A Just Economy in Troubling Times

Recent economic events in the United States have caused concern about economic conditions in Canada. The economic downturn in the US will unavoidably have some type of effect on the Canadian economy as we are so closely tied in terms of trade and commerce. However, while the US is facing a certain recession, it is unclear as to whether Canada will see the same challenges.

Until recently, federal party leaders have been unhurried in addressing the economy as a major election issue, however with the sharp economic decline in the US, leaders are now beginning to communicate their party’s positions in regards to stabilizing the Canadian economy. It is apparent that if the economic situation is not properly monitored and acted on in Canada, people who live below the poverty line or in low-income households may face many potential hardships.

Historically, it has been the practice of governments to monitor and adjust fiscal policies during economic slowdowns. Fiscal policy essentially is changes in taxes and spending. During a recession, common government practice includes cutting taxes and increasing spending in order to secure consumer confidence. However, these techniques, while boosting the overall economy, tend to place a focus on households that are mid-income to high-income earners.

Securing consumer confidence does little to aid those who have a low income and cannot spend, and tax cuts cannot help those who don’t have enough income to pay taxes. So, remedial efforts on the part of the government make little headway in terms of aid for the impoverished. Yet economic slowdowns have a highly negative impact on these people.

During tough economic times a decrease in the demand for labor tends to cause higher unemployment and lower wages. Those workers who are untrained are generally the first to be let go or have wages lowered, however, they are also the workers that do not have easily transferrable skills that will aid them in finding replacement work. In addition to this, they now face the need for credit and/or social assistance programs. Throughout economic slowdowns, though, credit is less accessible and even if the poor are able to get credit, increasing personal debt will not solve their problems.

Social assistance is also less attainable during economic times as a result of government tax cuts and lower government revenues. This loss of government revenue causes lowered budgets for social assistance and aid programs; however, the government does face a choice to continue providing social assistance as they have the ability to run a deficit or to reduce funding for other government programs. In addition to this, government could also focus on investing in infrastructure or green technology, which would improve the economy, environment, and would create jobs in a number of work sectors.

Without the support of social structures and aid programs for those living in poverty, nutrition, wellness, and an individual’s dignity can be significantly injured. It can be a lifelong struggle for people to get back on their feet. Government fiscal practices alone during a recession do not foster public justice or equitable opportunities for all within society. Those who are forced to go into debt or to live below their means as a result of job loss or assistance cuts are not given the right to dignity that they are entitled to as image-bearers of God. Government policy should promote just relations among everyone in God’s creation, and rather than furthering injustices, it should remedy them through the strengthening of social assistance and benefits programs.

During the current election campaign, economic issues have recently captured the stage. This is much overdue given the fear and growing concern that has been rising in Canada due to the US economy.

• Prime Minister Harper has maintained throughout his campaign that Canada’s economy is sound and that a typical family’s finances are not in any danger. He has made it clear that Canada is not facing the same situation as the US and though the Conservatives are not proposing any legislation to offset economic concerns, if there was any legislative measure to strengthen the economy, they would pursue it.
• The Liberals, on the other hand, state that Canada is on the edge of recession after having two upsetting economic quarters back to back. They insist that their plan for a green economy will bring Canada back into the playing field of the 21st century and, if elected, they intend to re-establish financial order to government.
• Jack Layton of the NDP, after unsuccessfully requesting an all-party meeting to discuss economic concerns and the consequences for Canada, stated that the NDP’s main concern is to ensure that working families are protected from financial difficulties relating to savings, homes, and jobs.

With such greatly varying views on the state of the Canadian economy and the government action that needs to be taken, will economic issues gain more recognition in the remainder of the election campaign? As Canadian citizens, we should be actively engaged in ensuring that the economy and its impact on all Canadians is addressed by our government representatives. It is crucial to know that the leaders we elect have a plan to protect the impoverished and those who are most vulnerable to economic struggles if we find ourselves following the downward slope that has so swiftly damaged the US economy.

Questions for Candidates:

• What will your party do to ensure that an economic downturn will not hurt the poorest Canadians the most?
• Will your party commit to strategies for maintaining and improving social assistance programs for the vulnerable?
• How does your party intend to address potential financial loss and job loss of low-income earners due to economic challenges?

Links for further information:

• Why Crises are Bad for the Poor
• Canadian Community Economic Development Network
• Conservative Party on the Economy
• Liberal Party on the Economy
• NDP on the Economy
• Green Party on the Economy