Building a Sustainable Recovery

Chandra's picture

Every year, the Finance Committee of the House of Commons receives submissions from Canadians on the federal budget, conducts hearings across the country, and submits a report outlining recommendations for the next federal budget. This year, the committee called for Canadians to share their ideas on “how to achieve a sustainable economic recovery in Canada, how to create quality sustainable jobs, how to ensure relatively low rates of taxation and how to achieve a balanced budget.”

In response, Citizens for Public Justice submitted a brief with our recommendations on Building a Sustainable Recovery for All Canadians. Our recommendations were carefully selected to emphasize job creation and sustainable recovery while not significantly increasing the federal deficit through a reallocation of existing priorities. In fact, our recommendations for Budget 2012 could create as many as 128,500 new jobs while boosting economic growth and creating greater income security for low income Canadians.

In the next few weeks, our web features will explore our policy recommendations, why we believe the policies and programs they call for are necessary, and why they should replace current spending priorities. This week, we explore the need for a sustainable economic recovery.

Still Waiting for Recovery

We were encouraged that the Finance Committee identified sustained economic recovery as a priority for this year’s pre-budget consultations because while Canada has enjoyed a recovery of some economic indicators such as Gross Domestic Product, there are many Canadians who are still waiting to experience recovery and who risk being permanently left behind. We believe that the best way of achieving a sustained economic recovery is to enable and empower all Canadians to participate in the economy.

So far, Canada has seen two recovery stories. One story is positive, with Canadians maintaining or finding new employment, and experiencing a rise in average income greater than the increase in cost of living. Canadians experiencing the other story, however, are finding recovery precarious or non-existent. They are still unemployed or precariously employed with low wages, inadequate Employment Insurance or social assistance benefits, faced with rising costs for housing, rising debt loads, and more likely to need assistance from a food bank.

Canadians who struggle with poverty, unemployment, inadequate EI and social assistance benefits, and high debt loads are unable to participate in the economy on an equal footing. Their exclusion is an injustice that forces people into scenarios that compromise their dignity: making unimaginable choices between paying the rent and feeding the kids, begging the person behind the Plexiglas panel for their income, applying for precarious work because anything is better than nothing, and feeling marginalized in their community.

Persistent poverty is not God’s vision for society. The Jubilee laws of the Old Testament called for a periodic redistribution of the means of production, ensuring that no one was permanently left behind and no one became wealthy at the expense of the poor. In today’s terms, Jubilee means that we need to ensure all people have the means to exercise a sustainable livelihood that provides a livable income. We must also make sure that everyone has access to an adequate income and the resources necessary for well-being, even when we are not able to secure all we need through paid work.

In addition to being a matter of justice and fairness, enabling all Canadians to participate in the economy is a matter of good economic policy. Low and middle class Canadians spend their money locally, paying the rent or the mortgage, buying food and clothing and cars, repairing and maintaining their homes, or paying for their child’s college or university tuition. This local consumption provides the stage for real economic activity: production of goods and services that meet the needs of Canadian communities. In turn, this generates economic growth.

In fact, calculations by the Department of Finance suggest that $1 billion in assistance to low income Canadians will increase GDP by $1.7 billion as low income Canadians invest their money in the local economy, creating new jobs and generating new economic opportunities.

To ensure that all Canadians are able to participate in the economy on an equal footing, CPJ has offered three policy recommendations for Budget 2012 that will support low income Canadians while boosting economic growth and reducing harmful greenhouse gas emissions:

  1. Budget 2012 should cancel the corporate income tax cut scheduled to take place January 1, 2012 and instead invest the $3 billion in new and repaired affordable housing.
  2. Budget 2012 should repeal the “Tough on Crime” agenda and invest the $1.5 billion in savings in Aboriginal programs and an increase to the National Child Benefit Supplement.
  3. Budget 2012 should cancel the oil and gas subsidies and invest the $1.4 billion in savings in green technologies and an eco-retrofit program for low income households.

For more details on these recommendations, check back in the next few weeks!

Chandra Pasma is CPJ's former Public Justice Policy Analyst.

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