OTTAWA—Today’s federal budget will do little to revitalize Canada’s sluggish job market and slow economic growth due to collapsing corporate investment in the tar sands, says the Canadian Centre for Policy Alternatives (CCPA).
“The federal government could be proactive mitigate Canada’s fragile economy, but has chosen to create budget surpluses instead of jobs,” says CCPA Senior Economist David Macdonald. “In order to boost the economy and create jobs, we need a real commitment to infrastructure today, not in five years time.”
"The government delayed the budget, claiming it needed to asses the impact of the plunge in oil prices but there is little in the budget to suggest the wait made any difference," says Macdonald. "The government is clearly still crossing its fingers and hoping for an economic miracle."
The tax cuts in today’s budget overwhelmingly benefit the wealthy and do little to meet the needs of those living in poverty. In addition, the family tax package is insufficiently focused, with a great deal of money being spent but very little delivered to those with the greatest need.
“With the economy slowing and population aging staring us down, this government decided to deliver an Economic Distraction Plan—purporting tax cuts, trade and fighting terrorism as the best way to manage the challenges facing our economy,” says Armine Yalnizyan, Senior Economist. “That’s like putting lipstick on a pig.”
Today’s budget measures for seniors, including doubling the Tax Free Savings Account (TFSA) and lowering the mandatory withdrawals from the Registered Retirement Income Fund, will primarily benefit wealthier seniors. Only 13% of seniors maxed out their TFSA at the pre-doubling rate, and more than half of seniors don’t even have a TFSA. Sixty-five percent of seniors have less than $50,000 in a RRIF or RRSP.
“Like so many other measures in this budget, the majority of the benefits from the TFSA and RRIF changes go to those who need it least. A better way to help seniors would be to cancel the increased age of eligibility in OAS or expand the Canada Pension Plan,” says Yalnizyan. “Let’s not kid ourselves into thinking that either of these measures will have any impact on senior poverty or the retirement savings crisis.”
The federal government will spend $7 billion on the Universal Child Care Benefit (UCCB) and income splitting this year—untargeted programs that won't create a single child care space. That $7 billion could pay for a national $7/day child care program. Forty-nine percent of qualifying families will receive nothing from income splitting, with the greatest benefit going to families that earn over $200,000 a year.
“This budget provides choices for those who already have them—families earning over $200,000 a year. It does nothing to address the real challenges facing the average family in Canada—stagnant incomes, record high household debt, and a lack of affordable child care spaces,” says CCPA Senior Researcher Kate McInturff.
The CCPA calls on all parties to review its Alternative Federal Budget, which proposes solutions that connect with what matters to Canadians: income inequality, job creation, health care, and climate change.
For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.