A new path for Canada: The Alternative Federal Budget

The Canadian Centre for Policy Alternatives released their annual Alternative Federal Budget (AFB) yesterday offering a different approach to government spending, while still balancing the books.  Titled, “Doing Better Together” the 2013 AFB follows the template of previous years bringing in outside partners to help craft an alternate course for Canada: one that ends poverty and keeps Canada prosperous and healthy.

Each chapter of the budget focuses on a particular theme and outlines spending and necessary program and policy recommendations.  From food, to Aboriginal women, to housing, to childcare, the AFB hits on all the key social challenges faced by society today with pragmatic solutions to address these issues.

Inequality and poverty have a chapter unto themselves, however, several chapters recognize that particular populations are more vulnerable to poor health, inadequate housing, food and income security, and violence. Here are a few key statistics highlighted in the AFB:

  • 40% of lone-parent Aboriginal households led by women are housing insecure
  • 73% of First Nation’s water systems are at high or medium risk of being contaminated  (National Engineering Assessment, 2011)
  • Aboriginal peoples require 85,000 new housing units, meanwhile 44% of existing stock needs repair and 15% needs replacement.
  • Canada’s spending on ECEC is 0.25% of GDP – 1/3 of the OECD average
  • Child care is increasingly unaffordable.  In a majority of provinces “parent fees are often higher than university tuition”
  • In 2010, there were only spaces for 21% of 0-5 year olds
  • Affordable housing waitlist in Toronto in October 2012 – 87,301 households (161,222 women, men and children) – a new record reached every  month since the recession
  • Housing investments have been in decline for two decades, and some investments in housing will completely disappear between 2014 – 2016
  • Between 3 – 4 million people in Canada live in poverty, 600,000 of which are children.  Poverty is a low-wage issue: the majority of poor people live in households with at least one person working.

While the government says they have a debt issue and therefore must ‘cut’ services that help individuals and families, the AFB says there is a growth problem that is the result of a lack of government investment and austerity measures.  Here is a brief look at what the AFB would allocate to address these issues and ramp up the economy:

  •  $1 billion a year towards Aboriginal Housing, and $2 billion a year for affordable housing
  • $2 Billion for a  new transfer to the provinces and territories to address poverty issues
  • $800 million to Aboriginal Education funding
  • Increase child tax benefit to $5,400/yr
  • Bring all seniors to the poverty line based on the Low Income Measure
  • Develop and fund a number of national strategies including plans for: poverty, housing, early childhood education and care, food security, violence against women, pharmacare and dental care for children

A ‘road map’ accompanies the recommendations so that each area of investment is clearly outlined and funded by a robust revenue stream.  This includes increases to corporate taxes (to 2007 levels), a new income tax level of 35% for the wealthy who make over $250,000 a year, a financial transaction tax of 0.5% on stock transactions (such as they have in European countries), an inheritance tax (on $5 million+ estates), and closing tax loopholes.  This would bring in $10+ billion to the government coffers, which have been dry since the tax cuts and days of austerity began.

The AFB considers that corporate tax rates have dropped to record lows, while unemployment remains high and corporations are sitting on $584 billion in cash reserves.  Instead of encouraging corporations to invest, tax cuts have lead to greater inequality and more money resting in the hands of the few at the top.

Meanwhile, average hourly wages are down, only 50% of the working-age population has full-time employment, 14% of youth are unemployed, and inequality is on the rise.  Why not turn the tide?

The AFB offers the creation of 200,000 – 300,000 jobs annually (many in green industries), helps women enter the workforce by investing in childcare, lowers tuition for students so they don’t carry the debt burden that many are stuck with today, and sets wage standards so individuals engaged in the labour force do not fall below the poverty line.  It does all of this AND balances the budget by 2015 just as the federal government wants.

It is common sense really.

Presenting a new way forward, the AFB charts a new course that puts people first.  While the federal budget has not yet been released, people will be watching closely to see if their interests and needs are addressed.  The status quo is not working, and as the AFB and other reports have pointed out, it is too expensive.  Addressing poverty and other social challenges head on through leadership, investment and smart policy will save governments money, and save lives.

As the AFB aptly notes:  “Doing nothing is poor policy”