Budget ignores the poor, critics say

  • January 30, 2009
{mosimage}OTTAWA - The federal budget proved disappointing for social justice organizations hoping for more direct help for the poor and more focus on renewable energy.“There were tax cuts that help a number of Canadians,” said Citizens for Public Justice (CPJ) executive director Joe Gunn after the government introduced its budget Jan. 27. “But for the poorest and most vulnerable, those too poor to pay taxes, there’s not much for them. These are the people the Christian community serves and hold dearest in our hearts,” he said, noting that “at time of recession they will suffer the most.”

Laurel Rothman, national co-ordinator for Campaign 2000, a national anti-poverty campaign aimed at eliminating child poverty said the budget contained “virtually nothing for low-income families,” especially 760,000 children living in poverty and their mothers.

“They are not moving to a basic child benefit of $5,200 per child like we recommended,” she said in an interview from Toronto.  “No mention of child care. Not a whit.”

Gunn said CPJ had asked for a poverty-reduction plan in pre-budget consultations, but there is none. The government did, however, double the working income tax benefit, as CPJ had requested.

Institute of Marriage and Family executive director Dave Quist also praised the increase in the working income tax benefit, noting it provides an incentive for low-income people to get a better job or work more hours without losing their social benefits.

“Previously this double jeopardy forced many low-income, especially single-parent families, to remain on social assistance programs,” he said.

Quist described the budget as a “mixed bag” for families. He praised the tax benefits that included increasing the basic personal exemption by 7.5 per cent and raising the ceiling for the two lowest tax brackets. But he was disappointed the budget did not introduce income splitting for single-earner families. Income splitting would end the inequity in the amount of taxes single-earner families pay, compared with two-income families, he said.

John Dillon, KAIROS: Canadian Ecumenical Justice Initiatives economic justice researcher, said the budget failed to deliver on poverty or ecological sustainability.

“It made some steps towards alleviating poverty for some people,” he said. “It will not bring about the society we want, one without child poverty.”

Dillard said he would have preferred to see the tax benefits targeted to low-income people rather than across the board, so that more money could be directed into programs for the poor and for job creation.

“Generally tax cuts like that are not as good for job creation as direct spending.”

Quist raised concerns over the size of the deficit, which will be $34 billion this year and $30 billion next year.

“By increasing the deficit right now, we’re actually adding onto the debt load of the next generation and probably the generation after that,” he said.

“We understand the government, given its international commitments to the G-20 and given the political situation in Canada, it didn’t have a lot of choice in some of the decisions being made,” said Cardus research fellow Ray Pennings. Cardus is a Christian think tank dedicated to the renewal of Canada’s civil society.

But Penning also raised concerns about the deficit.

“We’ve borrowed from tomorrow in order to hold onto yesterday’s lifestyle without really confronting the problems we face as an economy,” he said.

Those problems include demographics and an over-reliance on credit, he said. Canadian women are not having enough babies to replace the existing population. Soon, more people will be leaving the work force than entering it, he warned. Though government cannot solve all those problems it can provide a framework, and the budget did not do that.

The budget increases employment insurance duration from 45 weeks to 50 weeks for the next two years. While these increases were praised, Rothman points out that employment insurance (EI) benefits are much lower and welfare eligibility is much stricter than during the last recession. Fewer people are eligible for EI, she said.

“We’re going to see people who lose their jobs who can’t get EI,” she said. Those people living on the edge, who have a month’s savings, may find that not only are they not eligible for EI, but, unless they sell all their assets, they are not eligible for welfare either, she said.

While the budget directs $1 billion towards green infrastructure projects, Dillard said he was disappointed the money goes toward unproven technology to capture carbon dioxide and pump it underground while extracting oil from the tar sands or using coal to produce electricity. He called it “another subsidy for the oil industry.” He said he would have preferred that money be redirected towards renewable, clean energy. He noted that even if the carbon capture and storage system works, the tar sands development still leaves behind contaminated air, water and tailings ponds.

“This is the first budget statement in living memory that has not a line, not a single reference to foreign aid,” said Canadian Council for International Co-operation (CCIC) president Gerry Barr. “There is a human tragedy unfolding around the world and it is no time for Canada to be treating itself as a gated community.

“The solutions to Canada’s problems are worldwide and Canada needs to step up its game when it comes to the developing world,” he said.

He noted the World Bank had suggested countries organizing stimulus packages devote seven per cent towards the poor of the world. “This has not happened here.”

Barr said the development community has verbal assurances the government will commit to an eight-per-cent increase in foreign aid the coming year. CCIC is an umbrella group for non-governmental international aid and development agencies.

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