Not Much For The Poor

  • January 30, 2009
{mosimage}When it comes to economics, Catholic social teaching is pragmatic, not ideological. While popes in the last 150 years have recognized that capitalism beats socialist economic systems in terms of human freedom and effectiveness, they have been under no illusion that, unless carefully managed, free market economics can inflict terrible pain and injustice.

That’s why successive encyclicals on political and social matters have emphasized the “preferential option for the poor” and insisted that governments have a duty to protect the most vulnerable from the vagaries of the market while working for the common good of all.

In light of these principles, the federal Conservative government has offered a mediocre melange of proposals in its Jan. 27 budget. While a few items nod at the plight of the poor, what is most noticeable is that, by and large, the budget is a missed opportunity.

The government of Stephen Harper does seem to recognize that more and more people are jobless, and that many more will be in this state over the coming months. There was roughly $2 billion to expand the Employment Insurance system to allow those on unemployment to remain there five weeks longer. This does little, however, for the many, many people who will not even be eligible for EI and will have to go on welfare.

There was $2 billion for job training, some additional room in child benefits for low-income families and a hike in the basic personal tax exemption by $720, which will eliminate 130,000 people from the tax rolls, according to the government. A portion of the massive tax cut will also help low-income families. There was also some money to help improve social housing.

All these measures are good, and will help many people stressed by the economic crisis. But they will do little to reduce poverty in Canada and appear grudging compared to what the budget offers to sectors of the economy such as the banks and compared to the large tax cuts across the board, most of which will likely go into personal savings, thus neutralizing any stimulus effect they may have had.

Few will dispute the government’s need to do something to spur the economy at this time, though many will have doubts about the effectiveness of this hodgepodge of measures. Many others will lament the lack of any recognition that the budget was a rare opportunity to seriously tackle some of the inequities in Canadian society.

It would appear the government is still hoping the economic recession will be shortlived and believes that its sole job is to maintain public confidence while doing as little as possible. Though the deficits slated for the next five years are enormous, at least half of them are not due to the stimulus package, but rather to the decline in tax revenues caused by the recession itself along with earlier GST cuts. The government’s own efforts, therefore, are much less than they appear to be.

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