November 2, 2001
By Marcel Lauzière and Andrew Jackson
Published by The Toronto Star, November 2, 2001
When Finance Minister Paul Martin brings down his long delayed budget in December, he will be doing so largely because of the new demands on the government following the tragic events of September 11. But that doesn’t mean he should react only to those events. With the hot economy chilling and consumer confidence waning, the Finance Minister should remember what the Prime Minister promised recently—that the government will use its improved fiscal position to re-invest in Canadians, especially those who could not cash in on the boom years.
Four years ago, the Liberals eliminated the deficit – a job that needed to be done. Unfortunately, the cuts to social spending that contributed to this task hurt many of Canada’s most vulnerable – the poor, the elderly, children and youth at risk and recent immigrants.
In the years since, this government has racked up huge fiscal surpluses, delivered the largest tax cut in Canadian history to middle and high income families, and has tinkered around the edges of its social policy agenda -- modestly increasing spending on such things as child benefits and programs, homeless shelters and university scholarships.
Judging by their actions, it’s obvious the core priorities of the federal government have been debt reduction and tax cuts. Granted, the social needs of Canadians have been hotly debated, the subject of endless studies and many important speeches, including every Speech from the Throne since 1994. But major actions that required real resources have been deferred to a tomorrow that has never come.
In December, we will get the first real Budget in almost two years. Even before September 11, slowing growth and the tax cuts left little room for new initiatives. Now, security needs and the desire to hang onto a balanced budget are widely expected to trump -- yet again -- the proposals of social advocates.
There is no question that September 11 has created new priorities that must be funded. But security is about more than troops, police, border guards and mountains of antibiotics. Consider the wider context of economic and social security.
In 1999, when average incomes were rising rapidly and Canada was experiencing a boom, the low income rate (the proportion of all Canadians with incomes less than half of the average), actually increased to 19.1% from 19.0%. New immigrants, single parents, persons with disabilities and young working families were living in deep poverty while the country prospered. In fact, well before September 11, rising rent cheques and falling incomes were pushing the vulnerable into shelters and onto the streets. Aboriginal poverty was and is a national disgrace.
For far too many Canadians, the current economic slowdown, worsened by the events of September 11, means a much higher risk of unemployment and poverty. The provinces are already on the brink of deficits, and facing mounting health costs. Does anyone really think our reduced EI and social assistance programs are up to the task of providing Canadians with the income security they will need in troubled times?
What we need in December is a Budget which does something to maintain and create jobs, and improve the lives of the marginalized. How do we achieve this? There is no better candidate than investment in affordable housing. Even a modest allocation of $1 billion from this year’s fiscal surplus to a capital investment fund would, in the view of the Federation of Canadian Municipalities and numerous social housing groups, make a real difference. Building rental housing creates jobs, lots of jobs. And with every new affordable unit, one less person or family is forced to choose between buying food or paying the rent.
The Prime Minister has been clear that while the government must respond to the events of September 11, it should not drop its core agenda of social inclusion and economic development. Is the Minister of Finance paying attention? Let’s hope so.
Marcel Lauzière is Executive Director and Andrew Jackson is Director of Research at the Canadian Council on Social Development