LABOUR AND PEOPLE'S MOVEMENTS SLAM TORY BUDGET

PV Vancouver Bureau

     The budget presented in late February by Finance Minister Jim Flaherty was adopted just days later, after a minimal debate in the House of Commons. Stephane Dion's Liberals, who could have brought down the Tory minority government, sent just a handful of MPs to vote against the budget. At a moment when public support for the Tories remains mired in the low 30s, a federal election on the budget or the Afghanistan war could have become a campaign to drive out the far-right Harper government; instead, the Tories have gained several more months to push their unpopular big business agenda.

     The Flaherty budget received a lukewarm response from the corporate media, perhaps reflecting the desire of the Canadian ruling class for even bigger tax breaks and giveaways. But the same media ignored the widespread outrage expressed by the four-million strong labour movement, the major Aboriginal organizations, environmental groups, and other popular sectors.

     The Canadian Labour Congress had called for the budget to focus on the manufacturing and forestry job crisis, and to narrow the gap between the corporate elite and working families. The Congress called for "new manufacturing investment by supporting sector development strategies in key industries like auto and forestry" as well as "highly targeted measures to boost real investment, not more reckless, costly, across-the-board corporate tax cuts which mainly benefit the booming energy sector and the banks."

     The CLC had also argued for major new spending on basic municipal infrastructure, public transit, and energy conservation and renewable energy, to meet environmental challenges while building new industries and creating new jobs.

     Instead, the budget featured Tax Free Savings Accounts (TFSAs) "a new tax exempt savings vehicle" which will eventually remove a high proportion of investment income from income tax, costing billions in lost revenues while doing little to help working families. The Budget cut existing programs, and failed to invest in new job-creation plans.

     Most of the 2007-08 federal surplus of ($10.3 billion out of $13 billion) went to pay down debt, allocating just $2.7 billion to new spending and tax measures. As Tory tax cuts take full effect, the surplus will fall to just over $2 billion in 2008-09, and just over $1 billion in 2009-10.

     Looking at the TFSA plan, the CLC notes that high income earners will be able to save $5,000 per year and to reinvest the resulting income, giving the wealthy yet another substantial tax benefit. The official estimate is that TFSAs will cost federal revenues of $3 billion annually in twenty years.

     While the gas tax transfer to municipalities worth almost $2 billion per year was made permanent, this falls far short of the $6 billion per year called for by cities. Similarly, the $500 million to support public transit projects in Toronto, Vancouver and Montreal is peanuts compared to the urgent transit needs faced by major cities.

     On another controversial issue, the government is moving to separate the Employment Insurance Fund from the Public Accounts starting in 2009. Any future surpluses will be held and invested to meet EI program costs by a new crown corporation, the Canada Employment Insurance Financing Board. However, the new Fund will start with a mere $2 billion reserve, not the $57 billion surplus in the existing EI Fund. There is no assurance that the government will support the new Fund during a serious and prolonged recession.    The 2007 budget had allocated $98 million (over 2 years) to speed up entry of temporary migrant workers. This policy aims to please corporations pushing for maximum "labour flexibility" and to undermine the labour movement. Budget 2008 allocates another $22 million over the next two years for the "just-in-time" immigration system, the Temporary Foreign Worker Program. As the CLC points out, "once again, no resources are allocated to monitoring the compliance of employers in the TFWP", and the budget "makes no reference to resolving the backlog of over 200,000 applications for permanent residency under the family re-unification and `Humanitarian and Compassionate' categories of the immigration system."

     Assembly of First Nations National Chief Phil Fontaine called the federal budget "a bitter disappointment for First Nations and a missed opportunity for all Canadians. It is disheartening that this government sets out reducing the cost of a toaster by a couple cents as a national objective, but not helping First Nations children finish high school or grow up in safe homes."

     The budget contained very little in the way of new initiatives for First Nations and relied on re-announcements and the re--profiling of existing resources, says the AFN.

     "The Conservative government has repeatedly let down First Nations since they took office," Fontaine said. "They promised to `put wheels' on the Kelowna Accord. That was three budgets ago and First Nations are still waiting." He noted a 2007 study by the Canadian Centre for the Study of Living Standards which found that if investments were made to bring First Nations education levels up to those of the rest of the population, an additional $71.1 billion would be added to the economy. But under the current system, First Nations students receive on average $2,000 less than students in mainstream schools.

     "They do not feel any responsibility to address the third world poverty conditions that exist within this country," said Fontaine. "It is inconceivable that the government could have found new ways to spend over a hundred billion dollars since coming to office, and that none of that would lead towards a real, comprehensive plan to move First Nations from poverty to prosperity."

     The AFN is planning for a second National Day of Action, which Fontaine said will be "a day of solidarity with Canadians, and a day of protest against this government."

     The budget let down Aboriginal women, according to Beverley Jacobs, the President of the Native Women's Association of Canada (NWAC), which represents thirteen member groups.

     Jacobs said the budget "included a few investments for First Nations peoples in Canada, including improved child and family services on reserve, as well as increased health and education outcomes. Further, the announcements to improve access to safe drinking water for First Nations were welcomed; however, there are over 600 First Nations communities in Canada and the amount of the investments are no where near what is needed."

     "This budget is a far cry from what is needed," said Jacobs. "What is the point of improving standards for drinking water on reserve, when there is a housing crisis with no access to water? When this government chose not to honour the Kelowna Accord, it promised an alternative plan for Aboriginal peoples. This budget delivers small investments, but we are still awaiting a ground-breaking strategy to finally pull the most marginalized segment of the Canadian population out of its current mire and onto a path towards prosperity."

     The federal budget failed to include real measures to protect the environment, said the David Suzuki Foundation.

     "The federal government has repeatedly stated that climate change must be addressed and has consistently refused to do anything meaningful about it," said Dale Marshall, a policy analyst with the Foundation. "Canada is falling further and further behind other countries that are taking action on climate change. Not only is Canada out of synch with the rest of the world, it's being upstaged by its own provinces that are showing leadership and taking action on climate change."

Found at: http://www.peoplesvoice.ca/articleprint14/04.%20LABOUR_AND_PEOPLE'S_MOVEMENTS_SLAM_TORY_BUDGET.html