The exceedingly aggressive austerity cuts carried out by Prime Minister Stephen Harper and Finance Minister Jim Flaherty over the past seven years have come home to roost as millions of Canadians, depressed and without hope, are succumbing to its worst consequences.
Program cuts and tax reductions for corporations and the wealthy have had a huge, disproportionate impact on the poor, working poor, underemployed, and those with health problems including mental illness.
The massive austerity program translates into less income, decreased services, and reduced health care for many of Canada's most vulnerable people. It appears that more than 3.5 million Canadians -- mainly the poor, the unemployed/underemployed and the under-privileged -- are struggling.
The attacks on the vulnerable began soon after the Conservatives came to power in 2006. They launched cuts that were a broadside attack on the government's ability to finance many of its activities, including these much-needed employment and social support programs.
Neo-liberal economics dominate
Ignoring the needs of Canadians living in desperate conditions, Harper and Flaherty initiated the extremely aggressive austerity program because of their determination to reduce the deficit and cut the size of the federal government. Their decisions were based on their own neo-liberal economic beliefs, not what Canadians needed or wanted.
There are numerous examples of needless, brutal cuts. Claiming it was concerned that some people don't have enough incentive to work, Harper-Flaherty toughened up the Employment Insurance rules. They took millions of dollars away from mostly seasonal workers, leaving them vulnerable.
Human Resources and Skills Development Canada (HRSDC), the government department that provides the most hands-on support for the poor, is being cut more than any other department. It will lose 5,700 positions -- one-quarter of its workforce by 2016. The largest cut in absolute terms is to the Citizen-Centered Services Program, which helps Canadians access government services by phone and online.
Harper also cut funding to the National Aboriginal Health Organization (NAHO) and to a number of Aboriginal women's health organizations -- crucial programs on suicide prevention, women's health, and diabetes. They also cut the Women's Health Contribution Program, which funds six women's health organizations across the country.
The austerity cutting is based on Harper and Flaherty's near-fanatical determination to cut the deficit and reduce the size of government. The two unwaveringly believe in neo-liberal economics, which enriches corporations and the wealthy at the expense of the rest of us. We have two people running our country who don't really believe in government!
Unfortunately, the problems of the less fortunate are not acknowledged in the PMO or Department of Finance. It is much more important that interest rates remain low for the benefit of corporations and the one per cent. A Google search for any Harper or Flaherty comments that express any concern or interest in the problems of the poor comes up empty.
Two moves early on by Harper and Flaherty eliminated the ability of the Conservatives to fund the kind of generous, liberal-minded government Canadians have been used to -- even if they had wanted to. First, a two per cent cut in the Goods and Service Tax income in Flaherty's first two budgets cost the government a staggering $10-billion to $12-billion annually in revenues that had been used to help support government services.
In addition, Flaherty has cut $60-billion in corporate taxes since the Conservatives took power in 2006 -- needlessly reducing the country's corporate tax rate to the lowest among G8 countries.
The austerity program and other government cuts have had disastrous consequences for millions of Canadians. There are staggering disparities in life expectancy based on the amount of education a person receives and their amount of education. On average, people living in rich neighbourhoods live an average of 86.3 years, while those living in a poor neighborhood live only 65.5 years -- a difference of 21 years.
There is more hunger across the country than ever before. In March, 2012, 882,188 people received food from a food bank in Canada -- an increase of 2.4 per cent over 2011 and 31 per cent higher than in 2008, when austerity was being launched.
Children's programs also targeted
Children are not spared from the suffering. According to UNICEF's most recent report, Canada is 21st out of 29 top countries for relative child poverty, and 27th for the percentage that were overweight.
Between the years 2007 and 2011, Statistics Canada reported a 20 per cent rise in people who said their mental health was deteriorating. Mental illness is already the number one cause for disability claims in the workplace. According to the Mental Health Commission of Canada, awards for mental injury at work have dramatically increased in recent years because of pressure placed on workers to produce more during the austerity period.
It's also likely been an increase in suicides in Canada due to the distress suffered by individuals as a result of the austerity program. Two international researchers, David Stuckler and Sanjay Basu, have documented substantial increases in suicide in several European countries and the United States as a result of austerity cuts.
Suicides in Canada increased from 3,512 in 2005 to 3,890 in 2009, which takes in the early part of the austerity period. However, Statistics Canada is three years behind in posting its deaths statistics, so no information is available covering a large period of austerity. But, assuming that Canada is experiencing roughly the same fallout as are Europe and the U.S., it is safe to predict a sizeable increase in suicides here.
Flaherty pushes ahead with austerity program
Throughout the Conservatives' seven years in office, independent economists argued that the austerity program was not achieving its stated goal of preparing the country for an economic recovery, but Flaherty refused to budge.
Then in April, the world was shocked when the austerity experiment, which had destroyed the lives of millions in Europe, was totally discredited. Thomas Herndon, a young University of Massachusetts Amherst graduate student in economics, discovered that an influential paper endorsing austerity practices as a way of rebuilding beleaguered economies was incorrect because of spreadsheet coding errors and selective data.
Amazingly, Flaherty continued with the austerity experiment. "What I worry about is those that suggest that austerity should be abandoned," he noted. "I think that's the road to ruin quite frankly."
So most cuts that will affect the poor are on the way. Harper and Flaherty will chop another $11.8-billion from government spending by 2014-15; job losses in both the public and private sectors will be 90,000 by 2014-15; and there will be 1.4-million unemployed workers in the country in 2015.
If Harper and Flaherty really wanted to balance the budget and look after people at the margins, they could work harder to collect the $29-billion the government is owned by the rich and corporations in unpaid taxes.
They also could try harder to find the $3.1-billion that was given to the anti-terrorism program but that cannot be accounted for.
Canada a 'rouge state' internationally
When it comes to complying with international law concerning the rights of its citizens, Canada is a rogue state. We have signed international laws that oblige us to provide certain benefits to all citizens. This means ensuring the right to adequate standards of living involving access to food, housing and clothing, the right to participation in the labour force and community, as well as providing citizens with the opportunity to report violations of these rights.
However, more importantly, the Harper government has neglected to adopt the part of the Covenant that would establish a complaints mechanism that would allow groups or individuals to go to the UN to protest the treatment they receive. They've made sure the process doesn't work and that there will be no complaints from disgruntled citizens.
Nick Fillmore - A Different Point of View
Revenues for 2013-14 forecast at $263.9 billion, spending at $282.6 billion, deficit at $18.7 billion. Deficit projected to drop to $6.6 billion in 2014-15 and become an $800-million surplus in 2015-16. With files from Althia Raj and The Canadian Press.
The Tories plan to create a Canada Job Grant that will provide $15,000 or more per person -- up to $5,000 provided by the federal government, the rest matched by the province/territory and the employer. Nearly 130,000 Canadians are expected to benefit when the new grant is fully implemented in 2017-2018. Essentially, this is the government saying it is taking training out of the hands of provincial governments because it hasn’t worked and placing it in the hands of individuals. The Canada Job Grant will replace the Labour Market Agreements the feds signed with the provinces, which expire in 2014.
Manufacturing and small business get tax-credits introduced in past budgets extended to help spur investment and growth. There will be $1.4 billion in tax relief for manufacturers by extending the temporary accelerated capital cost allowance for new investment in machinery and equipment. And hundreds of millions for small business owners.
The government has pledged more than $53 billion in infrastructure spending, including $47 billion in new funding over 10 years. This includes $32.2 billion over 10 years for a “Community Improvement Fund” to build roads and public transit as well as recreational facilities and other community infrastructure projects. The Fund will consist of an index Gas Tax Fund and the incremental GST Rebate for Municipalities.
Military spending will be re-jigged that it is modeled on the ship building strategy and aimed at creating more jobs in Canada and key domestic capabilities with an eye towards exports.
The budget has cancelled the Canadian International Development Agency, the primary agency responsible for foreign aid. Its duties will be merged into the Department of Foreign Affairs.
The government says it is aggressively going after tax avoiders/and closing tax loopholes. They are launching a “Stop International Tax Evasion Program” where the Canada Revenue Agency will pay individuals with knowledge of “major international tax non-compliance” a percentage of the tax collected as a result of information provided. The CRA will only pay a reward if the information results in total additional assessments exceeding $100,000 in federal tax.
Two departments -- Canada Revenue Agency and the Department of Fisheries and Oceans -- will see big cuts. Departments will see a 5 per cent cut in their travel budgets. The government also says in the budget it intends to work with the public sector unions to “further align overall compensation with other public and private sector employers.”
The federal budget says new projects related to Canada's perimeter security deal with the United States will go ahead as planned, despite budget woes south of the border. The federal budget has given the green light to almost a dozen information-sharing and infrastructure projects related to the Beyond the Border initiative between the two countries. The vaunted deal was announced with fanfare by Prime Minister Stephen Harper and U.S. President Barack Obama in December 2011 at the White House. The plan aims to speed the flow of goods and people across the 49th parallel while protecting the continent from a terrorist attack.
The government wants to reduce import tariffs on a number of goods including baby clothing, skis, snowboards and gold clubs. But it plans to offset the $76-million revenue loss from that by hiking excise taxes on chewing tobacco and other manufactured tobaccos, to bring them in line with cigarette taxes.
Finance Minister Jim Flaherty's spring budget commits Ottawa to five more years of funding through the Investment in Affordable Housing program. The level of commitment is the same as in the past: $253 million a year over five years, which needs to be matched by the provinces and territories and can be spent on new construction, renovation, home ownership assistance, rent supplements, shelters and homes for battered spouses. But there's a new twist to the funding. Home construction in the program will support the use of apprentices so that newcomers to the construction trades can build up crucial experience. The budget also commits $100 million over two years to build 250 more units of affordable housing in Nunavut, where homes are so crowded that illness spreads easily and poverty abounds.
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