Spending cuts, OAS changes and giveaways to corporations are unnecessary and irresponsible, say Alberta unions

Based on the magnitude of the cuts and changes contained in today’s federal budget, you’d think that Canada was about to “hit the debt wall.”

But the truth is that Canada has weathered the global recession better than almost any other industrialized country – thanks largely to its natural resource wealth, decisions made by previous governments and pressure from opposition parties that stopped the previous minority Harper government from enacting harsh cuts at the height of the recession.

“Given the reality of Canada’s current economic situation, there’s no good reason why we should even be contemplating cuts on this scale,” says Gil McGowan, president of the Alberta Federation of Labour.

“What we see with today’s budget is a plan that will turn a rough patch into really tough times. It’s the opposite of what this country needs. It’s both unnecessary and irresponsible.”

If there’s a problem, McGowan says it’s that the Harper government’s various tax cuts have cost the federal treasury more than $200 billion since 2006. For example, the effective federal tax on corporate profits has dropped to its lowest rate since before the Second World War.

“The only reason that the Harper government isn’t looking at a balanced budget right now, or at least in the very near future, is because it has given away literally hundreds of billions of dollars in revenue in a very short period of time,” says McGowan.

“If there’s a crisis, it’s a crisis caused by the Harper government’s irresponsible tax giveaways, especially to profitable corporations that are no longer being asked to pay their fair share of the cost of keeping this country running. The crime in this budget is that ordinary Canadians – especially seniors – are being forced to pay the price for Stephen Harper’s ideologically driven irresponsibility.”

Despite Finance Minister Flaherty’s argument that the cuts really only amount to “backroom efficiencies,” McGowan says ordinary Canadians will feel the bite of this budget in three important ways.

First, there will be a real and noticeable erosion in the quality of service provided by the federal government. With fewer workers, the government simply won’t be able to provide the same level of service that Canadians need and expect in everything from handling passport applications to inspecting food.

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Second, the Harper government’s plans to restrict payments to the provinces and remove the “strings” attached to the remaining dollars will mean it will become even more difficult for provinces to pay for things like health care and more likely that governments like ours in Alberta will resort to increased privatization.

Third, by increasing the age of eligibility for OAS from 65 to 67, the Harper government will be taking thousands and thousands of dollars out of the pockets of seniors. This will force many seniors into poverty or to the brink of poverty.

“As it stands right now, Canadians between age 65 and 67 get an average of 25 per cent of their income from OAS,” says McGowan. “By taking that income away, we run the risk of reversing one of the biggest public policy successes of the 20th century: which was the use of GIS and OAS to pull almost all Canadian seniors out of poverty.”

McGowan points out that the attack on OAS is particularly galling because the federal government’s own Parliamentary Budget Officer has concluded that the current OAS system is affordable and that increasing the eligibility age to 67 is unnecessary and unwarranted.

“The real thread that runs through this budget has to do with gifts and giveaways to Stephen Harper’s corporate friends,” concludes McGowan.

“The cuts to public-sector jobs and benefits are being made so Harper can finance his tax giveaway to big business. His changes to OAS eligibility rules are being made to address business concerns about a looming labour shortage – just make seniors work longer! And the so-called streamlining of approvals for resource projects is really a gift to oil companies so they no longer have to worry about pesky things like environmental impacts and the public good.

“In many ways, this is more than a budget: it’s a road map towards a conservative future in which corporations matter more than citizens. The Harper government should be ashamed of itself … and ordinary Canadians should be deeply concerned.”

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CONTACT: Gil McGowan, AFL president, 780-218-9888