issues – get off the streets.
The federal government also renewed the Affordable Housing Initiative for $253 million/year over five years. Again, this is good news as this funding was set to reach zero by 2015. These funds are matched by provinces and territories to build and renovate affordable housing, provide rent supplements, etc.
Unfortunately no new housing programs were announced for beleaguered First Nations reserves, although $100 million was allocated for housing construction in Nunavut (creating 250 new units).
These housing investments are something, but with record numbers of people experiencing homelessness and housing insecurity, we have to wonder if these funds (which represent a decrease in federal spending in these areas compared to recent years) will make a real difference or just maintain the status quo.
Environment?… what environment?
Sometimes, having nothing to say is better than saying something harmful. This might be the only environmental good news about Budget 2013.
Whereas 2012’s budget implementation bill contained bad news for creation, in Budget 2013, the environment seems to have – well, disappeared.
In the 433 pages of the budget plan, there is simply no mention of climate change. According to Clare Demerse, of the Pembina Institute, “Today’s budget did almost nothing to get Canada on track to hit its 2020 greenhouse gas reduction target…” While highlighting investments in infrastructure, it was notable that no spending was specifically directed to public transit and the necessary transition to clean energy.
CPJ recommended that the government end subsidies to fossil fuel companies and this was done – but only with tepid intent. A mere $35 million of the estimated $1 billion in annual federal subsidies will be saved by 2017 in the two small measures announced.
Aboriginal peoples
There is a growing demand from Aboriginal peoples for a fundamental shift in relationship: one that we have described as “covenantal.” While there are some references in the budget to a need for more partnership and First Nations control over their own programs, other elements seem to continue top-down control.
Education and training is a key area. Although the requested First Nations Education Act has been promised for 2014, $10 million for post-secondary education is only a drop in the bucket of what is needed. Of greatest concern is the patronizing choice of a form of “workfare”: young people’s Income Assistance benefits are now tied to their participation in the new $109 million First Nations Job Fund training program, using the language of “compliance.” No reference is made to education that will sustain Aboriginal identity and culture.
The gap between Aboriginal peoples and other Canadians in access to basic necessities and a range of health outcomes is staggering. Budget “infrastructure” increases, however, are not focused on potable water or adequate housing—except for some houses in Nunavut—but rather energy, Web access, and roads, which seem to be aimed at the wellbeing of the broader economy. There is, at least, some funding dedicated to improving health care facilities and mental health teams on reserves.
Taxation
Mr. Flaherty boasted that “the federal tax burden for all Canadians is now the lowest it has been in 50 years.” Budget 2013 stays the course in this regard, keeping corporate tax rates low and making insignificant cuts to oil and gas subsidies. Instead of introducing a more progressive tax system that encourages all Canadians to pay their fair share, this budget seeks to bring in new revenues by closing tax loopholes for corporations and wealthy Canadians. It’s great to see the federal government take this challenge on, yet most of the targeted loopholes are on the domestic side, not international tax havens.
Budget 2013 takes some small steps to combat tax havens, but clearly not enough. It introduces the ‘Stop International Tax Evasion Program’ whereby the Canada Revenue Agency will pay large rewards to Canadians who tip them off to international tax evasion. The plan is expected to bring in $315 million this year alone and $4.4 billion over the next five years. This budget will also require banks to report electronic transfers of $10,000 or more. While CRA did receive $3 million to monitor international transactions, their overall budget was cut by $60 million, which will make these new programs difficult to enforce.
The needs and aspirations of poor ignored.
Low-income Canadians continue to face uncertainty. Unemployment has edged down to 7%, but a closer look shows that the labour market remains weak: labour force participation is down and precarious employment is up. Household debt is at record highs as more and more families finance their spending through credit. Others are forced to rely on impoverished income security programs.
What Canada needs is a comprehensive poverty elimination plan – what we got was more austerity and a slick new marketing campaign. Some funds were earmarked for investment in training – for young people, people with disabilities, and Aboriginal Canadians. But no steps have been taken to improve Canada’s social safety net. The budget is silent on pensions, senior’s benefits, Employment Insurance and children’s benefits. Budgets are about the choices we make as a society – and in this budget, the poor, as with the environment, were blindly ignored.
An emphasis on training and job creation must address more fundamental barriers to labour market participation such as lack of accessible childcare, public transportation, affordable housing, and good health. All these require investments in social programs, something that was all but absent in Budget 2013.
