Budget 2012 Recommendations

As 2011 enters its last quarter, the House of Commons Standing Committee on Finance is undergoing its pre-budget consultation process for the 2012 federal budget. Each year, the committee invites Canadians to participate in this process by submitting budget recommendations and/or appearing before the committee. In December, the committee’s recommendations will be presented in the House of Commons and to the Minister of Finance, Jim Flaherty, for consideration. This year, the committee called for Canadians to share their ideas on four key issues: “how to achieve a sustainable economic recovery in Canada, how to create quality sustainable jobs, how to ensure relatively low rates of taxation and how to achieve a balanced budget.”

The federal budget is an important way in which the government outlines its priorities and, presumably, those of Canadians. It serves as a blueprint for Canada’s economic and social well-being.

Participating in the budget process is an opportunity for Canadians to influence the health of their society. It allows us to raise important questions. Are we addressing Canada’s most urgent needs? Are we investing in the good of all Canadians? Are we using our money wisely?

It’s a dialogue worth participating in.

This year, seven Dignity for All partner organizations – Campaign 2000, Canada Without Poverty, Canadian Association of Social Workers, the Canadian Labour Congress, Citizens for Public Justice, Council of Canadians with Disabilities, and Make Poverty History – made pre-budget submissions to the Finance Committee. While each of our organizations offers a unique perspective and set of recommendations, several major themes emerge from the submissions.

All seek to address one of Canada’s biggest problems: poverty. The shared premise: Canada’s economic well-being rests on the health and well-being of its citizens. Poverty undercuts this well-being, thereby undercutting the health of the Canadian economy.

The submissions bear witness to the difficult situations that many low-income Canadians find themselves in. They draw attention to especially vulnerable and disadvantaged groups: the disabled, the elderly, women, children and Aboriginal people. The situations of the two latter groups yield especially startling statistics. Campaign 2000 reports that in Canada, almost one child in every ten still lives in poverty. This reality is even more abysmal in First Nations communities where one in every four children grows up in poverty.

The submissions also maintain that poverty will continue to be a problem if the government does not play its part in adequately funding social programs and services. The Dignity for All contributors are concerned that the government’s current strategy to cut spending to close the deficit will only increase unemployment and poverty in Canada.

With this in mind, each submission offers recommendations for government action that will improve the lives of Canadians, especially those living on the margins. Examples include the implementation of a national child care and early learning program, adjustments to various taxes to help alleviate poverty, numerous revisions to the Employment Insurance program and calls for a federal poverty reduction strategy, one of the key goals of the Dignity for All campaign.

The submissions are unanimous in stressing the economic wisdom of investing in poverty reduction and good social programs. Poverty is an expensive problem for Canada. It contributes substantially to the costs of healthcare, corrections, and unemployment. Investing wisely and adequately in poverty reduction means saving ourselves the expense incurred by poverty.(See, for example, the findings of recent reports from British Columbia, Ontario, and Nova Scotia).

The common emphases and concerns highlighted in the submissions resonate with Dignity for All’s key objectives for a poverty-free Canada:

First, by highlighting areas of deep need in Canadian society and recommending concrete ways for the government to address these needs, the submissions show the key role the federal government needs to play in developing a comprehensive federal plan to eliminate poverty.

Second, the contributing organizations echo Dignity for All’s belief that government must be held accountable for its responsibility to ensure the social and economic well-being of all Canadians.

Third, the submissions show that sufficient federal investment to address Canada’s deepest needs is possible. Contrary to popular belief, it’s not necessarily about spending more money; it’s about making wiser decisions as to how we spend it.

Presented together, a common message is clear: a sustainable recovery is only possible when all Canadians have the opportunity to live in social and economic security. Let’s hope the government agrees.

Summary of Recommendations:

Campaign 2000: (i) increase the Canada Child Tax Benefit (base benefit plus NCBS) to a maximum of $5,400 (2011 $) over the next two budget years; (ii) restore eligibility requirements for Employment Insurance to 360 hours, with benefit levels based on 60% (min.) of the best 12 weeks of earnings; (iii) designate $1 billion for Early Childhood Education and Care services.

Canada Without Poverty: (i) set targets and timelines for poverty reduction and elimination; (ii) study and all fiscal mechanisms to identify options available to help reach these targets.

Canadian Association of Social Workers: (i) ensure the combined amount of Old Age Security (OAS) and GIS for those with no other sources of income is at least equal to the after-tax LICO, double the GIS exemption limit to $4000, and eliminate the marital status limitation in the allowance of OAS; (ii) increase the replacement rate to a limit to 50% of average earnings for those with earnings at or below half the Year's Maximum Pensionable Earnings (YMPE) and implement a care giving drop-out in the CPP; (iii) gradually increase the maximum weeks for sickness and compassionate care benefits, expand the definition and categories of just cause for voluntarily leaving a job, and increase the weekly benefit so it is set on the best 14 weeks of earnings during the latest 12 month period.

Canadian Labour Congress: (i) maintain spending at the current (2011–12) level and cancel the Strategic and Operating Review; (ii) double benefits of the Canada Pension Plan and increase the Guaranteed Income Supplement (GIS); (iii) raise the federal corporate income tax rate to 19.5% to allow for the introduction of a multi-year public investment program to create jobs and to promote environmental and social goals.

Citizens for Public Justice: (i) cancel the corporate income tax cut scheduled to take place January 1, 2012 and instead invest the $3 billion in new and repaired affordable housing; (ii) repeal the “Tough on Crime” agenda and invest the $1.5 billion in savings in Aboriginal programs and an increase to the National Child Benefit Supplement; (iii) cancel the oil and gas subsidies and invest the $1.4 billion in savings in green technologies and an eco-retrofit program for low income households.

Council of Canadians with Disabilities: (i) make the Disability Tax Credit (DTC) refundable for Canadians with disabilities who do not have a taxable income; (ii) reform the EI Sickness Benefit to provide 52 weeks of coverage; (iii) renew and expand the Social Development Partnerships Program.

Make Poverty History: (i) support the Financial Transaction Tax; (ii) commit to designing and implementing a federal poverty reduction plan that complements provincial and territorial initiatives in consultation with those living in poverty; (iii) include a timetable of 15% annual increases for official development assistance to reach the UN aid target of 0.7% of GNI within ten years.