Skip to main content
Start of content

FINA Committee Report

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

PDF

Budget 2015: NDP Pre-budget Consultations Supplementary Report

Choosing a Fairer and More Prosperous Canada

1. Introduction

As Canada begins to turn the page on the most severe economic downtown since the Great Depression, Canadians are faced with a choice. Canadians must choose between a Conservative government that intends to drain the fiscal capacity of the state through reckless handouts to the wealthiest Canadians and a New Democratic government that will bring a balanced, evidence-based approach to Ottawa that is both environmentally and fiscally sustainable. Canadians want a government that will take their everyday challenges seriously. They want a government that takes an active role to improve their lives by making life more affordable, to ensure their financial security in retirement, and to help create good jobs, particularly in the many struggling regions across the country. New Democrats intend to take up these challenges.

The pre-budget consultations majority report is an imperfect document, although it does include a great deal of important content from the dozens of witnesses who were able to appear before the committee. Unfortunately, many of the majority’s recommendations are self-congratulatory and fail to address the challenges that we face. We note that few of the recommendations include the kind of progressive measures that Canadians are looking for to build a fairer, greener, and more prosperous Canada. As a consequence, the New Democratic members of the Standing Committee on Finance have chosen to respectfully present this supplementary report.

2. Global Economic Uncertainty and the Canadian Economy

  • Ongoing weaknesses in the European economies and weakening growth in major developing countries such as China are suppressing international demand and pose a continuing and significant risk to the Canadian economy and its inconsistent recovery.
  • The significant decline in the price of oil may lead to substantial revisions in provincial and federal revenues, which must be accounted for in Budget 2015.
  • The recent uptick in the American recovery presents an opportunity to jumpstart the Canadian economy. In particular, as the primary destination for Canadian exports this progress in the United States offers an opportunity for Canadian exports to finally rebound from the recession. 

3. Domestic Economics Challenges

  • Although Canada’s unemployment rate has declined in recent months, over 1.2 million Canadians remain out of work and there are still more than 200,000 additional unemployed Canadians than before the recession.  
  • In particular, Canada is continuing to struggle with persistently high youth unemployment, which has hovered around double the national average.
  • Whole regions of Canada have been left behind in what has remained a relatively modest national recovery. Since the Conservative Government took office in February 2006, approximately 375,000 manufacturing jobs have been lost across the country. This has been particularly devastating for the cities that comprise our industrial heartland.
  • Even with recent more positive jobs numbers, aggregate employment growth has been a meager 1% over the last year. Even worse, 56% of the jobs that have been created over that time period are in part-time work.
  • Although the Federal Government is now in a fiscally sustainable position, it has been achieved on the back of the sub-federal governments that are now in a fiscally unsustainable position.

4. The Failure of the Government’s Response

  • The Conservative Government has made a decision to place ideology over evidence-based policy. From the elimination of the long-form census to the regular denial of information to the Parliamentary Budget Officer, the government has decided to limit the role of evidence in decision-making.
  • The decision to move forward with an unfair income splitting scheme that will primarily benefit the wealthiest Canadian families and drive thousands of Canadians out of the labour force is a clear result of this ideological policy-making. By driving thousands of women out of the labour force, this policy will only exacerbate the problems facing our country as we seek to grow our economy while supporting an aging population.
  • The Conservatives' inadequate and uncosted “Small Business Jobs Credit” is another example of their preference of ideology over evidence. The impacts of this tax cut were apparently not reviewed or costed by the professionals at Finance Canada. As a result, this measure, costing a total of $550 million dollars, will only create a mere 800 jobs according to the PBO. We are also concerned that the cost of this poorly designed measure would be borne by the Employment Insurance account – misdirecting funds that should be exclusively devoted to support EI benefits.
  • Access to EI has deteriorated significantly under the Conservatives, continuing a trend of restricted accesss that began under the previous Liberal government. In January, 2006, 45.7% of unemployed Canadians were able to access EI benefits. By September 2014, this figure had fallen to just 38% - meaning that fewer than 4 in 10 Canadians are able to access EI benefits when they need them most.
  • The Conservatives are banking on surpluses in the EI Account in order to fund their return to budget balance -- at the same time that they continue to restrict access through the implementation of their regressive EI reforms.
  • The Conservatives have hampered Canada's economic recovery by enacting billions of dollars in cuts that have directly and indirectly eliminated tens of thousands of jobs. Along with slowing economic growth, this has had a direct and significant impact upon the services that the Government provides to Canadians. This includes deep cuts to food safety inspection programs, rail oversight, and the closure of veterans offices.
  • The cuts introduced by the Conservative government have been implemented without regard for the success or failure of the programs at issue, as confirmed by the Parliamentary Budget Officer. This further demonstrates how their ideological approach and political self-interest have trumped sound policy making.
  • In addition to the broad departmental budget cuts announced by the Conservatives – and they still refuse to release detailed information about these cuts – the Conservatives have lapsed billions of dollars in planned spending each year – funds that were approved by Parliament for use but left unspent.

5. Practical Steps to Take Canada Forward

The committee heard testimony underlining the significant challenges facing Canada and the need for greater government action to address social, environmental, and economic issues. Many witnesses urged the government to use expected surpluses to invest in programs that will make Canada more competitive and equitable rather than giving further tax breaks to the well-connected and wealthy few.

New Democrats believe that the federal government has an important, common sense role to play both in providing services to Canadians and ensuring that the conditions to foster economic growth in the private sector are present. Below, we detail some of the measures or practices that the Government should adopt to meet this goal:

5a. Child Care

  • The Government should work with the provinces and territories to implement a national universal affordable childcare program to provide quality early childhood education and child care spaces available for a maximum of $15 per day.

5b. Retirement Security

  • The Government should improve retirement security for all Canadians by working with the provinces to boost Canada Pension Plan and Quebec Pension Plan benefits and by reversing its planned $10.8 billion cut to Old Age Security and restoring the age of eligibility to 65.

5c. Income Inequality

  • The Government should reinstate the federal minimum wage for federally regulated sectors and incrementally raise it to $15 per hour.
  • The Government should consider increasing the value of the Working Income Tax Benefit, as recommended in FINA’s study on income inequality, in order to combat poverty and decrease income inequality.

5d. The Environment

  • The government should enshrine the polluter pay principle in law and put a price on carbon to help meet our international climate obligations and encourage investment in green energy technology.
  • The Government should announce a clear timeline to eliminate outstanding fossil fuel subsidies.
  • The Government should restore investment in home energy efficiency retrofits to help Canadians reduce energy consumption and home energy bills.
  • The Government should strengthen the review process for major resource projects by ensuring broad consideration of environmental impacts, honoring the duty to consult and accommodate First Nations, and removing arbitrary limits on public participation.
  • The Government should take advantage of current opportunities for Canada to become a world leader in the development and export of clean energy by supporting investment in this burgeoning sector.

5e. Taxation

  • The federal government should increase efforts to recover the estimated billions of dollars of revenue lost to tax evasion and tax avoidance through the use of offshore tax havens and treaty shopping – including reversing cuts to the number of senior auditors in the International Audit Program and the Aggressive Tax Planning Program at the Canada Revenue Agency.
  • The federal government should engage in a comprehensive review of Canada’s tax code in order to simplify the administration of and compliance with tax laws to enhance the fairness and efficiency of our tax system.

5f. Evidence-Based Policy

  • The Government should reinstate the long-form census and reverse its devastating cuts to Statistics Canada.

5g. Refugees

  • The Government should reverse cuts to healthcare coverage for refugee claimants that the Federal Court has called “cruel and unusual”, and should abandon proposed modifications to restrict access to social assistance for refugee claimants.

5h. Health Care

  • The Government should take concrete action to improve affordability and access to medications.
  • The Government should immediately reverse its $36 billion cut in health transfers to the provinces and reinstate the 6% CHT escalator. 
  • The government should establish, in collaboration with the provinces, territories and health experts, a national strategy on mental health and dementia.

5i. Education

  • The federal government should improve access and affordability of post-secondary education in Canada.

5j. First Nations

  • The Government should provide stable and predictable funding for the successful Aboriginal Skills and Employment Training Strategy (ASETS) model and for other related programs to help First Nations and other Aboriginal groups fill the skilled job shortages.

5k. Employment Insurance

  • The Government should protect Employment Insurance funds from further misuse and fix the EI program so that it works for unemployed Canadians – including improving access to benefits and addressing the significant backlog of EI appeals before the Social Security Tribunal.

5l. Responsible Budgetary Practices

  • That the Government establish a permanent Federal-Provincial-Territorial working group to study intergovernmental issues that could affect government economic sustainability, including but not limited to such issues as the equalization formula, transfers, and pensions.   
  • The Government should introduce more transparency to the budget process as recommended by the Parliamentary Budget Officer and should enact legislation to establish the Parliamentary Budget Officer as a fully independent officer of Parliament.

5m. Youth Employment

  • The federal government should take concrete action to reduce soaring rates of youth unemployment, including the introduction of hiring incentives to encourage businesses to hire and provide training to individuals between the ages of 18 and 25.
  • The federal government should protect interns working in federally regulated industries by amending the Canada Labour Code to extend basic workplace protections and to prevent the abuse of unpaid internships.

5n. Infrastructure

  • The Government should reverse cuts to infrastructure funding and instead increase investments and simplify application processes to ensure that long-term predictable funding is accessible to communities of all sizes without undue delays or procedural burdens.
  • The Government should work with the provinces, territories and municipalities to develop and implement a national transit strategy that will include long-term, predictable, sustainable funding for public transit infrastructure.

5o. Affordable Housing

  • The federal government should take immediate action to address the affordable housing crisis facing Canadian municipalities by renewing social housing agreements and working to develop and implement a national housing strategy as proposed by Bill C-400.

5p. Veterans

  • The Government should ensure Canadian veterans receive the support they need, including by immediately reversing budget cuts to Veterans’ Affairs Canada and reopening the veterans services offices that it has closed.

5q. Affordability

  • The Government should implement strong regulations to stop abusive practices by banks, lenders and credit card companies including measures to ensure that all Canadians have access to at least one low-rate credit card with an interest rate capped at prime plus 5% and cap ATM fees at $0.50 per transaction.
  • The Government should crack down on the abusive practices of payday lenders.

5r. Labour Rights

  • The Government should take concrete actions through the Canada Labour Code and public sector labour legislation to protect workers against workplace retaliation for engaging in union activities.
  • The Government should reverse its damaging changes to health and safety laws that limit the ability of workers to refuse unsafe work.

5s. Manufacturing

  • The government should support the maintenance and creation of well-paid manufacturing jobs, beginning by ending delays in the delivery of funding promised in the Advanced Manufacturing Fund.