CCSD's Priorities for the 1998-99 Federal Budget

February 19, 1998

The Canadian Council on Social Development (CCSD) hopes to see five priorities addressed in next Tuesday's budget. They should take form as measures to:

  • improve employment opportunities for Canadians,
  • improve their economic security,
  • increase access to postsecondary education,
  • improve child well-being, and
  • develop an annual social report

BALANCE FISCAL AND SOCIAL RESPONSIBILITY

The CCSD is not advocating that Ottawa spend its way into another fiscal crisis. Rather, the Council is suggesting that fiscal and social responsibility have to be balanced. Many Canadians have paid a heavy price as a result of public spending cuts made to balance Ottawa's ledgers. With Canada's fiscal house in order and the implementation of the above proposals, Paul Martin can continue to manage responsibly the public's money for the greater national good.

BRING DOWN THE SOCIAL DEFICIT

Our nation's financial deficit may have been overcome, but another deficit--a social deficit--remains stubbornly in place. The symptoms of this social deficit are every bit as serious for our nation's future because they threaten to weaken our society by limiting opportunity and security. The social deficit is measured in terms of out-of-work Canadians unable to take part in the country's growing prosperity, and in the growing numbers of children and other Canadians living in poverty as a result.

Today about 1.3 million Canadians are looking for but can not find work. And in 1995 Statistics Canada found that about 5.2 million individuals had earnings so low that 55 per cent or more of their gross household incomes was required to purchase the basics of food, clothing and shelter. To make matters worse, several other large groups of Canadians risk being left behind as our nation's economy improves: involuntary part-time and temporary workers, new young workers with huge student debts, laid-off older workers, mothers on welfare with their children, persons with disabilities, First Nations peoples, and the homeless.

RECOMMENDED FEDERAL BUDGET PRIORITIES

The federal government's priority for its 1998 budget should be to implement measures that address the country's social deficit.

1. Improve Employment Opportunities

The Canadian Council on Social Development (CCSD) recommends that this budget recognize that the best way to end unemployment and poverty is a steady pay cheque. Investing resources to generate jobs, improve income security and employability, as well as reduce child poverty will ensure that Canada remains the best country in the world in which to live, for all our residents.

Useful, long-term jobs could be created by community economic development (CED) organizations if the federal government bolstered their resources for infrastructure and wage subsidies. Federal action could allow community organizations to hire youth interns. By assisting the creation of CED corporations, worker co-ops and similar organizations, the federal government could spark needed community activities, increased consumer spending, and of course, jobs. In effect this represents a "two for one" deal that will put Canadians-at-risk to work and get more dollars surging through our economy--while fighting the social deficit.

The cost of federal investment in the voluntary sector would be small. For example, Ottawa could provide support to 6,000 CED projects at $50,000 each with the requirement that matching contributions come from the local private sector and volunteers. This could create up to 30,000 jobs at a cost of $300 million to the treasury.

2. Improve Canadians' Income Security

Linked to job creation is the question of income security. As stated in a Human Resources Development Canada report tabled in the House of Commons last week, the majority of unemployed people in Canada no longer qualify for employment insurance benefits even though most, excluding the self-employed, pay premiums. This first annual EI Monitoring and Assessment Report shows that only 43 per cent of unemployed Canadians received benefits in the 12-month period to October, 1997--down from a rate of 83 per cent of unemployed Canadians in receipt of UI in 1989. For an alarmingly large number of Canadians, the loss of a job is compounded by the lack of replacement income.

Ottawa needs to revisit the changes made to the unemployment insurance system during the last eight years that have contributed to this situation. These changes include the disqualification in 1993 of those who voluntarily left their jobs, the toughening of entrance requirements in 1990, 1994 and 1996, and the reduction in benefit entitlements in 1994 and 1996. These changes have cut off temporary and part-time workers from EI eligibility when pro-rating their benefits would have made more economic sense. Measures should be included in the federal budget to make the EI program available to these workers on a pro-rated basis.

3. Improve Access to Postsecondary Education

Ottawa should help to fight unemployment and poverty by improving access to postsecondary education, so that more Canadians can obtain emerging knowledge sector jobs. In this regard, statistics presented in the EI Monitoring and Assessment Report cannot be ignored. Of Canadian workers over the age of 24 years, those with less than postsecondary education experience higher unemployment rates (in 1996, 10.5 per cent compared with 6.7 per cent for those with postsecondary credentials) and lower labour market participation rates (in 1996, 55.2 per cent as opposed to 79 per cent for those with a postsecondary education).

Ottawa's promise to create a Canada Millennium Scholarship Endowment Fund will help to improve access to university and college, but only if it is geared towards need as the most important eligibility criterion. The government should also implement a student debt reduction strategy and enhance student tax supports. Postsecondary education organizations have estimated that implementing these measures would cost a maximum of $632 million in program expenditures and foregone tax revenue.

4. Improve Child Well-Being

Budget day will provide the federal government with an opportunity to take the next step in fighting child poverty. Scheduled to begin in July, the National Child Benefit is a good start. Last year's budget committed the federal government to invest $850 million in the Child Benefit. Then Ottawa promised to contribute a further $850 million during the course of the government's mandate. The upcoming budget should announce when this further investment will be implemented, and it should commit to a third installment of $850 million to the National Child Benefit.

Ottawa also needs to put meat on the bones of its Throne Speech promise to collaborate with the provinces in developing clear measures by which to gauge success in the fight against children's poverty. At their December meeting, Canada's First Ministers agreed to "fast track" work on a National Children's Agenda. Yet since then Ottawa and the provinces have said little about the Agenda.

The federal budget should go beyond reiterating Ottawa's earlier promise to implement the first phase of the Child Benefit. It should also commit to multi-year funding, indexed to inflation, for other programs that would improve child well-being, such as accessible child care and other labour market supports. Such a strategy would allow Ottawa to make a significant contribution to improving child well-being by helping more children gain a better start in life.

In 1996 the number of poor children in Canada totalled nearly 1.5 million, up from about one million in 1989. The 1997 federal budget commitment of an additional $850 million for the National Child Benefit should cut this child poverty level by about ten per cent. Research by the CCSD and many other experts in child well-being shows that investing now in a comprehensive strategy to improve child well-being will pay off down the road in reduced public expenditures for corrective social programs such as h ealth care, criminal detention and general welfare assistance.

5. Develop an Annual Social Report

Ottawa took the lead in improving Canadians' understanding of the fight against the fiscal deficit. Now it must turn its resources to improving Canadians' understanding of our social deficit. To do this, Ottawa should produce a national social report that identifies specific targets--or benchmarks--to measure progress in job creation, improving income security and employability, and combatting poverty. For example, data related to levels of literacy, education performance, population health, public safety, and employment should be measured and analysed regularly. This reporting will stimulate discussion and subsequent action throughout our society on ways to improve Canada's social well-being.

CONCLUSION

As a national, independent, non-profit organization the CCSD seeks the improvement of social and economic security for all Canadians. This goal is achievable, given that the engine of economic growth is under full steam. But while Canada's economic train has left the station, too many Canadians have been left behind on the platform.

Our economic train is powered largely by private sector engineers who are not very concerned with those left off the train. Public sector investments by the federal government, and by other levels of government, are critical to getting the poor and the unemployed aboard. Its 1998 budget provides the federal government with its best opportunity to help many more Canadians become passengers.

CCSD

Canada's Social Development Convenors

info@ccsd.ca

Phone: 613-236-8977

Kanata, ON

P.O. Box 13713 K2K 1X6

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