This year’s federal budget is yet another missed opportunity for Canadians. After several years of eviscerating the public services that Canadians count on, this government continues to promote shortsighted policies that further erode public services and scapegoat federal government workers and retirees.
The macro-economic picture
This government’s obsession with aggressive deficit reduction comes at the expense of job creation and real economic growth. It celebrates that the deficit will be 27% of GDP by 2017, the lowest of any of the other G-20 countries, despite the fact that Canada’s debt is already very low at 33% compared to GDP and by international standards.
Canada now has a 7.0% unemployment rate, with over 1.3 million Canadians officially counted as unemployed in January 2014. 400,000 Canadians have left the labour market. The youth unemployment rate is almost 14%. More and more jobs are part-time, temporary and precarious.
At the same time Canada’s real-GDP recovery from the most recent economic slump has been the weakest in 30 years. The size of the federal government is the smallest it’s been relative to the economy in 70 years. Between 1983 and 2010, the Canadian population expanded by almost 34% from 25.4 million to 34 million, while the size of the public service over this period increased by 12.7%. Real GDP has increased by almost 100% since 1983, while federal program spending has only increased by 60.9%. Program expenses as a proportion of GDP will decline below 13%. All this means the government is investing less to meet the needs of a growing economy.
Ongoing austerity means more cuts to jobs and services
Budget 2014 re-announces cuts from previous budgets and confirms that the operational spending freeze will remain in place for the next two years. That means at least $1.6 billion in cuts to departments already reeling from years of deep cuts to jobs, programs and services. In 2014 alone, federal government departments will see the implementation of $14 billion in previously announced cuts to program spending. The Canadian Center for Policy Alternatives estimates those cuts will mean the loss of 26,000 full time positions from the federal government since 2012, leaving far fewer workers behind to deliver services Canadians rely on.
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The budget ignores calls by veterans to re-open nine district Veterans Affairs offices and does nothing to address the shortage of front line workers available to provide them with the in-person services they need and deserve. Instead it announces $2.1 million to try and fix problems with ill-reputed online tools that many veterans say they can’t or simply won’t use.
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The government claims to enhance food safety but its numbers simply don’t add up. Since 2012 it has cut 308 workers who delivered or supported the delivery of front line inspection work. Budget 2014 announces 200 new hires, but PSAC’s Agriculture Union says that those workers won’t be doing front line inspection. Instead, they will make up verification teams that play more of an oversight role. The union says this may be important work, but cannot make up for cuts to the delivery of front line food inspection.
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After ignoring warnings by experts across the country and shutting down search and rescue stations in St. John’s and Kitsilano in BC, this government announces a tax credit for search and rescue volunteers like those in the Coast Guard Auxiliary. Those volunteers do crucial work, but they know they can’t make up for the loss of trained professionals or the shut down of Search and Rescue stations.
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After cutting Parks Canada services, reducing access to National Parks, and gutting environmental protections, the budget invests a mere $391 million on infrastructure such as roads, bridges and waterways (just $1 million allocated for 2014-15, $4 million for 2015-16, and the rest allocated in 2016 and beyond). The Rideau Canal alone needs and estimated $104 million in overdue maintenance and repairs. The Trent-Severn Waterway and Lachine Canal system are also badly in need of repair. The budget doesn’t address cuts to canal workers responsible for water management, which have left communities along the waterways at risk.
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The budget doesn’t acknowledge the need for nature conservation in National Parks, despite a recent finding by Canada’s Commissioner of Environment and Sustainable Development that 43% of national park ecosystems are in a declining state of health. The Commissioner found that recent budget cuts to Parks Canada have significantly hampered the Agency’s ability to deliver on its mandate of maintaining and restoring ecological integrity in our national parks.
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Instead of improving access to EI benefits to the unemployed, the government has focused on small boutique improvements that will have little measurable impact on the livelihoods of Canadians with precarious employment. Nothing is done to reverse recent changes to EI eligibility that make it harder for the unemployed, particularly seasonal workers, to access crucial EI benefits – changes that have a deleterious impact on the economy in many communities in Canada. Also, nothing is proposed to fix delays caused by cuts to the number of employees who do work like processing EI applications and cheques. That means people like those unable to find work or going on maternity leave will continue to experience troubling delays.
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The budget announces that it will introduce legislation as needed to “eliminate redundant organizations and consolidate operations, such as support and administrative services”. It’s unclear what services or organizations they’ll deem “redundant” or how any government operations could survive without administration and support.
Broken promises for federal retirees, veterans and Canadian Forces members
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The budget repeats the Government talking point that it “remains committed to ensuring that overall employee compensation is reasonable and affordable, as well as aligned with that offered by other public and private sector employers.” Instead of trying to ameliorate the livelihoods of all Canadians, the government prefers to foster a race to the bottom, further exacerbating income inequality in Canada.
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The budget arbitrarily doubles Public Service Health Care Plan premiums for federal retirees, veterans and members of the Canadian Forces from $261 to $550 a year for individuals and more if they have families. It also increases the eligibility requirement from two to six years of service. This is a significant increase given that the average federal pensioner receives just $27,000 per year. Survivors receive half that amount on average. The move may force opting out of the health plan leaving many without important extended health care.
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The PSHCP is part of the compensation promised after years of service, and premiums and eligibility have been the subject of ongoing negotiations at National Joint Council between Treasury Board, bargaining agents and the National Association of Federal Retirees. This is yet another demonstration of Treasury Board’s complete disregard for meaningful consultation and negotiated solutions.
Scapegoating federal government workers
Budget 2014 says the government’s goal in upcoming negotiations will be to “ensure that the public service is affordable, modern and high-performing” and promises “minor legislative amendments to clarify recent changes to the labour relations regime.” This is troubling given recent budget legislation that aims to stack the deck in the government’s favour.
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The budget says the government wants to bargain agreements on total public service compensation “that are fair and reasonable to employees and taxpayers.” It’s difficult to understand how this won’t translate into an attack on our members’ wages and benefits, given the ongoing operational spending freeze.
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The budget also says the government wants “a modernized disability and sick leave management system, including the introduction of a formal short-term disability plan. This is double-speak for limiting the access of employees to wage replacement when they fall sick. Experience with short term disability plans in other contexts has demonstrated that sick leave and disability benefits become much harder to access and subject to the arbitrary whims of private insurance providers.
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The budget also signals that the Government intends to exert more pressure on crown corporations to change their pension plans to a 50:50 cost-sharing ratio for workers and employers. The Government also wants crown corporations to set the normal retirement age at 65 for new hires and to raise the age at which workers are eligible to receive other retirement benefits. This undermines the independence of crown corporations and constitutes interference in the bargaining relationship between crown corporations and their workers.
What about democracy, young workers, childcare and women?
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The budget announces a “public consultation” to review whether non-profit organizations are abusing their tax-exemption status. Charities have experienced first-hand what this can actually mean – many major environmental organizations, think tanks, human rights and international development organizations that do policy work that is often critical of government policies have been targeted for audits. This is a serious threat to democracy, especially in the context of other efforts by this government to stifle dissent, such as eliminating government funding for many NGOs, legislating away labour rights, muzzling government scientists and undermining Statistics Canada’s ability to provide information vital to policy-making.
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The government talked a lot about young workers in the lead-up to this budget but offers nothing meaningful to address Canada’s 14% youth unemployment rate. Remarkably, the government’s only answer is to fund 3,500 youth internships – a measure that applies to less than 1% of the 384,000 young Canadians aged 20-29 who were unemployed as of January this year. The Canadian Federation of Students points out that the budget proposed no spending to alleviate the over $15 billion student debt carried by Canadian families, despite widespread public concern about steadily declining affordability of post-secondary education.
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The budget also fails once again to commit to a national early learning and child care program, which has been shown to more than pay for itself. Instead, it re-announces the Universal Child Care Benefit of up to a mere $1,200 per year per child – a paltry amount that doesn’t come close to covering the cost of raising young children and does nothing to create desperately needed child care spaces.
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Gender equality is clearly not on the agenda for this government. Instead of restoring the mandate of Status of Women Canada to fund women’s groups to conduct much-needed independent policy research and advocacy – something the CCPA estimates would cost $100 million annually – this budget throws the agency a token amount of $150,000 to increase mentorship among women entrepreneurs.
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The government says it is addressing violence against Aboriginal women and girls by supporting the work being undertaken by the Special Parliamentary Committee on Violence Against Indigenous Women. This is curious – why wouldn’t it? It does propose $25 million over five years, beginning in 2015–16, to continue efforts to reduce violence against Aboriginal women and girls. But it ignores calls by the Native Women’s Association of Canada for a federal inquiry into the cases of missing or murdered Aboriginal women and girls. The association has documented 582 cases so far and warns that more lives will be claimed unless real action is taken.