Budget 2009: No Poverty Reduction Strategy

You’ve heard us say it before, and I’ll say it again: there are over 3.4 million Canadians living in poverty – this according to the Statistics Canada after-tax Low Income Cut-Off (LICO).

Poverty is an affront to a person’s dignity. It is a violation of human rights. It is unacceptable the context of our national affluence. It also robs society of valuable contributions that those living in poverty would otherwise have the opportunity to make.

In our December 17 letter to Finance Minister Flaherty, CPJ called for the 2009 Federal Budget to include a “visionary stimulus package” with a federal poverty reduction strategy at its core. Such a package, we said, “would be designed to limit unemployment and strengthen the stability of families, create a more ecologically sensitive infrastructure, and construct a fairer and more secure global economy.”

Sadly, the Conservative government failed to deliver for Canada’s poor.

The budget contained no poverty reduction strategy. In fact, it contained no mention of poverty, let alone a commitment to ensure that it is addressed. And, the measures aimed at “low-income” Canadians provide far too little for those that need it most.

Five budget items touched on CPJ poverty-related recommendations: new investments in social housing, the near doubling of the Working Income Tax Benefit (WITB), the increase to the phase-out level of the Canada Child Tax Benefit (CCTB) and National Child Benefit (NCB) Supplement, initiatives to address the needs of Aboriginal peoples, and some minor changes to Employment Insurance (EI).

1. In her recent blog post Mariel identified how, while useful, investments in social housing missed the mark in their failure to include funds for new construction.

2. Chandra’s follow-up on the $2 billion in tax cuts touched on the fundamental flaw in the changes to the WITB: the access cut-off – that is the allowable income level – remains so low that someone working full-time, year-round at minimum wage would not qualify.

3. On the issue of the CCTB and NCB, it is unfortunate to see that measures labeled as “increases” are in fact mere adjustments in line with the overall adjustment of the upper limit of the lowest personal income tax bracket. With this adjustment, the phase-out level (the family income level at which these benefits are no longer accessible) has been raised to $50,000. There is, however, no increase to the maximum benefit for poor families and those with incomes of less that $20,000 per year will see no change.

The lack of movement on this issue is made all the more unbelievable in light of the complete absence of any attention to early learning or child care. In the context of $12 billion in infrastructure investments, it is striking that none of that money is being targeted towards social infrastructure, areas like health care, education, child care. These are sectors dominated by women and investments in these areas would provide additional employment opportunities while also providing essential supports for young children.

4. The budget contains $1.4 billion in investments in Aboriginal skills and training, on-reserve social housing and infrastructure. Though relatively minor in the context of overall spending, these investments have the potential to have a significant impact in First Nations communities and they are well targeted in the areas of schools, water, housing, health care and policing. More is clearly required to address the staggering poverty in Aboriginal communities, to ensure that children are receiving quality education, and to support local economies. Additional measures are also required to address the needs of Aboriginal people living off-reserve.

5. Perhaps the most egregious deficiency in the budget was the failure to reform EI. Only 40% of unemployed Canadians qualify for EI, and benefit rates max out at $447 per week. The budget announces nearly insignificant reforms: a freeze on premiums for the next two years and a five week extension of available benefits to a total of 50 weeks.

In an article in published today by the Canwest News Service, HRSDC Minister Diane Finley makes the appalling statement that “We do not want to make it lucrative for [unemployed workers] to stay home and get paid for it.” Lucrative. At $22,350 this barely surpasses the Market Basket Measure – one of the poverty measures used by the National Council of Welfare. Nevermind that EI was originally intended as an income-replacement program.

As the recession continues to deepen, it is unconscionable that 60% of unemployed Canadians will not have access to even these meager EI benefits.

The one bright light here is that the budget does allocate $1.5 billion for re-training that will include unemployed Canadians who cannot access EI. Still, this is a positive change has its limits. Only one-third of the money is directed at those outside of EI, while two-thirds of the money will be delivered through EI programs. If they are really serious about the value of skills development, the government should open EI training programs to all unemployed Canadians.

Clearly a lot remains to be done. While we are no doubt discouraged by the direction set by this budget and by the failure of this government to exercise compassion and genuinely consider the needs of the country’s poorest citizens, we understand that this is not the end.

We will continue to seek inspiration in the fact that three provinces now have poverty reduction strategies and three more are on their way to putting in place plans of their own. We will be buoyed by efforts across the country, by churches, community organizations, unions and human rights activists that are coming together to call for action. And we will be encouraged by a recent poll that suggests that the vast majority of Canadians believe that it is time to turn things around and to make Canada poverty-free.