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How About Stimulating the Poor AND the Economy

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Recent federal and provincial budgets seem to share the theme of doom and gloom. Whether it is the Drummond Report in Ontario which recommended deep cuts to social programs and public services, the federal government cutting money to programs related to environmental protection and cutting funding to the CBC, or the New Brunswick government disinvesting in poverty reduction, the themes are bleak.

Debts and deficits, the reasoning goes, are more important than combating unemployment or poverty. It is an either/or choice. Thus, despite an ongoing recession and continuing concerns about poverty and youth facing an uncertain job market, governments cannot help in these difficult times, the focus must be on strictly balancing the fiscal ledger.

Of course fiscal responsibility is important, and public sector money must be spent responsibly. There can be cases of unnecessary programs that must be eliminated or reduced, and where reduction may be necessary through attrition (not hiring for a position after a retirement).

However, unemployment and poverty must not be neglected. Poverty -- whether through homelessness or malnutrition -- puts cost pressures in areas such as law enforcement and healthcare. Long term unemployment -- including of youth -- is an economically inhibiting factor with people having less money to spend in the economy or contribute through tax revenues.

It is both a moral and economic imperative that governments continue to be concerned about poverty and unemployment, especially in a recession, and cannot merely consider the "job done" after earlier stimulus funding in the aftermath of the 2008 Wall Street crash. Investment in post-secondary education and in student debt relief, in poverty reduction and ending homelessness, and innovative thinking to spur job creation is still needed.

As well, while efficient public spending is important, there should be recognition of the importance of the public sector as an employer, especially in a recessionary environment.

A report from the Organization for Economic Cooperation and Development (OECD) has shown that in Canada the gap between the top 10 per cent of income earners and the rest of Canadians has grown over the past 10 years, surpassing the average for developed industrialized countries. As well, poverty rates in Canada have grown with 15 per cent of children living in poverty.

The OECD report cited the loss of good quality careers and inadequate social welfare benefits as contributing to this unfortunate situation in Canada.

Combating poverty, investing in jobs and post-secondary education, need to be priorities. While the Harper budget does include investment in science, technology, and increases in venture capital investments in the amount of $1 billion -- important for innovation, entrepreneurship, and job creation -- more needs to be done, especially in combating poverty, investing in post-secondary education, and developing a jobs strategy for youth (for example maybe expanding and revamping the Katamvik program for youth rather than abolishing it).

Provincially in New Brunswick, as per the CTV, there has been a steep increase in the use of food banks with Bernice MacKinnon of the Oromocto Food Bank citing an increase of 25 per cent in use at her food bank. In this regard, she stated that she had "never seen the numbers go up like this."

In such a situation, combating poverty must be a priority of the provincial government. However, the Alward Tories have refused calls by the opposition Liberals to increase social assistance rates, and have continued to roll back the poverty reduction program of the last government. Poverty reduction is important overall, but moreso in a recessionary environment where the job market is more difficult, and there are increased pressures of poverty.

As well, the provincial government has called for "government renewal" with cuts to civil service jobs through attrition, putting a Fredericton area Minister in charge of this process for a major employer in the city.

While it is encouraging that the government has stated there would be no layoffs -- no elimination of permanent positions -- there remains the question of contract positions. Many contract positions are de facto permanent with contracts that are continually renewed for years. Even if these jobs lack the security and benefits of a permanent position, they end up being in practice permanent jobs.

Furthermore, many younger employees fall into the category of contract employees.

In a time of recession, the status of these contract employees -- for whom the termination of their contractions would in practice be layoffs -- needs to be part of the debate. That the Alward government wants to limit committee debate on budget estimates, as well as debate on the floor of the Legislature to only four departments, becomes all the more concerning in this regard.

Governments cannot neglect issues such as poverty and unemployment during a recession, even accounting for fiscal pressures faced. The imperative is both a moral one -- to help the poor, help youth facing an uncertain job market, and help the unemployed -- and an economic one as helping these groups ultimately foster economic growth and -- in the case of combating poverty -- alleviates pressure on social services.