(The following article is from the March 16-31, 2010 issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to: People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)

PV Commentary

     Corporate media outlets and business groups have hailed the Throne Speech which ended Stephen Harper's prorogation of Parliament, as well as Jim Flaherty's federal budget. But as feared by the labour and people's movements, the budget uses the federal deficit as a smokescreen to offer goodies to the corporate sector. For working people, that means major spending cuts. Federal public service workers will bear the brunt of $6.8 billion in cuts to their departments through job losses and a three year pay freeze.

     As the Canadian Labour Congress pointed out in a response to the budget, "deficits are not a problem when the total government debt today is the lowest of the advanced industrial countries (53% of GDP in 2008-2009 compared to 102% in 1995-1996), and interest rates are at an all-time low. The federal debt is just one-third of GDP, and the cost of servicing that debt is just 2% of GDP. The federal deficit is still less than 4% of national income, far lower than it was in the early to mid-1990s."

     Despite the "deficit scare", corporate tax rates will continue to decline, from 22% when the Tories took office, down to 15%, the lowest rate in the G7 countries. This will cost the treasury a whopping $9 billion in the coming fiscal year alone. The budget will benefit the business sector by reducing tariffs on manufacturing inputs, although this will make things even more difficult for the beleaguered Canadian manufacturing industry. Deregulation of the telecommunications and uranium mining sectors, and expansion of so-called "free trade" have big business applauding. The biggest winners appear to be transnational corporations, eager to expand their role in the Canadian economy.

     This aggressive neo-con economic policy is matched on the political side with a combination of flag-waving, war memorials, and a so-called "law and order" agenda designed to take public attention away from the fact that over 1.5 million Canadians remain unemployed.

     Overall, the Throne Speech and the budget confirm the minority Harper government's intention to govern as though they had a majority in Parliament to push their far-right agenda. The reluctance of the Opposition parties to block this strategy may allow the Tories to shape political debates heading into an election widely expected later this year.

     The Opposition parties have argued that more should have been done to create jobs and combat poverty, and to reduce greenhouse gas emissions. But Liberal leader Michael Ignatieff will allow the Tories to stay in office, waiting for his party's polling numbers to rise.

     NDP leader Jack Layton has been critical of the Tories on some economic issues, but without advancing any substantial alternative. Early in the recession, Layton spoke to the Toronto Board of Trade, praising workers who had the "courage" to accept pay cuts. NDP governments in Manitoba and Nova Scotia continue to implement economic policies which are nearly identical with the big business parties.

     Several key trade union leaders came down hard against the Tory budget and the Throne Speech.

     "All political parties should vote to bring this government down now," said Dave Coles, president of the Communications, Energy and Paperworkers, Canada's largest union in the forestry sector.

     "Yet another budget, filled with rhetoric and platitudes, that does nothing for workers, families and communities in hundreds of forest-dependent communities," said Coles. "We saw the same show in last year's budget. In fact, in the past year, the Conservatives made many announcements about aid to the forest sector, yet we saw a record number of bankruptcies."

     Coles warned that the budget contains "nothing for pensioners who are paying the price for the federal government's inaction, as companies facing bankruptcy seek to finance their debts with employee pension funds."

     In past budgets, the CEP called for a national strategy to help rejuvenate the forest sector through investment in new products and the creation of value-added jobs. The Throne Speech made reference to this, said Coles, but "it's a case of too little, too late. Without loan guarantees to keep mills alive, who will produce these new products?"

     The Harper government should be defeated on its plans to sell off key telecommunications and broadcasting industries, said the CEP, which also represents many media workers.

     "Telecommunications is now an integrated industry with the rest of the media; the sector is key for our cultural sovereignty and national security," said Peter Murdoch, the CEP's media vice-president. "It is incumbent on all opposition parties to draw a line in the sand on this issue. The cultural community has been of one voice on this issue, but where are the opposition parties? We need something more than rant and rhetoric."

     The largest union of federal public-sector workers will mobilize against cuts in public sector programs and operations.

     "This budget is a clear attack against quality public services," said John Gordon, president of the Public Service Alliance of Canada. "The freeze on public-sector operation budgets, combined with an increase in deregulation and free trade, will further weaken the economy and hurt Canadians."

     In a pre-budget news conference with other labour leaders, Gordon called for continued stimulus spending refocused on social infrastructure such as poverty reduction and expanding child and elder care. He also called for improving retirement security for all Canadians.

     "What do we get instead? Seniors' Day," said Gordon. "This budget does nothing for workers in Canada. Investing in social infrastructures and in quality public services would have ensured job creation and economic growth. But this government failed in that direction."

     Gordon has asked to meeting with the leaders of the opposition parties, calling on them to support his union's position.

     "This budget does little to help Canadian workers secure their footing during a period of severe economic instability and is rooted in government-destroying, deeply ideological values," CAW President Ken Lewenza said.

     A CAW statement says "the budget shifts the Conservative government policies further in favour of businesses and corporations, to the detriment of average Canadians."

     Taking credit for old news, the Tories re-announced the $19 billion already planned for stimulus projects in 2010. What Canada needs is not "one-off" projects, Lewenza said, but investment in renewable energy projects, public transit improvements and other initiatives to spur sustainable and `green' economic development.

     Despite widespread demands to improve EI eligibility criteria for all workers, the Tories did virtually nothing on this issue.

     Since October 2008, almost 500,000 permanent, paid jobs have been lost as the manufacturing and forest industry crisis spread to other sectors. The Budget estimates that the stimulus package has saved or created 130,000 jobs. But unemployment is projected to average 8.5% this year, and 7.9% in 2011. The real rate of unemployment - counting people who have been forced into part-time jobs or have given up looking for jobs - is over 12%.

     Only half of all unemployed workers qualify for benefits, and their average weekly benefit is just $343. The more than 800,000 unemployed workers now on EI qualify for an average of just 38 weeks of benefits, and tens of thousands who lost their jobs in the early stages of the crisis have exhausted their claims. EI benefits have been temporarily extended for five weeks for workers who file claims before September 11, 2010, but provincial social assistance caseloads are already starting to rise rapidly.

     "This is a tragic failure of our federal government at a time when many Canadian workers are looking for leadership in protecting their jobs and their communities," said Ken Neumann, United Steelworkers National Director for Canada.

     "Protecting Canadian communities should be the first order of business of our federal government. However, in the Throne Speech, Mr. Harper has indicated he is going to further abdicate his responsibility to ensure communities are the net beneficiaries of foreign ownership."

     The Throne Speech emphasized that the government intends to "open Canada's doors further to venture capital and to foreign investment in key sectors."

     "It is outrageous that this government has refused to side with Canadian communities and workers as foreign multinational after foreign multinational buy up Canadian companies and end up devastating our resource communities," said Neumann. Instead of putting more teeth in the Investment Canada Act, he said, the government will add insult to the injury communities like Sudbury and Hamilton are experiencing.

     He stressed that foreign takeovers by companies like Vale Inco and Xstrata have failed to be a "net benefit" to Canada as the law requires. Rather, these takeovers have resulted in thousands of lost jobs, the closing of vital plants and mills, and the transferring of industrial production outside our borders. The Harper government has failed to make those companies live up to their lawful requirements, and have even refused to make public the promises made by these companies.