2018 Alternative Federal Budget: Getting There

B A C

AFB2018

Alternative Federal Budget 2018 ISBN 978-1-77125-387-1

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With your support we can continue to produce high quality research — and make sure it gets into the hands of citizens, journalists, policy makers and progressive organizations. Visit www.policyalternatives.ca or call 613-563-1341 for more information. The CCPA is an independent policy research organization. This report has been subjected to peer review and meets the research standards of the Centre. The opinions and recommendations in this report, and any errors, are those of the authors, and do not necessarily reflect the views of the funders of this report. 5 Introduction 10 Macroeconomic Policy 23 Fair and Progressive Taxation 30 Agriculture 35 Arts and Culture 40 Child Care 45 Defence 50 Employment Insurance 55 Environment and Climate Change 60 First Nations 64 Gender Equality 71 Health Care 77 Housing and Neighbourhoods 82 Immigration 91 Industrial Strategy and a Just Transition 95 Infrastructure and Cities 100 International Development 106 International Trade and Investment 112 Post-Secondary Education 118 Poverty 125 Public Services 131 Seniors and Retirement Security 137 Sustainable Development Goals (SDGs) 142 Water 148 Youth 153 Acknowledgements

Introduction

For more than two decades, the Alternative Much has changed in the past decade. Federal Budget has provided a blueprint for During the 2008-09 financial crisis, even sustainable and equitable growth in Canada. pro-austerity governments were convinced When successive federal governments of the power of debt-backed government advocated austerity, we demanded new stimulus. More recently, in the 2015 federal stimulative investment in social and eco- election, political parties won public sup- nomic infrastructure. When they said the port by promising to spend progressively private sector should deliver public goods, on new social services and poverty-fighting we recognized that some priorities — like programs — an approach now applauded by expanded health care, housing and child the International Monetary Fund. care — could only be properly addressed by In the international arena, the United the government. Nations has set more ambitious goals for Where governments of all stripes have human development. These goals seek to spent billions subsidizing fossil fuel pro- end poverty, not just alleviate it, and to duction and export, the Alternative Budget build a more equitable and sustainable fu- pointed out it would be far more product- ture for everyone. ive, and more beneficial in the long term, Because they apply equally to all coun- to fund a just transition to a zero-carbon fu- tries, rich and poor, the Sustainable Develop- ture.1 Where the mainstream media obsessed ment Goals represent an important shift from about the deficit, we urged governments to paternalism in development policy to the ac- focus on the more important debt-to-GDP knowledgment of shared responsibilities for ratio and the multiplier effect that public fighting poverty and climate change. This investment would have on the economy. year the Alternative Budget demonstrates

Getting There: Alternative Federal Budget 2018 5 how its policies will move Canada toward market is a timely reminder that we need fulfilling its commitment to these goals. a better approach to trade. Canada’s tem- Our Alternative Budget’s priorities are plate free trade deals severely restrict what becoming political priorities, going main- governments can do to regulate in the pub- stream. And the positive impacts on people’s lic interest and to direct investment toward lives, from new spending and social pro- more productive ventures. grams introduced over the past two years, Canada has become an exporter of raw are starting to be measurable. resources and importer of higher-value-add- But what to do in times of apparent sta- ed products. The Alternative Budget moves bility and even better-than-average growth? Canada toward a trade and investment strat- What should a federal government prioritize egy that promotes sustainable development, in the winter of 2018, with employment lev- public services and the health of Canada’s els and GDP projections in their best shape democracy. in a decade? Investments in public services, on the The Alternative Federal Budget has a other hand, create jobs in a sector that sustainable plan for the future. We demon- doesn’t rise and fall with the fortunes of strate how we can face the challenges that the United States. They also provide im- lurk in the shadows of rising GDP numbers, portant respite to families struggling to look and that, with the right policies in place, after children and aging parents, and care we can build a green economy that brings for those living with physical and mental greater equality to Canadians. health issues. The Alternative Budget invests in bet- Economic growth does nothing to prevent ter public services, including increasing the slow unfolding of catastrophic climate health transfers to provinces and imple- change, particularly if our economy con- menting a pharmacare program, so that no tinues to rely heavily on high-emission re- family has to choose between medication source industries. It is precisely in this per- and food. It provides universal child care iod of relatively low unemployment that we for the millions of families with working should begin, in earnest, the just transition parents who face long wait lists and un- to a green jobs future. affordable fees. This year’s Alternative Budget accel- Economic growth continues to dispro- erates the national carbon price increase portionately benefit those at the top end of to reach $50 per tonne by 2020, moderat- the income spectrum, leading to extreme ing the impact on workers through rebates levels of inequality in Canada. Between 2015 while investing the rest in training, appren- and 2016, the average income earner saw a ticeships and green infrastructure, includ- raise of a couple hundred dollars, while the ing high-speed rail. top 100 highest-paid CEOs saw a pay bump The current uncertainty around Can- of $1 million. ada’s trade relations with its biggest export

6 Canadian Centre for Policy Alternatives Meanwhile, jobs in home care or child in our public research institutions and our care rarely pay enough to move full-time creative class, providing opportunities for workers in those occupations out of poverty. Canada’s brightest thinkers and creators to Alternative Budget investments will make work without the restrictions generated by sure a full-time paycheque in the care econ- market driven interests. omy pays for rent and groceries. Together these investments would cre- Young workers face record-high student ate nearly a million new jobs by 2020, turn- debt loads and a job market that delivers part- ing today’s positive GDP and employment time and precarious work. The Alternative levels into a foundation for ongoing sus- Budget would eliminate tuition fees, which tainable growth. will lead to a better educated and more prepared workforce for the future, and allow Canada draws great strength from its divers- new workers to enter the economy without ity — of peoples, cultures, identities and re- an unmanageable debt load. gions. Just as our diverse communities make The Alternative Budget would also mod- unique contributions to society and the ernize our employment insurance program economy, they also face distinct challenges. to reflect the increasingly precarious nature Farmers struggle with uncertain mar- of work — ensuring that workers in part-time kets and high debt loads. The Alternative or contract work are supported by our so- Budget would create a guaranteed basic incial safety net. come for new farmers, ensuring sustainable More sustainable and accessible infra- food production for the future and support structure, including better public transit for rural communities. and more affordable housing, will help Can- Canada’s First Nations, Inuit and Métis adians live better lives. However, transfer- communities are rebuilding in the wake of ring money to the private sector to build that colonialism, residential schools and the en- infrastructure at interest rates of 7–9%, when demic underfunding of education and social the government could deliver the same re- services. But Indigenous peoples continue newal at interest rates of 0.8%, isn’t innov- to face discrimination in pay and employ- ative. It is foolish and wasteful. ment. The Alternative Budget would invest The Alternative Budget would rebuild $9 billion in 2018-19 to make up for the loss our cities and roads through public works, in purchasing power created by decades of at the lowest possible financing rate, ensur- underfunding. ing that Canadians don’t pay a premium on Women make up 47% of the labour force. infrastructure investments. In addition to this paid work, women per- Innovation is an important component form an extra 10 hours a week of unpaid care of growth and a source of new solutions work. The Alternative Budget would invest in to existing problems. However, the pri- affordable child care, which has been dem- vate sector is not the only source of innov- onstrated in country after country to boost ation. The Alternative Budget would invest female labour force participation. It would

Getting There: Alternative Federal Budget 2018 7 also institute pay equity legislation immedi- would be lifted out of poverty by the Al- ately — so that women’s labour is no long- ternative Budget. er discounted as a result of discrimination. Older Canadians now experience increas- Not only are these investments important ing economic insecurity at the end of their for creating a Canada that can weather this working lives. Just one in four private sec- generation’s interrelated financial, environ- tor workers have a workplace pension plan mental and inequality crises, they are them- and the recent bankruptcy of Sears Canada selves sustainable. For example, the Inter- is an unwelcome reminder of the instability national Monetary Fund has demonstrated of private sector pensions. that a universal child care program would The Alternative Budget would expand pay for itself through the taxation and con- the Canada Pension Plan replacement rate sumer spending of parents who can remain to 50% and increase the income exemption in the workforce. for the Guaranteed Income Supplement, en- Likewise, returning EI premiums to their suring greater security for an aging popu- previous level (rather than cutting them in lation and reducing senior poverty rates by times of prosperity, only to find the fund 30%. Fifty-nine per cent of seniors lifted out short in times of economic crisis) would of poverty by these changes are women. allow the program to sustainably support Canada’s immigrant and racialized com- workers at a lower entry level. With better munities continue to face economic and so- EI support, workers are able to choose more cial discrimination. The Alternative Budget stable and better paid jobs rather than tak- would support immigrants with greater ing the first one available to them. That, in access to training and accreditation and turn, means a boost to wages, income and ensure a path to citizenship for the most government revenues. marginalized immigrant workers. The Al- Reforming the tax system, so that the ternative Budget would also implement a wealthy and corporations are no longer able comprehensive Action Plan Against Racism to take advantage of unfair tax loopholes, to measure and redress the impact of racial would raise $18 billion in additional rev- discrimination. enue while making the tax system simpler Child poverty rates in Canada remain and fairer. With the progressive tax reform stubbornly high. The census shows us that policies that this budget advocates, families 1.2 million children lived in poor families with incomes under $250,000 would see a in 2015. The Alternative Budget would in- net benefit from the combined tax and pro- crease direct transfers to low-income fam- gram changes. For those with incomes over ilies, including a new GST top-up, reducing $250,000, the net impact would be a mere child poverty rates by roughly a third. 1% loss in income. Adults would also see a reduction in their Better days may be upon us in 2018, but poverty rate of just over 10%. The result is now would be the worst time to fall back that roughly 600,000 children and adults on the old habits of deficit reduction, aus-

8 Canadian Centre for Policy Alternatives terity and an overreliance on the private wisely to build a sustainable, equitable and sector for guiding new growth. We’ve seen secure future for all Canadians. where those plans lead us: eroded public services, growing inequality and inaction on climate change. Notes

The current federal government has taken 1 Zero-carbon, meaning zero net carbon emissions, pri- promising steps toward progressive reform. marily via the gradual transition away from both fossil This year’s Alternative Budget offers a blue- fuel production and use. print to ensure we are using our tax dollars

Getting There: Alternative Federal Budget 2018 9 Macroeconomic Policy

The Canadian economy enjoyed a surprise ada’s employment rate (the proportion of jolt in 2017, with nominal growth topping working-age Canadians with a job) has 5.5% and real growth hitting 3.1%. In other just hit 62%, well below its pre-crisis high good news, Canada’s unemployment rate of above 63.5%. This is largely due to there dropped to 5.7% in December, a level never being relatively fewer young people looking before seen in the current data series, which for work (or currently working) than there dates back to 1976. were prior to the Great Recession — a prob- At the same time, average hourly wages lem in its own right. only increased by 2.7% last year, with all of The federal government is projecting that growth occurring between September nominal GDP growth will fall back into the and December.1 And over the course of 2017, 3.5% range in 2019-20, and that unemploy- inflation raised the price of goods by 1.9%, ment levels will rise again in future years meaning workers were left with a real wage (Table 1). But these are not statements of increase of only 0.8% for the year.2 fact so much as they are a sign of tempered Such a marginal increase in wages seems ambitions. inconsistent with historically low levels of As outlined in this year’s Alternative unemployment. Indeed, textbook models Federal Budget, the government can play argue that when the labour market tight- a critical role in turning one year of strong ens, wages should rise. growth into many, and a year of high em- Likewise, while GDP growth and low ployment into a long-term trend. unemployment are good news stories, Can-

10 Canadian Centre for Policy Alternatives Figure 1 Canadian debt-to-GDP ratios by sector

140% Households and non-proﬁts Local government Provincial governments Federal government 120% AFB case federal government Base case federal government Non-ﬁnancial corp 100%

80%

60%

40%

20%

0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source CANSIM 385-0032, 378-0121, 380-0063, Finance Canada Fall Economic Update and author’s calculations.

Government, household from its 2016 high of 101%, it is only because and private sector debt it was held in check by this year’s surpris- ingly strong GDP growth (see Figure 1). Against the backdrop of strong economic The total government debt-to-GDP ratio growth looms the massive debt the private (federal and provincial) has fallen slightly in sector has taken on to fund it. Non-finan- the past year, likewise due to the strength of cial corporations continue to hold record GDP growth and relatively stable debt levels. amounts of nominal debt, valued at 113% of Since the Great Recession, federal debt as a GDP in 2017, the highest debt-to-GDP ratio share of GDP has also been stable while the ever recorded (Figure 1). The eye-popping provincial ratio has slowly inched upward, indebtedness of the corporate sector could overtaking federal debt decisively in 2013. have had a silver lining had the money been Annual federal revenues, meanwhile, invested in worker productivity. Unfortu- continue to fall as a share of GDP, despite nately, it has been largely spent on mergers personal tax increases in the past few years. and acquisitions.3 The Fall Economic Statement (Table 1) pro- Canadian households also added $83 jects revenue will hit 14.3% of GDP by 2020, billion to their collective debt in the past similar to where it was in the early 2010s. year, bringing the total to $2.2 trillion.4 If Prior to that, we have to go to back to the household debt-to-GDP ratio is unmoved 1941 — two years into the Second World

Getting There: Alternative Federal Budget 2018 11 War — to find federal revenues this low, illus- ($53 billion) and falling to 1.8% ($45 billion) trating the severity of the problem. Short- in year three. If that seems high, compare falls and cutbacks will be endemic in this it to the more than $80 billion per year that environment as there is less and less money Canadian households have added in debt to fund programs and properly serve a grow- over the past decade, mostly to buy homes. ing economy and a growing population. Deficits of any size obviously add to the As revenues continue to drop, so too do national debt, but this is offset in the AFB expenditures. Federal program spending is by higher GDP growth spurred on by new projected to fall significantly, from today’s spending commitments. And so while we 14.2% of GDP to 13.8% in 2020-21 (Table expect the federal debt-to-GDP ratio to rise 1). That may seem small on a percentage from 30.5% to 32.4% over three years, con- basis, but it is the equivalent of a $9.5-bil- sider that in one year alone (2016) the cor- lion spending cut. That is a lot of money porate sector’s debt as a share of GDP went that could be put to productive use provid- up by the same percentage. ing benefits to Canadians. One of the major benefits of the AFB’s program enhancements and new spending commitments is that they will increase The Alternative Federal Budget plan employment. The AFB creates or main- Despite all that it accomplishes in its 22 tains over 600,000 jobs at its peak (Table 2), chapters, the Alternative Budget’s revenue which would enable Canada to lock in to- and spending projections are not dramatic- day’s low unemployment rate of about 5% ally different from those of the government. while boosting the employment rate back For example, by taxing people and activ- to where it stood prior to the Great Reces- ities differently, government revenues will sion (e.g., closer to 63.5%). increase under the AFB from 14.4% of GDP Strong economic growth should lead to somewhere in the range of 16% — less than to strong wage growth, despite last year’s what it was in most years between 1968 and lackluster showing in this respect. While not 2000. A full fifth of that additional money is incorporated in the employment model in the result of higher employment levels: as Table 2, continued low unemployment and more Canadians find good jobs, the taxes a higher employment rate generally should they pay will add $10.1 billion to federal cof- mean more Canadians see higher annual fers annually by 2020-21 (Table 2). raises in the future. At 16.8% of GDP (by 2020-21), AFB spend- Strong employment is only one of the ing is likewise slightly higher than the gov- bonuses of the AFB plan. Canadians will ernment baseline of 13.8%, but again this is also benefit directly from the programs the less than what it was from the 1970s to 1990s. AFB will enhance or create (Table 3). While New spending is largely, but not entirely, off- the details of these programs are spelled out set by new revenue, meaning the AFB will in subsequent chapters, here we examine run a deficit peaking at 2.3% of GDP in 2018 more broadly their expected distributional

12 Canadian Centre for Policy Alternatives impacts. How are families across the income On the other end of the spectrum, Can- spectrum affected by our budget’s tax and ada’s highest-earning 5% of families — those transfer changes, for example? And who making on average over $249,000 a year — will would be the likely beneficiaries of expendi- see their tax bill go up by about 1.7% of their tures on public programs? income once tax loopholes that currently dis- Every AFB measure outlined in Table 3 proportionately benefit wealthy families are has been assigned a distribution across the closed. However, as just mentioned, these income spectrum. For instance, pharma- high-income families also benefit from new care expenditures are distributed to match universal programs like pharmacare and present expenditures on prescription drugs, child care, which will add the equivalent and the benefits of lower tuition fees match of 0.7% to their family incomes. The net re- the present distribution of who pays them. sult is that high-income Canadians are only Where the tax system is directly changed, slightly less well-off (incomes fall by about Statistics Canada’s tax modelling software 1%) in the AFB plan. SPSD/M is used to estimate aggregate costs Canadian families below the $249,000 and the distribution of any changes.5 SPSD/M family income threshold are on average is also used to simulate the impact of tax or better off under the AFB once both the tax transfer changes on poverty rates. and transfer changes and the benefits from The AFB is a budget for all of Canada, new program spending are considered. meaning the public services and programs it While families in the top 30% do pay more funds are enjoyed across the entire income in taxes, this is more than offset by bene- spectrum. Pharmacare and lower tuition fees ficial new programs. In fact, the net bene- provide benefits to wealthier families, but fit resulting from tax changes and new pro- also to those earning lower incomes. Older grams is relatively even in dollar terms — in families, who also tend to have higher in- the $2,000 range — across much of the incomes, are more likely to have high prescrip- come spectrum (see Figure 2). tion drug costs, which would be eliminated The substantial new net transfers to low- through universal pharmacare. er-income families can also be evaluated New First Nations spending and more based on how they would impact poverty affordable housing, on the other hand, rates. In this case, poverty is measured using provide more benefit, as a result of income the after-tax low-income measure (LIM-AT). distribution, to lower income deciles. And As with other poverty-line analyses, here we overall, the AFB’s tax and transfer changes examine only family cash income and ig- have a dramatic net impact on the incomes nore any additional benefits from the AFB’s of people in the first three deciles, greatly improved public services as just discussed improving the fairness of our federal tax sys- (and as included in Figure 2 and Figure 3). tem. Lower-income families see an average In Figure 4 we can see that the AFB annual benefit of close to $2,000, the equiva- would lower poverty rates significantly for lent of a 5–22% bump in income (Figure 3). seniors and children. The improvements

Getting There: Alternative Federal Budget 2018 13 Figure 2 AFB impact by economic family income deciles

$6,000

$4,000

$2,000

$-2,000

Average beneﬁt per family Average $-4,000 Tax/transfer ($ per family) Program spending ($ per family) Total impact ($ per family) $-6,000

$-8,000 1 2 3 4 5 6 7 8 9 9.5 10 Income decile

Source SPSD/M 26.0 and author’s calculations.

Figure 3 AFB impact by economic family income deciles

35% Program spending (% of family income) Tax/transfer (% of family income) 30%

25%

20%

15%

10%

-5% 1 2 3 4 5 6 7 8 9 9.5 10 Income decile

Source SPSD/M 26.0 and author’s calculations.

14 Canadian Centre for Policy Alternatives Figure 4 AFB poverty rate impacts by age group

20%

10%

-10%

-20% Children (<18 years) Seniors (≥65 years) Adults (18–64 years) All -30%

-40% Pre-AFB poverty rate Post-AFB poverty rate Poverty rate change

Source SPSD/M 26.0 and author’s calculations, LIM-AT.

for the former are largely due to changes to For those Canadians who would re- the Guaranteed Income Supplement (GIS), main below this line, even under the AFB which targets low-income seniors. A large plan, the depth of poverty is reduced across number of seniors are currently living with all family types. The improvement is most incomes just below the poverty line, so a notable for single- or dual-parent families relatively small increase in the GIS would with children. There is also a notable reduc- lift 31% of seniors out of poverty (59% of tion in poverty levels for single seniors, for them women). whom the depth of poverty is already the The child poverty rate is most impact- lowest. The depth of poverty is reduced for ed by the AFB’s proposed GST top-up. For non-senior adults without children, but by both children and seniors, the poverty rates less than for other family types. are reduced by roughly one-third. Adults also see a reduction in their poverty rate of Summary of AFB just over 10% (it is lower than for seniors program expenditures or children simply because there are relatively more adults). The AFB lifts almost The AFB measures listed in Table 3 (and elab- one million people in all age groups above orated in subsequent chapters) tackle im- the LIM-AT line. portant challenges facing our country and promise to substantially improve the lives

Getting There: Alternative Federal Budget 2018 15 Figure 5 AFB poverty depth impacts by family type

$-2,000

$-4,000

$-6,000

$-8,000

$-10,000

$-12,000

$-14,000 Pre-AFB average depth of poverty Post-AFB average depth of poverty $-16,000 With kids, With kids, With elderly, With elderly, Other, Other, All single parent 2+ adults 1 adult 2+ adults 1 adult 2+ adults

Source SPSD/M 26.0 and author’s calculations, LIM-AT.

of Canadians. As the analysis above shows, Notes

these measures are further supplemented 1 CANSIM 282-0071 December 2016 through Dec 2017 by important distributional, employment Average hourly wage rate for all employees.

and poverty impacts. 2 CANSIM 326-0020 December 2016 through Dec 2017.

While the transfers to lower-income 3 David Macdonald, Addicted to Debt: Tracking Can- families result in important reductions in ada’s rapid accumulation of private sector debt, June poverty levels, benefits are hardly restrict- 2017, Canadian Centre for Policy Alternatives. ed to the lower end of the income spectrum. 4 CANSIM 378-0121 Q3 2016 to Q3 2017 (most recent data available at publication). Total financial liabil- Better employment prospects and improved ities for households and non-profit institutions serv- programs would also benefit upper-income ing households.

families — by sustaining GDP growth and 5 This analysis is based on Statistics Canada’s Social furnishing the stable tax base that will pay Policy Simulation Database and Model 26.0. The as- for public services and programs today and sumptions and calculations underlying the simulation were prepared by David Macdonald and the responsibil- into the future. ity for the use and interpretation of these data is entirely that of the author.

16 Canadian Centre for Policy Alternatives Table 1 Finance Canada’s base case

Macroeconomic indicators (mil) 2017 2018 2019 2020 Nominal GDP $2,140,000 $2,226,000 $2,301,000 $2,386,000 Real GDP growth 3.1% 2.1% 1.6% 1.7% GDP inflation 2.4% 1.8% 1.8% 2.0% Nominal GDP growth 5.5% 4.0% 3.4% 3.7%

Employment Participation rate 65.8% 66.0% 66.0% 65.8% Labour force 19,767 20,037 20,238 20,378 Employed (000s) 18,640 18,775 18,963 19,074 Employment rate 62.0% 61.8% 61.8% 61.6% Unemployed (000s) 1,127 1,262 1,275 1,304 Unemployment rate 5.7% 6.3% 6.3% 6.4%

Budgetary transactions (mil) 2017-18 2018-19 2019-20 2020-21 Revenues $309,200 $320,100 $330,300 $342,300 Program spending $304,900 $312,200 $319,000 $328,900 Debt service $24,200 $26,600 $28,700 $30,200 Budget balance (surplus/deficit) -$19,900 -$18,700 -$17,400 -$16,800 Closing debt (accumulated deficit) $652,800 $671,500 $688,900 $705,700

Budgetary indicators as a percentage of GDP Revenues / GDP 14.4% 14.4% 14.4% 14.3% Program spending / GDP 14.2% 14.0% 13.9% 13.8% Budgetary balance / GDP -0.9% -0.8% -0.8% -0.7% Debt / GDP 30.5% 30.2% 29.9% 29.6%

Source Finance Canada’s 2017 Fall Economic Statement and authors’ calculations.

Getting There: Alternative Federal Budget 2018 17 Table 2 The Alternative Federal Budget case

2017-18 2018-19 2019-20 2020-21 Nominal GDP $2,140,000 $2,273,000 $2,368,000 $2,451,000 Nominal GDP growth 5.5% 6.2% 4.2% 3.5%

Revenues (mil) Base case $309,200 $320,100 $330,300 $342,300 Net AFB revenue measures $40,200 $43,200 $45,200 Additional tax revenue due to higher GDP $5,600 $9,200 $10,200 Total $309,200 $365,900 $382,700 $397,700

Program Spending (mil) Base case $304,900 $312,200 $319,000 $328,900 Net AFB program measures $79,700 $76,700 $82,100 Total $304,900 $391,900 $395,700 $411,000

Debt service $24,200 $27,200 $29,800 $31,800 Budget balance (surplus/deficit) -$19,900 -$53,200 -$42,800 -$45,100 Closing debt (accumulated deficit) $652,800 $706,000 $748,800 $793,900

Budgetary indicators as percentage of GDP Revenue/GDP 14.4% 16.1% 16.2% 16.2% Program spending/GDP 14.2% 17.2% 16.7% 16.8% Budgetary balance/GDP -0.9% -2.3% -1.8% -1.8% Debt/GDP 30.5% 31.1% 31.6% 32.4%

AFB Employment Impact 2017 2018 2019 2020 AFB jobs created (000s) 470 621 562 Population (000s) 30,059 30,359 30,663 30,970 Participation rate 65.8% 67.0% 67.5% 67.4% Labour force (000s) 19,767 20,341 20,698 20,874 Employed (000s) 18,640 19,245 19,584 19,636 Employment rate 62.0% 63.4% 63.9% 63.4% Unemployed (000s) 1,127 1,096 1,114 1,237 Unemployment rate 5.7% 5.4% 5.4% 5.9%

18 Canadian Centre for Policy Alternatives Table 3 AFB actions (all figures in $M)

2018-19 2019-20 2020-21 Agriculture Create basic income for young farmers 50 275 275 Restore Canadian Grain Commission funding 40 40 40

Arts & Culture Canada Arts Training Fund 10 10 10 Canada Arts Presentation Fund 30 30 30

Child Care Expand affordable child care 1,000 2,000 3,000

Defense International peacekeeping training centre 5 5 5 Cancel purchase of F-35s (400) (400) (400)

Employment Insurance Increase EI premiums to $1.88 per $100 of insurable earnings (3,500) (3,500) (3,500) Establish uniform EI entry of 360 hours 2,000 2,000 2,000 Additional eight weeks of leave for non-birthing parents 600 600 600 Low-income supplement 900 900 900

Environment and Climate Change Cancel Accelerated Capital Cost Allowance on liquified natural gas (9) (9) (9) Cancel Canadian Development Expenses on oil, gas well and mining development (1,018) (1,018) (1,018) Cancel Canadian Exploration Expenses for coal mining (148) (148) (148) Cancel flow-through share deductions for coal, oil and gas projects (133) (133) (133) Cancel Canadian Oil And Gas Property Expense (36) (36) (36) Global climate financing 1,000 1,000 3,000 Re-establish home energy efficiency retrofit program 600 600 600 Retrofitting of multi-unit residential homes 2,000 2,000 2,000 Invest in environmental protection measures 467 467 467 Implement revised environmental protection laws 15 30 30 Invest in protection of fisheries and fish habitat 47 47 47 Invest in environmental data 55 55 55

First Nations Eliminate funding shortfall due to 2% funding cap since 1996 9,053 1,786 1,786 Invest in First Nations child and family services 84 87 87 First Nations housing investment 825 825 825

Getting There: Alternative Federal Budget 2018 19 Clean drinking water on reserves 320 320 320 On-reserve infrastructure (roads, recreational facilities, fire halls, etc.) 1,765 1,765 1,765 Language revitalization 124 124 124

Gender Equality Increase funding for Status of Women Canada 100 100 100 National plan to address violence against women 500 500 500

Health Care Health Accord with 5.2% annual escalator 463 1,209 1,895 Recommission the Health Council of Canada 10 10 10 Build Indigenous health centres 30 10 10 National pharmacare 11,500 11,960 12,438 New long-term and residential care spaces 2,300 2,300 2,300 Dedicated mental health spending 100 100 150 Commission on regulation of currently illegal drugs 15

Housing and Neighbourhoods Preserve existing social housing stock 1,000 Investment in supportive housing 1,000 1,000 1,000 National Housing Benefit 1,500 1,500 1,500

Immigration Foreign credential recognition and training 100 100 100 Exempt refugees from repayment of resettlement costs 50 50 50 Reduce citizenship fees back to $100 17 17 17 Reinstate Immigrant Settlement Services 50 50 50 Build Canada Action Plan Against Racism 20 20 20 Extend the CCB to children irrespective of immigration status 10 10 10 Remove excessive demand medical inadmissibility 27 27 27

Industrial Strategy and Just Transition National Decarbonization Strategy 50 50 50 Just Transition 100 100 100 Strategic Training Fund 100 150 250

Infrastructure and Cities Boost short-term public transit and transport electrification funding 2,000 2,000 2,000 Boost short-term green infrastructure funding 2,000 2,000 2,000 Low Carbon Economy Fund investments 1,500 1,500 1,500 National Community Development Agency 50 50 50

20 Canadian Centre for Policy Alternatives International Development Increase Canada’s international assistance envelope to 0.7% of GNI over 10 years 755 1,625 2,630

Post-Secondary Education Eliminate the federal tuition tax credit (1,545) (1,545) (1,545) Cancel the Canada Job Grant (300) (300) (300) Cancel RESP (110) (110) (110) Eliminate the student loan interest tax credit (45) (45) (45) Reduce the scientific research and experimental development credit by 0.8% (12) (25) (25) PSE Renewal Transfer 5,480 5,480 5,480 PSE Act 3,590 3,590 3,590 Improve labour market information 15 15 15 Create national labour market partners forum 5 5 5 Training for unemployed Canadians who do not qualify for EI 300 300 300 Improve union-based apprenticeship training 125 125 125 Harmonize provincial-territorial apprenticeship training 15 15 15 Establish a mandatory apprenticeship ratio for all federal infrastructure projects 505 505 505 Eliminate interest on student loans 283 283 283 Restore funding to tri-council funding agencies (SSHRC, NSERC and CIHR) 1,300 1,300 1,300 Funding for PSE scholarships 146 146 146 English as an additional language (EAL) training 53 53 53

Poverty Poverty reduction transfer to provinces 4,000 4,000 4,000 Create a GST top-up 4,400 4,400 4,400 Disability tax credit 360 360 360

Public Services Assess the budget cut impacts and restore programs where needed 500 2,000 2,000 Hire new payroll, IT and other staff to fix Phoenix pay issues 200 200 200

Seniors and Retirement Security Limit RRSP contributions to $22,000/year (780) (780) (780) Index OAS to average industrial wage growth 65 70 75 Increase the GIS top-up by $1,000 for singles and couples 2,080 2,080 2,080 while increasing the exemption by $3,000 Exempt first $1,500 of CPP income from GIS clawback 1,730 1,730 1,730

Taxation Eliminate stock option deduction (700) (700) (700) Equalize capital gains treatment (personal) (5,500) (5,500) (5,500) Equalize capital gains treatment (corporate) (5,500) (5,500) (5,500)

Getting There: Alternative Federal Budget 2018 21 Lifetime cap on principal residence exemption (1,500) (1,500) (1,500) Lifetime cap on TFSA contributions at $50,000 (120) (130) (140) Cancel boutique tax credits (home buyers, firefighters, teachers) (170) (170) (170) Eliminate corporate meals and entertainment expense (400) (400) (400) Economic substance test for offshore subsidiaries (400) (400) (400) Cap interest payments to offshore subsidiaries (200) (200) (200) Tax havens withholding tax (2,000) (2,000) (2,000) Tax foreign e-commerce companies operating in Canada (600) (600) (600) End GST/HST exemption for foreign e-commerce companies (500) (500) (500) Increase corporate income taxes from 15% to 21% (6,000) (7,500) (9,000) Small business tax rate to 15% (1,270) (2,625) (3,015) Carbon tax at $50/tonne by Jan 1, 2020 (1,000) (1,000) (1,000) Financial activities tax (5,000) (5,100) (5,202) Inheritance tax on estates worth $5 million (and up) (2,000) (2,000) (2,000)

Water National public water and wastewater fund 6,500 6,500 6,500 Implementation of wastewater systems effluent regulations 1,000 1,000 1,000 Water infrastructure aid for small municipalities 100 100 100 Water operator training, public sector certification and conservation programs 75 75 75 Assess environmental impact of energy and mining developments 50 50 50 Assess environmental impact of tar sands 30 30 Reinstate cut water programs at Environment and Climate Change Canada, 60 60 60 and Fisheries and Oceans Canada Protect Canada’s Great Lakes and freshwater supply 500 950 950 Establish water quality and quantity monitoring frameworks 109 109 109 Groundwater protection plan 3 3 3 Review of virtual water exports 1 1 1

Youth Review income security and labour statutes 4 3 0 Youth labour market planning board 30 30 30 Workforce Renewal Fund 100 100 100 Renewal of federally funded internships 300 300 300 Statistics Canada tracking of unpaid internships and NEET 2 2 2 Proactive Labour Code enforcement 20 20 20

Total AFB expenditure changes 79,673 76,694 82,063 Total AFB revenue changes (40,196) (43,174) (45,176)

22 Canadian Centre for Policy Alternatives Fair and Progressive Taxation

ALTERNATIVE FEDERAL BUDGET TAXATION 2018

¢ Our tax system has become overly complex and riddled with ¢ Eliminate regressive tax loopholes that benefit almost expensive loopholes that worsen inequalities. exclusively high-income earners. ¢ The federal government is losing up to an estimated $48 ¢ Monitor and crack down on corporate tax dodging, in part billion to tax evasion and aggressive avoidance, while Canadian through new reporting requirements for offshore subsidiaries of companies have over $250 billion publicly reported in tax Canadian firms. havens. ¢

SITUATION Tax services provided by non-Canadian e-commerce firms ¢ Multinational e-commerce firms are not paying their fair to level the playing field and recoup foregone government

share of taxes, which puts domestic competitors at a DESTINATION revenues. disadvantage. ¢ Raise the corporate tax rate to 21% (in line with the ¢ Canada’s low corporate tax rate has encouraged proposed U.S. level) and create a new financial transactions tax cash-hoarding and speculation, not new economic growth. to curb excessive speculation. ¢ Canadian tax breaks for the fossil fuel sector and the low ¢ Introduce a national $30/tonne carbon tax in 2018, to grow carbon tax rate will not incentivize the transition to a greener to $50/tonne in 2020, and invest part of the revenues in economy. just-transition measures.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background yers and the people who can afford to hire them — Canada’s richest 10% get a discount Progressive tax reform in Canada could easily of more than $20,000 on their taxes due to generate the additional revenues the federal unfair loopholes — but for most people tax government will need to enhance Canada’s complexity is just irritating.1 public services and social infrastructure as Canada’s myriad tax expenditures are proposed in the Alternative Federal Budget. also extremely costly to the government. A fairer tax regime would also help reverse Hundreds of billions of dollars are spent growing inequalities while strengthening annually on tax breaks for capital gains, the Canadian economy. stock option deductions, fossil fuel pro- Our tax system has become too complex. duction, etc., with no apparent benefits to There are too many different rates for differ- the economy. Let’s face it: jobs and income ent sources of income, too many loopholes growth have been, and for the most part re- for high-income earners and corporations. main, extremely sluggish since the 2008 fi- This may benefit tax accountants and law- nancial crisis.

Getting There: Alternative Federal Budget 2018 23 The 2015 Liberal election platform prom- benefits exist or do not file their taxes every ised to conduct “an overdue and wide-ran- year (and therefore can’t make use of them). ging review” of Canada’s tax expenditures, Not enough effort is being made to help dis- “with the core objective being to look for op- advantaged groups, particularly in Indigen- portunities to reduce tax benefits that un- ous communities, access the tax benefits fairly help those with individual incomes they are entitled to. in excess of $200,000 per year.”2 The Liber- To date, Finance Canada’s review of tax als clearly suggested that capping the stock expenditures has been a purely internal af- option deduction and addressing abuse of fair. The government still hasn’t taken steps private corporations by high-income earn- on stock options, and an attempt to address ers would be part of it. abusive tax avoidance by Canadian-con- Since then, the Trudeau government has trolled private corporations (CCPCs), while taken some positive steps on tax reform: it well-intentioned, was badly managed, re- cancelled some of the previous Conserva- sulting in enormous opposition that dilut- tive government’s most egregious tax breaks, ed the final proposals. closed some loopholes, increased the cap- It’s a shame, because Canada’s Parlia- acity of the Canada Revenue Agency to ad- mentary Budget Officer estimates that fed- dress tax evasion, added another top tax eral revenues from the proposed CCPC tax bracket of 33% on incomes over $200,000, reforms (i.e., public money saved by closing introduced the Canada Child Benefit and this loophole) would generate an immediate improved the Working Income Tax Benefit. $1 billion annually, growing to upwards of But these changes, while welcome, need to $6 billion a year over the longer term.3 That be put in perspective. money could be used to build more social A higher tax bracket can be undone if housing stock, pay for upgrades to Canada’s other tax loopholes for high-income earn- aging water infrastructure, or top-up funders — like the ability of professionals to incor- ing for Indigenous education, among any porate so their income is taxed at the much number of the government’s priorities — or lower small business rate — remain available. our priorities in this AFB. Even higher up the income chain, large corporations, and especially those which structure themselves as digital service providers, AFB Actions can still too easily avoid taxes by establish- The following straightforward tax meas- ing themselves in tax havens and low-tax ures are intended to generate significant jurisdictions, putting local businesses at a revenues for public services, broaden the significant disadvantage. tax base, promote economic growth, in- At the other end of the pay scale, while crease equality and make tax filing easier the government’s improvements to tax bene- for Canadians. fits for low-income earners are positive, many people are either unaware that these

24 Canadian Centre for Policy Alternatives Action: Make tax time simpler. The AFB eliminates the deduction (sav- Canadian families spend too much time ings: $700 million a year).5 in front of tax accountants (or computer ap- • Capital gains: Individuals and corpora- plications) just to file their taxes — at an es- tions who profit from the sale of invest- timated total cost of $4 billion a year. The ments or assets pay tax at half the rate process is especially challenging for lower- of tax on employment income. The AFB income and marginalized people, many of maintains the existing lifetime capital whom don’t even bother filing and there- gains exemptions for farms, fisheries fore miss out on tax benefits to which they and small business, but would tax per- may be entitled. sonal and corporate income from capital The AFB would provide Canadians with gains at the same rate as employment the option of having the Canada Revenue income after adjusting for inflation. Al- Agency (CRA) prepare their tax returns, a lowing for an inflation adjustment would service other countries such as Norway have still provide some tax deferral benefit to offered for many years.4 Though the exact investors but encourage longer-term in- costs of such a program in Canada are not vestments rather than speculation. The calculated, the AFB assumes they would be AFB would also introduce a $500,000 life- largely, if not totally, defrayed by efficiency- time capital gains exemption for gains based savings. from selling a primary residence, which Action: Close unfair and ineffective tax would remove some of the incentive for loopholes. real estate speculation and help reduce Closing unfair and ineffective tax loop- wealth inequality (savings: $12.5 billion.)6 holes (or tax expenditures), while making • Tax-free savings accounts: The cost the tax system simpler and fairer, could of foregone revenues from TFSAs has raise $18 billion in additional revenue — all grown from $250 million in 2012 to over without raising taxes for the vast majority $1 billion in 2017. The AFB sets a lifetime (90%) of Canadians. The following expendi- TFSA contribution limit of $50,000 to tures are top candidates for elimination or avoid a federal revenue sinkhole down restriction. the line (savings: $120 million a year • Stock option deduction: This federal initially, increasing into the billions of tax expenditure allows corporate execu- dollars in the future). tives and others to pay tax on their stock • Registered retirement savings plans: option compensation at half the rate that The AFB reduces the annual RRSP con- the rest of us pay on our working income. tribution limit to $22,000 but makes sig- Over 90% of the benefit of this loophole nificant improvements to the Canada goes to the top 1% of tax filers — those Pension Plan (see the Seniors and Re- who make more than $250,000 a year. tirement Security Chapter).

Getting There: Alternative Federal Budget 2018 25 • Boutique tax credits: Canada’s tax sys- Two-thirds of federal revenue loss relat- tem became riddled with so-called bou- ed to tax haven abuse is likely the result of tique tax credits. These activity-specific companies trying to avoid paying corporate breaks make filling out annual tax forms taxes. A study commissioned by Canadians much more complex and are generally for Tax Fairness found that 56 of the 60 ma- not effective in their intended objectives. jor companies listed on the TSX have more Recent federal budgets have eliminated than 1,000 subsidiaries in tax havens.9 While several of these credits, but there are still ending this abuse of the tax system will re- more that should be cancelled includ- quire international co-operation, there are ing the first-time home buyers, volun- several measures Canada could take now to teer emergency/firefighter and teacher recoup some of the lost revenues. supplies tax credits (savings: $170 mil- • First, the AFB would require that com- lion a year). panies demonstrate the economic sub- • Corporate meals and entertainment stance of their offshore subsidiary for expense deduction: Businesses can de- them to be recognized as separate cor- duct half their meal and entertainment porate entities for tax purposes. In other expenses, including the cost of season’s words, corporations would have to dem- tickets and private boxes at sports events. onstrate their subsidiaries are carrying The AFB cancels this widely abused out actual economic activity such as pro- tax break while maintaining the meal duction or sales. Bill C-362, introduced expense deduction for long-distance in June 2017 by Victoria, B.C. MP Mur- truckers (savings: $400 million a year).7 ray Rankin, provides a good legislative example of how this could be done (rev- • Fossil fuel subsidies: The AFB elimin- enue: $400 million a year).10 ates all federal subsidies for fossil fuel sectors (see the Environment and Cli- • Second, the AFB puts a cap on interest mate Change chapter). payments to offshore subsidiaries as recommended by the OECD in its Base Action: Stop offshore tax dodging. Erosion and Profit Shifting (BEPS) action The Conference Board of Canada esti- plan. The U.K. government introduced mates Canada loses as much as $47 billion such a measure its 2016 budget, though every year to tax evasion.8 Some of this loss at 30% the cap is far too high to be very is from domestic tax avoidance, but billions effective. We recommend a group ratio of dollars are also being parked in inter- rule limiting the deductibility of international tax havens. The CRA should cal- est to the entity’s share of the group’s culate and report on this “tax gap,” as Sen- consolidated net interest expense ap- ator Percy Downe proposes in his Fairness portioned by earnings (EBITDA). If this for All Canadian Taxpayers Act. measure is combined with a fixed cap,

26 Canadian Centre for Policy Alternatives that cap should be set at 10% (revenue: other foreign digital economy players. Fail- $200 million a year).11 ure to update our tax policy creates unfair competition, causes significant job losses • Finally, the AFB applies a 1% withhold- in journalism, media and the cultural sec- ing tax on Canadian assets held in tax tors, threatens the vitality of Canadian cul- havens, which amounted to an estimat- ture and squanders the opportunity to raise ed $261 billion in 2016, or one-quarter of hundreds of million dollars in revenue for all Canadian direct foreign investment both federal and provincial governments. abroad (revenue: over $2 billion a year). The AFB requires all e-commerce com- Action: Fairly tax foreign-based e-companies with Canadian income above a cer- merce companies. tain threshold to pay corporate income tax E-commerce companies such as Netflix, on profits from products or services sold or Google/YouTube, Amazon, Facebook, Uber rented in Canada (estimated revenues: up and Airbnb are capturing a huge and grow- to $600 million a year federally). The AFB ing share of the Canadian market but pay also requires e-commerce firms in Canada little or no taxes. They have been exempted to collect and remit GST/HST and PST (es- from paying taxes because they have no timated revenues: $500 million a year for physical presence in Canada and therefore the federal government). are deemed not to be “carrying on business” Action: Increase corporate tax rates. here.12 The foreign-based e-commerce sector Deep corporate tax cuts over the past 16 takes in more than $20 billion a year from years have failed to stimulate higher invest- sales in Canada, with Google and Facebook ment and economic growth. Instead they’ve alone capturing 64% of all internet adver- led to corporate cash surpluses of over $700 tising dollars (over $3.5 billion). billion. This “dead money,” which could be The European Union, New Zealand, Aus- productively invested, is instead fuelling pot- tralia, Norway, South Korea, Japan, Switz- entially destabilizing speculation and lead- erland and South Africa have modernized ing to intense pressure for governments to tax laws to respond to this changing e- privatize public services, including through commerce reality.13 The OECD has recom- public-private partnerships (P3s) and the mended governments collect value-added Canada Infrastructure Bank. taxes where the service product (e.g., a Net- The AFB would gradually increase the flix account, or Airbnb’s cut of online rent- federal corporate income tax rate from 15% als) is purchased, which would help level to 21%, slightly lower than it was in 2006 the playing field between foreign and do- but similar to the 21% rate proposed in the mestic suppliers.14 United States. The small business tax rate While the 2017 federal budget included will be increased to 15% to preserve propor- a requirement that ride-sharing business- tionality with the corporate rate, be con- es like Uber and Lyft pay the GST, this is on sistent with the lower rate on personal in- a self-reported basis and does not apply to

Getting There: Alternative Federal Budget 2018 27 come, and reduce tax avoidance by those Action: Increase taxes on banks and finance. channelling personal income through pri- Ten years after the financial crisis, the vate corporations. We would also limit the financial sector has regained its losses and, amount that corporations can deduct for apparently, its hubris. The underlying fac- any single salary in total compensation to tors that led to the crash — “too big to fail” $1 million annually (total revenues gener- companies chasing high returns through ated: $12 billion). risky financial products — remain largely in place. Meanwhile, the financial sector Action: Introduce a higher and more pro- still benefits from preferential taxes (most gressive carbon tax. financial services in Canada are exempted The federal government plans to have from value-added taxes such as the GST/ a national carbon price of $10 per tonne HST), the easy exploitation of tax havens, in place by July 1, and to increase it by $10 and government’s implicit guarantee of a a year to $50 per tonne in 2022. As in past bailout in the event of another crisis.15 years, the AFB goes further than this, intro- In the last U.S. election, Democrats sup- ducing a $30/tonne carbon tax on July 1 and ported a “financial transactions tax on Wall increasing it by $10/tonne annually until it Street to curb excessive speculation and reaches $50 per tonne in 2020. Unlike the high-frequency trading.”16 European nations current Liberal government’s plan, a sub- including Germany and France are mov- stantial share of the revenues from the AFB ing ahead with a FTT as a means of curb- carbon tax would go to a “green” tax re- ing excessive speculation and raising rev- fund — an annual cheque worth $10 for every enues, and the tax exists in different forms adult and $5 per child for every $1/tonne in in many other countries, including China carbon tax (e.g., $300 per adult for a carbon and Taiwan. tax of $30 per tonne). The International Monetary Fund has The remainder of the revenues from the also proposed a financial activities tax (FAT), AFB carbon tax would go to complement- a kind of value-added tax on profits and re- ary investments in climate change mitiga- muneration in the financial industry akin to tion and adaptation, and measures to assist the one Quebec has had in place for some affected workers, communities and indus- time. The AFB would either introduce a FAT tries (see Industrial Strategy and a Just Tran- rate of 5% on profits and remuneration in sition chapter). The AFB also applies border the financial sector or a FTT in collaboration tax adjustments (with exemptions for goods with the provinces (revenues: $5 billion). from impoverished nations) to ensure Can- adian-based industry is not at a competitive Action: Introduce wealth (inheritance) taxes. disadvantage, and to put pressure on other Wealth inequality in Canada is more ex- countries to introduce similar climate meas- treme than income inequality. But our only ures (net revenues: $1 billion). tax tied to wealth is the regressive property tax, which targets the only asset (our homes)

28 Canadian Centre for Policy Alternatives of significant value to most middle-income 7 Richard Schmalbeck and Jay A. Soled, Elimination of the Deduction for Business Entertainment Expenses families. The IMF has estimated that Canada http://scholarship.law.duke.edu/cgi/viewcontent.cgi could generate $12 billion annually from a ?article=2733&context=faculty_scholarship. new tax of just 1% (similar to property tax 8 Dave Seglins, “CRA not tracking billions in poten- rates) on the net wealth of the top 10% of tial taxes lost each year,” CBC News, November 7, 2017: http://www.cbc.ca/news/business/paradise-papers- households. The AFB introduces such a tax-gap-1.4384532. wealth tax, along with a minimum inherit- 9 Canadians for Tax Fairness, Bay Street and Tax Ha- ance tax of 45% on estates valued over $5 vens: Curbing Corporate Canada’s Tax Addiction, Nov- million, similar to the estate tax in the U.S. ember 2017. http://www.taxfairness.ca/en/news/ (revenues: $2 billion). canada%E2%80%99s-top-60-public-companies-have- over-1000-tax-haven-subsidiaries-or-related-companies-0.

10 House of Commons of Canada, Bill C-362, An Act to amend the Income Tax Act (economic substance). http:// Notes www.parl.ca/DocumentViewer/en/42-1/bill/C-362/ first-reading. 1 David Macdonald. (2017). Preferential Treatment: The History and Cost of Tax Exemptions, Credits and Loop- 11 For details on this issue see the G20 submis- holes in Canada. Canadian Centre for Policy Alterna- sion on behalf of the BEPS monitoring group to the tives: https://www.policyalternatives.ca/publications/ U.K. parliament: https://bepsmonitoringgroup.files. reports/preferential-treatment. wordpress.com/2016/01/bmg-submission-to-uk-all- party-parliamentary-group.pdf. 2 Liberal Party of Canada. (2015). Real Change: A New Plan for a Strong Middle Class: https://www.liberal.ca/ 12 Canada Revenue Agency, Carrying on business in wp-content/uploads/2015/10/New-plan-for-a-strong- Canada, GST/HST Policy Statement P- 051R2, Date of Re- middle-class.pdf. vision April 29, 2005. This policy statement cancels P- 051R1, dated March 8, 1999: http://www.cra-arc.gc.ca/E/ 3 Office of the Parliamentary Budget Officer. (2017). An- pub/gl/p-051r2/p-051r2-e.html. alysis of Changes to the Taxation of Corporate Passive Investment Income: http://www.pbo-dpb.gc.ca/web/ 13 Ibid., pp. 18–21. default/files/Documents/Reports/2017/Analysis%20 14 Organization for Economic Cooperation and Develop- Changes%20CPII/Taxation%20of%20CPII_EN.pdf. ment, Addressing the Tax Challenges of the Digital Econ- 4 See the Norwegian government’s FAQ here: https:// omy, Action 1 2015 Final Report. Base Erosion and Profit www.skatteetaten.no/en/International-pages/If-you- Shifting Project. http://www.oecd.org/tax/addressing- work-in-Norway-you-need-to/Norwegian-employer/ the-tax-challenges-of-the-digital-economy-action-1-2015- Norwegian-employer/Articles/Tax-return/. final-report-9789264241046-en.htm.

5 Many of the revenue estimates are taken from Finance 15 Toby Sanger, Fair Shares: How Banks, Brokers and Canada, Report on Federal Tax Expenditures - Concepts, the Financial Industry Can Pay Fairer Taxes, Canadian Estimates and Evaluations 2017: https://www.fin.gc.ca/ Centre for Policy Alternatives, 2011: https://www. taxexp-depfisc/2017/taxexp17-eng.asp. policyalternatives.ca/publications/reports/fair-shares.

6 David Macdonald, Preferential Treatment, Canadian 16 Nick Baker and John Voskuhl, “Democrats Back a Centre for Policy Alternatives, May 2017, https://www. Trading Tax, Say Speediest Traders a Threat,” Bloomb- policyalternatives.ca/sites/default/files/uploads/ erg, July 1, 2016: https://www.bloombergquint.com/ publications/National%20Office/2017/05/Preferential_ politics/2016/07/01/democrats-endorse-a-trading-tax- Treatment.pdf. call-speediest-traders-a-threat.

Getting There: Alternative Federal Budget 2018 29 Agriculture

ALTERNATIVE FEDERAL BUDGET AGRICULTURE 2018

¢ Canada’s farms could be entirely in the hands of ¢ Create a guaranteed basic income for new corporations and absentee landlords within 20 farmers and facilitate farm transfers to the next years. generation. ¢ Trade deals have left Canada with fewer farmers, ¢ Rebuild domestic, regional and local more imported food, fewer local food processers agricultural and food markets, and add production SITUATION and generally greater foreign ownership in and processing capacity.

agriculture. DESTINATION ¢ Adopt “triple win” low-carbon-emission ¢ Climate change is having serious impacts on production that improves farm-family livelihoods, farming through droughts, floods, early frosts, and builds soil carbon and increases the resilience of new diseases and pests, increasing price volatility farms. and uncertainty.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background ers obtain a fair share of the wealth produced on the land. Farmers are a minority within the Canadian The Alternative Federal Budget seeks to population, yet everyone in Canada relies on reorient agricultural investment away from them for the food they eat every day. Farm- export promotion and into rebuilding food ing and agriculture are therefore critical to system capacity within Canada, ensure that Canada’s future. our agriculture sector is a genuine part of The foundation of Canada’s rural econ- the climate change solution, and support omy is farmers’ net income. When returns the next generation’s ability to succeed in to farming are sufficient, money is spent farming. in towns and cities in a wide range of local enterprises, which supports farming and community life and provides tax dollars Meeting the rural to fund infrastructure and public services. demographic challenge The downward spiral of rural decline and The average age of farmers in Canada is now depopulation can be turned around by im- 55 and rising as older farmers delay retire- plementing measures to ensure that farm- ment.1 Most farmers do not have someone

30 Canadian Centre for Policy Alternatives lined up to take over when they retire, and Rebuilding our agricultural only 8% have a written succession plan.2 foundation Today, farmers constitute only 1.6% of the Since the Canada-U.S. Free Trade Agreement Canadian population.3 The number of farms came into force in 1989, Canada’s food and has gone down and the average farm size agriculture imports have increased faster has increased. Younger people who wish to than like exports. At the same time, Can- farm face large financial barriers to entry, adian ownership of major agriculture and precarious farm income prospects and a food processing sectors has plummeted and, fraying rural social fabric. in areas such as beef and malting barley, Declining farm profitability has led to this disappeared altogether. Since 1988, 20% of crisis in intergenerational transfer. When too Canadian farms have vanished, farm input few younger people can afford to farm, land costs have gone up and inflation-adjusted is acquired by farmland investment compan- commodity prices have dropped. ies, consolidated into large holdings, and The farmer sees an ever-shrinking pro- farmed by tenant farmers and hired labour portion of the consumer’s grocery dollar. instead. A lack of new farmers leads to lost Canadians are consuming more food that skills, creates obstacles to innovation, and is not grown or raised by Canadian farm- poses a threat to Canada’s food sovereign- ers, not processed by Canadian workers. ty. There is an urgent need for measures to We are exporting high-volume, low-priced help young and new farmers from diverse bulk commodities such as canola, wheat, backgrounds enter all sectors of agriculture soybeans and lentils, and importing high- so they can farm successfully and contrib- er-value prepared foods, bakery products, ute to a more resilient and just food system. wine, fruits and vegetables. Income stability is the single biggest Canada has lost significant fruit and vege- challenge to new farmers as they start their table production as a result of trade agree- new business or take over an existing farm ments that give advantages to processors operation. A guaranteed basic income would using low-cost labour in other countries. allow young farmers to bridge the season- Yet climate change and political situations al income gap and reduce their vulnerabil- abroad are also making Canada’s supply of ity to price and market volatility during the fruit and vegetables more precarious. Our crucial years of establishment. A modest food system is not only becoming more ex- guaranteed basic income would allow them port-dependent, it is losing its diversity and to invest farm proceeds in their operation, complexity. helping them develop viable businesses that Instead of correcting course, the 2017 provide a consistent cash flow to spend in federal budget committed to dramatically their communities — so that more money increase food exports. For Canada’s bulk circulates through the local rural economy. commodities to gain market share internationally, our agriculture system will need

Getting There: Alternative Federal Budget 2018 31 to reduce the cost of production by offloading Because agriculture currently contrib- costs onto the least powerful. The predict- utes a significant amount of Canada’s GHGs, able result will be even fewer farmers, high- there is an opportunity to significantly re- er greenhouse gas emissions from agricul- duce carbon emissions through changing ture, fewer workers, and less protection for farming practices. Our first priority needs to our soil, air and water. be a major reduction in emissions to avoid Increasing the scale of processing facili- disaster. To do this, Canada needs to im- ties creates longer distances between the plement measures that help farmers adapt farm and the plant — or concentration of pro- to climate change while they reduce emis- duction close to processing facilities — and sions. Fiscal and program support for both longer distribution chains to deliver food to adaptation and mitigation are required so consumers. Increased scale would also in- agriculture can play its part in preventing crease the system’s brittleness, adding risk in catastrophic climate change while main- the face of inevitable economic and climate taining adequate food production and de- stresses. The very infrastructure needed to cent farmer livelihoods into the increasing- supersize our exports would simultaneously uncertain climate future. ly create roadblocks for the development of While agriculture is responsible for sig- more localized food systems that would de- nificant GHGs, emission intensity varies liver prosperity to rural communities. among different farm types and methods of production. Canada’s national GHG in- ventory assigns emissions to the sector of Climate change the economy that is responsible for most of Agriculture is vulnerable to climate change. each source. Thus, only emissions due to Adequate production depends on getting the animal production, manure management right amounts of sun and rain at the right and agricultural soils are counted as “agri- times. As greenhouse gas (GHG) emissions cultural” while emissions from diesel fuel go up, the atmosphere retains more heat are assigned to the transportation sector. and can hold more moisture, changing the However, when all emissions from agri- global water cycle. More of our precipita- culture are accounted for, it becomes clear tion comes from intense storms, tornados that energy-intensive inputs, such as nitro- and plough winds become more common, gen fertilizer produced from natural gas, and jet stream patterns are altered, causing manufactured herbicides, pesticides and droughts in some areas and extended cool, other inputs, transportation, and farm fuels wet weather in others. Crop yields, soil and and electricity, are all significant. Reducing water quality, livestock health, farm build- these inputs and/or replacing them with ing repairs and maintenance of rural infra- lower-GHG alternatives would reduce agri- structure are all affected by this new and culture’s contribution to climate change. uncertain reality. Mitigation measures must simultaneously promote adaptation and resilience. Diversifi-

32 Canadian Centre for Policy Alternatives cation of production and soil improvement and to stop lending to farmland investment are key strategies. If farmers produce a range companies. of products and incorporate natural buffers Result: The lending activities of FCC will into the farm landscape they will be better support successful intergenerational transfer able to survive unpredictable climatic con- of farms by providing needed credit to new ditions, extreme weather events and errat- entrants, investing to develop a larger range ic market conditions. Farmers manage mil- of enterprises using diverse farming practi- lions of acres of land in Canada and, with ces, and avoiding contradictory support for the right support, can make a huge contri- non-farmer-owned competing businesses. bution to global efforts by building soil or- Action: Invest in local and regional food ganic carbon. processing, storage, transportation and dis- Climate adaptation for agriculture also tribution infrastructure, and in capacity- requires off-farm action. Today’s food sys- building (e.g., training), giving priority to tem uses more than 10 calories of fossil fuel those operating under community-based energy to produce one calorie of food energy. and local co-operative ownership. The AFB Farmers can improve this ratio by reducing will fund this by shifting existing corpor- their reliance on fossil fuels for food produc- ate, export-oriented Canadian Agricultur- tion, but their efforts must go hand in hand al Partnership grants to local food systems. with changes in the transportation, distri- Result: Community-based food systems bution, storage and consumption of food. will provide employment and markets for workers and farmers, retaining agricultur- AFB Actions al wealth and promoting economic activity through the multiplier effect. Action: Create a basic income support pro- Action: Restore the Canadian Grain Com- gram for farmers with at least two but not mission’s funding to pre-2012 levels and pro- more than 10 years of experience farming. vide additional funds to support its ability An initial $50 million will set up the pro- to better oversee the grain trade in the inter- gram with on-going costs of $275 million a ests of farmers, e.g., through grading, bond year thereafter. security, producer cars and the reinstate- Result: The total number of farmers in Can- ment of inward inspection (cost: $40 mil- ada will increase, their average age will go lion a year). down, intergenerational knowledge trans- Result: Grain companies will be disciplined fer will occur and rural communities across to provide fair grades, correct weights and the country will gain population. prompt, full payment to farmers. Canada’s Action: Direct Farm Credit Canada (FCC) reputation for high-quality grain (that earns to prioritize lending to small- and medium- premium prices) will be recovered, resulting sized farms, to lend to farm-related business- in a greater share of the value produced on es only if they are majority farmer-owned, Canadian farms being returned to the farm-

Getting There: Alternative Federal Budget 2018 33 ers where it will support economic activity Notes

in their communities. 1 CANSIM Table 004-0017: Census of Agriculture, number of farm operators by sex, age and paid non-farm Action: Establish an effective, national agri- work. Ottawa: Statistics Canada. cultural extension program to help farmers 2 CANSIM Table 004-0245: Census of Agriculture, farms develop low-input production methods and reporting a written succession plan for the operation. strategies. The AFB will fund this by re-allo- Ottawa: Statistics Canada. cating funding presently devoted to corpor- 3 CANSIM Table 051-0005: Estimates of Population. Ot- ate driven agriculture such as research into tawa: Statistics Canada. “CANSIM Table 004-0017: Cen- sus of Agriculture, number of farm operators by sex, age GMO, big data and precision agriculture. and paid non-farm work.” Ottawa: Statistics Canada. Result: Agricultural practices will be altered to reduce total lifecycle GHG emissions and increase farm resilience to climate uncertainty while maintaining viable farmer livelihoods and needed food production.

34 Canadian Centre for Policy Alternatives Arts and Culture

ALTERNATIVE FEDERAL BUDGET ARTS AND 2018 CULTURE

¢ Canada’s investments in arts and culture help sustain ¢ Increase funding for both the Canada Arts a vibrant sector that generates more than $54 billion in Training Fund and the Canada Arts Presentation economic activity, or 3% of Canada’s GDP in 2014. Fund. ¢ A recent federal investment agreement with Netflix ¢ Re-examine the Netflix deal so that foreign runs counter to domestic cultural policies and reinforces investment agreements do not establish separate

SITUATION the U.S. company’s unfair tax advantage over Canadian cultural or taxation policies for foreign competitors. competitors.

DESTINATION ¢ Implement artists’ resale rights, clarify fair dealing ¢ Mitigating the exploitation of artists by third parties provisions in the Copyright Act, and establish an (e.g., the illegitimate copying and resale of their work) interdepartmental task force to ensure a living wage would improve artists’ economic outcomes, particularly and build an opt-in pension plan for active those from historically disadvantaged groups. professional artists.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background benefits that must also be taken into account in federal policy-making. Investments by government in arts and cul- The Canadian Arts Training Fund (CATF), ture are an essential part of a healthy creative for example, supports nationally and inter- ecology. Art engages our common humanity; nationally recognized pre-professional arts culture connects us to one another. Public training institutions, which in turn support funding for both pursuits gives creators the emerging artists at a critical stage in their ca- latitude to better reflect and reinforce Can- reers. Adding $10 million to the CATF’s base adian values. The creative sector also gen- funding (i.e., increasing the amount to $32 erates a lot of economic activity — $54.6 bil- million annually) over the next five years lion in 2014, or 3% of Canadian GDP — and would help ensure the success of Canada’s keeps about 630,000 people employed (3.5% next generation of artists for many decades of the workforce). to come. This money would also address the In other words, the return on investment glaring need for additional support for cul- of adequate arts and culture funding is sig- tural institutions within Indigenous, racial- nificant and easily quantifiable. But there ized and other marginalized communities. are other societal, cultural and economic

Getting There: Alternative Federal Budget 2018 35 Likewise, the Canada Arts Presentation the national and regional arts and cultural Fund (CAPF) helps animate hundreds of com- sectors can remain responsive to changing munities, with important economic spinoff demographics and tastes. benefits. A $30-million top-up to the fund’s base amount (bringing it to $62 million an- Creative Canada nually) would improve access for Canadians, strengthen local economies and address his- Nearly 70 years have passed since the Mas- toric inequities faced by Indigenous, racial- sey-Lévesque Commission laid out a plan ized and marginalized communities. Intro- for Canadian arts and culture. In that time, ducing an international component to the Canada has developed a complex network CAPF would also improve international mar- of support mechanisms, levers and incen- ket access for Canadian artists, non-profit tives, through legislation and regulation, to arts organizations and presenters, further enhance Canada’s cultural sectors. complementing the fund’s essential role in While consultations in the first half of preparing product for export through Can- the Trudeau government’s mandate have ada’s Cultural Export Strategy. produced a visionary plan called Creative As a final, but by no means last, example Canada, to bring arts and culture policy into of the multiplier potential of arts and cul- the 21st century, this remains very much a ture funding, the federal government should work in progress and is not without contro- raise the annual cap on the endowment in- versial elements. centives component of the Canada Cultural For example, there is a need to level the Investment Fund (CCIF), from its current $2 playing field in Canada between newer for- million to $3 million annually, which would eign entrants offering online access to arts help established organizations raise addi- and culture and their Canadian competi- tional capital with the benefit of matching tors. But the government has so far chosen funds. Endowments can help organizations to pursue investment agreements with for- become more self-reliant and reduce their eign internet giants, which should be short- emphasis on operating grants, freeing re- term and temporary, as they are generally sources for those who need it most. not enforceable. These programs are an essential part In the case of a recently announced deal of the arts infrastructure — the mines and with Netflix, these agreements run counter pipelines of the arts sector. The supply of to existing domestic policy. Under that deal, raw materials (talent) as well as distribution Netflix will avoid having to collect taxes on systems (presenters) must keep pace with the internet services it sells to Canadians (as creation and production. Enhancing these similar Canadian service providers must) or programs, which are currently up for renew- abide by Canadian content rules applied to al at the Department of Canadian Heritage, domestic broadcasters. in step with doubling the budget of the Can- Such exceptions to the rules exacerbate ada Council for the Arts, would make sure the digital divide between foreign internet

36 Canadian Centre for Policy Alternatives giants and their domestic competitors, nota- Canada, and museums and heritage, among bly in this case by providing an unfair tax other institutions, are critical to the creative break (see the Fair and Progressive Taxa- sector. This government’s support is wel- tion chapter). Canada should co-operate come and comes at a critical time, as Can- in multilateral efforts (e.g., at the OECD) to ada adapts to new demographic realities ensure fair taxation in the borderless digit- and identity dynamics. To ensure cohesion al economy. in a country of many diversities, differing At home the government must insist on approaches are needed for specific cultur- discoverability. Easy access to Canadian con- al segments and niches. tent across broadcast and online mediums, Ongoing dialogue with the public and both domestic and based in other countries, the arts and cultural sectors will be critical to is not only important to Indigenous and our success as we evolve the Canadian pro- francophone artists, but for the continuity ject. Protecting and promoting our cultural of a plurality of distinct Canadian identities. sovereignty will ensure the continuation of Creative Canada references upcoming our creative capacities as well as the dyna- reviews of the Copyright Act and the Broad- mism that underpins our continued success casting Act, among other legislation, which at home and on the world stage. will inevitably affect different constituencies in different ways, necessitating close con- Equity and solidarity sultation with the public and stakeholders. With respect to copyright, Canada should A major benefit of expanding support for join the 93 countries that have agreed to im- Canada’s cultural voices lies in its capacity plement artists’ resale rights (ARR), which, to reinforce policies related to reconciliation as the name suggests, guarantee income to and immigration. While Canada stands out artists for the resale of their work. For ex- globally in this respect, more needs to be ample, Inuit art is often bought at a bargain done to ensure a more equitable cultural basement price when compared to its resale landscape within our borders. value outside the country. ARRs help miti- The 2016 census demonstrated again the gate this type of exploitation. important and growing place of Canada’s Digitization also poses a real threat to diverse racialized communities within the creative professionals’ ability to monetize Canadian population. Funding for our na- their ideas, while the fair dealing provisions tional and international arts and culture in existing Canadian law require clarifica- scenes must adapt and grow accordingly. tion. When reviewing the Broadcasting Act, Most glaringly, reconciliation with Can- content development contributions and ada’s Indigenous peoples requires the recog- Canadian content rules must be reviewed, nition and reversal of centuries of cultural as well as spectrum auction levies. genocide. This might involve, for example, a Investments in the Canada Council for multi-generational project, co-created with the Arts, the CBC/Radio-Canada, Telefilm Inuit, Métis and First Nations, to ensure lan-

Getting There: Alternative Federal Budget 2018 37 guage and cultural preservation and revital- AFB Actions ization, which would foster a better overall Canada’s robust and dynamic culture is understanding of Indigeneity as a living, worth celebrating, in part thanks to the in- breathing, necessary part of Canada’s cul- vestments and policies of successive Can- tural landscape. adian governments over the last 75 years. But In general, however, we should see the if we are to ensure sociocultural cohesion, arts and culture as transformative tools for all peoples must see themselves reflected in helping to share Indigenous cultures with the nation’s stories and arts, on our stages both Indigenous and non-Indigenous Can- as well as on our screens. A more equitable adians, on Indigenous peoples’ terms, and arts and culture landscape can only sustain in a way that is respectful of Indigenous cul- and enhance Canada’s domestic and inter- tural sovereignty. national presence in arts and culture. While the diversification of Canadian arts and culture is inching forward, the trans- Action: Invest an additional $10 million per parent monitoring and evaluation of sec- year over the next five years in the Canada tor demographics, and more pluralist cast- Arts Training Fund and $30 million per year ing and other cultural practices, continue in the Canada Arts Presentation Fund. En- to elude us. We don’t have a good picture of sure an adequate part of this new funding gender, linguistic, racialized, disabled and goes to supporting arts practices within In- ethnocultural diversity among Canadian digenous, racialized, differently abled and creators, managers, support teams, and other historically marginalized communities. so on. We don’t know why some art forms Result: The Canadian government’s invest- are slower to change or what the barriers ments in arts and culture will continue to sus- to change are. Equity cannot be achieved tain and grow a vibrant sector and underpin without transparency in this regard. economic activity that adds $54.6 billion to Toward that end, we can do better at Canadian GDP, all while strengthening en- collecting and analyzing statistics to adapt gagement with diverse Indigenous, linguis- funding mechanisms and create a more even tic and racialized communities. playing field in line with Canada’s evolving Action: Continue to hold comprehensive demographics. If we are promoting Indigen- public consultations on the Creative Can- ous, racialized, linguistic, cultural and cre- ada agenda. ative pluralism, investments should better Result: Creative Canada becomes a catalyst reflect this direction. Providing across-the- for renewal in the cultural sector by involv- board relative increases (when possible and ing key stakeholders in the evolution of Can- even merited) may be a regressive policy in ada’s arts and culture legislation and regu- the current context. Instead, artists and arts lation. In turn, a new framework for arts and organizations that adapt and evolve should culture will better support Canada’s adap- be rewarded accordingly for moving with tation to a plurality of cultural identity ex- cultural currents.

38 Canadian Centre for Policy Alternatives pressions, digitization, media consolida- ments, the evolution of artistic practices tion and the proliferation of new platforms. and the diversification of cultural expressions on our stages and screens, ensuring Action: Re-examine the Netflix deal, and future investments better reflect Canadian in general the one-on-one agreement ap- demographics and diverse cultural con- proach to regulating global internet giants, texts, including all aspects of human re- to ensure a level playing field and encour- sources in the field (artists, staff, boards, age competition. volunteers, etc.). This effort will involve key Result: Domestic taxation and cultural poli- departments and agencies (Canadian Herit- cies are not evaded by side-deals with for- age, Canada Council for the Arts, Statistics eign competitors. Canada, etc.) in consultation with the field Action: Establish an interdepartmental task and using data collected through existing force, with representation from the arts and centralized systems. culture sectors, to explore ways to ensure a Result: Arts and culture will evolve in a living wage standard for active professional more responsive way to meet growing de- artists and to develop an opt-in pension plan. mands for increasingly diverse cultural ex- Result: The outlook for hundreds of thou- pressions. The cultural sector will adapt to sands of hard-working Canadians in the cre- better reflect Canada’s many peoples, par- ative sector will improve, strengthening pur- ticularly Indigenous and racialized groups, chasing power and quality of life. as well as other minorities that are currently underrepresented. This change will become Action: Implement artists’ resale rights evident as persistent inequities in funding (ARR) and clarify Canada’s fair dealing pro- and artists’ incomes are redressed, and as visions during the upcoming review of the public performances, publications and ex- Copyright Act. hibits better reflect contemporary Canada Result: Fewer artists will be exploited by and the plurality of cultural expressions third parties through the resale and illegit- that make Canada one of the most diverse imate copying of their work. places in the world. Action: Establish metrics and milestones to monitor and evaluate the flow of invest-

Getting There: Alternative Federal Budget 2018 39 Child Care

B ALTERNATIVE A C FEDERAL BUDGET CHILD 2018 CARE

¢ Recent federal child care initiatives, ¢ Over 10 years, through conditional although positive, will not reduce fees for federal transfers to the provinces, ensure most parents. affordable child care for all parents. ¢ Most comparable countries spend at least ¢ Increase federal child care funding by $1

SITUATION 1% of GDP on child care; Canada spends billion annually until the 1% benchmark is

0.3%. DESTINATION met. ¢ Child care fees for parents are ¢ Ensure that funding goes directly to prohibitively high and increasing, sometimes public and not-for-profit providers to faster than inflation. reduce fees, not to fee/tax subsidies.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background al government will be spending only $870 million on child care annually.1 Canada’s largely market-based approach to The bulk of these funds will be trans- child care is failing children, women, fam- ferred to provinces/territories for their sep- ilies, employers and the economy. Parent arate initiatives in ELCC, including capital fees in most of Canada are very high rela- expenditures. A much smaller amount, still tive to other advanced economies and they not announced, will fund Indigenous child are increasing, in some cases faster than care initiatives. Additionally, $95 million inflation. from these funds is earmarked for develop- The 2016 and 2017 federal budgets coming a child care data strategy and $100 mil- mitted a cumulative $7.5 billion for early lion will be spent directly by the federal gov- learning and child care (ELCC) over 11 fiscal ernment on ELCC “innovation.”2 periods beginning in 2017. The multi-year To put this federal commitment to child funding schedule provides for an average care in perspective, the accepted internation- annual allocation in each of the first five al benchmark for a country’s annual public years of just under $540 million. It is struc- spending on ELCC is a minimum of 1% of tured so that a decade from now the feder- GDP for children aged 0–5, which a num-

40 Canadian Centre for Policy Alternatives ber of OECD countries have exceeded.3 It developments to date are inadequate for has been estimated that Canada’s public building the kind of child care system that spending on ELCC is less than 0.3% of GDP. would simultaneously grow the economy, Thus, Canada has been deemed the lowest increase labour productivity, fulfil commit- spender among peer wealthy countries a ments to women’s equality, provide much- number of times.4 needed support to all families, and offer all In June 2017, the federal government an- children the full benefit of high-quality, in- nounced a Multilateral Early Learning and clusive early childhood education and care. Child Care Framework that sets very broad spending parameters.5 The framework claims A better framework to adhere to the principles of accessibility, affordability, quality, flexibility and inclusiv- The federal government’s child care frame- ity, but these principles are not operation- work and bilateral funding agreements with alized. It does not set goals, objectives, tar- provinces/territories fail to live up to the Can- gets or timetables, nor does it identify initial adian child care community’s blueprint for benchmarks on which to calculate metrics. better child care.8 The collaboratively de- The framework does not set requirements veloped Shared Framework for Building an with respect to public or parliamentary ac- Early Childhood Education and Child Care countability beyond the public posting of System for All calls for a break with the cur- action plans and progress reports. rent market-based, parent-funded approach, The child care framework states that fed- in which governments take minimal respon- eral funds will go toward “local, regional sibility for funding, planning and provision. and system priorities that have an impact on Without a fundamental change in govern- families more in need, such as lower-income ment policy and funding, the current crisis families, Indigenous families, lone-parent in child care will only worsen. families, families in under-served commun- Parent fees, already prohibitively ex- ities, those working non-standard hours, pensive, are growing and there is a serious and or families with children with varying shortage of high-quality licensed child care abilities.”6 Evidence suggests a much bet- services in Canada. In all regions, some ter system would aim to make child care ac- groups — such as infants, children with dis- cessible to all children, including those of abilities, newcomers, rural communities, middle class working parents.7 Furthermore, and parents working or studying part-time the government’s targeted approach does or nonstandard hours — are routinely left not address women’s issues of economic out completely. security or equality, and was not subjected Real reform and progress require the fed- to the scrutiny of gender-based budgeting. eral government to assert a leadership role While the federal government’s re-entry and rely on the best available evidence in into ELCC after an absence of more than a building a comprehensive system of child decade is important, funding and policy care that is accessible, affordable, of high

Getting There: Alternative Federal Budget 2018 41 quality and inclusive. While recognizing one of the considerations that a couple provincial and territorial jurisdiction over with children makes is whether addi- ELCC, the federal government must increase tional family income that the mother its funding commitment substantially over earns would pay off the costs of child time. Federal transfers for child care should care. While she stays at home, the couple come with conditions, similar to what is now need not send their children to a child in place for health care. care center. However, once the mother A key condition on federal funding should starts working, unless they have some- be that provincial/territorial action plans body (such as other relatives) to take care are aimed at moving to more publicly man- of their child or children free of charge, aged child care systems, and that expansion the couple must leave the children at a is limited to not-for-profit and public oper- child care center and pay fees. The moth- ations. Increased funding would give the er also needs to pay income taxes, and federal government more leverage to require the family might lose some benefits as that provinces and territories dispense with a result of its higher income. their parent-fee/subsidy systems, which are The IMF analysis found that for almost rooted in obsolete policies that do little to all income groups in almost all provinces increase child care supply or affordability, the additional income mothers earn from or to meet the needs of low-income families. being in the paid labour force is either in- Increased public funding for the oper- sufficient or just sufficient enough to offset ation of regulated services (as in Quebec) the costs of child care and the loss of family- combined with geared-to-income fees will related tax benefits. The report notes that improve affordability for all parents and the structure of the Canada Child Benefit make it possible to begin to address inequi- does not provide incentives for women to ties, improve the quality of care, and tackle enter the workforce. As the quotation above the serious child care workforce challenges describes, couple-families with one parent that now exist. not working are likely to have less income than the same couple would have if both Economic arguments were employed. for policy change The IMF researchers proposed a new federal government funding program to help A 2017 International Monetary Fund (IMF) provinces/territories reduce parent fees by study makes yet another economic argu- an average of 40%. According to their an- ment for increasing federal spending on alysis, the cost of such a program would early childhood education and child care, be approximately $8 billion a year. If Can- and notes that Canada’s current policies ada’s 150,000 stay-at-home mothers with are a barrier to women’s employment.9 Sig- high educational attainment, and who live nificantly, the IMF researchers explained: with a spouse or partner, were to take ad-

42 Canadian Centre for Policy Alternatives vantage of the lower fees, enter the paid systems and services that meet their needs work force and start paying taxes, it would and aspirations. The framework notes that raise Canadian GDP by 2%, “which would the Truth and Reconciliation Commission in turn raise federal income tax revenues “has called on federal, provincial, territor- by about $8 billion, fully compensating the ial and Indigenous governments to develop cost of the program. In other words, the pro- culturally appropriate early childhood edu- gram would be fully financed in a federal cation programs for Indigenous families as government perspective.” a part of healing and reconciliation.”

Canada’s international AFB Actions commitments to care Action: Commit $1 billion in the 2018-19 fis- As strong as the economic case is for gen- cal year to be transferred to provinces/ter- erously funded child care, there are other ritories/Indigenous communities to begin compelling arguments for a more robust building a comprehensive ELCC system. federal framework in Canada. This amount will grow by $1 billion per year As signatory to both the United Nations until total spending on ELCC reaches the Convention on the Rights of the Child (CRC) minimum established international bench- and the Convention on the Elimination of mark of 1% of GDP. Discrimination Against Women (CEDAW), Canada has a duty to ensure that the rights Action: Earmark a portion of the 2018-19 of all children to high-quality early child- federal ELCC budget for implementing the hood education and child care are realized Indigenous-led framework agreement on and safeguarded — regardless of where they early learning and child care, which is cur- live or their family’s economic status. rently under negotiation. The federal government also has a duty Action: Make federal ELCC transfer pay- to ensure that women’s rights to equality and ments (outside of those set aside for Indigen- economic security, which are known to be ous services) conditional on provinces/ter- associated with access to high-quality child ritories agreeing to develop systems based care, are also realized and safeguarded. Of- on the principles of universality, high qual- ficial UN committees on women’s and chil- ity and comprehensiveness, and which in- dren’s rights have repeatedly called out clude the following elements: Canada for the lack of access to affordable, high-quality child care. • Public plans for developing integrat- In a similar vein, the shared framework ed systems of ELCC that meet the care developed by Canada’s child care commun- and early education needs of children ity acknowledges the importance of Indigen- and parents; ous self-determination with respect to the design, delivery and governance of ELCC

Getting There: Alternative Federal Budget 2018 43 • Public management of the expansion Notes

of public and not-for-profit ELCC services 1 As child care operating budgets are recurring, not one- under public authorities through pub- time-only, public child care funding needs to be con- lic planning processes, including inte- sidered on an annual, not cumulative, basis. gration of existing community services 2 Employment and Social Development Canada, Better for Our Families and Our Children: Early Learning and into publicly managed systems; Child Care in Budget 2017, Speech by the Minister. https:// www.canada.ca/en/employment-social-development/ • Public funding delivered directly to ELCC news/2017/03/better_for_our_familiesandourchildrene services and systems rather than through arlylearningandchildcarein.html.

individual parent-payment measures, 3 UNICEF. (2008). The child care transition: A league such as fee subsidies and tax rebates/ table of early childhood education and care in econom- credits, to ensure that high-quality ser- ically advanced countries. Innocenti Report Card 8. Flor- ence, Italy: UNICEF Innocenti Research Centre. vices employing a decently remunerated 4 Early learning and child care: How does Canada meas- workforce are accessible to all families ure up? International comparisons using data from Start- through predictable, sustained, dedi- ing Strong II. (2006) BRIEFing NOTE. Toronto: Childcare cated funding; and Resource and Research Unit. 5 Employment and Social Development Canada. Multi- • Public reporting in federal, provincial lateral Early Learning and Child Care Framework. Ot- and territorial legislatures on quality, ac- tawa: Government of Canada. https://www.canada. cess, affordability and other elements in ca/en/employment-social-development/programs/ early-learning-child-care/reports/2017-multilateral- the ELCC system. framework.html.

Action: Develop a plan within the next 12 6 Ibid. months to strengthen the federal-provincial- 7 Canadian Centre for Policy Alternatives, Child care for territorial approach to maternity/parental all of us: Universal child care for Canadians by 2020. Al- ternative Federal Budget Technical Paper. (2016). https:// leave with respect to eligibility, flexibility, www.policyalternatives.ca/sites/default/files/uploads/ adequacy of benefits, special considerations publications/National%20Office/2016/12/Child_Care_ (including children with disabilities, adop- AFB2017_technical_paper.pdf. tion and multiple births), and earmarked 8 Child Care Advocacy Association of Canada, Can- adian Child Care Federation, Childcare Resource and Re- leave for a parent who is not the birth par- search Unit and Campaign 2000. (2015). Shared Frame- ent in a couple (see the Employment Insur- work for building an early childhood education and care ance chapter). system for all. https://timeforchildcare.ca/wp-content/ uploads/2017/11/sharedframework_jan2016.pdf.

9 B. Petersson, R. Mariscal and K. Ishi. (2017). Women Are Key for Future Growth: Evidence from Canada. International Monetary. Fund http://www.imf.org/ en/Publications/WP/Issues/2017/07/19/Women-Are- Key-for-Future-Growth-Evidence-from-Canada-45047.

44 Canadian Centre for Policy Alternatives Defence

ALTERNATIVE FEDERAL BUDGET DEFENCE 2018

¢ Canada lacks an up-to-date framework to guide defence ¢ Make UN peacekeeping and sustainable peace the Canadian policy. defence priority. ¢ Canada is the sixth largest military spender in NATO and the ¢ Reduce the defence budget to a level that DND can actually 16th largest in the world. spend (i.e., without the funding lapsing). ¢ DND wants to increase defence spending by 70% over the ¢ Reject the F-35 fighter jet and Canadian participation in the

SITUATION next 10 years. American ballistic missile defence boondoggle. ¢ Canada hasn’t re-engaged in UN peacekeeping; if and when ¢ Invest $5 million a year in in a world class international peace we do, we lack the modern training and experience for the job. DESTINATION operations training centre. ¢ Canadian regulation of armaments is inadequate to meet our ¢ Ensure that Canadian military procurement and arms exports obligations under international law. are consistent with international law. ¢ NATO’s reliance on nuclear weapons conflicts with Canada’s ¢ Lead an initiative within NATO to end its reliance on nuclear disarmament obligations under the Nuclear Non-proliferation weapons. Treaty.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background hard choices it needs to on procurement. It even increased the number of fighter jets The 2017 defence policy review DND would be purchasing — from a total A defence policy review should be guided by of 65 under the former Conservative gov- the priorities established by the Canadian ernment to a whopping 88 in the new de- government for its foreign policy and inter- fence policy.1 Given the lack of any direct national development policy framework. threat to Canadian territory, and Canada’s Instead, the Liberal government chose a shared defence of North America with the narrowly focused review that resulted in a U.S., setting realistic equipment priorities document more akin to a set of procurement should not be so complicated. guidelines than a considered defence policy.

UN peacekeeping A procurement bonanza As of July 31, 2017, Canada ranks 71st among Despite an outstanding $40 billion in un- contributors of uniformed personnel (police funded commitments for military equipment, and military) to UN peace operations.2 That’s the government simply avoided making the lower than the 10-year average of the Harp-

Getting There: Alternative Federal Budget 2018 45 Figure 6 Defence funding, 2017-18 to 2026-27

$ Billions 15

0 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27

Source Strong, Secure, Engaged: Canada’s Defence Policy, National Defence, 2017, p. 43.

er government and contrasts sharply with tion. With UN peace operations at an all- our frequent past role as the single largest time high, and the Canadian contribution contributor to UN peacekeeping. The Can- dismally low, Canada is currently lagging adian decline took place as UN peacekeep- far behind other nations in its readiness to ing mushroomed in size and complexity, to train for and support UN operations. the point where operations now comprise At the 2017 UN Peacekeeping Defence a total of 92,867 military, police and civil- Ministerial in Vancouver, Canada failed to ian personnel.3 deliver on its long overdue commitment to Less than a quarter of the training activ- provide up to 600 military and 150 police ities Canada engaged in a decade ago toward personnel for UN peace operations.5 In- UN peace operations exist today.4 Included stead, Canada pledged specialized equip- in the training cuts was the closure in Nov- ment and up to 200 personnel on a “case ember 2013 of the Pearson Peacekeeping by case” basis, together with measures to Centre (PPC), a world class peacekeeping increase the proportion of women deployed facility funded by Canada for interdisciplin- in UN peace operations and support for a ary training of military, police and civilians set of non-binding principles on reducing from around the world. recruitment and use of child soldiers.6 The complexities of modern peace operations require in-depth training and educa-

46 Canadian Centre for Policy Alternatives Weapons systems and • Armed drones: There is currently no international law international control regime for armed unmanned aerial vehicles and other Canadian weapons choices must reflect bind- armed drones. Despite their manifest ing international humanitarian and human potential for misuse against civilians, rights law and the principles of the Geneva the new defence policy states Canada’s Conventions. Canada must therefore vigor- intention to acquire armed drones and ously support the international control of only develop a policy governing their use weapons and a ban on “problem weapons once we are ready to use them. groups” that cause indiscriminate or dis- proportionate harm to civilians. • Offensive cyber warfare:Although The new defence policy was an opportun- cyberspace is an overwhelmingly civil- ity to reinforce Canadian support for rigor- ian environment, the new defence policy ous international controls. Instead, it fails accords this vital domain the status of to remedy current problems while introdu- a battlefield and declares Canada’s in- cing significant new dangers. tention to move from purely defensive cyber measures to cyber warfare. • Cluster munitions: Although Canada is party to the treaty banning cluster mu- • Arms Trade Treaty: Bill C-47, the legis- nitions, our domestic implementation lation to enable Canada to accede to the legislation created a loophole that could Arms Trade Treaty, fails to meet the most see Canadian Forces personnel assisting basic requirements of that treaty. allies currently outside the treaty (e.g., the U.S.) in their use of such weapons. NATO and nuclear weapons This would be contrary to both the letter and the spirit of the treaty. The new de- Canada is a non-nuclear-weapons state party fence policy fails to address this problem. to the Nuclear Non-proliferation Treaty (NPT) and therefore obligated, under Article VI, to • Lethal autonomous robotic weapons: pursue good faith negotiations with the goal “Killer Robots” lack human judgment of nuclear disarmament. At the same time, and the ability to understand context we are a member of a collective defence al- that is necessary for the use of force liance, NATO, with a strategic doctrine of in accordance with international law, reliance on nuclear weapons for their al- namely, the principles of proportion- leged deterrence value. American nuclear ality, precaution and distinction. The weapons modernization plans include up- new defence policy fails to recommend a graded “tactical” or “battlefield” nuclear moratorium on their development while weapons for NATO.7 the international community grapples Against the backdrop of what is being with the problem. called a new Cold War, 122 UN member states agreed on the text of a landmark treaty on

Getting There: Alternative Federal Budget 2018 47 the prohibition of nuclear weapons.8 Can- Action: Invest $5 million a year in a world ada opposed the negotiations and, since the class international peace operations training opening for signatures in September 2017, centre for military, police and civilian per- has joined with other NATO countries in sonnel from Canada and around the world. condemning the treaty.9 Result: Canada will begin to rebuild its institutional knowledge of modern UN peace operations, prepare Canadian forces for UN AFB Actions deployments, and contribute to international capacity building for UN peace operations. By prioritizing UN-led peace and security operations, and working to curb and pro- Action: Close the loophole in Canada’s do- hibit destabilizing weapons systems, Can- mestic implementation legislation for the ada can enhance its sovereignty and secur- Cluster Munitions Treaty, to categorically ity while contributing responsibly to global prohibit any form of aid or assistance in peacebuilding. the use of these banned weapons. Declare a moratorium on the development and deploy- Action: Restore and expand Canada’s em- ment of lethal, fully autonomous weapons phasis on war prevention and peaceful con- systems and work to ban them. Reverse Can- flict resolution and give priority to strength- ada’s decision to acquire armed drones and ening the UN’s rapid response capacities. to develop offensive cyber weapons. Accede Result: Such a foreign policy focus will al- to the Arms Trade Treaty on the basis of na- low Canadian to reorient its defence policy tionally implemented legislation that fully to achieving sustainable peace and com- meets the letter and the spirit of the treaty. mon security. Result: Canadian military procurement and Action: Base military equipment choices on arms export policies will more fully reflect Canada’s modest national requirements and stated Canadian policy and values, help our specialization in UN peace operations. expand the reach of, and respect for, inter- Costly, unproven systems that fill no com- national humanitarian and human rights pelling Canadian need will be eschewed. law and the Geneva Conventions, and help Accordingly, the F-35 fighter jet will be re- strengthen international security. jected, saving at least $400 million per year, Action: Support the landmark Nuclear Pro- and Canada will not seek to participate in hibition Treaty by re-entering and revitaliz- the U.S. strategic ballistic missile defence ing the debate within NATO on the role of system.10 nuclear weapons with a view to agreeing Result: Canada will begin to reduce its mas- to their removal from Europe as a first step sive defence procurement deficit while also toward NATO adopting a deterrent posture contributing to strengthening UN peace that excludes nuclear weapons. operations and providing value at home for Result: Canada will tangibly contribute to Canadian taxpayers. moving the world back from the nuclear brink

48 Canadian Centre for Policy Alternatives and beginning meaningful, comprehensive 6 “The 2017 UN Peacekeeping Defence Ministerial con- cludes in Vancouver with 46 new pledges for UN peace- negotiations for nuclear disarmament. keeping operations,” Government of Canada press release, November 15, 2017: https://www.canada.ca/en/ department-national-defence/news/2017/11/the_2017_ un_peacekeepingdefenceministerialconcludesinvanco Notes uverwi.html.

1 Michael Byers. (2015). Smart Defence: Rebuilding Can- 7 See Arms Control Association fact sheet (chart): ada’s Military. Ottawa: Rideau Institute and Canadian https://www.armscontrol.org/factsheets/ Centre for Policy Alternatives. p. 11. USNuclearModernization#chart.

2 “Canada and UN peace operations: Unmet prom- 8 “United Nations Conference to Negotiate a Legally ises, delayed commitments and a possible diplomat- Binding Instrument to Prohibit Nuclear Weapons, Lead- ic train wreck,” World Federalist Movement-Canada ing Towards their Total Elimination,” UN: https://www. press release, http://www.wfmcanada.org/wp-content/ un.org/disarmament/ptnw/. uploads/2016/04/0817-PK-press-release.pdf. 9 “NATO statement decrying nuclear ban treaty full of 3 A. Walter Dorn and Joshua Libben, “Unprepared for errors,” Ceasefire.ca press release, November 24, 2017: Peace? The Decline of Canadian Peacekeeping Training https://www.ceasefire.ca/nato-statement-decrying- (and what to do about it)”, Canadian Centre for Policy nuclear-ban-treaty-full-of-errors/. Alternatives & Rideau Institute on International Affairs, 10 Ottawa, February 2016 (at page 32). See Michael Byers op cit, p. 31.

4 Dorn and Libben, op cit. p. 6.

5 UN Peacekeeping Defence Ministerial, London 2016, Report of the Meeting: https://www.gov.uk/ government/uploads/system/uploads/attachment_data/ file/566647/FCO1022_Defence_Ministerial_Meeting_on_ UN_Peacekeeping_v9.pdf (at page 10).

Getting There: Alternative Federal Budget 2018 49 Employment Insurance

ALTERNATIVE FEDERAL BUDGET EMPLOYMENT 2018 INSURANCE

¢ Temporary and part-time workers rarely qualify for ¢ Set a universal EI entrance requirement of 360 EI and benefits are limited when they do. working hours to level the playing field for precarious ¢ Women, racialized Canadians and other workers. marginalized groups receive consistently less EI ¢ Set a minimum benefits floor for all unemployed support due to their lower average wages. workers, not just those with children. SITUATION ¢ 86% of working fathers claimed paid parental leave ¢ Add eight weeks of EI leave that can only be

in Quebec in 2015, but only 12% of fathers in the rest DESTINATION taken by a non-birthing parent. of Canada did. ¢ Issue open work permits for the Temporary ¢ Despite paying into EI, there is almost no way for Foreign Worker Program and allow migrants to migrant workers to claim either parental or regular obtain parental benefits. benefits.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background lion per year from revenues for the EI fund over the next seven years. Employment insurance (EI) is a vital part of Canada’s social safety net, but successive federal governments have made the pro- Regular benefits: Addressing gram less equitable and harder to access. A precarious work and inequality social insurance program should dampen EI is not keeping up with the realities of to- the effects of labour market inequality; the day’s job market in which 20% of jobs are current design of EI amplifies it. part time and roughly 14% are contract or EI could be used to address precarious seasonal. A key disadvantage of temporary employment, support a just transition or and part-time employment is that when the reduce inequality. Instead of doing any of job ends, workers are unlikely to qualify for these things, the federal government has EI. Even when they do qualify, benefits can reduced premiums from 1.88% in 2015 to last as few as 14 weeks. 1.66% in 2018. This change will cut $3.6 bil-

50 Canadian Centre for Policy Alternatives Because of variations in hours worked A growing number of unemployed work- from week to week, benefit rates can also ers haven’t contributed to EI over the past be lower for precarious workers — one way 12 months — they may be students, previ- that EI amplifies labour market inequal- ously self-employed, unpaid interns or re- ities. We know that racialized and Indigen- turning from parental leave. These workers ous workers, workers with disabilities, and need to be able to access training through LGBTQ workers are all disproportionately labour market agreements, which are funded represented in low-wage precarious work. through general revenue, not EI premiums. EI should help level the playing field for these workers. Benefit levels

As it stands, the basic parameters of Can- Access to benefits: Hours worked ada’s EI system are insufficient. The bene- Workers qualify for regular benefits based fit rate is low — just 55% of earnings aver- on the number of hours they have worked aged over the previous six months. Women over the previous year and the local un- still face a significant earnings gap in Can- employment rate. Fewer hours are needed ada and so their EI benefits are also lower. to qualify in regions with high unemploy- Between 2006 and 2015, women’s average ment, and claimants in those regions re- weekly benefits were consistently about $60 ceive benefits for longer. lower than men’s, and 13% lower in 2015-161. In an average EI region with an unemploy- We know that racialized workers also ment rate of 7% to 8%, workers need at least face a significant earnings gap in Canada. 630 hours — about four months of full-time According to the 2016 census, racialized work — to qualify for EI. They are eligible men’s average employment income is 78% for between 17 and 40 weeks of benefits de- of the average white man’s income, and pending on how long they’ve worked over racialized women’s average employment the previous year. income is only 59% of the white men’s aver- This rule implies that the local unemploy- age. While this unquestionably translates ment rate is the most important factor for into lower EI benefits, such data is not col- determining how hard it is for workers to lected by the program. find a new job. While that may have been One way to address this inequality is to mostly true at one time, it is no longer the set a minimum floor for benefits. While EI case for precarious workers in urban areas. has a supplement for low-income families Low unemployment rates in one sector with children under 18, there is no supple- can mask high unemployment in others. A ment for those without children. EI has had pan-Canadian entrance requirement of 360 higher replacement rates for lower-income hours would level the playing field for pre- workers in the past. It would not be out of carious workers. place for a social insurance system to implement this kind of policy — to lessen labour

Getting There: Alternative Federal Budget 2018 51 market inequalities, and to ensure workers Prior to the 1997 changes to unemploy- can meet their basic needs and pay for hous- ment insurance, parents needed the equiva- ing while they look for new jobs. lent of 300 insurable hours of work to qualify for maternity or parental benefits. Returning the entrance requirement to 300 hours and Parental benefits: instituting a minimum benefit level would Addressing inequality give new parents better access to benefits In Budget 2017 the federal government an- and make taking parental leave more af- nounced a measure to implement a Liberal fordable for families. campaign promise on flexible parental benefits. Parents can now choose between com- Addressing gender inequality bined leave of 50 weeks at a 55% benefit replacement rate or 18 months at a 33% rate. Quebec’s experience offers clues about how This change does not increase the total to improve EI parental benefits. Research value of the benefits available to parents, nor shows that Quebec fathers are far more does it improve access to benefits for par- likely to take parental leaves than fathers in ents who don’t qualify under current rules. the rest of Canada. In 2015, 86% of working It is also, in effect, inaccessible for low-in- fathers claimed or intended to claim paid come parents, who will not be able to live on parental leave in Quebec, compared to only 33% of their earnings for a year and a half. 12% of working fathers in the rest of Canada. A study found that an increase in the number of Quebec fathers taking leave had Access to benefits: lasting effects on the division of unpaid labour Hours worked and benefit levels within the home, resulting in more balance Workers need 600 hours of insurable em- between unpaid and paid work responsibil- ployment in the past year to access mater- ities for opposite sex spouses. Fathers who nity, parental and adoption benefits in most took parental leave spent more time doing of Canada. Quebec has its own provincial unpaid work and their spouses spent more plan and provides benefits to workers with time in paid work. more than $2,000 in labour market earnings — equivalent to about 178 hours of work Fairness for migrant workers at Quebec’s current minimum wage of $11.25. Many new parents are surprised to find In 2012, Canada changed its regulations to out that they don’t qualify for these bene- limit EI parental benefits to those individuals fits, especially recent graduates, and self- who were authorized to remain in Canada employed and part-time workers. Also, the at that time. This meant that migrant work- low replacement rate makes taking parental ers such as seasonal agricultural workers, leave unaffordable for low-income families. who left Canada but were likely to return at the beginning of the next growing season,

52 Canadian Centre for Policy Alternatives no longer had access to parental benefits. ated by public investment programs and All other Canadian workers are eligible to sector strategies. receive parental benefits even if they leave Labour market development agreements the country. Only migrant workers are treat- (LMDAs) between the federal government ed differently. and the provinces and territories will be cru- This change was regressive; parent- cial in accomplishing this goal. The LMDAs al benefits were the only type of EI bene- currently transfer $1.95 billion from the EI fit that many migrant workers were able to account to the provinces and territories for access. As a result, most migrant workers training programs for people who are EI con- are no longer eligible for any employment tributors. Budget 2017 gradually increases insurance benefits, even though they pay this amount to $2.45 billion in annual fund- into the program with each paycheque. The ing by 2021-22. The AFB strongly supports AFB will reverse this mean-spirited policy. this commitment and encourages a focus The AFB would transform the Tempor- on supporting a just transition for workers. ary Foreign Worker Program so that it issues open work permits. Permits that are tied to Access to a fair appeals process only one employer make it very difficult for migrant workers to qualify for regular EI In 2012, the federal government made pro- benefits because they have to establish that found changes to the appeal process for em- they could get another job. The system also ployment insurance claims, abolishing the currently makes these workers much more Board of Referees and instituting the Social vulnerable in the workplace. They may be Security Tribunal (SST). Previously, appeals reluctant to speak out against poor or dan- were heard by local EI boards of referees, gerous workplace conditions, for example which had three part-time members: one (see the AFB Immigration chapter). from labour, one from business and a neutral chair appointed by the government. The EI board members were knowledgeable about Just transition: Training local labour conditions as well as EI legisla- for a green industrial revolution tion and regulations, and delivered timely We have a major opportunity to offer un- decisions, usually within 28 days. employed, underemployed and low-paid The changes in 2012 were made with no workers better jobs as a part of a strategic consultation or notice to stakeholders. The response to meeting our climate change tar- result was a process that takes longer than gets. We can expand access to EI training ever, that is at odds with basic principles programs with a focus on labour adjustment of procedural fairness, and that stacks the and transition. That way, Canadian workers odds against unemployed workers. could benefit from the transition to a green The structure of the new SST appeal pro- economy by accessing new, green jobs cre- cess is highly unusual and deviates from accepted legal norms. Workers are required to

Getting There: Alternative Federal Budget 2018 53 submit all their evidence and legal submis- migrant workers’ access to parental bene- sions at the first stage of the process, be- fits (cost: $2 billion per year). fore they have even been informed of the Result: An additional 250,000 workers will case against them or given full disclosure of receive regular and special benefits. their file. Normally a person would have the Action: Add eight weeks of leave that can chance to see the evidence against them so only be taken by a non-birthing parent. This that they can respond in an informed way. leave is additional to maternity leave and The new appeal process also takes con- parental leave, and would be available to siderably longer to complete than under the adoptive parents and same-sex couples as former system. The SST’s service standard well (cost: $600 million per year). is to deliver final decisions in 85% of cases Result: An additional 155,000 parents could within 90 days of the appeal being filed; in take parental leave. 2016-17, the SST met this service standard only 12% of the time. This is on top of the Action: Add a low-income supplement so time it took to get the original decision plus that no regular or special benefits fall below the time for reconsideration of the decision $300 per week (cost: $900 million per year). from the EI commission. Result: Reduced inequality for low-income workers.

AFB Actions Action: Restore the Board of Referees appeal system for EI. The Social Security Tri- bunal introduced in the 2012 budget isn’t Action: Return EI premiums to $1.88 per working for workers and has proven to be $100 of earnings up to the 2018 maximum costly and inefficient. insurable earnings of $51,700. Result: More justice for unemployed workers. Result: Increased revenue of approximately $3.5 billion in 2018 for the EI Operating Account. Notes

Action: Establish a uniform national eligi- 1 EI Monitoring and Assessment Report: https:// bility requirement of 360 hours for regular www.canada.ca/en/employment-social-development/ benefits and 300 hours for special benefits programs/ei/ei-list/reports/monitoring2016/annex2.html. (returning to pre-1990 levels), and restore

54 Canadian Centre for Policy Alternatives Environment and Climate Change

ALTERNATIVE FEDERAL BUDGET ENVIRONMENT AND 2018 CLIMATE CHANGE

¢ Climate change threatens the prosperity and ¢ Remove all direct and indirect subsidies for well-being of all Canadians. fossil fuel exploration, development and ¢ Federal and provincial government climate transportation. policy does not reflect the ambition of Canada’s ¢ Enforce a stringent national carbon pricing climate targets. standard. SITUATION ¢ Many of Canada’s environmental laws need ¢ Contribute Canada’s fair share of global improving, which will require new funding. DESTINATION climate financing. ¢ Canada is far from meeting its international ¢ Create a network of protected areas covering commitments on biodiversity and ecosystem 17% of Canada’s land and freshwater and 10% of health, both of which are in decline globally and in its oceans. Canada.

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Background the federal and most provincial governments to a unified climate strategy for the Reducing global greenhouse gas (GHG) emis- first time. However, the policies outlined in sions is central to mitigating the worst effects the framework do not put Canada on a path of climate change. Canada has committed to to meeting its medium-term GHG emission deep emission reductions in principle, but reduction target of 30% below 2005 levels without ambitious domestic policy action by 2030. Even that modest target — a hang- we will continue to miss these targets. Can- over from the previous Conservative govern- ada must implement a comprehensive do- ment — does not reduce Canada’s emissions mestic climate action plan commensurate as far as climate scientists say we must in with its global ambitions for climate change order to do our part in avoiding catastroph- mitigation and adaptation. ic global climate change. The Pan-Canadian Framework on Clean Canada is also not meeting its internation- Growth and Climate Change is an unpreced- al climate obligations. Through the Paris ented step forward insofar as it commits Agreement, Canada and other developed

Getting There: Alternative Federal Budget 2018 55 countries committed to collectively raising tinction) and ecosystem health. Canada’s at least US$100 billion per year to help de- natural land, freshwater and ocean environ- veloping countries address local climate ments, and the wildlife they sustain, are the change impacts and undertake low-carbon lifeblood of our country and a core part of development. In November 2015, the feder- our national identity. Yet, despite this green al government announced it would be scal- self-image, all ecosystem types in Canada ing up its international climate finance con- are declining and the number of species at tribution to $800 million per year in 2020, risk continues to grow, year after year. but this amount falls significantly short of The species that wildlife and people de- the 3–4% of total developed country finan- pend on are being degraded and lost due to cing considered to be Canada’s fair share. ever-expanding industrial and urban develop- Canada’s contribution to global climate ment and the growing impacts of climate finance is critical not only to support devel- change. Large-scale networks of protected oping countries’ mitigation and adaptation land, inland waters and ocean are there- efforts, but also to show leadership and build fore needed to support healthy ecosystems trust in international negotiations. The cli- so they can sustain wildlife and deliver the mate change challenge requires global col- clean air, water, food and other goods and lective action, so international trust and co- services we all rely on for survival. operation are essential for long-term success. Evidence shows that we likely need It is promising that the Paris Agreement as- to protect 30% to 70% of each ecosystem pires to a global warming target of just 1.5 type in the long term.1 Canada took a step degrees Celsius above pre-industrial levels in the right direction with its internation- (with a firm target of two degrees), which al commitments under the Convention on would give the world a reasonable chance Biological Diversity to protect at least 17% of avoiding catastrophic climate change. of our landscape and 10% of our ocean by However, missing from the Paris Agree- 2020, and to substantially exceed these tar- ment is a coherent framework that clearly gets in the long term. However, we are cur- states a peak year for emissions, a target rently far from those goals: only 10% of land date for a 100% renewable economy, or a and 1% of ocean is protected. Major federal carbon budget (i.e., a total amount of car- funding will be needed to meet our inter- bon we can “safely” use before exceeding national targets. the 1.5 degree threshold). Taken together, the GHG emission reduction targets submit- ted by each country, if met, would put the AFB Actions world on track for a temperature increase of three degrees Celsius or more by the end Action: Remove all remaining federal gov- of the century. ernment fossil fuel subsidies. Related to climate change, the world is Over five years, the AFB will eliminate facing serious declines in biodiversity (ex- all remaining federal tax credits, production

56 Canadian Centre for Policy Alternatives subsidies and public financing provided for The new pan-Canadian climate frame- fossil fuel. The government will save over work includes a minimum national carbon $1.3 billion annually by phasing-out the fol- price, which means all jurisdictions must im- lowing measures: plement a carbon tax or cap-and-trade system by 2018. This is certainly progress, but • The Accelerated Capital Cost Allowance improvements are needed. In particular, re- (ACCA) provided to liquefied natural gas search shows that, along with other strong projects ($9 million per year); government measures, the national carbon • Canadian Development Expenses (CDE) price floor needs to rise further before 2030 for oil and gas well or mining develop- for Canada to reach its 2030 GHG target. ment ($1.018 billion per year); In the AFB plan, the government creates a stronger national carbon pricing stan- • Canadian Exploration Expenses (CEE) dard that enforces a common set of princi- for coal mining ($148 million a year); ples across provincial and territorial carbon • Flow-through share deductions available pricing regimes. First, the new standard to investors in coal, oil and gas projects will require a stringent carbon price of $50 ($133 million per year); per tonne by January 1, 2020, increasing by $10 per tonne per year until 2030. The price • The Canadian oil and gas property ex- must be applied broadly, with no industrial pense (COPGE), which allows compan- sector exempt, thus providing all Canadian ies to claim 10% of the costs of acquir- households and businesses in all sectors of ing oil and gas wells and rights ($36 the economy with the same incentive to re- million a year); duce GHG emissions and switch to low-car- • The Foreign Resource Expense (FRE) bon energy sources (see the AFB Taxation and Foreign Exploration and Develop- chapter for more details). ment Expense (FEDE); and Second, the AFB will require a portion of revenues from all carbon pricing regimes • Duty exemptions for imports of mobile to be redistributed to those most affected by offshore drilling units in the Atlantic the transition off fossil fuels. For example, and Arctic. a portion of all carbon revenues will be al- Action: Enforce a strong, harmonized car- located: to help low-income families affect- bon price in all Canadian jurisdictions. ed by energy poverty; to provide just transi- A broad, economy-wide carbon price will tion plans and retraining for workers in the help drive GHG emission reductions at the industries being phased-out (see Industrial lowest cost. Although it is not, on its own, Strategy and a Just Transition chapter); and sufficient to meet Canada’s climate goals, to invest in clean technologies, energy effi- carbon pricing is the most efficient policy ciency programs and adaptation measures. tool for reducing GHG emissions. Competitiveness issues and carbon leak- age have been shown to apply to a very small

Getting There: Alternative Federal Budget 2018 57 percentage of Canada’s emissions and GDP, er costs of energy; these funding measures therefore AFB measures to address competi- will support reducing energy costs while tiveness concerns (such as border carbon improving the housing stock. adjustments) will be targeted, transparent The AFB will also provide $10 billion and temporary. The AFB would also imple- over five years to support retrofits of multi- ment a clean fuel standard as an important unit residential buildings. This is an im- complement to carbon pricing. portant measure to protect low- and middle-income Canadians, many of whom do Action: Contribute Canada’s fair share of not benefit from typical retrofit programs global climate financing. aimed at single-family homes. Developing countries face significant challenges to reducing their emissions and Action: Deliver on Canada’s commitment are already suffering the greatest losses and to protect land, inland waters and oceans. damages due to climate change. Canada has The AFB will invest $1.4 billion over the committed to providing a total of $2.65 bil- next three years (2018–21) and $470 million lion in climate financing by 2021, but that per year thereafter to protect at least 17% of does not go far enough to support adapta- our landscape and 10% of our ocean by 2020, tion and mitigation activities in develop- and to substantially exceed these targets in ing countries. the long term. These funds will be used on The AFB increases Canada’s financing the following priorities: the establishment commitment by $1 billion in 2018 and 2019, and management of protected areas; federal and $3 billion annually between 2021 and leadership and collaboration; a cost-shared 2025. This will help less developed coun- fund to support provincial, territorial, In- tries reduce their dependence on fossil fuels digenous and privately protected areas; a while building climate resilience. The AFB connectivity strategy; the development of will also explore opportunities to generate new marine governance arrangements and funding for this purpose through levies on policy tools; and citizen and stakeholder bunker fuels used in international aviation engagement. and marine shipping. Action: Strengthen environmental protec- Action: Improve energy efficiency for Can- tion laws and make advances toward sus- adian homes. tainable fisheries. The AFB provides $600 million annu- The AFB will provide new funding to ally to offset the cost of energy efficiency implement the five important environment- retrofits and the construction of energy effi- al protection laws for which revisions are cient homes. Funding is divided between re- pending: the Canadian Environmental As- mote communities ($100 million), Canada’s sessment Act, National Energy Board Act, north ($200 million) and low-income family Canadian Environmental Protection Act, homes ($300 million). These communities, Fisheries Act, and Navigation Protection in particular, are adversely affected by high- Act. This AFB funding will include:

58 Canadian Centre for Policy Alternatives • An additional $15 million in 2018-19 and develop, link and make accessible a much $30 million annually thereafter for pro- stronger shared environmental data and sci- ject impact assessments; and ence system (SEDSS) that better meets the needs of these important policy priorities. • $47 million annually for fisheries and The AFB invests a further $5 million in an fish habitat. expert panel to provide recommendations Action: Create a stronger environmental on how to best structure this SEDSS system. data and science system at Statistics Canada. Strong, credible, accessible environmental data and science is fundamental for effect- Notes ive progress on many national policy prior- 1 For example, Noss et al. (2012). Bolder thinking for con- ities including environmental assessment, servation, Conservation Biology 26(1): http://onlinelibrary. climate change mitigation and adaptation, wiley.com/doi/10.1111/j.1523-1739.2011.01738.x/full ; E.O. Wilson (2016). Half earth: Our planet’s fight for life. biodiversity, protected areas, freshwater, Liveright publishing; http://natureneedshalf.org/how- and reducing risks from toxic chemicals. much-is-enough/ ; IUCN World Conservation Congress The AFB will invest $50 million annually motion 053 https://portals.iucn.org/congress/motion/053. to strengthen Statistics Canada’s capacity to

Getting There: Alternative Federal Budget 2018 59 First Nations

ALTERNATIVE FEDERAL BUDGET FIRST 2018 NATIONS

¢ The ability of First Nations governments to improve ¢ Invest $9 billion to make up for the loss in results for their citizens has been hindered by a 2% cap purchasing power created by 21 years of underfunding. on funding since 1997. ¢ Bring financial support to First Nations child and ¢ First Nations child and family services are family services in line with provincial systems and fulfil significantly underfunded compared to provincial all orders from the Canadian Human Rights Tribunal. SITUATION systems. ¢ Invest $2.9 billion in housing, water and other

¢ First Nations continue to live with inferior housing, DESTINATION infrastructure in First Nation communities. boil water advisories and a lack of road access to the ¢ Support Indigenous language revitalization across rest of the country, situations that are forcing people the country, beginning with an investment of $124 out of their communities. million per year. ¢ 58 First Nations languages are threatened with extinction.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background ference between what was invested in basic governance capacity — through programs The prime minister has committed to elim- such as band support funding, operations inating the 2% cap on annual funding in- and maintenance, and the administration creases for core First Nations programs and of income assistance — and the effect of in- services. Over the course of 2016-17, fund- flation and population growth. To catch up ing was increased by 4.5% for kindergart- and keep up, an investment of $12.7 billion en to Grade 12 education and by just over over the next three years is required. 3% for child and family services, finally Investment in governance capacity will exceeding the 2% cap in those areas. How- help First Nations make the most effective ever, funding increases to support the gov- use of other funding, with significant eco- ernance and administration of First Nations nomic benefits for the country. The Nation- remained under 2%. al Aboriginal Economic Development Board Since 1996, when the 2% cap on annual estimates that achieving equity of outcomes funding increases was announced, First Na- in First Nations education and labour force tions have lost $9 billion in cumulative pur- participation, for example, would add $27.7 chasing power. This figure represents the dif- billion to Canada’s GDP, far more than it

60 Canadian Centre for Policy Alternatives would cost the government in program erased with a single investment of $84 mil- spending to achieve this objective. At the lion in 2018-19. same time, equity would alleviate the most In the future, priority issues such as an severe poverty in Canada and respect First enhanced prevention-focused approach for Nations rights. CFS will require additional investments to Investments in the 2016 and 2017 federal close the gap in services between provincial- budgets have been greatly appreciated and ly funded child welfare systems and those are helping to narrow the huge funding gap provided by First Nations through feder- suffered by First Nations. The additional inal funding. First Nations also welcome the vestments proposed in the AFB will go to- government of Canada’s willingness to en- ward repairing the damage done, though gage in dialogue toward transforming child even they will not entirely meet the full and family services on a more fundamen- needs of First Nations. tal level, addressing the issue of jurisdiction and making progress in reducing the number of children taken into care, while Child and family services increasing the security and safety of all First First Nations child and family services (CFS) Nations children. are a national priority. Youth suicide, frequently linked to treatment in foster care, Housing continues to be a crisis. The Truth and Rec- onciliation Commission’s 2015 report priori- Housing is a basic human right and the foun- tized child welfare, and in a landmark rul- dation for success, as recognized recently by ing the Canadian Human Rights Tribunal the government of Canada. Overcrowding, (CHRT) ordered several improvements be mold and other deficiencies in housing im- made to services in this area. The govern- pair First Nations scholastic achievement, ment of Canada has committed to imple- employment and health. Without addition- menting the TRC Calls to Action and is legal- al funding communities are unable to meet ly obliged to follow the orders of the CHRT. demand, which is driving people to urban Although the 2016 federal budget allo- centres. This outmigration leads to increased cated $634.8 million to CFS over five years, homelessness, the loss of language, sub- the investments of $71 million in 2016-17 and stance abuse and family breakdown. There $99 million in 2017-18 did not come close to remains a significant need for new construc- what is needed. Cindy Blackstock, execu- tion and renovation to relieve overcrowding, tive director of the First Nations Child and address deficiencies and provide services. Family Caring Society, estimates it will take A study commissioned by Indigenous $200 million a year to meet Canada’s obli- and Northern Affairs Canada (INAC) esti- gations. As the 2016 budgetary investments mates that between 2012 and 2036 there will continue to grow, the existing gap could be be an on-reserve housing shortfall of 99,581 units, an additional need for 5,836 replace-

Getting There: Alternative Federal Budget 2018 61 ment units, and approximately 12,492 units fuel systems, community and recreation requiring major repairs. Addressing this facilities, administrative offices, flood and shortfall will take an annual investment of erosion protection, all season roads and $825 million on top of funding announced internet connectivity, among other items. for housing in the 2016 federal budget. The government of Canada is developing a 10-year infrastructure plan. First Na- tions are at the greatest disadvantage, both Water historically and currently, with respect to Access to clean drinking water is a universal the infrastructure listed above and should human right recently affirmed by the United receive a share of the eventual total invest- Nations and Canada has a responsibility to ment proportional to their needs. This will ensure clean drinking water is accessible cost $1.765 billion annually. to all First Nations communities. However, First Nations water quality continues to be Languages a national concern. The federal government committed to Language defines nationhood and every eradicating all boil water advisories on re- language matters. Languages are integral to serves within five years of the 2015 election. the cultural continuity that has been identi- Toward this goal, Budget 2016 committed fied as a key factor in preventing youth sui- $1.8 billion over five years for clean drink- cide.1 It is unacceptable that an estimated ing water and the treatment of wastewater, 58 First Nations languages are threatened but the government estimates that an addi- with extinction. Without supports for In- tional $320 million annually will be required. digenous languages, entire nations and cul- This must be accompanied by funding for tures are at risk. operations and maintenance, as identified The government of Canada has com- above, tied to systemic reform to protect mitted to co-developing legislation in sup- watersheds and water sources, and to rem- port of Indigenous languages. In addition to edy imbalances in the governance struc- school-based immersion programs, invest- ture to empower First Nation governments. ment is needed in community language revitalization, adult language revitalization, and language maintenance and dissemina- Other infrastructure tion. This investment is urgently needed due In addition to housing, water and wastew- to the crisis facing Indigenous languages in ater, there is an urgent need for additional Canada. An investment of $124 million an- funding for other community infrastructure nually is needed. including elementary and secondary educational facilities, roads and bridges, fire halls and other emergency services, elec- trical power generation and distribution,

62 Canadian Centre for Policy Alternatives AFB Actions and $1.8 billion a year for physical infrastructure. Action: Invest $12.7 billion over three years Result: Thousands of houses will be built, in First Nation government with a substan- clean drinking water will be provided to tial $9-billion investment in the first year. more people, and roads will link First Na- Result: First Nations will be able to govern tions to the rest of Canada. effectively and make the best use of other Action: Invest $124 million annually in First funding, improving results on the ground Nations languages revitalization. for their citizens. Result: The extinction of 58 Indigenous lan- Action: Invest $84 million in First Nations guages will be prevented and fluency will child and family services. increase in communities across the country. Result: First Nations child welfare services will be brought closer to par with provincial child welfare systems. Notes

Action: Invest $2.9 billion annually in hous- 1 Chandler, M.J. & Lalonde, C.E., Cultural continuity as a moderator of suicide risk among Canada’s First Na- ing, water and other infrastructure for First tions. In Kirmayer, L. & Valaskakis, G. (Eds.), Healing Nations communities. $800 million a year traditions: The mental health of Aboriginal peoples in Can- towards housing, $25 million a year for shel- ada (pp. 221–248), University of British Columbia Press. ters, $320 million a year for drinking water

Getting There: Alternative Federal Budget 2018 63 Gender Equality

ALTERNATIVE FEDERAL BUDGET GENDER 2018 EQUALITY

¢ The employment gap between men and ¢ Stimulate job growth in the sectors where women is costing our economy an estimated 4% women work and where they earn a living in GDP growth. wage. ¢ Women continue to perform 10 hours more ¢ Institute a universal child care program and

SITUATION per week of unpaid work in the home and make a paternity leave policy for fathers on the up 89% of workers taking parental leave. model of the Quebec Parental Insurance ¢ Women are now more likely to be a victim of DESTINATION Program. a violent crime than men. ¢ Fund organizations combatting violence against women and implement a fully resourced national action plan to end violence against women.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background ly wage that their full-time male counter- parts earned, they would have taken home Underemploying and underpaying women an additional $85.4 billion.3 is costing women and the Canadian econ- The Bank of Canada is predicting a slow- omy billions of dollars annually. The Inter- down in labour productivity growth in Can- national Monetary Fund estimates that “if ada over the next five years.4 That slowdown the current gap of 7 percentage points be- is not inevitable. The IMF and the OECD tween male and female labour force partici- have pointed out that Canada could see in- pation with high education attainment were creased productivity and growth with eco- eliminated, the level of real GDP could be nomic policies that do more for the female about 4 per cent higher.”1 half of its labour force.5 If the 670,000 women who were working part time for non-voluntary reasons in 2016 were able to find full-time work, they would Economic policies have brought home an additional $19.2 bil- Canada’s female labour force is among the lion in wages.2 If the women who worked most educated in the world, with 72% of full time last year earned the same hour- women aged 25–54 holding a post-second-

64 Canadian Centre for Policy Alternatives Figure 7 Median employment incomes (2015)

$50,000

Men Women

$40,000

$30,000

$20,000

$10,000

$0 Indigenous Racialized Immigrant White

Source Census 2016

ary degree or diploma. While women and level of 77%.7 The employment gap has men have equal levels of education, women closed slightly over the past decade, but are consistently paid less and employed less only as a result of men’s full-time employ- often. The gaps in employment and income ment rates failing to recover fully from the widen even further for Indigenous, racial- recession — not as a result of more women ized and immigrant women, as well as for moving into full-time employment. women with disabilities. At the same time, women are dispro- The wage gap for women working full portionately represented among part-time time has barely budged in a decade. In workers. The share of women in the labour 2016, women working full time, all year force working part time remains the same earned 81% of what their male counter- today as it was a decade ago and is much parts earned — only a two-point improve- higher for women aged 25–54 (18%) than ment over the wage gap in 2007.6 At this rate for men the same age (5%). However, the of change it will be nearly a century before share of women who report working part the pay gap is closed. time as a matter of preference is at a his- Core working-age women have seen little toric low — falling from 28% to 21% in the change in their levels of full-time employ- past decade among the same age group. ment over the past decade. After a drop in Among involuntary part-time workers, half employment post recession, women’s em- cite child care as the reason they are not in ployment stands today at its pre-recession full-time work and half cite business con-

Getting There: Alternative Federal Budget 2018 65 Figure 8 Employment rates (2015)

90% Men (25–64 years) Women (25–64 years) 80%

70%

60%

50%

40%

30%

20%

10%

0% White Immigrant Racialized Indigenous

Source Census 2016

ditions. This provides a clear direction for tive impact, particularly for highly educated public policy intervention. women — precisely the group the IMF iden- Accessible and affordable child care is tifies as a key solution to improving produc- the best lever the government has for sup- tivity and economic growth.11 porting female labour force participation.8 It is also clear that employers need to be Affordable and available child care has had encouraged to lean in, particularly when it a demonstrable positive effect on women’s comes to hiring women who are returning employment levels and on the wage gap in from parental leave. Fertility rates have not similar high-income countries.9 However, declined in correlation with the entry of long waiting lists and high fees are leaving women into paid work.12 However, women 275,300 women in involuntary part-time work. continue to make up the vast majority of As a recent IMF study points out, out- those taking parental leave (89%) and con- side of Quebec the high cost of child care tinue to perform 10 more hours a week of means that, net all tax and other benefits, unpaid work than men — work that is par- “the household’s economy clearly worsens ticularly uneven with respect to child care.13 if the mother enters the labour market.”10 The majority of women with children aged Extending parental leave to 18 months, as 2 and under are in the labour force (71%).14 the government has done, is not a solu- Fifty-two per cent of those women work full tion. Longer parental leaves have a nega- time; only 15% work part time. The share of

66 Canadian Centre for Policy Alternatives Figure 9 Percentage in part-time work by reason, women (25–54 yrs) 2016

35%

30%

25%

20%

15%

10%

0% Business conditions/ Caring for Going to school Illness Preference/voluntary could not ﬁnd children/family full-time work

Source Labour Force Survey

mothers working full time increases steadily ly with employment levels in the field.17 A with the age of their children — with 56% of similar pattern can be seen in financial and mothers of children aged 3–5 working full business services. time and 61% of mothers of children aged In all these fields women continue to 6–17 working full time.15 Rates of part-time be paid less than their male peers — even work vary by less than 2% among these three when adjusting for education, occupation groups. This suggests that as women move and age. As women generally take less than back into the workforce following the birth a year’s parental leave, this should have a of a child their preference (by choice or ne- minimal impact on pay disparities over a cessity) is for full-time work. 30-year career. And yet the gap in pay and It has been argued that women’s underemployment remains evident throughout employment is the product of an oversupply women’s working lives. of labour and a lack of demand in predomin- The government’s decision to table pay antly female occupations. The evidence does equity legislation in 2018 is welcome. The not support this theory. One in five women legislation should be proactive. Greater work in health and social services in Can- transparency from employers in both the ada.16 The share of women graduating with public and private sector is needed as the degrees in the health field tracks precise- evidence shows that tracking and transpar-

Getting There: Alternative Federal Budget 2018 67 ency are key to closing the wage gap.18 The women by provinces such as Ontario, and government should implement the recom- the federal money appears largely intend- mendations of the pay equity task force and ed to support other departments and agen- the report of the special parliamentary com- cies, not women’s organizations. mittee on pay equity. When Canada invested in similar women’s funds abroad the results were “the most successful mechanism we have found” for Social policies empowering women, according to a gov- Violence against women, and sexual assault ernment evaluation.23 Because of Canada’s in particular, remain a persistent blight on investments in women’s funds in Pakistan, the lives of women in Canada. Rates of sex- women were able to fight successfully for ual assault are nearly unchanged over the the same legal status as men when testify- past two decades.19 A mere 5% of incidents ing in court. Because Canada invested in a of sexual assault are reported to the police.20 women’s fund in Paraguay, domestic vio- Stagnant rates of sexual assault, set lence is now a crime in that country. It is against a decline in every other violent crime time to bring these lessons home. over the past decade, mean that women are now more likely to be victims of a violent crime than men.21 Women with disabilities experi- AFB Actions ence higher than average levels of violence and Aboriginal women and girls experience Action: Invest in the sectors where women over three times the rate of violent victimiza- are working today. More than one in five tion experienced by non-Aboriginal women. women in the labour force work in health There is clear evidence that direct fund- and social services.24 Women are also highly ing to women’s organizations is one of the concentrated in occupations like nursing, most effective means to lower rates of vio- teaching and the service industries — sec- lence against women.22 However, the only tors that accommodate their dispropor- federal program that is devoted exclusively tionate share of unpaid work, particularly to providing direct funding to women’s or- child care. The federal government should ganizations is the Women’s Program housed be working closely with the provinces and within Status of Women Canada. Funding to territories to ensure that job stimulus is the Women’s Program has remained stag- directed at the entire labour force, not just nant over the past decade and amounts to a the 53% male part of it. paltry few hundredths of a per cent of total Result: Narrowing the gender employment federal program spending. gap, particularly among highly educated The government’s decision to invest an workers, will contribute an additional 4% additional $100 million over five years is also in GDP growth, according to the IMF.25 It will welcome. However, it falls far short of cur- offset the challenges posed by an aging work- rent per capita spending on violence against force and declines in productivity growth.

68 Canadian Centre for Policy Alternatives Action: Institute supports for women in in- women’s groups to conduct independent voluntary part-time work. Work with em- policy research (cost: $100 million annually). ployers to increase their uptake of female Result: Federal policies will benefit women applicants and recognize the qualifications and men more equally. Decisions about fund- of women who have been out of the working for women’s services will be based on force caring for children and family mem- research. And the organizations and com- bers. Lower the threshold of hours required munities who respond to the needs of women to qualify for employment insurance (see on a daily basis will be empowered to share Employment Insurance chapter). their insights into the programs and poli- Result: If the 670,000 women who were cies that work. working part time for non-voluntary rea- Action: Invest in a fully resourced national ac- sons in 2016 were able to find full-time work, tion plan to address violence against women, they would have brought home an addi- based on the Blueprint for a National Action tional $19.2 billion in wages.26 This would Plan, bringing federal per capita spending put much needed income into the hands of on the issue in line with provincial spending women and their families at a time when (cost: $500 million annually).28 The action household debt is at an unprecedented high. plan will include the following components: It would also put additional money into the economy, stimulating growth. • funding for annual, detailed national surveys on violence against women; Action: Invest in universal child care (see Child Care chapter) and institute paid pater- • support for an office to provide federal nity leave on the Quebec model. The Quebec co-ordination; Parental Insurance Program, which provides • increased funding for prevention pro- five weeks of “father only” leave, has dem- grams; onstrated a significant unmet need — with 86% of men now taking parental leave in • increased funding for victims’ services, Quebec compared to 12% in the rest of Can- including long-term housing; and ada.27 Return the parental leave window • funding to support uniform access to from 18 months to 12 months. specialized social, legal and health servi- Result: The distribution of unpaid work ces, including domestic violence courts, will shift, leaving women better able to sexual assault nurse examiners and balance paid and unpaid work. The unmet crisis centres. need for parental leave for fathers will al- Result: Levels of violence experienced by low more fathers to take time off to spend women will begin to decline and survivors with their children. of violence will receive adequate support for Action: Increase funding for Status of Women their needs. The estimated $12.2-billion-per- Canada and restore its mandate to fund year cost of violence against women would be offset by declining crime rates.29

Getting There: Alternative Federal Budget 2018 69 Notes structional Programs, Primary Grouping (CIP_PG) and sex, annual. Ottawa: Statistics Canada. 1 Petersson, Bengt et al. (2017). Women are Key for Fu- 18 Mandel, Hadas (2012). “Winners and Losers: The Con- ture Growth: Evidence from Canada. Washington D.C.: sequences of Welfare State Policies for Gender Wage In- International Monetary Fund. Closing the Gender Gap: equality.” European Sociological Review, vol. 28.2: 241– Act Now. Paris: OECD Publishing. 262; Blau, F. D. and L. M. Kahn (2003). “Understanding 2 Labour Force Survey. Ottawa: Statistics Canada. Au- International Differences in the Gender Pay Gap.” Jour- thor’s own calculations. (All numbers for core working nal of Labor Economics 21.1: 106–144. age, 25–54 yrs, only.) 19 General Social Survey: Victimization. Ottawa: Sta- 3 Labour Force Survey. Ottawa: Statistics Canada. Au- tistics Canada. thor’s own calculations. (All numbers for core working 20 Rotenberg, Cristine (2017). Police-reported Sexual age, 25–54 yrs, based on median weekly wages.) Assaults in Canada, 2009 to 2014: A Statistical Profile. 4 Bank of Canada (2017). Monetary Policy Report, April Ottawa: Statistics Canada. 2017. Ottawa: Bank of Canada. 21 General Social Survey: Victimization. Ottawa: Sta- 5 Petersson, Bengt et al. (2017). Women are Key for Fu- tistics Canada. ture Growth: Evidence from Canada. Washington D.C.: 22 Batliwala, Srilatha et al. (2013). Women Moving Moun- International Monetary Fund. OECD (2017). “How Does tains: The Collective Impact of the Dutch MDG3 Fund. Canada Compare?” in The Pursuit of Gender Equality: Toronto: AWID. Htun, Mala and Lauren Weldon (2012). An Uphill Battle. Paris: OECD Publishing. “The Civic Origins of Progressive Policy Change: Com- 6 Labour Force Survey. Ottawa: Statistics Canada. (All bating Violence against Women in Global Perspective, numbers for core working age, 25–54 yrs, based on medi- 1975–2005.” American Political Science Review, Vol. 106, an weekly wages.) No. 3 August 2012.

7 Labour Force Survey. Ottawa: Statistics Canada. 23 Evaluation of CIDA’s Implementation of its Policy on Gender Equality: Benchmarking Report, Performance and 8 See: Child Care chapter. Knowledge Management Branch, CIDA, 2007. 9 Plantenga, J. and C. Remery eds. (2006). The Gender 24 Labour Force Survey. Ottawa: Statistics Canada. Pay Gap: Origins and Policy Responses: A comparative study of 30 European countries. European Commission, 25 Petersson, Bengt et al. (2017). Women are Key for Fu- Directorate. ture Growth: Evidence from Canada. Washington D.C.: International Monetary Fund. 10 Petersson, Bengt et al. (2017). Women are Key for Fu- ture Growth: Evidence from Canada. Washington D.C.: 26 Labour Force Survey. Ottawa: Statistics Canada. Au- International Monetary Fund. thor’s own calculations. (All numbers for core working age, 25–54 yrs, only.) 11 Mandel, Hadas (2012). “Winners and Losers: The Con- sequences of Welfare State Policies for Gender Wage In- 27 Dave McGinn, “Seeking balance as a working dad,” equality.” European Sociological Review, vol. 28.2: 241–262. The Globe and Mail, November 15, 2017: https://www. theglobeandmail.com/life/parenting/new-parents- 12 McInturff, Kate and David Macdonald (2015). Time in-canada-will-soon-get-more-paid-leave-but-for- to Grow Up: Family Leave Policy for the Way We Live fathers-time-is-just-one-of-theobstacles-parenting/ Now. Ottawa: Canadian Centre for Policy Alternatives. article36992989/. 13 General Social Survey: Time Use (2015). Ottawa: Sta- 28 A Blueprint for Canada’s National Action Plan (NAP) tistics Canada. on Violence Against Women and Girls. http://endvaw.ca/ 14 Labour Force Survey. Ottawa: Statistics Canada. our-work/blueprint-for-canadas-national-action-plan- on-violence-against-women. 15 Labour Force Survey. Ottawa: Statistics Canada. 29 Hoddenbagh, Josh, Ting Zhang, and Susan Mcdonald 16 Labour Force Survey. Ottawa: Statistics Canada. (2014). An Estimation Of The Economic Impact Of Violent 17 CANSIM Table 477-0030: Postsecondary graduates, Victimization In Canada, 2009. Ottawa: Justice Canada. by program type, credential type, Classification of In- Zhang, Ting et al. An Estimation of the Economic Impact of Spousal Violence in Canada, 2009. Ottawa: Justice Canada.

70 Canadian Centre for Policy Alternatives Health Care

ALTERNATIVE FEDERAL BUDGET HEALTH 2018 CARE

¢ The federal share of public health care funding will fall ¢ Commit to a new Health Accord with a Canada to 20% by 2027, which downloads $31 billion in health Health Transfer that grows at 5.2% annually. costs to the provinces. ¢ Develop a strong federal vision for expanding ¢ Pharmacare has the potential to save $11 billion medicare to include pharmacare, home care, long-term annually. It requires federal leadership and care, dental care, and community-based mental health

SITUATION intergovernmental collaboration. and rehabilitation services. ¢ Canadians are being double-billed for medically ¢ Uphold and enforce the Canada Health Act. DESTINATION necessary services due to violations of the Canada Health ¢ Act. Establish a federal commission to explore health-centred approaches to drug policy. ¢ In 2016, there were 2,816 apparent opioid-related deaths. Canada’s chief public health officer estimates overdose deaths will have surpassed 4,000 in 2017.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background were abandoned by the Conservative government after 2006. A new accord has yet The original vision of public health care put to be negotiated. forward in the 1960s by Tommy Douglas in- In the 2015 federal election campaign, cluded a broad spectrum of health services the Liberal Party promised to provide “col- intended to provide comprehensive health laborative federal leadership” on health care care. A half-century later that vision still if elected to government, and to “negotiate a eludes us: medicare has not expanded to new Health Accord with provinces and terri- cover the full scope of health services in tories.”1 These promises were broken when, Canada, and responsibility for public health in 2016, the new Liberal government decid- care funding has been jettisoned onto the ed instead to sign bilateral health funding provinces and territories. deals with the provinces and territories. As The 2004 Health Accord intended to “fix a result, Canada lacks a clear pan-Canadian health care for a generation” with goals of vision for public health care. increasing the federal share of health care In 2016, the Parliamentary Budget Of- costs and expanding public health care to ficer, the Conference Board of Canada and include a catastrophic drug program. Un- the Financial Accountability Office of -On fortunately, many of the accord’s goals tario each independently determined what

Getting There: Alternative Federal Budget 2018 71 kind of financing would be needed to main- AFB Actions tain, but not expand, the current basket of A robust Health Accord public health care services over the next 10 years. All three agreed that the Canada The federal share of health care spending Health Transfer (CHT) would need to in- must, at a minimum, maintain the current crease by 5.2% per year.2 basket of health care services. Further in- Instead, the Trudeau government adopt- creases of 5.2% per year are needed to meet ed the former Harper government’s fiscal this standard. The federal government must plan to tie federal health transfers to nom- also lead the country in discussions and pro- inal GDP growth with a floor of 3% a year. To gram development to strengthen and ex- this base amount the government has add- pand public health care into new areas in- ed $1.1 billion a year for 10 years — 0.07% of cluding pharmaceuticals, dental care, eye the total CHT — for bilateral (non-universal) care and mental health care. Any Health agreements on home care and mental health.3 Accord roundtable must include the federal A CHT tied to GDP will result in the loss government, provinces and territories, and of $33.5 billion over 10 years in needed health First Nations as full partners.6 care funding and reduce the federal share Action: Fund a 10-year Health Accord with of health spending from 24.2% in 2016 to a minimum 5.2% escalator to increase the 20.7% by 2026.4 The loss of federal funding federal share of health spending. All health will impact all areas of public health care, care dollars will be tied to health care spend- and further encourage provincial and terri- ing (cost: $463 million in the first year). torial governments to continue privatizing care, contracting out services, violating the Action: Recommission the Health Council Canada Health Act and failing to address of Canada to provide annual reports on the the opioid crisis. status of the Health Accord and to continue Provinces and territories are trying to fill monitoring the progress in closing the gap some of the federal gaps by working togeth- between Indigenous and non-Indigenous er to create a common drug formulary and peoples (cost: $10 million a year).7 find savings through the bulk purchasing Results: A strong federal vision for public of medicines. As of July 2016, premiers say health care coupled with fair federal finan- they are saving $712 million annually.5 In cing will open the policy door to expanding January 2018, Ontario launched a universal medicare into new areas, as Tommy Doug- youth pharmacare program through which las envisioned a half-century ago. anyone under 25 will have free access to more than 4,000 prescription medications First Nations health (with no co-pay or deductible). To scale up universal access to medication across Can- There are large health disparities between ada, federal leadership is a must. First Nations and non-First Nations in Can- ada. The AFB will work with provinces, ter-

72 Canadian Centre for Policy Alternatives ritories and First Nations to implement the Primary health care Truth and Reconciliation Commission’s sev- Investing in and advancing the use of pri- en Calls to Action related to this health gap. mary health care (PHC) is critical to ensur- Action: Allocate $30 million to build and ing continuity of care across the health care maintain new Indigenous Health Centres. system.10 Effective PHC is also needed to de- Result: Improved access to culturally ap- velop long-term strategies to improve health propriate care that reflects a holistic vi- outcomes at the individual and population sion of health at the community and indi- levels.11 As PHC reform promotes interdisci- vidual level. plinary, team-based care to improve accessibility and comprehensiveness of care, it will change the way physicians are reimbursed.12 Enforcing the Canada Health Act Our current fee-for-service payment model The federal government must monitor and is susceptible to billing abuse.13 There are enforce the principles and criteria of the Can- now more than 82,000 physicians in Can- ada Health Act (CHA), which require health ada, and total payments to physicians in- care to be universal, publicly administered, creased by 4% from the previous year to comprehensive, accessible, portable, and reach $25 billion in 2014-15.14 delivered without user fees or extra bill- Action: Continue the transition to PHC based ing — no matter where you live in Canada. on best practices listed in the 2007 Primary Undercover investigations have revealed Health Transition Fund.15 unscrupulous practices such as unlawful patient billing, double-billing (by charging both patients and the public system for the Pharmacare same service), and ordering tests and pro- Among countries with universal public cedures that are not medically necessary so health care, Canada is the only one whose that extra profit can be made.8 When pri- plan does not include prescription drug vate clinics refer patients for unnecessary coverage. Canadians spent more than $30 tests, those tests are often done in the pub- billion in 2016 to fill over 600 million pre- lic system, which is both costly and leads scriptions.16 Canada is the third highest per to longer wait times.9 capita spender on medicines among high- Action: Withhold funds from the Canada income-earning countries.17 Meanwhile, ap- Health Transfer equivalent to the amount proximately 3.5 million Canadians lack even that patients are being unlawfully billed in basic drug coverage,18 and around one in four provinces violating the Canada Health Act. Canadians fail to take needed medication as Results: Holding clinics, provinces and ter- prescribed due to high costs.19 Prices would ritories accountable for unlawful billing and fall if we implemented a universal pharma- unnecessary testing will reduce costs paid care program with a single payer who could by both patients and governments. negotiate prices, bulk purchase, and use a different set of price comparator countries.20

Getting There: Alternative Federal Budget 2018 73 Action: Working with the provinces and ter- home care and mental health. This amounts ritories, an independent organization made to 0.07% of the total CHT transfer and will up of prescribers and consumers will be es- not help provinces and territories provide tablished to recommend safe medications seniors with additional care.24 to be added to the formulary. Action: Spend a targeted 2% of GDP on Result: Such an organization would ensure home care based on principles and criteria prescribers have access to more informa- set out in the Canada Health Act. tion on drug safety, improving prescribing Result: Provinces that participate in a na- behaviour and health outcomes. tional home care program in compliance with Action: Allocate $11.5 billion a year to create the CHA will see federal contributions of up a single-payer pharmacare plan in Canada, to 40%. This would put Canada in line with with direct savings to Canadians of the same comparable northern European countries. amount. This national pharmacare program Action: Invest $2.3 billion a year in long- would be implemented rapidly and not in- term and residential care. crementally, ensuring that all Canadians Result: Hospitals will be able to move Alter- benefit quickly.21 nate Level of Care (ALC) patients current- Result: Cheaper access to prescription drugs ly in acute care beds to a more appropri- will lower costs to Canadians and to govern- ate setting.25 ments while improving health outcomes.

Mental health Home care and long-term care Spending on mental health — much of it Despite an aging population, there is no na- through private insurance, out-of-pocket tional strategy for seniors’ care in Canada. payments or non-profit agencies — makes up Each province has different requirements to only 7% of all public spending on health in access home and long-term care and differ- Canada, below the 10–13% reached by sim- ent price caps ranging from $960 to $3,118 a ilar countries including the U.K. and New month.22 To save money, provincial govern- Zealand.26 It is estimated that 9% of GDP ments have been discharging patients from (close to $800 million in Canada’s case) is acute care in hospitals. Often, patients are the minimum level of public investment re- transferred to unorganized, privately-fund- quired to improve access to a range of men- ed for-profit providers. tal health programs and services, and get The deep inequality in accessing con- better health outcomes.27 tinuing care also extends to First Nations, Métis and Inuit, who face additional chal- Action: Implement a mental health program lenges finding care that is culturally sensi- using the principles and criteria of the Can- tive or safe.23 The Liberal government has ada Health Act. Dedicated mental health pledged to invest $11.5 billion over 10 years in funding needs to be part of the enhanced

74 Canadian Centre for Policy Alternatives Health Accord proposed by the AFB (cost: prehensive treatment and harm-reduction $350 million over three years).28 interventions (cost: $15 million).33 Result: A dedicated mental health stream would ensure that mental health promotion and the treatment of mental illnesses Notes are timely, continuous, collaborative, cul- 1 Liberal Party of Canada. Real Change: A New Plan turally safe and appropriate, and integrat- for a Strong Middle Class. 2015. https://www.liberal.ca/ ed across the life cycle from children to sen- wp-content/uploads/2015/10/New-plan-for-a-strong- middle-class.pdf. iors.29 Furthermore, the AFB acknowledges 2 Beckman, K., Fields, D., and Stewart, M. A Difficult that affordable and safe housing, good jobs Road Ahead: Canada’s economic and fiscal prospects. with liveable wages, and clean and safe en- The Conference Board of Canada, 2014; Bartlett, R., vironments are needed to address the so- Cameron S, Lao H., and Matier, C. Fiscal Sustainability Report. Office of the Parliamentary Budget Officer, 2012; cial determinants of health that contribute Financial Accountability Office. Economic and Fiscal to mental health. Outlook. Spring 2016, page 39.

3 As calculated by the Canadian Health Coalition and the Ontario Health Coalition in the Health Accord Break Drug policy Down: Costs and Consequences of the Failed 2016/2017 Negotiations. In 2016, there were 2,816 opioid-related 4 Institute for Fiscal Studies and Democracy (IFSD). CHT deaths in Canada.30 Canada’s chief public and the Federation: Past, Present and Future. April 2017. health officer estimates overdose deaths will http://www.ifsd.ca/web/default/files/Presentations/ have surpassed 4,000 in 2017. While Canada Reports/CHT%20and%20the%20Federation%2017009. pdf Page 28. is embarking on major changes to its cannabis legislation, a health-centred approach to 5 The Council of the Federation. Leadership in Health Care: Report to Canada’s Premiers on the Achievements all drug use could decrease negative health of the Health Care Innovation Working Group. 2013– impacts and social harms.31 In Portugal, de- 2016. http://www.canadaspremiers.ca/leadership-in- criminalization, treatment and harm reduc- health-care/. tion resulted in a decrease in adolescent drug 6 Assembly of First Nations. First Nations Health Trans- formation Agenda. February 2017. http://www.afn.ca/ use and drug use by people deemed depend- uploads/files/fnhta_final.pdf. ent, a decrease in drug-induced deaths and 7 Truth and Reconciliation Commission of Canada. Truth HIV/AIDS diagnoses, and a 60% increase in and Reconciliation Commission of Canada: Calls to Ac- people seeking treatment.32 tion. 2015. http://www.trc.ca/websites/trcinstitution/ File/2015/Findings/Calls_to_Action_English2.pdf. Action: Strike a federal-provincial-terri- 8 Natalie Mehra. Private Clinics and the Threat to Public torial-First Nations commission to explore Medicare in Canada: Results of Surveys with Private Clinics health-centred approaches to the regula- and Patients. Ontario Health Coalition. June 2017. http:// www.ontariohealthcoalition.ca/wp-content/uploads/ tion of currently illegal drugs, as suggested final-report-1.pdf; Natalie Mehra. For Health or Wealth? by Canada’s Drug Futures Forum. The AFB The evidence regarding private clinics and user fees in also commits to providing and monitoring Ontario. Ontario Health Coalition. March 2014. http:// www.ontariohealthcoalition.ca/wp-content/uploads/ adequate coverage for evidence-based com- March-25-2014-Private-Health-Clinics-Full-Report.pdf.

Getting There: Alternative Federal Budget 2018 75 9 Kate MacNamara. “Both province and patient pay for 23 The Care Guide. https://www.thecareguide.com/ tests at Copeman Clinic,” CBC News. May 26, 2016. http:// residence-options/long-term-care/costs/cost-of-long- www.cbc.ca/news/canada/calgary/private-healthcare- term-care. copeman-overtesting-billing-1.3589748. 24 Health Council of Canada. Canada’s most vulner- 10 Health Council of Canada. (2005). Primary Health able: Improving health care for First Nations, Inuit, and Care: A background paper to accompany Health Care Métis seniors. November 2013. http://www.metisnation. Renewal in Canada: Accelerating change. org/media/422632/senior_ab_report_2013_en_final.pdf.

11 David Price, Elizabeth Baker, Brian Golden, and 25 Canadian Health Coalition and Ontario Health Coali- Rosemary Hannam. (2015). Patient Care Groups: A new tion. Health Accord Break Down: Costs and consequences model of population based primary care for Ontario. A of the failed 2016/2017 negotiations. October 2017. http:// report on behalf of the Primary Health Care Expert Ad- www.healthcoalition.ca/wp-content/uploads/2017/10/ visory Committee. Health-Accord-Report.pdf.

12 Canadian Foundation for Healthcare Improvement 26 Canadian Centre for Policy Alternatives. (2016). Al- factsheet. January 1, 2010: http://www.cfhi-fcass.ca/ ternative Federal Budget: It’s Time to Move On. Ottawa. SearchResultsNews/10-01-01/13b5e8bb-e7c2-4544-8da5- 27 Bruce Doern and Christopher Stoney, eds. (2016). b1aa5d9e38db.aspx#ii. How Ottawa Spends: The Trudeau Liberals in Power. 13 Ibid. Ottawa: Carleton University’s School of Public Policy and Administration. 14 Canadian Institute for Health Information. “More doctors, but average payments to physicians virtually 28 Canadian Alliance on Mental Illness and Mental unchanged,” factsheet: https://www.cihi.ca/en/canadas- Health. (2016). Mental Health Now! Advancing the Men- doctor-supply-has-grown-faster-than-the-population- tal Health of Canadians: The Federal Role. for-the-past-decade. 29 Canadian Mental Health Association. Open letter 15 See Health Canada. (2007). Primary Health Transi- on the Health Accord. November 10, 2016: http://www. tion Fund: Summary of Initiatives: Final Edition; and cmha.ca/news/open-letter-mental-health-accord/#. the 2006 Canadian Collaborative Mental Health Initia- WHRJtVMrLIV. tive (CCMHI) which produced research and recommenda- 30 Canadian Alliance on Mental Illness and Mental tions http://www.shared-care.ca/cchmi-research-papers. Health. (2016). Mental Health Now! Advancing the Men- 16 Canadian Pharmacists Association. (2016). Phar- tal Health of Canadians: The Federal Role. macy in Canada. 31 National figures for opioid related deaths prior to 17 OECD Data. Pharmaceutical spending: Total, US dol- 2016 are not available. However, provincial data from lars/capita, 2015. Ontario and Quebec show that opioid related accident- al deaths doubled between 2003 and 2016, and between 18 https://data.oecd.org/healthres/pharmaceutical- 2005 and 2015 respectively. spending.htm#indicator-chart. 32 Centre for Addictions and Mental Health. Cannabis 19 Julie White. (2016). A National Public Drug Plan For Policy Framework. 2014. Camh.ca. All. Ottawa: Canadian Health Coalition. 33 Drug Policy Alliance. Drug Decriminalization in 20 Angus Reid Institute. (2015). Prescription Drug Ac- Portugal: A Health-Centred Approach. February 2015. cess and Affordability an Issue for Nearly a Quarter of https://www.drugpolicy.org/sites/default/files/DPA_ All Canadian Households. Fact_Sheet_Portugal_Decriminalization_Feb2015.pdf. 21 Marc-André Gagnon. (2014). A roadmap to a ration- 34 Canada’s Drug Futures Forum. Canada’s Drug Future al pharmacare policy in Canada. Ottawa: The Canadian Forum: Summary of proceedings and Final recommenda- Federation of Nurses Union. tions. April 2017. http://www.cdff-fadc.ca/summary-of- 22 Ibid. proceedings-and-final-recommendations.

76 Canadian Centre for Policy Alternatives Housing and Neighbourhoods

ALTERNATIVE FEDERAL BUDGET HOUSING AND 2018 NEIGHBOURHOODS

¢ Federal affordable housing investments were ¢ Make a one-time $1-billion capital investment in substantial from the 1960s to 1980s, minimal from repairing and retrofitting existing social housing. 1994 to 2001, and have since made only a modest ¢ Allocate $1 billion annually for building new comeback. supportive housing for vulnerable populations, ¢ Waiting lists for subsidized housing in Canada including new investments for on- and off-reserve SITUATION continue to grow. Some people become homeless housing. while they wait. DESTINATION ¢ Allocate $1.5 billion immediately to a Canada ¢ In November 2017, the federal government Housing Benefit that helps low-income households unveiled a National Housing Strategy; funding was afford their rent. modest in a historical context, and many new initiatives won’t start to take effect for several years.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background A third reason for co-ordinated action is that non-profit ownership of affordable All orders of government in Canada, along housing stock keeps rent levels down over with the non-profit sector, must play an ac- the long term and creates public assets in tive role in creating affordable housing. Co- the process.1 Finally, when it comes to vul- ordination is fundamental for several reasons. nerable subpopulations (e.g., persons with First, low-income households, especial- mental health problems, those living with ly those relying on social assistance, simply HIV/AIDS, and frail seniors), non-profit en- cannot afford monthly rents on most pri- tities are effective at creating buildings that vate-market housing. A government sub- can foster community development. sidy is therefore vital. Second, Canadian Beginning in the 1960s, the federal gov- cities, especially in high-growth areas, can- ernment very actively created housing for not rely on private developers to create the both low-income and middle-income house- affordable apartment units needed by low- holds, often by sharing the costs of develop- wage workers. ment with provincial and territorial govern-

Getting There: Alternative Federal Budget 2018 77 Figure 10 Annual social housing commitments, Canada 1954–2011

30,000

RRAP non-proﬁt 25,000 AHI-IAH and pther post-96 Non-proﬁt and co-op Public housing 20,000 Total social housing

15,000 Housing units 10,000

5,000

0 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010

Source This is a modified line graph using data compiled by Greg Suttor (Wellesley Institute). The original line graph appeared in Dr. Suttor’s 2016 book, Still Renovating: A History Of Canadian Social Housing Policy (McGill-Queen’s University Press).

ments.2 Tenants, in turn, were charged rents But fewer units are created annually today they could afford, typically in the range of than in the 1970s and ‘80s, and these units 30% of their gross monthly income. tend to provide only modest affordability As many as 25,000 new subsidized hous- (see Figure 10). ing units were being created annually across The 2017 federal budget was Canada’s Canada under this system. Low-income most important for housing since 1993. It households who sought subsidized housing proposed investments of $11.2 billion over 11 received it more quickly than they would to- years, including $2.1 billion to expand and day, and very few individuals stayed in emer- extend funding for the Homelessness Part- gency shelters or outside on the street rela- nering Strategy (HPS) beyond 2018-19 (see tive to today’s numbers.3 Today, wait lists for Figure 11). The budget also announced that subsidized housing are growing and many the Investment in Affordable Housing (IAH) people become homeless while they wait.4 initiative, set to expire at the end of 2018- The federal government stopped sub- 19, will be replaced by a new framework. sidizing new units of social housing in the The recently unveiled National Hous- early 1990s (with the exception of on-re- ing Strategy (NHS), which made history by serve housing). The government gradually adopting housing as a human right, includes and incrementally started to get back into plans to create a Canada Housing Benefit the housing game, so to speak, after 2001. consisting of financial assistance to help

78 Canadian Centre for Policy Alternatives Figure 11 Annual Homelessness Partnering Strategy funding

$250 $237

Budget 2015–16 Budget 2016 Budget 2017 $213 $203 $200 $177 $173 $173

$150

$119 $ Millions $100

$50

$0 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Source Chart reproduced from Janice Chan’s March 30, 2017, Calgary Homeless Foundation blog.

low-income households afford their rents. territories. Canada’s approximately 500,000 However, this will not begin until 2020, and social housing units — those that are both the average beneficiary will receive a mere administered by provincial or territorial au- $200 per month in benefits. This new feder- thorities and have rent-geared-to-income al benefit is expected to be cost-shared with (RGI) subsidies — will be eligible. The fund the provinces and territories. will assist with repairs, help keep rents af- The federal housing strategy also includes fordable and provide mortgage assistance the creation of a new National Housing Co- for the operators. Investment Fund, which over 10 years will Once funding starts to flow from this in- create up to 60,000 units of new housing itiative, the challenge of expiring operating and repair up to 240,000 units of existing agreements will be addressed for a 10-year housing. This is a unilateral federal program, period, provided the provinces and territor- though some assistance from provincial and ies agree to match costs. The Federal Com- territorial governments may be required. munity Housing Initiative will do essential- Furthermore, the government’s strategy ly the same thing for social housing units includes a new Canada Community Hous- that are federally administered, including ing Initiative that will focus on preserving co-op units, at a cost of $500 million to the existing units of social housing. This will federal government over 10 years. require cost-matching from provinces and

Getting There: Alternative Federal Budget 2018 79 It’s important to note that the National ment per unit will extend the lives of exist- Housing Strategy’s targets — about 6,000 new ing housing stock by 25–35 years. builds annually over the next decade — rep- Action: Invest in supportive housing. resent just one-third of the total volume of Provide $1 billion in new annual spending Canada’s new annual builds from the 1970s on subsidized housing and support staff for and 1980s, keeping in mind that Canada’s vulnerable populations at a per-unit rate of population has grown since that time.5 $200,000. A strong focus is placed on Indigen- ous peoples living off reserve, women, LG- AFB Actions BTQ2S+ populations, persons with physical disabilities, persons with mental health This year’s AFB will go beyond the current problems, and frail seniors. Federal funds federal government’s spending promises for will be conditional on the provinces/terri- housing. It will immediately allocate $3.5 bil- tories providing additional funding — e.g., lion over and above commitments made in housing allowances or rent supplements — to the 2017 federal budget. Much of this money keep rents affordable for low-income ten- can be thought of as bridge funding as we ants. In addition, provincial and territorial wait for National Housing Strategy dollars governments will be expected to pay for on- to start flowing. As new programs are de- going professional staff support for the spe- signed and implemented under the new cialized subpopulation in question. federal housing framework, future AFBs Result: The creation of 5,000 new units of may funnel money directly into them. For housing annually that will remain afford- now, most AFB dollars go toward existing able for 25–35 years. programs. Action: Move forward on the Canada Action: Preserve existing social housing Housing Benefit. Immediately allocate stock. Provide a one-time $1-billion capital $1.5 billion annually toward the new Can- investment to provinces and territories to ada Housing Benefit to provide enhanced help maintain existing units of social hous- and expedited demand-side assistance for ing. Three types of units are especially vul- low-income households. Under the AFB nerable to expiring agreements: units creat- plan, each household assisted by the Can- ed under the Urban Native program, public ada Hosing Benefit will receive approximate- housing units, and units in Northern Canada. ly $500 per month in rental assistance, and We assume no cost-matching from provin- approximately 250,000 households will re- cial/territorial governments for this funding. ceive the benefit during the first year. Prov- Result: Between 10,000 and 15,000 exist- incial and territorial governments will not ing units of social housing in serious state need to match this funding until 2020 under of disrepair will be saved. A $75,000 invest- the AFB plan. Result: The Canada Housing Benefit will help make many private units (that are cur-

80 Canadian Centre for Policy Alternatives rently sitting empty) affordable to low-in- Forum website: http://www.progressive-economics. ca/2011/11/05/the-privatization-of-social-housing/. come households. An estimated 250,000 2 Pomeroy, S., & Falvo, N. (2013). Housing policy in low-income households will be able to af- Canada under the Harper regime. Retrieved from Focus ford rent in private units. Consulting website: http://www.focus-consult.com/ wp-content/uploads/2014/07/PomeroyFalvoThe-Harper- Action: Renew investment in on-reserve Years-ENHR-with-table.pdf. housing. The AFB will make substantial in- 3 Falvo, N. (2009). Homelessness, program responses and vestments in on-reserve housing in Canada an assessment of Toronto’s Streets to Homes program. Re- and direct Indigenous and Northern Affairs trieved from Canadian Policy Research Network’s website: http://www.cprn.org/doc.cfm?l=en&doc=1979. Canada to consult on a nation-to-nation basis 4 Adamo, A., Klodawsky, F., Aubry, T., & Hwang, S. on the details. Strong emphasis should be (2016). Ending homelessness in Canada: A study of 10- placed on cultural appropriateness and en- year plans in 4 Canadian cities. Retrieved from St. Mi- vironmental sustainability. chael’s Hospital website: http://www.stmichaelshospital. com/pdf/news/20161010.pdf.

5 Suttor, G. (2017, November 28). Canada’s national housing strategy: The strong, the soft, and the splashy. Notes Retrieved from http://www.wellesleyinstitute.com/ 1 Falvo, N. (2016, November 5). The privatization of housing/canadas-national-housing-strategy-the-strong- social housing. Retrieved from Progressive Economics the-soft-and-the-splashy/.

Getting There: Alternative Federal Budget 2018 81 Immigration

ALTERNATIVE FEDERAL BUDGET IMMIGRATION 2018

¢ The unemployment rate for less recent immigrants is similar to ¢ Invest in foreign credentials recognition. that for non-immigrants. However, their employment rate is lower. ¢ Give all migrant workers in Canada, as well as all future arrivals, ¢ Recent immigrants made 63 cents for every dollar made by access to permanent residence. Canadian-born workers. ¢ Ensure employment equity for racialized groups. ¢ The low-income rate for recent immigrants is 31.4%, and 17.9% for immigrants generally, compared to 12.5% for non-immigrants. ¢ Lower citizenship fees. SITUATION ¢ Citizenship fees increased from $100 to $530 in 2014-15. ¢ Place a moratorium on all removals until reforms are in place,

DESTINATION immediately end all immigration detentions where there are no ¢ 475 people are in immigration detention in Canada at any given security concerns, and end the security certificate regime. time; 6,251 migrants were in immigration detention in 2016, including 162 children. ¢ Create a Canada Action Plan Against Racism to examine the intersecting effects of race with other demographic factors in ¢ At least 16 people have died in immigration detention since data, law and policy. 2000.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background making Canada’s immigration and refugee system more equitable. Immigrants will soon make up nearly all new entrants into the labour market and be a key driving force of Canada’s econ- Persistent, growing disparities omy given demographic realities. It is esti- Racialized Canadian-born workers and im- mated that by 2036, due largely to immigra- migrants are overrepresented in low-paid tion, between 34.7% and 39.9% of Canada’s and precarious employment.2 Systemic in- working-age population will be racialized.1 equalities have grown worse and become en- There is a strong correlation between trenched over the last decade.3 The chronic racialization and poorer outcomes in in- underemployment of skilled immigrants in come, employment, housing, health, etc., Canada and the strong correlation between and these outcomes are often compounded racialization and the growing wage gap in by immigration status. The AFB will develop the labour market is well-documented.4 policies and commit resources to address Bridging initiatives and the foreign cre- these socioeconomic racial inequities, while dentials loan program support retraining, requalifying and licensing in Canada, and

82 Canadian Centre for Policy Alternatives can benefit individual program participants.5 costs.9 Refugees must repay the “loan,” with But they are limited in scope and scale. We interest, 30 days after arrival, a time when also need targeted policies such as full and most have limited income. Some refugees consistent implementation of employment have used their child tax benefit to repay this equity and community benefits agreements loan.10 The government waived the loan for to address systemic barriers that prevent the 25,000 Syrian refugees brought to Can- immigrants from accessing jobs and em- ada between November 2015 and February ployment income at a level that is consist- 2016. But this happens for no other refugees, ent with skills, education and experience. despite the positive investment absorbing these costs would be for Canadian society.11 The government maintains a 2014 change Refugees to the Canada Social Transfer that allows Many people are prevented from entering provinces and territories to impose min- Canada to make a refugee claim because of imum residency requirements (for eligibility the Safe Third Country Agreement with the for government benefits) on certain groups United States. As a result, increasing num- of individuals based on their immigration bers of people are crossing irregularly, often or refugee status.12 at great risk to their lives and health.6 The U.S. cannot be considered a safe country Family sponsorship for refugees, especially under the present administration. The UN Committee on the The previous Conservative government re- Elimination of Racial Discrimination (CERD) stricted the sponsorship of parents and has called on Canada to rescind or at least grandparents (PGP), including by increas- suspend the agreement.7 ing the eligible income of sponsors to 30% The Designated Countries of Origin (DCO) above low income cut-offs (LICO), doub- scheme developed by the previous Conserv- ling the sponsorship period to 20 years, ative government, which remains in place, and capping applications at 5,000 a year.13 effectively creates a two-tier refugee deter- The current Liberal government doubled mination system that discriminates between the cap to 10,000 and introduced a lottery refugee claimants based on nationality.8 for PGP sponsorship, but the remaining re- DCO claimants face more restrictions, for strictions remain. example, making it more difficult for them PGP is the only category of immigration to have their claim recognized. Those most that is subject to this process. The govern- vulnerable to this policy are claimants flee- ment has said the persistent backlog and ing persecution based on gender, gender processing delays are due to limited resour- identity and sexual orientation. ces. Since all prospective immigrants must Canada is the only resettlement country pay an application fee, in effect a user fee, that charges government- and privately-re- all collected funds should be earmarked to settled refugees for their travel and medical process sponsorship applications.

Getting There: Alternative Federal Budget 2018 83 Citizenship The auditor general of Canada found there is little or no government oversight to en- Citizenship fees increased in 2014-15 from sure that employers follow program require- $100 to $530, which was on top of a $100 ments, do not mistreat workers and do not right-of-citizenship fee, creating a significant use the program simply to hire vulnerable barrier for low-income immigrants. Subse- and low-wage workers rather than fill genu- quently there was a sharp decline in citizen- ine labour shortages.16 ship application numbers.14 This exorbitant A 2016 parliamentary committee review fee disproportionately affects racialized im- of the TFWP strongly favoured employers migrants and immigrant women, given their and reinforced the temporary nature of the overrepresentation in low-income groups. program.17 Following the review, the govern- The current federal government has main- ment cancelled rules that limited workers tained the fee increase, although it has re- to only four years in the program. But it has versed many other changes by the previous not implemented other worker-supportive government that made it harder to acquire recommendations such as open work per- citizenship and easier for it to be revoked. mits and multiple-entry work visas.

Migrant workers Live-in Caregiver Program Most live-in caregivers are racialized women Temporary Foreign Worker Program from the Global South. There are long-stand- Canada’s economic permanent immigra- ing concerns about the Live-in Caregiver Pro- tion program excludes low- and semi-skilled gram (LCP), notably how it isolates work- workers. Instead, they are recruited through ers, leaving them vulnerable to abuse and the Temporary Foreign Worker Program exploitation, and the lack of workplace (TFWP), which has grown dramatically inspections to prevent worker abuse and over the last decade and become deeply mistreatment.18 The backlog in processing entrenched in the Canadian labour market caregiver applications for permanent resi- as an ongoing source of cheap labour. The dency has persisted for many years, caus- workers are predominantly racialized and ing lengthy family separations and consider- from the Global South. able hardship and distress for workers and Lack of job mobility and little or no ac- their families.19 cess to permanent residence (PR) has left The previous Conservative government workers highly vulnerable to abuse and removed the guaranteed pathway to PR exploitation by recruiters and employers. while introducing higher language require- They are among Canada’s lowest-paid work- ments and a cap on the number of PR ap- ers, have little or no access to rights and en- plications. It also implemented new labour titlements compared to all other workers, market impact assessment (LMIA) require- and are at the mercy of weak enforcement ments for employers and a new fee. Between by federal and provincial governments.15 January and March, 2015, 90% of employer

84 Canadian Centre for Policy Alternatives LMIA applications were rejected, reducing Enforcement available caregiver jobs.20 Detention Between January 2014 and June 2016, According to the CBSA, 6,251 people were the Canada Border Services Agency (CBSA) held in immigration detention in 2016-17, pursued 40 investigations under Project including 162 minors.23 The majority are de- Guardian, an initiative that collected tips tained on grounds other than posing a se- and complaints about alleged program in- curity threat.24 Many are routinely held in fractions by LCP workers. Following the in- provincial maximum security jails where vestigations, 24 workers were kicked out of they are treated the same as those held for Canada, including five whose departure was criminal charges or conviction. A signifi- said to have been “voluntary.”21 But the gov- cant number are racialized. At least 16 de- ernment did not address worker concerns tainees have died since 2000 while in CBSA about their vulnerability, and the abuse and custody. In August 2016, the government exploitation of employers and recruiters. announced a $138-million fund to upgrade immigration detention centres across Can- Seasonal Agricultural Worker Program ada and use detention as a last resort. No Created in 1966, the Seasonal Agricultural concrete changes have been seen to-date. Worker Program (SAWP) is now more than In its 2017 review of Canada, CERD rec- 50 years old. Participants, mostly from the ommended that immigration detention Caribbean and Mexico, work in Canada for should be a last resort, there should be a eight months a year but are barred from legal time limit to detention, and detention permanent residence. Some have worked of minors should end. The UN agency also here for decades, spending most of their requested detailed detention statistics, in- working lives in Canada, but are “perma- cluding data disaggregated by age, gender, nently temporary,” and frequently face ra- nationality and ethnicity.25 cial discrimination from police forces. Injured and sick seasonal workers are Removals sent home prematurely instead of receiving Thousands of people with precarious im- treatment in Canada. They have little or no migration status, including children, are access to programs such as EI, despite pay- removed from Canada every year. Tens of ing into it, are barred from collective bar- thousands of others, many of them from the gaining or joining a union, are excluded from Global South, are on CBSA removal watch- basic human rights and worker’s rights in lists. They include those who arrived as low- most provinces, and are highly vulnerable wage migrant workers, students or refugee to abuse and exploitation by employers.22 claimants. The top five countries of removal between 2015 and 2016 were the United States, China, Hungary, Mexico and India.

Getting There: Alternative Federal Budget 2018 85 Systemic barriers and inequalities in through a longer-term budget commitment. the refugee determination system, unfair This will avoid service disruptions and mini- treatment of migrant workers (including mize precarious work in the sector, which those who are injured in the workplace), has escalated in recent years due to short- and other discriminatory practices are pri- term funding and budget uncertainties.29 marily at fault for people’s loss of immigra- Federally funded immigrant settlement tion status and risk of deportation. The cre- services must be provided to all who need ation of the DCO refugee scheme has made them, including refugee claimants, migrant the situation worse. For more than 15 years, workers (except caregivers), international there have been numerous calls from civil students, and those with precarious immi- society groups, labour organizations, and gration status, who are currently excluded. many others across Canada for an immigra- These people are typically most vulnerable tion status regularization program.26 to exploitation and abuse, and often most Security certificates have been applied in need of such assistance. to non-citizens deemed inadmissible to Can- ada on security grounds, on the strength of National Action Plan Against Racism secret evidence, which has permitted in- definite detention or imposition of extremely Data disaggregated by ethno-racial back- stringent house arrest conditions.27 ground is rarely collected by any order of government. The lack of data conceals ethno- racial inequalities and impedes political and Immigrant settlement services legal recognition of racial discrimination, The previous Conservative government made which is of particular concern in areas of significant funding reductions to immigrant federal jurisdiction including immigration and refugee settlement services. New money and immigration enforcement, national se- for Syrian refugee resettlement only offset curity and income support programs. previous funding cuts in many regions. For The government’s poverty reduction many funded organizations, service demand strategy — the first ever in Canada — names outstripped federal resources. several communities at heightened risk of In November 2017, the government re- poverty, but these do not include racialized leased a multi-year immigration plan fea- communities nor does the document men- turing a gradual increase in immigration tion racism. Peoples of colour are more like- numbers to approach 1% of the popula- ly to live in poverty compared to the general tion by 2020. This can be much higher and population, yet these oversights effective- Canada can resettle many more refugees.28 ly exclude them from the poverty strategy. The government must provide the im- All levels of government must collect race- migrant- and refugee-serving sector with based data to allow identification of the ex- adequate resources to meet service needs periences of diverse peoples of colour and while maintaining annual funding stability

86 Canadian Centre for Policy Alternatives to measure the unique impacts of public “Excessive demand” policy interventions. and medical inadmissibility As mentioned above, CERD has called on Hundreds of immigration applications are Canada to systematically collect disaggre- refused each year because the applicants gated data, including economic and social are deemed likely to cause an excessive de- indicators for ethnic groups, African-Can- mand on Canada’s health and social servi- adians, Indigenous peoples and non-cit- ces. 31 Demand is found to be excessive if it izens.30 Canada’s Action Plan Against Ra- exceeds $6,655 a year, which is the average cism (2005–2010) has not been renewed, annual health care cost for a Canadian.32 A despite compelling evidence of persistent parliamentary standing committee on cit- racial inequalities and growing racism and izenship and immigration recently recom- xenophobia. mended that relevant immigration law and regulations should be repealed. The com- Canada Child Benefit mittee also proposed interim measures such as better training of immigration officers.33 Eligibility for the Canada Child Benefit is The minister of immigration has said he is based on the immigration status of the child’s committed to overhauling the policy. parents. Thus, children of people who are claiming refugee status in Canada, who cannot leave Canada for reasons wholly beyond AFB Actions their control, or who do not have regular- ized immigration status, are unfairly and Immigrant employment disparities arbitrarily excluded — even if the child has Action: Ensure full and consistent imple- full immigration status. mentation of employment equity to racial- Denying benefits in this way means that ized immigrants, including in community children in low-income immigrant families benefits agreements, and invest in foreign continue to live in poverty, which under- credentials recognition support initiatives mines their healthy development. It also such as bridging and loans programs (cost: signals that some children are less worthy $100 million a year). of poverty alleviation than others. To truly combat child poverty, the Canada Child Benefit must be made available to all chil- Refugee policy dren in Canada regardless of their parents’ Actions: Withdraw from the Safe Third immigration status. Country Agreement. Eliminate the Designat- ed Countries of Origin scheme. Exempt all refugees from having to pay back the transportation loan and immediately cancel all outstanding interest charges (cost: $50 mil-

Getting There: Alternative Federal Budget 2018 87 lion a year). Eliminate minimum residency release disaggregated data on detentions. requirements based on immigration status End the security certificate regime and all in the Canada Social Transfer. deportation proceedings under it. Intro- duce a permanent residency program for those with precarious immigration status. Sponsorship

Action: Eliminate the minimum income re- Action Plan Against Racism quirements for all family class sponsorships. Actions: Work with civil society on a renewed, enhanced and comprehensive Canada Ac- Citizenship tion Plan Against Racism. Collect and use Action: Reduce citizenship fees (cost: $17 disaggregated data to enable the analysis of million a year). intersecting effects of race with other demographic factors and to measure the impact of laws and policies on racialized and other Immigrant settlement services disadvantaged groups (cost: $20 million). Action: Invest $50 million a year to meet settlement service needs. Canada Child Benefit

Action: Provide all children living in Can- Migrant workers ada with the Canada Child Benefit, regard- Actions: Give all migrant workers currently less of their parents’ immigration status in Canada access to permanent residency, (cost: $10 million). and allow future workers to gain PR on arrival. Increase program monitoring and en- Excessive demand forcement of employer compliance in all mi- and medical inadmissibility grant worker programs. Bar the CBSA from targeting migrant workers for enforcement Action: Immediately eliminate the policy of action based on allegations of infractions refusing immigration applications based on from employers and recruiters. excessive demand on Canada’s health and social services (cost: $27 million a year).34

Enforcement

Actions: Place a moratorium on all remov- Notes

als until reforms to the refugee determina- 1 Statistics Canada. (2017). Immigration and Divers- tion system and the immigration system are ity: Population Projections for Canada and its Regions, in place. Immediately end all child deten- 2011 to 2036. tions and all immigration detention where 2 Sheila Block, Grace-Edward Galabuzi and Alexan- dra Weiss (2014). The Colour Coded Labour Market by there are no security concerns. Collect and

88 Canadian Centre for Policy Alternatives the Numbers: A National Household Survey Analysis. 15 Faraday, Fay. Profiting from the precarious: How re- Wellesley Institute. cruitment practices exploit migrant workers. 2014. Met- calf Foundation. 3 Statistics Canada. (2014). Study: Difference in earnings between the less and more highly educated immigrants 16 Report 5 — Temporary Foreign Worker Program — Em- entering Canada, 1984 to 2007. http://www.statcan.gc.ca/ ployment and Social Development Canada. 2017 Spring daily-quotidien/140529/dq140529c-eng.htm. Reports of the Auditor General of Canada to the Parlia- ment of Canada. May 2017. 4 Sheila Block and Grace-Edward Galabuzi. (2011). Can- ada’s Colour Coded Labour Market: The Gap for Racial- 17 Temporary Foreign Worker Program. Standing Com- ized Workers. Wellesley Institute. mittee on Citizenship and Immigration. June 15, 2016.

5 Michelle Parkouda, Janneka Beeksma and Janet 18 Report 5 — Temporary Foreign Worker Program — Em- Kwansah. Measuring Returns: Valuing Investments in ployment and Social Development Canada. 2017 Spring Internationally Educated Nurses. Conference Board of Reports of the Auditor General of Canada to the Parlia- Canada, September 9, 2015. ment of Canada. May 2017.

6 Laura Glowacki, “Asylum agreement with U.S. to 19 Submissions to the temporary foreign workers blame for woman’s death near border, lawyer says,” review. June 2016. Caregivers Action Centre. http:// CBC News Posted: May 31, 2017 http://www.cbc.ca/ caregiversactioncentre.org/wp-content/uploads/2016/06/ news/canada/manitoba/safe-third-countries-border- Caregivers-Brief-to-HUMA.pdf. crosser-death-1.4140348. 20 http://www.thestar.com/news/immigration. 7 Concluding observations on the combined twenty- /2015/05/16/low-acceptance-and-backlog-stifles-foreign- first to twenty-third periodic reports of Canada. United nanny-program.html. Nations Committee on the Elimination of Racial Dis- 21 http://rabble.ca/news/2016/03/project-guardian- crimination. 13 September 2017. http://tbinternet.ohchr. raids-on-caregivers-leads-to-calls-immigration-reform. org/_layouts/treatybodyexternal/Download.aspx?sym bolno=CERD%2fC%2fCAN%2fCO%2f21-23&Lang=en. 22 The Seasonal Agricultural Workers Program. Jus- ticia/Justice for Migrant Workers - J4MW. http://www. 8 Joanna Berry, Primer on the ‘Designated Countries of justicia4migrantworkers.org/bc/pdf/sawp.pdf. Origin’ Scheme. http://www.carl-acaadr.ca/our-work/ issues/DCO#Primer. 23 Canadian Border Services Agency, “Detention Statis- tics” last modified 23 May 2017, http://www.cbsa-asfc. 9 http://www.ctvnews.ca/canada/canada-only- gc.ca/security-securite/detent-stat-eng.html. country-to-charge-refugees-interest-on-travel-loans- advocates-1.2559686. 24 Never Home, “Legislating Discrimination in Can- adian Immigration” (2015), http://www.neverhome. 10 http://www.theglobeandmail.com/news/british- ca/detention/. columbia/canada-alone-in-charging-interest-to-refugees- on-travel-loans/article26345150/. 25 Concluding observations on the combined twenty- first to twenty-third periodic reports of Canada. United 11 Canadian Council for Refugees. End the burden of Nations Committee on the Elimination of Racial Dis- transportation loans. http://ccrweb.ca/en/transportation- crimination. 13 September 2017. http://tbinternet.ohchr. loans. org/_layouts/treatybodyexternal/Download.aspx?sym 12 Statutes of Canada 2014 — Chapter 39. December 2014. bolno=CERD%2fC%2fCAN%2fCO%2f21-23&Lang=en. http://www.parl.gc.ca/HousePublications/Publication. 26 http://ocasi.org/call-regularization-immigration- aspx?Language=E&Mode=1&DocId=6836481&File=9. status-canada. 13 http://news.gc.ca/web/article-en.do?nid=813369; 27 Audrey Macklin, “The Canadian Security Certifi- http://maytree.com/blog/2014/01/plug-into-changes- cate Regime” (2009) Centre for European Policy Stud- in-immigration-and-employment-rules/. ies, http://aei.pitt.edu/10757/1/1819.pdf. 14 Griffith, Andrew. “The impact of citizenship fees on 28 “Multi-year immigration levels welcomed but gov- naturalization” in Policy Options. October 12, 2016. IRPP. ernment commitment to refugees falls short”. Canadian Council for Refugees. November 2017. http://ccrweb.ca/

Getting There: Alternative Federal Budget 2018 89 en/release/multiyear-levels-welcomed-commitment- illnesses” Toronto Star, 22 November 2017, https://www. falls-short. thestar.com/news/immigration/2017/11/22/federal- government-urged-to-scrap-ban-on-immigrants-with- 29 “CISSA-ACSEI and OCASI discussion paper: Chart- disabilities-and-illnesses.html. ing a new direction”. September 2017. 33 Building an inclusive Canada: Bringing the immi- 30 Concluding observations on the combined twenty- gration and refugee protection act in step with modern first to twenty-third periodic reports of Canada. UN Com- values. Standing Committee on Citizenship and Im- mittee on the Elimination of Racial Discrimination. 13 migration. December 2017. http://www.ourcommons. September 2017. ca/DocumentViewer/en/42-1/CIMM/report-15/page-5. 31 Kathleen Harris, “‘An issue that pulls at the heart- 34 Stephen Smith, “Changes coming to Canada’s med- strings’: MPs review rules that reject immigrants on ical inadmissibility rules,” Canadian Immigration News, medical grounds” CBC News, 24 October 2015, http:// 23 November 2017, https://www.cicnews.com/2017/11/ www.cbc.ca/news/politics/immigration-rules-medical- changes-coming-to-canadas-medical-inadmissibility- inadmissibility-1.4367826. rules-119878.html#gs.ot7kDck. 32 Nicholas Keung, “Immigration minister vows to change law that bars immigrants with disabilities and

90 Canadian Centre for Policy Alternatives Industrial Strategy and a Just Transition

ALTERNATIVE FEDERAL BUDGET INDUSTRIAL STRATEGY 2018 AND A JUST TRANSITION

¢ Decarbonizing the Canadian economy to ¢ Develop a national Decarbonization Strategy mitigate the costs of climate change will require a that puts workers and communities first while co-ordinated, large-scale industrial transformation. growing the zero-carbon economy. ¢ Transition to a zero-carbon economy will have ¢ Establish a Just Transition Transfer to the negative impacts on some high-carbon industries provinces to support workers and communities SITUATION such as oil and gas extraction. negatively affected by decarbonization policies. ¢ Women, racialized workers and other DESTINATION ¢ Establish a Strategic Training Fund to support marginalized groups are underrepresented in key advanced skills training and apprenticeships in growth industries for the zero-carbon economy. strategic sectors, with a focus on groups that have historically been excluded.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background The AFB plans to end Canada’s fossil fuel dependence by restricting new fossil Climate change is chiefly caused by the emis- fuel infrastructure, increasing the price of sion of greenhouse gases (GHGs) from the fossil fuels to reflect their true environment- combustion of fossil fuels. Reducing fossil al cost, and expediting energy efficiency fuel production and consumption is there- improvements (see Environment and Cli- fore the focal point of the AFB’s climate mate Change chapter). The AFB plans to change mitigation and adaptation strategy. build a zero-carbon economy through bold We must end Canada’s economic depend- and substantive new investments in renew- ence on oil, gas and coal and build an al- able energy generation, public transit and ternative, zero-carbon economy to ensure a electrification (see Infrastructure and Cities prosperous, sustainable future. Otherwise, chapter). Tying these elements together is a the rising costs of climate change will soon well-planned, large-scale, national indus- reach debilitating levels.1 trial strategy that ensures a just transition for workers and their communities.

Getting There: Alternative Federal Budget 2018 91 The “just transition” framework was de- In doing so, a just transition should veloped by the labour movement and civil address serious inequities in the economy. society groups to minimize the harm to work- Because the vast majority of workers in ers and their communities of the transition the construction and resources sectors are off fossil fuels.2 Canada has a long history white men, as are the majority of new stu- of resource booms going bust (for reasons dents in skilled trades training programs other than environmental policy) with re- and apprenticeships,5 in the short term al- sultant increases in poverty, violence and most all of the benefits from just transition poor public health. Unsurprisingly, many programs will flow to them. However, for a fossil fuel workers now fear that necessary just transition in the long term, programs environmental and industrial policies, such must be designed to ensure marginalized as the phase-out of coal-fired electricity groups have access to new economic op- generation, will hurt them and their com- portunities in the clean economy. Dedi- munities. Fortunately, a large-scale indus- cated training programs and hiring quotas trial transformation need not be disruptive for women, racialized Canadians and other if done in a co-ordinated and rational way. underrepresented groups should be includ- A just transition includes policies to ed in just transition program design. support the workers and communities most The AFB sees a central role for the federal negatively affected by decarbonization and government in co-ordinating and facilitat- to help them adapt to the zero-carbon econ- ing these changes through targeted indus- omy. For example, worker expertise in drill- trial and workforce development policies. ing wells for fracking gas can be redirected We need a managed wind-down of “dirty” toward drilling wells for clean geothermal industries over the course of a few decades. energy. In addition to these reactive policies, Through careful planning we can avoid the a just transition includes forward-looking, harmful boom-and-bust tendencies of re- proactive policies. source markets. Strategic development of Approximately 200,000 people work dir- “green” industries presents an extraordin- ectly in Canada’s fossil fuel industry today ary opportunity for Canada to make large (1% of total employment),3 but an ambi- new investments that create jobs and boost tious green jobs plan could create as many productivity while dramatically reducing as one million new jobs within a decade.4 In carbon emissions. other words, reskilling existing workers is The benefits of a just transition—as op- necessary but insufficient to meet the needs posed to an unmanaged, regressive one— of the zero-carbon economy. A just transi- extend beyond the economic well-being of tion therefore includes policies to train new workers and their communities. A just tran- workers to meet additional demand and to sition also strengthens political buy-in for ensure employment is created in the regions potentially controversial or divisive policy that need it most. proposals, such as the closing of fossil fuel-burning power plants. Without proactive

92 Canadian Centre for Policy Alternatives efforts to acknowledge and support affect- sectors for the zero-carbon economy and ed workers, an industrial strategy will never determine how the federal government can secure the consensus necessary for trans- best support them through the transition. formational change. These industries, such as electricity genera- That’s especially the case in Alberta, tion, forestry, and public transit equipment Saskatchewan, Newfoundland and Labra- manufacturing, lower our overall emissions, dor, and northern British Columbia, where provide good jobs and drive innovation and many communities are highly dependent on productivity growth. The strategy will also coal, oil and natural gas production. Given identify sectors incompatible with the ze- the highly regional nature of the zero-car- ro-carbon economy, such as fossil fuel ex- bon transition, it is vital that the provinces traction and conventional vehicle transpor- take the lead in supporting affected workers tation, and develop a plan to wind down or and communities. The federal government fundamentally reform them. To facilitate a can make its greatest contribution by pro- smooth transition, the strategy will ensure viding resources and helping to co-ordinate that new energy systems and economic- regional just transition programs. ally productive industries scale up before the fossil fuel sector is phased out entirely. Result: With a $50-million annual operating AFB Actions budget to support consultations, research and policy development, the National De- Action: Allocate $250 million over five years carbonization Strategy will act as a co-or- toward the development of a National De- dinating body for other spending detailed carbonization Strategy in consultation with in the AFB, including the enhanced Low provincial-territorial governments, labour Carbon Economy Fund (see Infrastructure organizations, First Nations, industry as- and Cities chapter) and the trade promo- sociations, academics, and other stake- tion strategy (see International Trade and holders. The strategy will be grounded in Investment chapter). the principles of decent work and environmental sustainability, include a comprehen- Action: Create a new $500-million Just Tran- sive assessment of the state of the Canadian sition Transfer (JTT) to support workers and economy and detailed picture of where it communities negatively affected by actions needs to go in the medium and long terms, taken under the National Decarbonization and chart a policy roadmap to get us there. Strategy, especially the phase-out of coal, At every stage, the strategy will prioritize oil and natural gas production (cost: $100 greenhouse gas emission reductions while million a year for five years). The JTT is pro- ensuring decent work for all regions and vided to the provinces as a complement to peoples in Canada. other federal employment and social secur- The National Decarbonization Strat- ity programs detailed in the AFB, including egy will identify key industries and sub- enhanced employment insurance benefits

Getting There: Alternative Federal Budget 2018 93 (see Employment Insurance chapter). The women, racialized Canadians, immigrants, specific allocation of the JTT to each prov- First Nations and other groups that have ince is contingent on progress made under been historically excluded from the skilled the National Decarbonization Strategy and trades. A portion of STF spending is dedicat- on the share of affected workers in each ed to marketing and recruitment campaigns jurisdiction. designed to increase applications from his- Result: The Just Transition Transfer will torically marginalized demographics. The provide income security, skill retraining Strategic Training Fund is a complement and family support (such as counselling) to other AFB workforce development initia- to the workers and communities hit hardest tives including the Post-Secondary Educa- by the zero-carbon transition. The transfer tion Renewal Transfer (see Post-Secondary is designed to reinforce existing provincial Education chapter). just transition programs, such as Alberta’s Coal Workforce Transition Fund, while in- centivizing the creation of new and more Notes

comprehensive programs where they’re 1 Without serious action to combat climate change, the needed most. cost of climate-related disasters to the Canadian economy is expected to rise to $21–43 billion per year by Action: Establish a new $1-billion Strategic the 2050s. See: National Round Table on the Environ- Training Fund (STF) to increase training cap- ment and the Economy, Paying the Price: The Econom- ic Impacts of Climate Change for Canada, Government acity in strategic zero-carbon sectors. Target- of Canada, 2011. ed investments in the areas identified under 2 Karen Cooling, Marc Lee. Shannon Daub and Jessie the National Decarbonization Strategy will Singer. Just Transition: Creating a green social contract create hundreds of thousands of new jobs, for BC’s resource workers, Canadian Centre for Policy Alternatives: BC Office, January 2015. especially in the skilled trades. For the zero-carbon transition to be successful, the 3 Hadrian Mertins-Kirkwood. Tracking Progress: Evalu- ating government plans and actions to reduce greenhouse Canadian economy needs skilled workers gas emissions in Canada, Canadian Centre for Policy ready to fill those positions. However, col- Alternatives and Adapting Canadian Work and Work- leges and trade schools currently lack the places to Respond to Climate Change, May 2017, p. 14. resources to train new workers on the scale 4 See, for example: Steering Committee of the Green Economy Network. Making the Shift to a Green Econ- required, and current programs are failing omy: A Common Platform of the Green Economy Net- to attract new students from many segments work, Green Economy Network, 2016.

of Canadian society. 5 Hadrian Mertins-Kirkwood. Making Decarbonization Result: Colleges and other training institu- Work for Workers: Policies for a just transition to a zero- tions will receive funding through the Stra- carbon economy, Canadian Centre for Policy Alterna- tives and Adapting Canadian Work and Workplaces to tegic Training Fund to create and expand Respond to Climate Change, January 2018. training programs consistent with the Na- tional Decarbonization Strategy. Funding is contingent on increased representation of

94 Canadian Centre for Policy Alternatives Infrastructure and Cities

ALTERNATIVE FEDERAL BUDGET INFRASTRUCTURE 2018 AND CITIES

¢ The number of commuters who drive to ¢ Increase short-term funding for public work has barely changed in recent years, transit and electrification initiatives and dropping only 1.3% from 2006 to 2016. modify the current mandate to target ¢ Government infrastructure spending is only greenhouse gas reductions.

SITUATION 0.1% higher than it was in 2006. ¢ Increase short-term funding for green infrastructure and the Low Carbon Economy

¢ In 1955, the federal government spent 35% DESTINATION of every infrastructure dollar; today, it spends Fund. closer to 15%. ¢ Create a National Community Development Agency to oversee community economic development.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background only the most decrepit infrastructure is estimated to be $141 billion — deplete muni- The backbone of Canada’s current munici- cipal resources, making it even harder for pal infrastructure system was built between cities to meet the day-to-day needs of their 1950 and 1980, but cities have been starved residents.1 To make matters worse, local of cash ever since. Cuts in federal and prov- governments simply do not have the cap- incial transfers and the downloading of re- acity, on their own, to manage the transi- sponsibilities to local governments have tion to a zero-carbon economy, which will led to decay. require significant spending on new green Less money for cities means less money infrastructure. for services such as public transit, police Canadian municipalities are restrict- and fire departments, libraries, water and ed in how they raise revenues. Unlike in sanitation services and community cen- other countries, local governments here tres. The added costs associated with aging cannot levy income or sales taxes but rely infrastructure — the total cost of replacing mostly on property taxes and user fees in-

Getting There: Alternative Federal Budget 2018 95 stead. As regressive forms of revenue gen- fers were cut in the mid-1990s. These funds eration, these measures disproportionately were a necessary improvement, but they did affect vulnerable populations.2 Property tax not fully remedy long-standing shortfalls. rates in some provinces, for example, are Problematically, these new spending among the highest in the world.3 In contrast, promises were back-loaded and ultimate- several major U.S. cities levy income and/or ly inadequate given the dire need for new sales taxes, and many European cities rely infrastructure in many communities. Addi- heavily on income taxes. Municipalities in tionally, the federal government failed to other countries also receive more reasonable address the flaws in the funding structure transfers from upper levels of government. itself. Grants were still approved using an In the early 1990s, transfers from Can- opaque application-based process that dis- ada’s federal and provincial governments courages a co-ordinated approach, leads to provided 26% of local government revenues. accusations of unfairness and emphasizes By 2000, cuts to both sources of revenue had high-profile, politically popular projects over reduced that amount to only 16%. During functional, forward-looking investments. this period of low investment, the popula- The much bigger problem with recent tion of Canadian cities grew by almost three federal funding changes is that the govern- million people.4 Local governments, espe- ment missed an opportunity to put in place cially in Ontario, increased property taxes, more efficient low-carbon infrastructure such user fees and service charges while reducing as public transit. Instead, the federal gov- public services and delaying investment in ernment invested heavily in infrastructure, and maintenance of infrastructure. Com- such as roads and bridges, that perpetuates munity organizations and community-based carbon-intensive activities. projects had trouble maintaining existing levels of support. Transfers to municipalities continued to shrink even when federal Current Issues and provincial governments ran surpluses Persistent problems and cut taxes to businesses and higher-income earners. The current government’s Investing in Can- Federal and provincial governments have ada Plan provides an adequate base-level increased the money they transfer to local of investment that will allow cities to slow- governments in recent years in response to ly renew and restock decaying infrastruc- pressure from civil society, the recession and ture, but it is far less than the injection of some major structural issues related to vital capital they need. bridges and roads. At the federal level, the Furthermore, the federal funding mech- 2007 Building Canada Plan, the 2013 New anism is still deeply flawed, based on an Building Canada Plan and the 2016 Investing opaque project approval process that in- in Canada Plan offered municipalities stable, hibits long-term planning. For example, a long-term revenue not enjoyed since trans- lack of publicly available data and objective

96 Canadian Centre for Policy Alternatives criteria prevents more robust analysis and new money will be wasted on higher inter- critique of this process, creating a vast ac- est payments. countability gap at the federal level. An infrastructure bank could, given the Government infrastructure spending in right mandate, lower the borrowing cost for 2016 was only 0.1% higher, as a percentage cities from 2.5% to the 0.8% federal rate. of GDP, than it was in 2006.5 And while we Such a bank could also simplify the pro- are finally approaching an era when infra- cess of accessing bond markets. The pro- structure spending levels will once again posed Canada Infrastructure Bank, how- rise to a suitable level, it is mystifying that ever, appears designed to serve the needs we’re still not there. of investors, not cities, with its likely focus on public-private partnerships and reliance on private sector financing, which currently Making the Canada Infrastructure comes with interest rates of 7–9%. Bank work for cities

The federal government continues to pay Breaking the fossil fuel paradigm the lowest interest rates of any level of government and enjoys the broadest tax base. Postponing investment for so long has re- Municipalities, on the other hand, face the sulted in numerous missed opportunities to highest interest rates and the smallest tax prevent and mitigate the effects of climate base. In other words, it is much more cost- change. Even worse, a generation of neg- effective for the federal government to make lect has made it harder to take the dramat- major infrastructure investments than it is ic steps needed to realize a climate-friend- for municipalities, even if public dollars are ly paradigm. being used in either case. Green infrastructure and public tran- There has been a substantial shift in sit are pillars of the Liberal infrastructure infrastructure investment and responsibility plan and these expenditures will likely re- over the past half-century. In 1955, the fed- sult in worthwhile, emission-reducing pro- eral government spent 35% of every infra- jects. Unfortunately, a significant portion of structure dollar; today, it spends closer to this investment is back-loaded or will other- 15%. Municipalities used to spend a quar- wise be used to play catch-up. Wastewater ter of every infrastructure dollar; now they facilities are in poor condition across the spend close to half. country (see the Water chapter) and public One of the key justifications for the new transit authorities are scrambling simply to Canada Infrastructure Bank is to reduce keep up with growing urban populations. costs and increase access to loans for Can- After oil and gas extraction, the trans- adian cities. Unfortunately, the bank’s lend- portation sector is the largest contributor ing structure will cost cities extra. That’s be- to greenhouse gas emissions. Urbanization cause a large portion of the benefit from the rates and urban populations continue to rise, but Canadians haven’t yet been convinced

Getting There: Alternative Federal Budget 2018 97 to leave their cars at home. The number of AFB Actions commuters who drive to work was down a The Alternative Federal Budget makes large- paltry 1.3% in 2016 compared to 2006 levels.6 scale, strategic investments in vital public To move in a meaningful way toward infrastructure with a clear emphasis on re- sustainability, we need to drastically reduce ducing greenhouse gas emissions and pre- the number of gasoline-powered vehicles on paring Canadian communities for the low- the road. Improved public transit is the best carbon economy. All new spending will be way to make that happen. It comes down to allocated in line with the National Decarbon- finding the right balance of lowered costs, ization Strategy (see the Industry Strategy reduced commute times and enhanced con- and a Just Transition chapter). Infrastruc- venience. Changing people’s habits is not ture spending in AFB 2018 is front loaded to easy, but it is certainly achievable. accelerate projects in the short term.

Action: Increase short-term funding for Prioritizing high-speed rail public transit and electrification initiatives Rail is one of the lowest-carbon modes of and modify the current mandate to achieve transportation, with the added benefits of the greatest possible greenhouse gas emis- speed and comfort, but it has been grossly sions reductions (cost: $2 billion per year neglected by Canadian policy-makers. High- through 2020-21). speed rail has been a frequent topic of con- The AFB tops up existing federal com- versation for decades; millions have been mitments for public transit infrastructure spent on feasibility studies, but no mean- with $6 billion in new spending over the ingful projects have broken ground. next three years to accelerate the develop- The corridor between Windsor and Que- ment of new projects. The AFB also expands bec City is populated by over half of Can- the scope of transit infrastructure funding ada’s population and 92% of travel along to include transportation electrification in- this route is done in cars. There are inten- itiatives that go beyond traditional public tions to build a high-speed rail connection transit, such as electric vehicle charging along the corridor, but progress will likely infrastructure and inter-city rail. Priority depend on the outcome of the next provin- projects for the new funding include high- cial election (possibly the next two). speed rail lines in the Windsor–Quebec City There are few, if any, other individual and Calgary–Edmonton corridors. projects in Canada that have as much po- Action: Increase short-term funding for tential as the Windsor-Quebec City rail link green infrastructure and the Low Carbon to take cars off the road and reduce carbon Economy Fund (cost: $3.5 billion per year emissions. We need leadership at the fed- through 2020-21). eral level to make this happen. As the level of ambition of Canada’s climate policy increases (see the Environment

98 Canadian Centre for Policy Alternatives and Climate Change chapter), more funding of government, stakeholders and civil so- will be needed. The AFB increases funding ciety partners. to the Low Carbon Economy Fund to $2 bil- As a key player in the implementation of lion per year (from $500 million) and adds the National Decarbonization Strategy, the $2 billion per year in new green infrastruc- National Community Development Agency ture spending until 2021. Investments will will also identify common goals and oppor- focus on expanding renewable energy gen- tunities across provinces to develop renew- eration capacity, especially in remote and able energy capacity, transition communities rural communities. and industrial sites to the low-carbon economy, and implement local climate change Action: Increase short-term funding for mitigation and adaptation strategies. social infrastructure and create a National Community Development Agency to oversee community economic development (cost: Notes $50 million per year). The AFB increases upfront social infra- 1 Federation of Canadian Municipalities. (2016). Can- adian Infrastructure Report Card. structure spending to match spending down 2 Lower-income households pay a much higher share the road (see the AFB chapters on First Na- of their income on increased user fees for public ser- tions, Child Care, Health Care and Hous- vices, or property taxes on owned or rented property. ing). The new development agency will be 3 Kyle Pomerleau and Andrew Lundeen (2014). made up of representatives from all levels of International Tax Competitiveness Index. Tax government and tasked with removing ob- Foundation. stacles to the smooth transmission of public 4 Statistics Canada. 2011 National Census. “Population, urban and rural, by province and territory.” resources to community economic development initiatives. It will develop streamlined 5 CANSIM Table 380-0064 with author’s calculations. Infrastructure spending defined as “General Govern- project approval criteria to get funding out ments Gross Fixed Capital Formation.” the door more quickly, and it will improve 6 Statistics Canada. (2017). “Journey to work: Key re- transparency through new reporting mech- sults from the 2016 Census.” anisms and fund-specific auditing. An ongoing outreach strategy will promote code- velopment of public policy with all levels

Getting There: Alternative Federal Budget 2018 99 International Development

ALTERNATIVE FEDERAL BUDGET INTERNATIONAL 2018 DEVELOPMENT

¢ Achieving the Sustainable Development Goals ¢ Align government policy with the Sustainable (SDGs) demands a transformative change in Canada’s Development Goals. approach to development co-operation. ¢ Increase development spending by 15% annually ¢ Canada invests 0.27% of gross national income to reach 0.7% of GNI by 2027-28. (GNI) in international development—below the ¢ SITUATION Focus Canada’s international assistance on the OECD peer average, and a third of the UN’s 0.7% poorest and most vulnerable people. target. DESTINATION ¢ ¢ Canadian development assistance must be Demonstrate leadership on the SDGs related to implemented in more integrated and complex ways, gender equality. with new, substantial, complementary investments ¢ Create a Development Finance Institute to invest and financing tools. in women-led businesses in low-income countries.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background Many other countries — from Colombia to Germany, Finland to China — are using Global context Agenda 2030 to achieve greater coherence The adoption, in 2015, of the 2030 Agenda in government policy around issues of so- for Sustainable Development (Agenda 2030) ciety, economy and environment (includ- and the Sustainable Development Goals ing actions on climate change), with the (SDGs) was a landmark achievement, es- aim of achieving a more sustainable im- tablishing a globally comprehensive and in- pact on the ground. These countries have tegrated approach to sustainable develop- established multi-stakeholder and/or inter- ment.1 These new goals are universal in ministerial mechanisms to implement the nature, applying to all countries includ- SDGs. There are many international preceding Canada. In fact, the SDGs are an ideal ents from which Canada can learn and bor- framework from which Canada should set row. The High Level Political Forum at the an ambitious global agenda. United Nations in New York in July 2018 will be a key opportunity for Canada to present

100 Canadian Centre for Policy Alternatives its national framework for implementing the resources needed to have an impact, the SDGs domestically and internationally. will allow Canada to make an important Beyond the SDGs, the World Humani- contribution and enhance its reputation on tarian Summit (WHS) in May 2016 also drew the global stage. global attention to the urgency for collect- Both these global agendas challenge ive action to address growing humanitar- Canada to move outside of its traditional in- ian need. The world is experiencing the stitutional and conceptual silos to achieve greatest displacement crisis ever recorded, inclusive development that leaves no one with some 65 million people forced from behind. Success will demand a whole-of- their homes in recent years.2 Over 218 mil- Canada and inclusive approach that reflects lion people each year are affected by disas- the multidimensional nature of poverty, de- ters, costing the global economy more than livering baskets of interventions that reflect $300 billion annually.3 A recent UN report country- and community-specific needs. Civil showed a $15 billion gap between available society’s strengths in program delivery, in financing for humanitarian assistance and policy and advocacy, and in engaging and global human need.4 mobilizing the public, will complement the political will and resources that Can- ada can invest in the right mix of policies National vision and programs. Canada’s new Feminist International As- Government, civil society organizations sistance Policy (FIAP) represents a signifi- (CSOs), and other stakeholders must en- cant shift in how Canada delivers global de- gage in a long-term partnership to elabor- velopment and humanitarian assistance. The ate — and implement — a comprehensive ambitious vision in the FIAP creates an op- and effective framework that will guide portunity for the government to align its ac- Canadian development co-operation over tions with Agenda 2030 and the WHS Grand the next five years, and enhance Canada’s Bargain. Making progress in both of these contribution to a fairer, more sustainable, areas demands a transformative change in and safer world. This vision for a strong de- Canada’s vision and approach to global co- velopment and humanitarian assistance operation. policy requires a strong financial commit- The world urgently needs to reverse the ment. It would be one of the smartest long- trend toward deeper inequality, end the term public investments the government gender discrimination that stymies human can make to help build a stable and pros- development, slow the progress of climate perous global economy that works for all. change while helping the poorest adapt, Canada must contribute its fair share and stop the human misery resulting from to fostering stability and reverse the recent regional instability, forced displacement trend that has seen its international assist- and recurring cycles of violence. An effect- ance budget decline to historically low lev- ive implementation of the FIAP, including els.5 Canada currently allocates about 0.27%

Getting There: Alternative Federal Budget 2018 101 of its gross national income (GNI) to develop- more complex ways as well. Above all, Can- ment co-operation and humanitarian assist- ada’s focus should be on poor people, not on ance.6 Canada has fallen below the average poor countries, in keeping with the principal of its peer group in the Organization for purposes of Canada’s ODA Accountability Economic Co-operation and Development Act.9 Canada should be seeking to assist the (OECD), to well less than half of the UN tar- poorest and most vulnerable, regardless of get of 0.7% of GNI.7 These figures affect how where they live. This focus is consistent with Canada is perceived internationally by its the Minister of International Development’s peers and in the UN. Without substantial mandate to focus on reducing poverty and increases, the current Liberal government inequality, and with the core goal of Agen- risks having the worst record in Canadian da 2030: to leave no one behind.10 history, in terms of the level of investments Canadian ODA should also be aligned in international assistance. with the priorities of Canada’s partners in developing countries. Alignment with developing country priorities, democratic owner- Strategic investments and focus ship of these priorities, and harmonization of There is no clearer way of rebuilding Can- efforts among donors, have been recognized ada’s global profile than through sustained over the past 15 years as key determinants annual increases to the international assist- of effective aid delivery.11 In a recent global ance envelope (IAE) — the most predictable monitoring exercise, Canada ranked 19 out way of growing Canadian official develop- of 22 bilateral donors in aligning the object- ment assistance (ODA). Canada can use ODA ives of its country assistance to country-led to support smart, strategic and impactful results frameworks, a key determinant of re- global development and humanitarian inspect for the principle of country ownership vestments, working in collaboration with in development co-operation.12 all development and humanitarian actors Yet, in 2012, Canada allowed its aid ef- including CSOs. By focusing Canada’s ODA fectiveness action plan to conclude without on supporting gender equality and empow- developing a new one. The government of ering women and girls, the government has Canada needs a new action plan with clear signaled its intention to play a leadership targets in line with the 2005 Paris Declara- role in supporting SDG 5, as well as SDG tion on Aid Effectiveness. implementation across the FIAP’s six key action areas.8 However, implementing the Complementary investment tools13 new policy will also require enhanced development practice. A diversified portfolio of tools and approach- The increasingly multidimensional nature es can reduce risk and enhance efficiency in of poverty and inequality across and within Canadian international assistance efforts. national borders means that Canadian de- In this vein, the mandate of Canada’s De- velopment assistance must be focused in velopment Finance Institute (DFI) must be

102 Canadian Centre for Policy Alternatives complementary to its ODA efforts, focused monitoring, transparency and accountabil- squarely on development and poverty re- ity standards; respecting key development duction, ensuring positive outcomes and effectiveness principles relating to country real impact. ownership, transparency and accountabil- To be most effective, Canada’s DFI should ity; and demonstrating development out- coordinate its operations with parallel efforts comes and results. through, for example, Global Affairs Can- In summary, Canada’s DFI can maxi- ada (GAC) and the International Develop- mize development impact by being inte- ment Research Centre (IDRC), including by grated within Canada’s existing develop- focusing on many of the same low-middle ment efforts. This means emphasizing clear income (LMICs) and low-income countries development outcomes and financial return (LICs) where GAC and IDRC have active pro- alongside financial and development addi- grams and knowledge of the development tionality, complementarity, good govern- landscape. ODA investments through GAC ance and transparency. and IDRC can help strengthen institutions, governance and the rule of law, build infrastructure, invest in education and training, AFB Actions and strengthen local knowledge, research The 2018 AFB proposes to substantially and innovation (among other things). strengthen Canada’s role as a co-operative These are the same factors that facilitate leader in building a fairer, more sustainable business development and attract capital. and safer world. The DFI should seek to address key financing gaps and fill niche markets, provid- Actions: Launch a comprehensive plan to ing patient capital, loans and loan guar- align government policy with the Sustain- antees, technical assistance and business able Development Goals. Toward this end, services to women-led SMEs in LMICs and the prime minister will establish an inter- LICs where there is a huge dearth of cap- ministerial committee on the SDGs, co-or- ital. Such a focus would complement GAC’s dinated by the Privy Council Office and renew FIAP and its $150 million fund for lo- porting directly to him. The government cal women’s rights organizations in devel- will also establish a multi-stakeholder na- oping countries. tional commission to foster a whole-of-so- The DFI must be guided by and account- ciety approach to implementing the SDGs. able to the following core principles:14 adopt- This commission will actively engage with ing mechanisms to ensure any investment the three levels of government, Indigenous can demonstrate clear development and fi- authorities, civil society, the private sector nancial additionality; giving as much weight and other Canadians. The committee and in evaluation and selection criteria to com- national commission will work together to mercial viability and return on investment as generate a comprehensive Canadian SDG to development impact; developing robust action plan, drawing inspiration from the

Getting There: Alternative Federal Budget 2018 103 Feminist International Assistance Policy Actions: Set clear additional targets to focus and the Federal Sustainable Development Canada’s international assistance and de- Strategy. This action plan will outline an velopment finance on the poorest and most inclusive process for developing a nation- vulnerable people, women and girls in par- al framework of indicators, inspired by the ticular. As of 2018-19, 50% of bilateral aid will global indicators but specific to Canada, and be dedicated to least developed and low-in- for working with the provinces and territor- come countries (LDCs and LICs) and fragile ies to collect data at the subnational level, states. In the next four years, or by 2022-23, disaggregated by age, race, ethnicity and 0.12% of GNI will be dedicated to develop- gender, among other criteria. ment co-operation for LDCs.15 As the IAE in- Result: A clear and coherent whole-of-gov- creases through the new investments in AFB ernment framework for meeting and meas- 2018, a larger proportion will be allocated uring Canada’s SDG priorities at home and to the baseline budget for humanitarian as- abroad. sistance (prevention, response, relief and re- covery) to gradually bring this into line with Action: Announce a 10-year timetable for typical year-end expenditures. A new over- gradually and predictably increasing the arching aid effectiveness action plan will be international assistance envelope until Can- created, with clear targets in line with the ada has met its UN target of 0.7% of GNI. 2005 Paris Declaration on Aid Effectiveness, The envelope will increase annually by 15%, the 2008 Accra Agenda for Action, and the from $4.9 billion in 2017-18 to $5.7 billion 2011 Busan Global Partnership for Effective in 2018-19, $6.5 billion in 2019-20 and $7.5 Development Co-operation. Finally, as part billion in 2020-21. This additional funding of a comprehensive feminist approach, the will be accompanied by new, flexible, di- Canadian Development Finance Institute verse and responsive funding mechanisms will invest half of its resources in women- to support the government’s work with a led small and medium-sized enterprises in variety of new, existing and non-tradition- LMICs and LICs. al CSO partners. Result: By focusing on the people most in Result: More predictable funding over the need, wherever they live, Canada will help coming years will help Canada meet its pol- realize the Agenda 2030 ambition of leav- itical ambitions for global co-operation and ing no one behind. catch up with its OECD peers with respect to development assistance. The AFB’s “fiscal escalator” will generate predictable an- Notes nual increases in the aid budget, double the aid envelope in the first five years and -al 1 United Nations, Transforming our world: The 2030 Agenda for Sustainable Development, 2015, low partner countries to absorb the increas- https://sustainabledevelopment.un.org/post2015/ es effectively and in accordance with their transformingourworld. own priorities.

104 Canadian Centre for Policy Alternatives 2 UNHCR, “Figures at a Glance,” 2016, http://www. 10 Prime Minister of Canada, Minister of Internation- unhcr.org/figures-at-a-glance.html. al Development and La Francophonie Mandate Let- ter, 2015, http://pm.gc.ca/eng/minister-international- 3 ReliefWeb, “The Human Cost Of Natural Disasters development-and-la-francophonie-mandate-letter. 2015: A Global Perspective,” report summary, March 2015, http://reliefweb.int/report/world/human-cost- 11 See notably the Paris Declaration on Aid Effective- natural-disasters-2015-global-perspective. ness (2005) and the Accra Agenda for Action (2008), http://www.oecd.org/dac/effectiveness/34428351.pdf. 4 ReliefWeb, “High-Level Panel on Humanitarian Fi- nancing Report to the Secretary-General: Too important 12 Global Partnership for Effective Development Cooper- to fail — addressing the humanitarian financing gap,” ation, 2016 Progress Report, page 154. http://reliefweb.int/report/world/high-level-panel- 13 A more detailed iteration of this section is available humanitarian-financing-report-secretary-general-too- at “Presentation to the Standing Committee on Foreign important-fail. Affairs and International Development on its Study 5 CCIC, “Implementing Canadian Ambitions: Sup- on Canada’s Development Finance Institute (DFI),” porting Global Development in Budget 2018,” October July 2017, http://ccic.ca/media/Standing_Committee_ 2017, http://ccic.ca/resources/Implementing_Canadian_ Appearance.pdf. Ambitions_October_2017.pdf. 14 See for example the “Annex 1: OECD DAC Blended 6 Ibid. Although this figure reflects the anticipated Finance Principles for Unlocking Commercial Finance GNI for 2016-17. for the SDGs,” in DAC High Level Communique, October 31, 2017, http://www.oecd.org/dac/DAC-HLM-2017- 7 Greenhill, Robert and Celine Wadhera, “On paying its Communique.pdf. These capture much of what is sug- global share, Canada’s not back — it’s far back,” Janu- gested here. ary 11, 2017, https://www.opencanada.org/features/ paying-its-global-share-canadas-not-backits-far-back/. 15 The Government of Canada currently allocates around 0.09 percent of GNI to LDCs. This transition 8 These key action areas are gender equality and the em- can be achieved within the context of an expanded powerment of women and girls, human dignity, growth IAE as per above. that works for everyone, environment and climate action, inclusive governance, and peace and security.

9 For details, see Global Affairs Canada, “The Official Development Assistance Accountability Act,” http:// www.international.gc.ca/development-developpement/ partners-partenaires/bt-oa/odaaa-lrmado.aspx?lang=eng.

Getting There: Alternative Federal Budget 2018 105 International Trade and Investment

ALTERNATIVE FEDERAL BUDGET TRADE 2018 POLICY

¢ Canada’s existing trade and investment ¢ Develop a trade promotion strategy that helps agreements, including NAFTA, are a contributing shift Canada toward a zero-carbon economy. factor in the rise of inequality over the past 30 years, ¢ Place a moratorium on new free trade and our overdependence on environmentally negotiations (hit pause), pursue sectoral harmful, carbon-intensive exports. agreements (e.g., on clean energy) with SITUATION ¢ New trade and investment agreements would international partners, and prioritize co-operation

exacerbate these problems without offering DESTINATION through international forums like the UN. significant benefits to Canadian firms or workers. ¢ Review existing international trade agreements ¢ Canada has other options for promoting trade to ensure they do not undermine social justice, and investment without committing to overbroad economic inclusion and environmental and restrictive “free trade” treaties. sustainability.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background deficits are the product of government policy choices. Over the past three decades, Can- Canada’s international trade in goods and adian governments have pursued trade and services was valued at $1.3 trillion in 2016, investment liberalization without regard for while investment flows were valued at $133 the costs. The result has been increased trade billion.1 Exports accounted for 31% of Can- and investment, but also slower economic ada’s GDP and imports were even higher, growth, increased socioeconomic inequality, producing a small trade deficit. Likewise, concentrated corporate power and structur- Canadian investors sent more money abroad al imbalances in the economy.3 Specifically, than Canada received in foreign direct in- Canadian trade policy has promoted the de- vestment. Overall, Canada’s current account velopment of environmentally destructive deficit expanded to $67.7 billion in 2016.2 resource industries at the expense of manu- Both the relative importance of trade facturing and other value-added sectors. and investment to the Canadian economy At the centre of Canada’s liberalization and the persistence of trade and investment agenda are free trade agreements (FTAs)

106 Canadian Centre for Policy Alternatives and foreign investor protection agreements ed to the Canada-Chile FTA at the request (FIPAs). Although ostensibly intended to of the Chilean government only creates an benefit all Canadians, these agreements oversight committee and is not enforceable have in fact empowered multinational cor- through the agreement’s dispute settlement porations and foreign investors at the ex- mechanism. pense of workers and governments. The government’s “progressive trade” In general, Canada’s international eco- agenda will continue to be put to the test in nomic agreements are problematic for four 2018 as Canada juggles 19 sets of ongoing reasons: trade and investment negotiations.5 The fol- 1. FTAs and FIPAs are negotiated in se- lowing four agreements will be especially cret with minimal public involvement or important this year. oversight (even from elected officials); 2. FTAs and FIPAs force changes to do- North American Free Trade mestic legislation in policy areas not direct- Agreement (NAFTA) ly (and sometimes not remotely) related to trade or investment, such as government pro- In May 2017, U.S. President Donald Trump curement and intellectual property rights; notified Canada and Mexico of his intent 3. FTAs and FIPAs give special rights to to renegotiate NAFTA. Formal negotiations foreign investors without corresponding re- began in August and are scheduled through sponsibilities, including the right to sue gov- spring 2018. ernments through private arbitration; and NAFTA has been a disappointment for 4. FTAs and FIPAs lack meaningful rights Canada since coming into force in 1994. On or protections for workers, the environment, the one hand, the agreement did not produce public services and other social consider- the higher wages and productivity growth ations, including the right of governments that were promised at the time. On the other to regulate freely in the public interest. hand, NAFTA has had clear costs. The auto The federal government has recently sector has been especially negatively im- adopted a “progressive trade” agenda that pacted in terms of production, investment, superficially addresses some of these con- trade balance and employment (45,000 auto cerns.4 In addition to consulting with labour sector jobs have been lost since peaking in unions and other civil society groups, the 2001).6 Canada has also been sued through government has attempted to introduce new NAFTA’s investor-state dispute settlement language on labour rights, environmental (ISDS) mechanism more than any other protection, gender equality and Indigen- country and has paid out hundreds of mil- ous rights into trade agreement negotia- lions of dollars in compensation to foreign tions. Although their rhetoric is laudable, (mostly U.S.) corporations.7 the government has so far failed to achieve In theory, the renegotiation of NAFTA any meaningful progressive outcomes. For presents an opportunity to remedy long- example, the gender equality chapter add- standing problems with the deal. For ex-

Getting There: Alternative Federal Budget 2018 107 ample, new provisions protecting workers hibits local development criteria in govern- and the environment could be added and ment procurement, locks in liberalization in the ISDS mechanism could be removed.8 public services, and extends pharmaceutical However, the Trump administration’s patent protections that increase the price of “America First” agenda poses new threats brand-name drugs and limit the availabil- to supply management, the affordability of ity of cheaper generic competition.10 Studies medicines, privacy rights, public interest predict CETA will have a negligible or even regulation and key export sectors. In many negative impact on the Canadian economy, cases, the U.S. is tabling provisions recycled with workers hit the hardest.11 Upwards of from the Trans-Pacific Partnership, even 150,000 jobs are put at risk.12 though the U.S. withdrew from that deal (see below). Given these demands and other Comprehensive and Progressive “poison pill” proposals that Canadian nego- Agreement for Trans-Pacific tiators have so far rejected, Canada should Partnership (CPTPP) be actively preparing for NAFTA to end. Fortunately, Canada can feel comfortable The Trans-Pacific Partnership appeared to walking away from a bad deal. Several recent be dead after President Trump withdrew studies, including one from the Canadian the U.S. from negotiations in January 2017. Centre for Policy Alternatives, have shown As it was written, the TPP could not come that the costs of leaving NAFTA would be into force without U.S. participation. How- modest for Canada.9 ever, the remaining eleven parties (TPP-11), including Canada, quietly continued negotiations and in November announced agree- Canada-EU Comprehensive Economic ment on the core elements of a revised TPP and Trade Agreement (CETA) text (rebranded as the CPTPP). Canada passed implementing legislation for The CPTPP removes some of the more CETA in May 2017 and the agreement came toxic provisions found in the original TPP into force on a provisional basis on Septem- (e.g., related to intellectual property rights ber 21. For the agreement to come fully into and the scope of ISDS), but ultimately the force, every EU member must complete a new deal looks mostly like the old one. It domestic ratification process. So far, only still contains an ISDS mechanism, enables half a dozen member states have done so. firms to shift migrant workers freely across In the meantime, several of the most con- borders — without giving rights to those tentious aspects of the agreement are in workers — and puts key domestic indus- limbo, including the investor-state dispute tries at risk.13 The Canadian government settlement mechanism. acknowledged as much when it promised Nevertheless, even on a provisional $4.3 billion in compensation to the supply- basis CETA poses significant risks to Can- managed agricultural sector, although the ada. Among other issues, the agreement pro- government later walked back its support.14

108 Canadian Centre for Policy Alternatives Besides inserting the word “progres- ported Chinese firms that benefit from arti- sive” in the title, the Canadian government ficially low wages and working conditions.15 secured no changes from the original TPP in the areas of labour, environmental protection, gender equity, Indigenous rights or AFB Actions other elements of their self-styled progres- International trade and investment can sive trade agenda. At the time of writing, contribute to cultural exchange, security Canada had not signed or ratified the deal, and economic well-being, but they are not although it had signalled its intent to do so. ends in themselves. Moreover, trade and investment will continue with or without (Proposed) Canada-China Free FTAs, FIPAs or other international economic Trade Agreement (CCFTA) agreements. With these principles in mind, the AFB moves Canada toward a more stra- Canada and China announced exploratory tegic, sustainable and genuinely progressive talks toward a free trade agreement in Sep- trade and investment policy. tember 2016. Getting negotiations off the ground has proven difficult, reportedly be- Action: Instruct Global Affairs Canada to cause most elements of Canada’s progres- develop a trade promotion strategy that sive trade agenda are non-starters with the reinforces the National Decarbonization Chinese government. But it has also been Strategy (see the Industrial Strategy and reported that China is insisting on changes Just Transition Policy chapter). to Canada’s investment restrictions and a Result: Canada will align trade promotion pipeline to the West Coast as part of any efforts with domestic economic develop- deal, which may also be delaying a final ment priorities, especially efforts to reduce blueprint for negotiations. greenhouse gas emissions and build a ze- Canada should be wary of negotiating a ro-carbon economy. Trade promotion will free trade agreement with China. As the jun- focus on helping desirable, strategic indus- ior partner, Canada has little leverage to win tries become globally competitive and ac- economic concessions, let alone meaningful cess foreign markets. The trade promotion social clauses. A traditional FTA is likely to strategy will also shift support away from in- exacerbate Canada’s unbalanced trading re- dustries that are no longer compatible with lationship at the expense of workers and the the national industrial policy (e.g., oil and environment in both countries. Moreover, gas extraction). China’s poor human rights record cannot Action: Put a moratorium on comprehen- be ignored. Not only is it morally question- sive free trade and investment agreement able to support an oppressive regime, but negotiations and instruct Global Affairs it is also foolish to force Canadian workers Canada to re-engage with trading partners and firms into competition with state-sup-

Getting There: Alternative Federal Budget 2018 109 on a sector-by-sector basis and in multilat- Notes

eral forums. 1 Mykyta Vesselovsky et al., Canada’s State of Trade: Result: Canada will cease to participate in Trade and Investment Update 2017, Minister of Public trade negotiations that rewrite broad swaths Works and Government Services Canada, 2017. of public policy at the expense of public 2 Ibid. interest regulation and public investment. 3 Jordan Brennan, Ascent of Giants: NAFTA, Corporate Recognizing the value of continued engage- Power and the Growing Income Gap, Canadian Centre for Policy Alternatives, February 2015. ment with international partners, Canada 4 Rt. Hon. Justin Trudeau, P.C., M.P., “Minister of Inter- will instead pursue sectoral agreements national Trade Mandate Letter,” Office of the Prime Min- in strategic sectors (e.g., to increase trade ister of Canada, February 1, 2017, https://pm.gc.ca/eng/ with China in clean energy technologies). minister-international-trade-mandate-letter. On broader economic issues, such as trade 5 Global Affairs Canada, “Trade and investment agree- facilitation, Canada will push for global co- ments,” Government of Canada, last updated Novem- ber 17, 2017, https://www.international.gc.ca/trade- operation through the United Nations and commerce/trade-agreements-accords-commerciaux/ other international venues, with an empha- agr-acc/index.aspx?lang=eng.

sis on promoting sustainable growth and 6 Jeff Rubin, “How Has Canadian Manufacturing Fared development. under NAFTA? A Look at the Auto Assembly and Parts Industry,” Centre for International Governance Innova- Action: The AFB will conduct extensive cross- tion Papers, No. 138, August 2017. country public consultation to review all ex- 7 Scott Sinclair, Canada’s Track Record Under NAFTA isting international economic agreements, Chapter 11: North American Investor-State Disputes to January 2018, Canadian Centre for Policy Alternatives, recommend the removal of any provisions January 2018. that undermine social justice, economic in- 8 Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirk- clusion, or environmental sustainability, wood, Submission to Global Affairs Canada on the re- and define the new elements of an alterna- negotiation and modernization of the North American Free Trade Agreement (NAFTA), Canadian Centre for tive trade agenda. Policy Alternatives, July 2017. Result: Canada will identify the areas where 9 See, for example: Dan Ciuriak, Lucy Ciuriak, Ali Dad- existing FTA and FIPA commitments are in khah, and Jingliang Xiao, The NAFTA Renegotiation: conflict with national priorities and map out What if the US Walks Away?, C.D. Howe Institute, Nov- a plan for reform. Canadian governments ember 2017; and Pierre Laliberté and Scott Sinclair, What is the NAFTA advantage? Putting the tariff impacts of a will be better able to act in the public inter- Trump termination in perspective, Canadian Centre for est once our international trade agreements Policy Alternatives, June 2017.

align fully with Canadians’ domestic prior- 10 Hadrian Mertins-Kirkwood, Scott Sinclair, Stuart ities and support, not impede, global efforts Trew, Laura Große, Peter Fuchs, Anna Schüler and Ines Koburger, eds., Making Sense of CETA (2nd Edition), Pow- to combat climate change and address un- erShift and Canadian Centre for Policy Alternatives, acceptable levels of poverty and inequality. September 2016.

11 Pierre Kohler and Servaas Storm, “CETA Without Blinders: How Cutting ‘Trade Costs and More’ Will Cause Unemployment, Inequality and Welfare Losses,” Global

110 Canadian Centre for Policy Alternatives Development and Environment Institute Working Paper ister Chrystia Freeland,” Financial Post, November 18, 16-03, Tufts University, September 2016. 2015, http://business.financialpost.com/commodities/ agriculture/4-3-billion-tpp-compensation-for-canadas- 12 Jim Stanford, Out of Equilibrium: The Impact of EU- dairy-industry-is-not-a-done-deal-trade-minister-chrystia- Canada Free Trade on the Real Economy, Canadian Cen- freeland. tre for Policy Alternatives, October 2010. 15 Scott Sinclair, Submission from the Canadian Centre 13 Scott Sinclair and Stuart Trew, eds., The Trans-Pacif- for Policy Alternatives to Global Affairs Canada’s consul- ic Partnership: A Citizen’s Guide, James Lorimer & Com- tations on a possible Canada-China Free Trade Agree- pany Ltd., 2016. ment, Canadian Centre for Policy Alternatives, June 2017. 14 Gordon Isfeld, “$4.3 billion TPP compensation for Canada’s dairy industry is not a done deal: Trade Min-

Getting There: Alternative Federal Budget 2018 111 Post-Secondary Education

ALTERNATIVE FEDERAL BUDGET POST-SECONDARY 2018 EDUCATION

¢ Revenue from tuition has tripled since 1996, when ¢ Restore federal funding for post-secondary federal funding for PSE was severely cut. Today, education and establish standards through a federal public funding supplies only half of university PSE Act. revenues. ¢ Eliminate tuition fees for all PSE students in all ¢ Public student debt reached $28 billion in 2012—its PSE programs. SITUATION highest level ever—which does not account for all ¢ Lift the cap on federal funding for Indigenous private debt. DESTINATION PSE learners and ensure existing waiting lists are ¢ Over 10,000 Indigenous students are on a waiting emptied. list for post-secondary training. ¢ Invest in skilled trades apprenticeships and adult ¢ Canada spends less on training and skilled trades education, and extend training to those not eligible apprenticeships than most industrialized countries. for EI.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background These numbers understate the consequences of high tuition fees and student Tuition fees, student aid and debt debt for marginalized groups such as stu- Canadian colleges and universities have dents with disabilities, racialized students, doubled or tripled tuition fee revenues since queer or trans students, and Indigenous stu- 2001, saddling graduates with unprecedent- dents, who are more likely to come from low- ed levels of debt (see Figure 12). The catalyst income households.1 The data also does not came in 1996, when the federal government capture debt from private student loans or made historic cuts to PSE transfers worth lines of credit, which many turn to for help $2.29 billion (an 18% reduction), facilitat- given inadequate student financial aid. Heav- ing dramatic tuition increases over the next ily marketed (and tax-sponsored) registered two decades, particularly for international education savings plans (RESPs) are used students and those enrolled in profession- primarily by upper-income earners.2 al programs (see Table 4). Almost 60% of public student financial aid comes from the Canada Student

112 Canadian Centre for Policy Alternatives Figure 12 Public student loan debt (federal and provincial), 1999–2012

30 $28.27

25 $22.72

$19.62 20

15 $ Billions

0 1999 2005 2012

Source Statistics Canada, Survey of Financial Security, 2014.

Loans Program (CSLP) while the balance lar concern, graduate students who do not is delivered through provincial student aid qualify for a CSLP Canada Student Grant, programs, employment insurance (for ap- and international students on travel visas, prenticeship training), and bursaries or are not eligible for either public or private scholarships available at PSE institutions. financial aid. The bulk of student aid is loan-based, which The CSLP also has a Repayment Assist- discriminates against those unable to pay ance Program (RAP) that was used by over PSE costs up front. Students compelled to 256,000 CSLP debtholders in 2014-15 (al- borrow from the Canada Student Loan Pro- most a third of all debtholders that year). gram suffer high interest rates after gradu- The RAP absorbs interest payments on CSLP ation (e.g., a $30,000 loan costs $10,000 to debt, and even reduces principal amounts finance over a 10-year period). for borrowers on RAP for 60 consecutive In 2014-15, the last year for which data months or 10 years after graduation. At 15 is available, the CSLP provided loans to years after graduation, CSLP debt is for- 498,000 students and modest grants to given.5 To qualify for modest RAP support, 366,000 low- and middle-income students.3 borrowers must earn less than $25,000 a This represented about 24% of enrolled stu- year — a poverty-level income that makes it dents in 2014-15, leaving the vast majority difficult to repay debt. Still, as a policy tool with unmet financial needs.4 Of particu- for debt reduction, the RAP should be ex-

Getting There: Alternative Federal Budget 2018 113 Table 4 Tuition fees at various PSE institutions (2017-18)

Institution Domestic tuition International tuition Dalhousie University - Dentistry $24,743 $49,522 Seneca College - Aviation Technology $19,059 $73,908 University of Ottawa - Common Law $29,187.57 $74,463.48 McMaster University - Medicine $28,201.34 $95,960.18 University of Manitoba - Asper MBA $31,863.55 $43,592.93 University of British Columbia - B.Ed. $11,558.40 48,958.20

Source Tuition fee schedules from named institutions.

panded given the scope of unemployment per year in the program. The cap has been and underemployment, particularly among lifted, and the 2017 federal budget did in- young workers. vest an additional $90 million towards the As a final note, it is inexcusable that the PSSSP from 2017–2019, but far more must be CSLP earned over $614 million in interest on done. The government must meet the more student loans in 2014-15.6 The CSLP must fol- realistic target of $424.8 million set by the low the lead of the four provinces that have AFN to address the backlog of qualified In- eliminated interest rates on student loans.7 digenous students seeking PSE.

Indigenous students Apprenticeships, skills-based training and continuing education Access to post-secondary education is a treaty right for Indigenous people in Canada; the Canada spends less on skills training and federal government has a moral and legal active labour market measures than most of responsibility to uphold this commitment. the industrialized world.9 (The 2016 federal The Post-Secondary Student Support Pro- budget began to address this by increasing gram (PSSSP) is the primary mechanism by funding to provincial and territorial labour which status First Nations and Inuit students market development agreements and the receive financial support from the federal Canada Job Fund agreements, and making government. In 2016, the Assembly of First new investments in apprenticeship train- Nations (AFN) estimated there was a back- ing.) Likewise, according to the OECD, 40% log of 10,000 Indigenous students waiting of employed Canadians do not have the lit- for PSSSP funding.8 eracy and essential skills to do their jobs During the 2015 election campaign, fu- properly or succeed in today’s knowledge- ture prime minister Justin Trudeau promised and technology-rich economy.10 Low literacy to lift the 2% cap on federal transfers to the levels are contributing to Canada’s dismal PSSSP and invest an additional $50 million

114 Canadian Centre for Policy Alternatives innovation record, preventing many people tinue to be informed by the short-term in- from accessing decent jobs.11 terests of the private sector and, as a result, In the past, Citizenship and Immigration prioritize research that can be commercial- Canada (today Immigration, Refugees and ized.17 The private sector is also increasingly Citizenship Canada) made important contri- relying on public PSE infrastructure for re- butions to literacy and essential skills train- search and development. According to the ing. However, federal austerity has under- World Economic Forum’s 2014 annual report, mined this commitment to adult education, Canada has fallen from 22nd to 27th place notably in language and literacy programs, in the world for private sector spending on starting with a $53-million cut in 2010.12 As research in the last five years.18 a result, provinces have cut funding for In 2014, of the 4,535 doctoral students English as an additional language (EAL) in that applied for SSHRC funding, only 580 PSE institutions, and tuition fees are now were successful.19 More investment in Can- assessed for EAL programs that were once ada Graduate Scholarships is needed to sup- available without up-front cost.13 port graduate-level research that is instru- mental in driving innovation and building a foundation for economic and social develop- Precarious work and executive ment. For faculty researchers, less than one compensation in PSE in four SSHRC applicants received funding Canada’s 400,000+ PSE workers are being in 2014, despite another 40% of them being asked to do more with less. A third of under- deemed eligible by peer review.20 graduate teaching is done by contract in- structors, many of them surviving on sub- sistence wages.14 Maintenance and skilled AFB Actions trades workers also report a sharp rise in The AFB establishes a new policy framework temporary, contracted-out employment, and for PSE that expands access to high-quality, the same is true for cleaners and food ser- publicly funded education and training. The vice workers.15 A recent study put the cost framework addresses decades of neglect by of deferred maintenance on university cam- introducing two new public policy instru- puses at $8.4 billion in 2014.16 Meanwhile, ments: the PSE Renewal Transfer (PSE-RT) austerity is never applied at the top, to the and the Canada PSE Act. salaries of campus executives, who typically make double or sometimes quadruple the Action: Eliminate the federal tuition tax salaries of provincial premiers. credit (savings: $1.5 billion), Canada Job Grant (savings: $300 million), RESP tax credit (savings: $110 million) and student loan PSE research and scholarships interest tax credit (savings: $45 million), The federal government’s current innova- and reduce the scientific research and ex- tion agenda suggests PSE research will con- perimental development tax credit to help

Getting There: Alternative Federal Budget 2018 115 fund a new PSE Renewal Transfer. The gov- • New money for apprenticeships and ernment will also appoint a parliamentary skilled trades will improve labour mar- task force to investigate the introduction of a ket information (cost: $15 million), cre- “decent work” standard that PSE institutions ation of a federal Labour Market Part- must meet to qualify for PSE-RT funding. The ners Forum (cost: $50 million over 10 standard will include a $15 minimum wage years), help for unemployed Canadians and a maximum wage for senior executives who do not qualify for EI access training tied to the income of the provincial or ter- programs (cost: $300 million), strength- ritorial premier where a PSE institution is ening of union-based apprenticeship based. The task force will also consider the training (cost: $125 million), and har- existence or extent of reserve funds and/or monizing of provincial-territorial ap- sizeable investments held by PSE institu- prenticeship training and certification tions, and whether these are in compliance requirements (cost: $15 million). The with the AFB’s proposed PSE Act. federal government will also establish Result: Post-secondary education will be- a mandatory apprenticeship ratio for come affordable for all students across Can- all federal infrastructure projects and ada, in part through the following measures maintenance contracts (total cost: $505 attached to the PSE-RT. million).

• Federal PSE transfers to provinces and • Interest on loans through the CSLP will territories will be restored to 1996 levels be eliminated and the provision of Stage accounting for enrolment growth and 2 assistance extended for all CSLP bor- inflation. PSE-RT funding will be sep- rowers five years after graduation. Part- arated from the existing Canada Social time students (like full-time students) Transfer and available for provinces, ter- will not be required to pay back CSLP ritories, and PSE institutions in compli- debt until six months after they gradu- ance with our proposed PSE Act (cost: ate. Graduate students will also be able $5.48 billion). to qualify for grants available through the CSLP (cost: $283 million). • Tuition fees for all PSE students in all programs will be eliminated through an • Following the advice of the Naylor Re- ongoing transfer based on 1996 (pre– port, a significant investment will be budget cuts) funding levels. The feder- provided for curiosity-driven research. al government bears responsibility for Tri-council granting agencies for PSE re- a 50% share of the cost; to qualify for search (SSHRC, NSERC and CIHR) will these funds, provincial or territorial au- have their budgets restored to 2007-08 thorities must commit to matching their levels, but funds will be distributed share of this cost and observing the PSE evenly among them (cost: $1.3 billion). Act (cost: $3.59 billion).

116 Canadian Centre for Policy Alternatives • An additional 1,250 students will be eli- 6 Ibid., p. 23. gible for Canada Graduate Scholarships 7 CFS. “Student Employment: Eroding Academic Suc- cess,” fall 2013. at a value of $20,000 per scholarship (cost: $146 million). 8 Assembly of First Nations. 2017 Pre-Budget Submission. 9 OECD. “Public Expenditure and Participant Stocks on • Immigration, Refugees and Citizenship Labour Market Programs.” (Online Comparative Data- Canada will restore training for EAL to base), July 7, 2016. be continued in perpetuity as a dedi- 10 Janet Lane and T. Scott Murray. “Smarten Up: It’s cated PSE-RT item in compliance with Time to Build Essential Skills.” Canada West Founda- tion. Calgary: June 2015. the PSE Act. This funding will be linked 11 Statistics Canada. “Skills in Canada: First Results to the Consumer Price Index (cost: $53 from the Programme for the International Assessment million). of Adult Competencies.” Catalogue no. 89-555-X. Ottawa: Councils of Ministers of Education, 2013. Action: Introduce a Canada PSE Act mod- 12 CBC News. “Immigrant Settlement Funds Cut for On- elled on the Canada Health Act to ensure tario,” December 23, 2010. the provinces and territories comply with 13 Federation of Post-Secondary Educators of British the core principles of universality, access- Columbia. “FPSE Calls for a Renewed Funding Commit- ibility, comprehensiveness, public adminis- ment to English as an Additional Language Programs,” November 18, 2015; Suzanne Smythe and Shauna Butter- tration, and freedom of expression in their wick. “Cuts to Basic Adult Education Would Make it PSE systems. Harder to Escape Poverty.” Vancouver: CCPA, February 25, 2015; CBC News. “Yukon College Cuts Enhanced Lan- guage Training Program,” December 13, 2015. Notes 14 Cynthia Field and Glen A. Jones. “A Survey of Ses- sional Faculty in Ontario Publicly-Funded Universities.” 1 Canadian Federation of Students. Time to Think BIG, Centre for the Study of Canadian and International High- pp. 5–6. er Education, April 2016; Ira Basen. “Most University Students Now Taught by Poorly Paid Part-Timers.” CBC 2 Kevin Milligan. “The RESP is Bad Tax Policy and Even News, September 7, 2014; Mary Wiens. “More Contract Worse Education Policy.” The Globe and Mail, March 11, Work in Post-Secondary Education - A Former Bastion 2008; “Tax Preferences for RESP Saving: Are RESPs Ef- of Secure Work.” CBC News, March 5, 2015. fective?” C.D. Howe Institute, November 2002. 15 CUPE National (Research Department). “Sector Pro- 3 Figures cited from: Employment and Social Develop- file: Post-Secondary,” June 11, 2015. ment Canada (ESDC). “Canada Student Loans Program: Annual Report, 2013-2014.” Ottawa: 2016. While Canada 16 Canadian Association of University Business Offi- Student Grant amounts were increased by 50% in the cers. “Deferred Maintenance at Canadian Universities: 2016 federal budget (a good measure), this still repre- An Update,” May 2014. sents a minor portion of available CSLP assistance rela- 17 See: CAUT, “”2017/2018 Federal Budget Highlights” tive to loans. (March 2017); Industry Canada, “Positioning Canada 4 Statistics Canada. CANSIM 477-0019, November 2016. to Lead: An Inclusive Innovation Agenda” (June 2016).

5 ESDC. “Canada Student Loans Program: Annual Re- 18 World Economic Forum, “Global Competitiveness port, 2014-2015,” pp. 4, 13–15. It is also worth noting that Report, 2013-2014” (2013). the RAP was introduced after considerable pressure from 19 NGC, “2017 Pre-Budget Submission”. the CFS, which made an effective public case to support student debt holders at a time of financial crisis in 2008. 20 CCR, “2017 Pre-Budget Submission”.

Getting There: Alternative Federal Budget 2018 117 Poverty

ALTERNATIVE FEDERAL BUDGET POVERTY 2018

¢ The national poverty rate in 2015 hit a new high of 14.2% (based ¢ Reduce Canada’s poverty rate by 50% within three years and on the low-income measure after tax) and 12.1% (using the market adopt bolder targets for populations experiencing acute poverty. basket measure), the equivalent of between 4.2 and 4.8 million Canadians. ¢ Adopt a human rights framework to guide poverty reduction efforts and re-establish an arm’s length body to track progress. ¢ Poverty rates are substantially higher for recent immigrants, Indigenous people, racialized people, senior women, single parents ¢ Introduce a yearly $4-billion transfer to the provinces and and people with disabilities. territories to boost social assistance benefits and achieve clear SITUATION poverty reduction targets. ¢ 863,492 Canadians relied on food banks in March 2016, 28% ¢ Create a GST credit top-up focused on low-income Canadians more people than before the 2008 recession. DESTINATION to lift 450,000 people out of poverty, half of them children. ¢ About 35,000 Canadians are homeless on any given night, and over 235,000 experience some form of homelessness during the ¢ Re-establish a federal minimum wage of $15 per hour covering year. all workers under federal jurisdiction and ensure annual increases into the future. ¢ The federal poverty reduction plan process is taking a long time and may not have any new initiatives prior to the next federal election.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background Indigenous poverty, housing, and improvements to employment insurance access and In its first year, the federal Liberal govern- benefits. But it is good to see this government instituted two key poverty reducing ment takes the issue of poverty more ser- policy changes recommended in past Al- iously than its predecessors. ternative Federal Budgets: a new Canada In October 2016, Jean-Yves Duclos, minis- Child Benefit (CCB), which should reduce ter of families, children and social develop- child poverty in Canada by 14%, and a 10% ment, released a discussion paper entitled increase to the Guaranteed Income Supple- Towards a Poverty Reduction Strategy and ment (GIS) top-up for poor single seniors, announced he would spend 2017 consult- which we estimate will reduce seniors poverty ing with Canadians on the development of by 5%.1 More recently, the federal govern- a nationwide plan.2 The paper displays a ment announced the CCB will be indexed as solid understanding of the scope, sources, of 2018, something the AFB and Campaign dimensions and consequences of poverty in 2000 have called for since the new benefit Canada. The willingness of the government was introduced. Other promised initiatives to consult on poverty reduction targets, and are still to come, including more action on

118 Canadian Centre for Policy Alternatives Data dilemmas

Minister Duclos’s discussion paper continues to use the low-income cut-off (LICO) as its measure of poverty. Yet one would be hard-pressed to find an economist outside of government who still recommends this as an ac- curate indicator. The LICO has not been re-based since 1992, making it an increasingly unreliable and inaccurate metric (e.g., the LICO has failed to keep up with the rising cost of housing as a share of household budgets).

For this reason, the AFB prefers the more reliable low-income measure (LIM) and market basket measure (MBM) for tracking poverty. The LIM tracks the median income over time and is internationally comparable. The MBM is reflective of the actual costs of living in communities across the country.

Securing reliable and timely data with respect to poverty among various at-risk population groups also remains a challenge, whether they be Indigenous people, people with disabilities, or racialized people. The census (released every five years) provides better data for these demographic groups, but for non-census years such data are rarely available. Campaign 2000 has proposed using tax-filer data, cross-referenced with the census, to keep such demographic data and tracking up to date in off-census years.4

to be accountable for meeting them, is wel- ing out people without children who rely come. But several concerns persist. on social assistance. For example, the process is taking a long The government’s discussion paper rec- time, the terms of reference appear vague, ognizes that poverty is about more than in- and at this stage it is unclear when a fed- come. It acknowledges that Canada will also eral plan will be unveiled, and what if any need to make improvements to social sup- new initiatives will result from the process ports, like post-secondary education and prior to the next federal election. This is de- secure housing, that enhance affordabil- spite the fact that many of the actions that ity, quality of life and economic security. will quickly lower poverty rates are already However, action on these fronts is slow and well known and could be implemented in lacking.3 Noticeably absent is any meaning- this year’s budget. ful action on a much-needed national child Also, while the federal government has care program. shown it is prepared to boost the incomes While the depth of poverty is primarily of families with children and some sen- a story of inadequate provincial social as- iors in poverty (via the CCB and GIS), and sistance, the breadth of poverty is equally has signalled that a boost in the Working a low-wage story. Income Tax Benefit for people in the low- Most of the poor in Canada are not on so- wage workforce is coming, it risks reprodu- cial assistance. Millions of Canadians strug- cing a narrative of the “deserving” versus gle with underemployment and precarious “undeserving” poor, in particular by leav- work. Yet the federal government has thus

Getting There: Alternative Federal Budget 2018 119 Figure 13 Poverty rates, all persons, 2000–15

15% Low Income Measure After Tax 14%

13%

12%

11% Market Basket Measure, 2011 base

10%

8% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source Statistics Canada, CANSIM Table 206-0041

far refused to take action on a federal min- al partner to effectively tackle poverty — as imum wage. Employment insurance bene- they do for child care, housing, health care fits now reach fewer than four in 10 unem- and post-secondary education. ployed workers, a level not seen since 1944.5 The Government of Canada has lead re- The provincial social assistance sys- sponsibility for addressing poverty among tem is a shadow of what it was during the Indigenous people and seniors. It is also the early 1990s. The purchasing power of wel- primary jurisdiction that can reduce dispar- fare benefit rates has plummeted and new ities facing poor children, recent immigrants rules have made assistance harder to get.6 and people with disabilities. And key income Those facing job loss, the loss of a spouse, supports (the CCB, GIS, CPP,8 GST credit and the loss of good health, or old age find that EI) are in the hands of the federal government. the social safety net meant to catch them has been shredded. Poverty by the numbers The good news is that every province and territory in Canada has a poverty reduction In March 2016, 863,492 individuals relied on plan (at some level) in place or in develop- food banks across Canada, 28% more people ment, with British Columbia, long the sole than before the recession hit in 2008.9 Food hold-out, now developing a plan.7 But cit- insecurity has risen since 2008 as well, with ies, provinces and territories need a feder- 12.5% of people in Canada experiencing some

120 Canadian Centre for Policy Alternatives level of food insecurity in 2013.10 Homeless- ing 51%, rising to 60% if restricted to chil- ness remains at crisis levels. Nearly one in dren on reserves.14 five Canadian households experience se- Poverty rates are higher for recent immi- vere housing affordability problems, about grants, Indigenous people, racialized people, 35,000 Canadians are homeless on any given senior women, single parents and people with night, and over 235,000 distinct individuals disabilities. Based on the 2016 census, and experience some form of homelessness dur- using the LIM-AT as our measure of poverty, ing the year.11 the following incidences of poverty emerge:15 By any measure, there was a rise in • Recent immigrants (those who immigrat- poverty rates in Canada immediately fol- ed in the last five years): 31.4% (versus lowing the onset of the 2008 recession. 12.5% among non-immigrants) As shown in the chart below, the national poverty rate in 2015 was 14.2%, based on • Racialized people: 20.8% the low-income measure after tax (LIM-AT), • Indigenous people: 23.6% and 12.1% using the market basket measure (MBM). That translates to between 4.2 • Women: 14.9% (versus 13.4% among men) and 4.8 million Canadians living in poverty. • Women over 65: 16.7% In both cases, poverty has increased from the previous year, and in both cases • People in lone-parent families: 29.1%; the rate remains higher than the pre-reces- and 31.5% among people in female lone- sion low. Indeed, the LIM poverty rate rep- parent families (versus 8.8% in two-par- resents an all-time high. We also have 2016 ent families with children) census data showing that the poverty rate According to a recent Statistics Canada remained 14.2% that year, based on the LIM- study, people with a disability accounted for AT, but rose to 12.9% based on the MBM. approximately 20% of the Canadian popula- According to the latest national Child tion aged 25 to 64 in 2014, but 41% of the low- Poverty Report Card, more than 1.2 million income population in the same age group. children (17.4%) lived in poverty in 2015, Put another way, “persons with a disability up from 15.8% in 1989, the year the House accounted for approximately one-fifth of the of Commons passed its ill-fated resolution overall population aged 25 to 64. Of these, seeking to end child poverty by the year 23% were in low income, compared with 9% 2000.12 A higher child poverty rate was ac- of those without a disability.”16 companied by a greater proportion of poor families with children that had at least one parent working full time, all year (37% in AFB Actions 2011, compared to 33% in 1989).13 The situation is much worse for Indigen- It is past time for the federal government to ous children. The poverty rate for status First develop and implement, with the provinces Nations children, for example, is a stagger- and territories, a comprehensive federal ac-

Getting There: Alternative Federal Budget 2018 121 tion plan to end poverty for all Canadians tasked with tracking poverty and holding and significantly close the income gap. To- the federal government to account for meet- ward this end, the AFB adopts the following ing its poverty reduction targets.17 indicators, targets and timelines: Action: Introduce a new federal transfer • Reduce Canada’s poverty rate by 50% payment to the provinces and territories within three years, and end poverty with- tied to helping them achieve their poverty in a decade (based on the MBM and LIM). reduction targets. This transfer will be worth $4 billion per year over and above the costs • Ensure the poverty rate for children and associated with the federal measures out- youth under 18, lone-parent households, lined below (and in addition to the Canada single senior women, Indigenous people, Social Transfer). The intent of the transfer is people with disabilities, recent immigrants to ensure that the lion’s share of these funds and racialized people also declines by 50% helps provinces improve social assistance in three years, in recognition that poverty and disability benefit rates and eligibility. is concentrated within these populations. There are no strings attached to the transfer • In two years, ensure every person in Can- in its first year. In subsequent years, however, ada has an income that reaches at least only provinces and territories that increase 75% of the poverty line. income assistance benefits and show progress on a number of other outcome indica- • Within 10 years, ensure there is sufficient tors will continue to receive federal support. stock of high-quality and affordable supported housing for everyone in Canada. Action: Provide adequate and accessible income support through the following measures: • Within two years, reduce by half the number of Canadians who report both • Legislate minimum national standards hunger and food insecurity. for provincial income assistance, tied to the Canada Social Transfer, to en- To achieve these targets, the AFB takes sure welfare is accessible and adequate. the following actions: • Continue to increase the Canada Child Action: Establish a human rights frame- Benefit (CCB) base amount as needed work by which the federal government will to ensure that child poverty is reduced provide leadership on poverty and inequal- by 50% by 2020, and ensure the benefit ity issues, with a plan grounded in legisla- fully reaches Indigenous children and tion that includes targets and timetables to the children of parents without regular eradicate poverty, accountability and report- immigration status. ing mechanisms, and input from those with lived experience of poverty. • Increase the Guaranteed Income Supple- ment (GIS) top-up for low-income sen- Action: Re-establish the National Council of Welfare or a similar independent body

122 Canadian Centre for Policy Alternatives iors (see the Seniors and Retirement Se- • Restrict federal government contracts curity chapter). to Living Wage employers.20

• Increase the monthly benefit rates for • Revise temporary foreign worker pro- CPP disability, expand the definition of grams so that migrant workers can seek disability, and loosen the contribution and obtain landed immigrant status, requirements. without nomination by employers, and assure all those who come to Canada for • Make the federal disability tax credit a work are granted full labour rights and refundable (rather than non-refundable) protections upon arrival (see the Immi- credit at its present maximum amount, gration chapter). so that, like the GST, it goes to people who qualify even if their income is so Action: Tackle homelessness and ensure low that they do not owe income tax the expansion of social and co-op hous- (cost: $360 million). ing stock (see the Housing and Neighbour- hoods chapter). • Create a GST credit top-up of $1,800 per adult and child targeted to those below Action: Provide universal, publicly funded the poverty line. The clawback will have child care, increasing the number of regu- a rate of 15% excluding the first $2,500 of lated spaces and capping fees (see the Child income. This new top-up, costing $4.4 Care chapter). billion, represents the largest expendi- Action: Provide support for training and ture in our poverty reduction action plan, education, and initiate a Green Infrastruc- and will go to all low-income people re- ture and just transition plan with a special gardless of family type. Combined with focus on apprenticeships for economically the social assistance transfer, this will marginalized populations (see the Post-Sec- lower the poverty rate by 11%.18 ondary Education and the Industrial Strat- • Collaborate with the provinces to use so- egy and Just Transition chapters). cial assistance data to identify and en- roll people entitled to these additional non-tax benefits (such as the CCB, and Notes

proposed GST top-up and the refund- 1 While positive, our estimate of the reduction in child able disability tax credit).19 poverty is considerably less than claims made by the federal government. For more see: http://www.progressive- Action: Improve the earnings and working economics.ca/2016/12/23/new-child-benefit-impact-on- conditions of those in the low-wage work- child-poverty-overblown/. force through the following measures: 2 In his mandate letter to Duclos of December 2015, Prime Minister Justin Trudeau asked the minister to • Re-establish a federal minimum wage of lead the development of an inter-ministerial federal poverty reduction strategy that “will align with and $15 per hour, indexed to inflation, covering all workers under federal jurisdiction.

Getting There: Alternative Federal Budget 2018 123 support existing provincial and municipal poverty re- 2016. The Homeless Hub and Canadian Alliance to End duction strategies.” Homelessness.

3 The federal government released its long-awaited Na- 12 This is measured by the after-tax LIM using custom tional Housing Strategy in November 2017, but the tar- T1FF (a different source than the Statistics Canada data get of 100,000 units of new affordable housing over 10 we use for the charts above). See A Poverty-Free Canada years is low (spread out over the whole country and for Requires Federal Leadership: 2017 Report Card on Child that long), and many of the promises do not material- and Family Poverty (2017). Campaign 2000. ize until after the next election. 13 Campaign 2000. (2013). Canada’s Real Economic Ac- 4 For more, see: https://campaign2000.ca/wp-content/ tion Plan Begins with Poverty Eradication: 2013 Report uploads/2017/07/Campaign-2000-Measurement-Brief_ Card on Child and Family Poverty. Toronto: Family Ser- Addendum-Canadian-Poverty-Reduction-Strategy- vice Toronto. Campaign 2000 has not been able to up- Teleconference.pdf. date the data on the number of children with parents in the paid labour force due to discontinued surveys at 5 Armine Yalnizyan. “Proportion of Unemployed Statistics Canada. The restoration of the long-form cen- Canadians in Receipt of Jobless Benefits, 1942 to sus should rectify this soon. July 2014” (https://twitter.com/ArmineYalnizyan/ status/512602190360633344), an update of her chart 14 David Macdonald and Daniel Wilson. (2016). Shame- in 2009 report, Exposed: Revealing Truths About Can- ful Neglect: Indigenous Child Poverty in Canada. Ottawa: ada’s Recession, Ottawa: Canadian Centre for Policy Canadian Centre for Policy Alternatives. Alternatives. 15 Statistics Canada, 2016 Census, Catalogue no. 98- 6 For a full review of provincial social assistance rates 400-X2016126 and 98-400-X2016125. and eligibility rules, see: Anne Tweddle, Ken Battle, and 16 Katherine Wall. (2017). Low Income Among Persons Sherri Torjman. (2017). Canada Social Report: Welfare In with a Disability in Canada. Ottawa: Statistics Can- Canada, 2016, Toronto: Caledon Institute of Social Policy. ada: http://www.statcan.gc.ca/pub/75-006-x/2017001/ 7 The Caledon Institute of Social Policy has produced article/54854-eng.htm. a helpful summary of all the poverty reduction plans 17 This call is echoed by both the Caledon Institute and in Canada along with their outcomes: http://www. Campaign 2000. Caledon has recommended a new in- canadasocialreport.ca/PovertyReductionStrategies/ dependent body called the Canadian Council on Inclusion Also see Citizens for Public Justice’s “Poverty Trends and Wellbeing. See more, including a suggested man- 2017”: http://cpj.ca/poverty-trends-2017. date, here: http://www.caledoninst.org/Publications/ 8 The CPP disability program could do much more to PDF/1116ENG.pdf. reduce poverty among people with disabilities. As it 18 Social Policy Simulation Database and Model. Sta- stands, monthly benefit rates are too low (averaging tistics Canada. $934 per month), and the definition of disability is too restrictive (only 15–32% of those who self-identify as 19 It is also vital to ensure a better process to resolve having a “severe” disability qualify); see Human Re- disputes for income supports delivered through the tax sources and Skills Development Canada [2011], Sum- system, given that the CRA’s objection process and tax mative Evaluation of the Canada Pension Plan Disabil- court are difficult to understand and navigate, and pro- ity Program: Final Report. pp. ii, 19). vide no interim protections to low-income people who may depend on these income supports to pay for basic 9 Hungercount 2016. Food Banks Canada. costs of living. 10 Valerie Tarasuk Andy Mitchell, and Naomi Dachner. 20 Employers who have been officially certified as -pay (2015). Household food insecurity in Canada, 2013. Re- ing the living wage for families, as calculated by living search to Identify Policy Options to Reduce Food Insecur- wage campaigns across Canada. For background, see ity (PROOF). Retrieved from: http://nutritionalsciences. Tim Richards, et al. (2008). Working for a Living Wage. lamp.utoronto.ca/wp-content/uploads/2015/10/ Canadian Centre for Policy Alternatives. Or visit: http:// foodinsecurity2013.pdf livingwagecanada.ca/. 11 Stephen Gaetz, Erin Dej, Tim Richter and Melanie Redman. (2016). The State of Homelessness in Canada

124 Canadian Centre for Policy Alternatives Public Services

ALTERNATIVE FEDERAL BUDGET PUBLIC 2018 SERVICES

¢ The government is not hiring enough public service ¢ Assess the impacts of service cuts since 2010 and workers to meet Canada’s needs; the jobs that are filled provide funding to fill internal capacity gaps. are frequently precarious. ¢ Ensure that all large contracting out and ¢ Privatization and contracting out are used as privatization initiatives are subject to a transparent alternatives to public service staffing, ignoring the public interest and risk analysis process.

SITUATION long-term public interest impact and the increased cost. ¢ Review the financial reporting framework and ¢ Poorly drafted and interpreted labour legislation is recreate Government Consulting Services. DESTINATION undermining the ability of the public service to work ¢ collectively. Ensure rigorous internal consultation on major organizational change, providing the ability for civil ¢ Competent and permanent staff save the servants to speak truth to power. government money and make it more effective at ¢ delivering services. Implement stronger whistleblower protections.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background tic product (GDP) grew by 120.8% over that same period. Meanwhile, real federal pro- Renewing the public service gram spending only increased by 52.6% (in The federal government planned to spend constant dollars), and the number of feder- $12 billion on contracting out in the 2017-18 al public servants grew by only 4.7% — from fiscal year — nearly a third as much as the 250,882 in 1983 to 262,696 last year.2 In his total budgeted for staffing costs that year latest report, the Clerk of The Privy Coun- ($38.9 billion).1 Not only do privatization cil celebrates the fact that the federal pub- and contracting out reduce the accountabil- lic service is so much smaller today than it ity of Canada’s public sector, but long-term was 30 years ago relative to the Canadian costs are expected to be higher as a result. population. Meanwhile, the government has failed to Overall, 5,662 public sector workers hire enough staff to meet the growing needs were hired between April 2015 and April of Canadians. 2017. Although increases in staffing are re- The Canadian population grew from 25.3 quired and welcome, this is a small number million in 1983 to 36.7 million in 2017, an in- compared to the more than 24,000 jobs that crease of 45%. Canada’s real gross domes- were cut in 2010. Government plans show

Getting There: Alternative Federal Budget 2018 125 an estimated increase of only about 9,000 and waterways, has likewise only hired 372 full-time equivalents until 2021. The num- more workers, despite Conservative cuts of ber of full-time employees is decreasing close to 1,200. while term employment is up 9.3%, casual employment has increased 8.3%, and stu- Precarious employment dent employment is up 6.0%.3 and the Phoenix crisis In departments that implement government priorities on food safety and the en- The Public Service Commission reports that vironment there has been very little rebound the government hired 4,533 indeterminate in staffing numbers since the previous Con- workers overall (not counting departures servative government’s cuts in those areas. and retirements) in 2015-16. Over the same Only 171 regulatory and enforcement staff time, 32,370 workers were hired to fill jobs have been added at the Canadian Food In- on a term, casual or student basis.4 Almost spection Agency (CFIA), for example, which 90% of this new staffing has been for pre- is far lower than the 650 jobs cut in 2010-11. carious (non-permanent) jobs. Over 60% of federal food inspectors have The negative impacts that result from reported that they don’t believe there are inadequate staffing can be most clearly ob- enough staff to provide mandatory over- served in the problems associated with the sight of the organizations they inspect or Phoenix pay system. Hundreds of thousands complete an inspection in a way that en- of federal public service workers have not sures compliance, and that a major food- been paid properly since the IBM-built hu- borne illness outbreak is likely. man resources system was activated. Some Budget 2016 provided $38.5 million over employees haven’t been paid at all. two years to improve food inspection activ- The Conservative government conflated ities. Although new management at CFIA is the requirement for technological change halting plans that would have compromised with opportunities to cut staff. It cut over food safety in Canada, more can be done. 1,000 experienced compensation advisors For example, the new inspection process before the new pay system was even oper- does not — but should — require compan- ational, predicting savings based almost ies to advise food inspectors on how viola- entirely on downsizing and unproven con- tions will be addressed. solidation initiatives. Environment and Climate Change Can- The Phoenix pay system is not expected ada has only hired six additional employ- to function properly for many years. The rea- ees since the Liberals took office in late sons for its failure are complex and multi- 2015, while the government clearly needs to dimensional. Changes to software, human be working more forcefully to meet its cli- resources practices and organizational cul- mate change obligations. The Department of ture are required across government. Even Fisheries and Oceans Canada, which plays organizations with no job losses in the com- the key role in protecting Canada’s oceans

126 Canadian Centre for Policy Alternatives pensation department are experiencing mul- (P3s) of this nature. Yet the government is tiple problems. throwing caution to the wind by expanding In the short term, the most important the P3 model well beyond National Defence. mitigating measure should be to increase In 2017, the Liberal government created a numbers of compensation staff — the people Canada Infrastructure Bank with $35 billion who can make sure people are being paid and worth of initial public financing to leverage paid appropriately. Serious efforts have been $200 billion in private sector investment for made to retain and entice former compen- new “revenue generating” infrastructure. sation officers back to work to fix Phoenix. New infrastructure is required and will have This is welcome, but more needs to be done. a positive impact on GDP and job growth. Unfortunately, the government plan will allow the private sector to propose the scope, Privatization and contracting out financing and operation of new projects. For the most part, government statistics do Under similar initiatives in the U.K., not capture the growing use of contract em- again well beyond defence, private infra- ployees in the public service (e.g., workers structure monopolies have become too big who are hired through temporary staffing to fail. Even private providers that have been agencies). We don’t know how many con- found in violation of their contracts are re- tractual employees are hired, for how long, tained over and over again. In Canada, the or what they are paid. The government has government is hoping the new infrastruc- no way of knowing if the broader public in- ture bank will be involved in the privatiza- terest is being served or if this money is be- tion of airports and ports — over strong ob- ing spent effectively. jections from current operators and clients.7 In August 2017, National Defence award- Most institutional (private) investors ed the French defence contractor Thales a expect a 7–9% rate of return whereas the $5-billion contract to maintain Canada’s new government can currently borrow money Arctic patrol vessels and supply ships for 35 over 30 years at 1.9% interest.8 A privately- years. On top of the additional costs these funded infrastructure bank is estimated to arrangements are likely to incur, some Na- cost $6.2 billion more for every $20 billion tional Defence officials have warned they in capital investment than had the projects give one firm too much control.5 For ex- been publicly funded.9 ample, the U.K.’s Private Finance Initiative (PFI) in defence, on which the Canadian P3 Accountability and transparency is modelled, has resulted in the U.K. government paying £50 billion (about $84 billion) Accountable government is essential to over the life of projects whose original cap- democratic governance. A government isn’t ital value was only £9 billion.6 democratic because it is elected every four Extra costs and lack of accountability or five years. It must be judged on what it are a staple of public-private partnerships does and how it does it during its time in of-

Getting There: Alternative Federal Budget 2018 127 fice. But recent investigative analysis of the ers and is calling for an additional five-year Phoenix pay fiasco has uncovered that senior review of the office’s activities. bureaucrats have difficulty speaking truth to power, which is compromising public interest decision-making and accountability, AFB Actions not to mention the efficient functioning of The AFB is dedicated to renewing Canada’s government.10 public service through new hires, scaling The health of the financial reporting back privatization and contracting out, and framework in the public service is also af- improving accountability mechanisms, in- fected. As the Auditor General noted in his cluding better whistleblower protections. spring 2017 report, the public accounts of Canada and the myriad financial reports cre- Action: Expand the capacity of the public ated within and across departments offer a service with a reinvestment of $500 million complicated and too-often fractured view of in 2018-19, and $2 billion in each of fiscal government finances. At a time when more years 2019-20 and 2020-21. This money will is asked of fewer public servants, the pub- be distributed among departments based lic service’s financial professionals spend on a public assessment of needs and the too much time creating reports that either impacts of recent service cuts. Important- do not provide a complete picture or are so ly, the AFB will reinforce the internal cap- complex as to inhibit good decision-making. acity of food inspectors and Canada’s en- In this environment, employees must vironmental regulators to meet their goals be able to alert the government and other with respect to food safety, climate change, parts of the public service to instances of and watershed protection. mismanagement and financial irregular- Action: Invest $200 million in each of the ity. But systemic barriers to speaking out re- next three fiscal years to increase and train main and whistleblowers are still punished. permanent compensation staff (1,500 new Existing federal whistleblowing legislation employees) and hire additional in-house IT is limited and employees still lack the ne- staff to ensure that software and hardware cessary protections against punitive retali- changes are aligned. ation. Review of the legislation is overdue. The Office of the Public Sector Integ- Action: Apply a public interest screen to rity Commissioner was created in 2007 to the contracting out and privatization of all investigate the abuse of whistleblowers. A government infrastructure projects. These standing committee on government oper- public risk analyses will be subject to par- ations has since recommended that the of- liamentary and public debate before any fice’s mandate be expanded. The committee decisions are made. The former Govern- would also like to see the onus reversed in ment Consulting Services and Audit Servi- allegations of reprisal against whistleblow- ces Canada, which were privatized by the

128 Canadian Centre for Policy Alternatives Harper government, will be reinstated as tisanship.12 In addition, structures need to public entities. be created to give public service employees, and their representatives at all levels, Action: When it is necessary to engage out- a meaningful, constructive, and alterna- side contractors, they should meet the same tive voice in work processes. While this is a accountability and transparency require- labour relations issue, it is essential to en- ments as the public servants they are sup- suring that public money isn’t spent fool- porting. For example, contractors, wheth- ishly on impractical, unrealistic, and ideo- er individuals or firms, should be bound logical initiatives. by the same statement of values and eth- ics, their work should be subject to access- Action: Immediately implement the recom- to-information provisions, and the Office mendations of the standing committee on of the Public Sector Integrity Commission- government operations with respect to Can- er should be able to fully investigate com- ada’s whistleblowing framework. plaints of wrongdoing that involve them.

Action: Repurpose the Canada Infrastruc- Notes ture Bank so that it is fully funded through direct federal government borrowing and tax 1 Main Estimates Standard Expenditures by Standard Objects https://www.canada.ca/en/treasury-board- dollars. Working models for this approach secretariat/services/planned-government-spending/ already exist.11 The bank should focus on government-expenditure-plan-main-estimates/2017-18- driving down interest rates for municipal- budgetary-expenditures-standard-objects.html. ities while accelerating their access to infra- 2 Government of Canada. Demographic profile of the federal public service, 2015, including author’s calcu- structure loans. This refocuses the bank’s lations with updated numbers (see http://www.tbs- priorities on what cities need instead of what sct.gc.ca/psm-fpfm/modernizing-modernisation/stats/ investors want. It will keep costs and user demo15-eng.asp). This data is only published annually with a lag of about four months. It is based on data fees down, and encourage municipalities from the pay system and may be slightly inaccurate as to use the bank for major projects. a result, but is still the most reliable data set for government population numbers. Action: Implement a process by which sen- 3 Parliamentary Budget Officer Expenditure Monitor ior bureaucrats, bargaining agents, workers, 2016-17 Q1 2.1 Operating, pp. 7–8. and others can examine the systemic struc- 4 Public Service Commission of Canada 2015-16 An- tures and organizational cultures that dis- nual Report, p.10. courage internal consultation and speak- 5 David Pugliese, “Liberals select French firm for $5.2-bil- ing truth to power. Serious consideration lion ship-maintenance project. But it could cost more should be given to developing a “moral con- in long run,” National Post, January 6, 2017. http:// nationalpost.com/news/canada/liberals-select-french- tract,” such as a Charter of Public Service, firm-for-5-2-billion-ship-maintenance-project-but-it- that would hold all public servants, minis- could-cost-more-in-long-run. ters, and other government officials to high 6 Chris Dando, Privatization in UK Defence — A Trade standards of professionalism and non-par- Union Response, 2015.

Getting There: Alternative Federal Budget 2018 129 7 The Canadian Transportation Act Review (common- 10 Goss Gilroy. Lessons Learned from the Transformation ly known as the Emerson report) http://www.tc.gc.ca/ of Pay Administration Initiative. https://www.canada. eng/ctareview2014/canada-transportation-act-review. ca/en/treasury-board-secretariat/corporate/reports/ html; see also Bruce Campion-Smith, “Ottawa eyes lessons-learned-transformation-pay-administration- airport sell-off to raise infrastructure cash,” Toron- initiative.html. to Star, July 3, 2016. https://www.thestar.com/news/ 11 William A. Galston and Davis Koron. Setting Prior- canada/2016/07/03/ottawa-eyes-airport-sell-off-to- ities, Meeting Needs : The Case for a National Infrastruc- raise-infrastructure-cash.html. ture Bank, Brookings, Dec. 2012 https://www.brookings. 8 Toby Sanger. Banking on Privatization? Progressive edu/wp-content/uploads/2016/06/1213_infrastructure_ Economics Forum Oct 31,2016. galston_davis.pdf ; http://www.eib.org/index.htm.

9 David Macdonald, “Federal Infrastructure Bank Loans 12 For a discussion on what this might look like see will Come At a Higher Cost,” CCPA Behind the Numbers Heintzman Ralph, Renewal of the Federal Public Ser- blog post, November 2016. http://behindthenumbers. vice, Canada 2020, June 2014. ca/2016/11/02/federal-infrastructure-bank-loans-will- come-higher-cost/.

130 Canadian Centre for Policy Alternatives Seniors and Retirement Security

ALTERNATIVE $ FEDERAL BUDGET SENIORS AND 2018 RETIREMENT SECURITY

¢ Pension coverage in Canada is down to 37% from a high of ¢ Expand the Canada Pension Plan (CPP) replacement 46% in 1977. rate to 50%. ¢ Just one in four private sector workers have a workplace ¢ Index OAS benefits to growth in the average industrial pension plan, and there has been no growth in private sector plan wage. membership since 2007. ¢ Increase the Guaranteed Income Supplement (GIS) ¢

SITUATION The poverty rate among seniors tripled between 1995 and top-up by $1,000 for single seniors and couples. 2014, from 3.9% to 12.5%, disproportionately impacting women. ¢ Expand the income exemption for the GIS by ¢ Old age security (OAS) benefits are indexed to inflation, not DESTINATION exempting the first $1,500 in CPP benefits. wage growth (which rises faster), meaning they become relatively smaller over time. ¢ Cap annual RRSP contributions at $22,000. ¢ RRSPs, which overwhelmingly benefit high-income earners, ¢ Ensure the expanded Working Income Tax Benefit accounted for $10 billion of federal personal income tax (WITB) fully offsets the additional CPP contributions for expenditures in 2015. workers earning up to $23,000.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background tirement, and to reduce poverty among seniors. The indexation of the OAS to the con- From the late 1970s to the mid-1990s, the sumer price index, rather than industrial number of low-income seniors in Canada wages, along with the decline of voluntary declined significantly thanks to regular in- private sector pension plans are contribut- creases in old age security (OAS) and the ing factors. Canada Pension Plan (CPP), among other Relatively recent attempts to increase government programs. Today, however, 12% employer participation in the pension sys- of Canadian senior families live in poverty, tem, through pooled registered pension a result of overall declines in government plans, proved ineffective. Evidence shows transfers since then.1 that RRSPs are cost-prohibitive to the aver- The CPP and OAS are cost-effective and age Canadian, and their tax benefits con- sustainable programs, but they are falling centrated among Canada’s highest income short of their goals: to ensure Canadians earners.2 can maintain their standard of living in re-

Getting There: Alternative Federal Budget 2018 131 The public pension system, on the other million a year (by increasing the GIS top-up hand, with its mandatory savings arrange- paid to the lowest-income single seniors). ment, offers the most effective avenue for For seniors with incomes below $4,600, securing retirement income for Canadian benefits will go up by as much as $950 an- workers. And while the policy discussions nually, representing a 10% increase in the on retirement security often focus on sen- total GIS maximum payout. This will bene- iors and the middle-age cohort, it is clearly fit some 900,000 vulnerable seniors in Can- in the interest of younger Canadians to en- ada.3 Importantly, Budget 2016 also can- hance both the CPP and OAS. celled the increases in the eligibility age for The absolute number of workers with OAS, GIS and the allowance benefits that secure, predictable defined benefit (DB) were scheduled by the previous Conserva- pension plans has been in near continual tive government. decline since 2005. Prolonged, exception- These programs are the foundation of ally low interest rates, increasing longev- Canada’s retirement income system and ity, uneven investment returns and an ag- provide a secure annual income to 95% of ing workforce have raised the cost and risk Canadian seniors aged 65 and older. OAS for employers sponsoring DB plans. Many and GIS benefits depend on residency and employers, especially global firms, no long- income rather than participation in paid er support DB plans that deliver more pre- employment, and are particularly import- dictability and security to workers. ant to women and low-income seniors. In As a result of falling pension plan cover- fiscal year 2016-17, OAS program expendi- age, among other factors, up to half of mid- tures amounted to $48 billion, a 5.97% in- dle-income baby boomer households can ex- crease over the previous year.4 pect a significant drop in living standards On the other hand, OAS is still indexed in retirement. Recently, several provincial to inflation, which means benefits increas- governments have made changes or con- ingly lag behind earned incomes as real sulted on potential changes to solvency fund- wages grow over time. OAS payments were ing rules in attempt to prevent the slide in worth about 19% of the average wage in DB plan coverage. The federal government 1966, but are expected to represent as little should take note of these developments. as 7.5% in 2076.5 The Liberal government’s The Liberal government made several promise to index OAS benefits to a basket positive pension reforms in 2016. However, of seniors’ consumption goods, instead of while the late addition of improvements to the consumer price index, will not prevent the Working Income Tax Benefit (WITB) and this relative decline. CPP are welcome, additional reforms, in- Canada’s chief actuary has stated that cluding to OAS and the Guaranteed Income the combined employer-employee CPP con- Supplement (GIS), are lacking. tribution rate of 9.9% is sufficient to fund On the positive side, the government in- the plan at least through the year 2090. Vir- creased GIS expenditures in 2016 by $700 tually all workers in Canada participate in

132 Canadian Centre for Policy Alternatives the CPP (or Quebec Pension Plan in that earnings under $20,000 a year, the WITB en- province): it is fully portable, inexpensive, hancement will fully offset additional CPP and delivers a secure, predictable monthly contributions, though not by enough to ad- benefit in retirement, protected against in- dress issues around the GIS (see below). On flation, for the remainder of a retired work- the positive side, the government announced er’s life. The CPP is publicly administered in its 2017 fall fiscal update that it intends to on a not-for-profit basis. further enhance the WITB with an additional In June 2016, the federal government $500 million annually starting in 2019. This and all provinces except Quebec reached money will help raise benefit levels under an agreement on modest pension enhance- the plan and expand the income range so ments. The CPP retirement benefit rate, fro- that more workers can qualify. zen for 50 years at 25% of average lifetime A significant drawback of the govern- pensionable earnings, will gradually rise to ment’s CPP enhancement was that it did not 33.3% in 2023, beginning in 2019.6 Also, over extend the plan’s child rearing and disability a two-year period beginning in 2024, the dropout provisions. In 1977, the Liberal gov- range of earnings to which the new 33.3% ernment of Pierre Trudeau allowed parents benefit rate will apply will rise by 14% (from (predominantly women) leaving paid work $55,300 to $63,000 in 2017 dollars). to raise children aged 7 or younger to leave These changes will have a noticeable if out, or “drop out” (from the calculation of modest impact on the CPP retirement bene- their retirement benefit), those months where fit of workers and the self-employed. High- they made little or no income. The receipt er-income earners and workers aged 25 or of CPP disability benefits was also exclud- younger in 2025 will see the greatest bene- ed from the calculation of CPP benefits. By fit, although older workers contributing at omitting these rules in the enhanced CPP, the increased rate for even a few years be- the current government all but ensures the fore retiring will see a slight improvement gap between men’s and women’s average re- in their CPP benefits. Canadians with em- tirement benefits will persist and possibly ployment earnings above average will also even grow in the future. benefit from the fact that the additional CPP In December 2017, Canada’s finance min- contributions will be tax deductible. How- isters attempted to address this oversight by ever, CPP benefits will still be too modest agreeing to a new “drop-in” provision. Rath- to substantially reduce the number of Can- er than simply applying the existing drop- adians facing declining living standards in out to the enhanced CPP benefit, the drop- retirement. in credits periods of low or zero income for Low-income earners will be able to take child rearing and disability. The drop-in advantage of an enhanced WITB, whose credit will be based on the average ratio of phase-in rate and maximum benefit will in- earnings in the five years before a leave of crease slightly while the reduction rate will absence — a system that is unlikely to be as be marginally lowered. For workers with

Getting There: Alternative Federal Budget 2018 133 effective as allowing people to “drop out” monthly benefit paid to the surviving spouse zero- or low-income months. or common law partner and their depend- Finance ministers also announced an ent children. Like all CPP income, survivor improvement to the CPP’s death benefit, benefits are included as income when cal- which currently pays out six times the amount culating GIS benefits. of the deceased contributor’s monthly retirement pension to a maximum of $2,500. The Amending the Pension Benefits benefit will change to a flat rate payment Standards Act of $2,500 for all eligible contributors — an improvement on the recent status quo but The 2016 Alternative Federal Budget called far from what the death benefit should pay. for the cancellation of Bill C-27, which would In 1997, the CPP death benefit was capped create a framework for single-employer tar- at a maximum of $3,850 and was expected get-benefit (TB) pension plans at Crown cor- to adjust annually with wage growth. porations and in the federal sector. The bill Another serious concern (still to be ad- was tabled in the House of Commons in Oc- dressed) with the CPP expansion is that the tober 2016 and to date remains at the first GIS clawback will significantly reduce the reading stage — an indication of the suc- income gains of higher CPP benefits for low- cess of progressive advocates in highlight- income workers. As income from CPP and ing concerns with this legislation. other sources grows, the GIS clawback impos- As a sponsor of a DB plan, an employer es severe reductions in benefits to low- and is legally obligated to fund the benefits so modest-income seniors. The maximum GIS that pensions can be paid in retirement. Al- benefit is reduced by 50 cents for every dol- ready earned pensions from past service are lar of income from the CPP, private pensions, legally protected and cannot be retroactively employment insurance, rental income, and reduced. Under a TB plan arrangement, the employment and self-employment income legal obligation on employers is removed, above $3,500. This is in addition to any re- and past and future service benefits can be duction to the GIS top-up, which is reduced reduced, including retirees’ pensions. by 25 cents for every dollar of income above The proposed legislation would also al- $2,000 for GIS single recipients and $4,000 low for the conversion of DB benefits to con- of combined income for couples. tingent TB benefits, including past service. Many provincial income top-ups and This effectively allows employers to renege benefits, and even municipal seniors sup- on past pension promises and shifts pen- port programs, are geared to GIS eligibility, sion risks — for both past and future ser- raising the spectre of further losses if high- vice — entirely to plan members both ac- er CPP income results in disentitlement to tive and retired. the GIS. The federal and provincial finance While C-27 would only apply to plans in ministers have committed to reviewing the the federally regulated private sector and GIS clawback on CPP survivor benefits, a Crown corporations, legislation that allows

134 Canadian Centre for Policy Alternatives for the conversion of accrued pension bene- AFB Actions fits is an attractive solution for employers Revenue enhancing measures (in both the public and private sector) facing the cost and risks associated with DB Action: Cancel legislation permitting retro- plans. These legislative developments, not active conversion of accrued DB pension limited to the federal jurisdiction, are of spe- benefits to target-benefit pension benefits. cial concern to women, who are overrepre- Action: Cap RRSP contributions at $22,000, sented in public sector employment and, a level that will affect only those making as a result, DB plan coverage.7 $126,000 or more. These savings will be allocated toward indexing OAS to the aver- Protecting pensions from age industrial wage and salary instead of employer insolvency the consumer price (all-items) index (CPI) to ensure the flat retirement benefit keeps There are currently two private member’s up with earned incomes. bills in the House of Commons aimed at improving the retirement security of workers and retirees participating in DB plans. Re-indexing old age security These bills acknowledge concerns that, after Action: Index OAS to the average industrial years of accruing and contributing toward wage and salary instead of the CPI all-items benefits in DB plans, members face reduc- index to ensure the retirement benefit keeps tions in retirement income due to employ- up with earned incomes (cost: $65 million er insolvency. DB plans facing wind-up are in 2018-19 and $70 million in 2019-20). forced to purchase annuities for plan members, often at the most unfortunate point with respect to the plan’s funding position Increasing the GIS and the cost of annuities. This frequently and the GIS top-up results in a loss for pension plan members. Actions: Increase the GIS top-up for low- Progressive advocates have previous- income single seniors and senior couples ly called for the establishment of a public by $1,000 and increase the income exemp- agency that would take over the adminis- tion by an additional $3,000 for each. Ex- tration of terminated pension plans. This pand the income exemption for determining institution would continue to manage the eligibility for the GIS by exempting the first pension plan’s assets and disburse monthly $1,500 in CPP benefits. Exempt CPP surviv- pensions, protecting beneficiaries from re- or benefits from the calculation of income ductions in benefits and providing an op- for the purposes of determining GIS eligibil- portunity for the plan’s funding position ity, and subsequently review the GIS claw- to improve. back to moderate or eliminate its impact on other sources of income (cost: $3.8 billion).

Getting There: Alternative Federal Budget 2018 135 CPP expansion Notes

Action: Hold discussions with provincial 1 Statistics Canada. (2016). Seniors’ income from 1976 to 2014: Four decades, two stories. Canadian Megatrends. and federal ministers with the aim of in- 2 David Macdonald, Out of the Shadows: Shining a creasing the CPP replacement rate from light on Canada’s unequal distribution of federal tax 33.3% to 50% of earnings up to 114% of the expenditures.

year’s maximum pensionable earnings. Ex- 3 See Budget 2016. tend the child rearing and disability drop- 4 Employment and Social Development Canada: Old outs to this enhanced benefit. Age Security Act, Expenditures.

Action: Ensure the expanded WITB fully 5 Fred Vettesse, Old Age Security is meting away: http:// business.financialpost.com/opinion/old-age-security-is- offsets the additional CPP contributions for melting-away-so-more-of-you-will-rely-on-low-income- workers earning up to $23,000. support-cheques-when-you-retire.

6 Department of Finance. (2016). Backgrounder: Can- Action: Restore the CPP death benefit to the ada Pension Plan (CPP) Enhancement. level it would have reached in 2017 had it 7 Statistics Canada. (2014). New Facts in Pension Coverage. not been reduced and frozen in 1998, and re-index it to growth in average wages.

Protecting pensions from employer insolvency

Action: Begin consultations with stakeholders on the establishment of a public agency dedicated to administering terminated pension plans.

136 Canadian Centre for Policy Alternatives Sustainable Development Goals (SDGs)

This year’s Alternative Federal Budget in- phasis on those who are perpetually being cludes an assessment of how the actions neglected. They are comprehensive, calling proposed across its many chapters contrib- on all actors—the four tiers of government ute to achieving the United Nations Sus- (federal, provincial, municipal and Indigen- tainable Development Goals. The 17 SDGs, ous authorities), civil society, the private sec- along with the 2030 Agenda for Sustainable tor and other citizens—to engage in delivering Development, were adopted at the UN in the agenda. The more holistic and integrated September 2015 by 193 governments. The nature of the Sustainable Development Goals event marked the conclusion of a multi-year requires us as a society to approach issues process to identify a successor to the Mil- differently and much more collaboratively. lennium Development Goals that could be Canada has signed on to the Sustainable merged with the Rio process started in 1992 Development Goals and will report to the UN at the UN Conference on Environment and High Level Political Forum in July 2018 on Development. The SDGs and 2030 Agenda their implementation. As part of this process, represent a single, integrated, global plan the government will need to identify the fol- of action that seeks to balance the three lowing: governance structures it has put in dimensions of sustainable development— place, both across federal departments and economy, society and environment—with between different levels of government; the the ultimate goal of realizing peace and implementation plan it has developed and prosperity for both people and the planet. national priorities it has selected (specific The SDGs are distinct from the Millennium to the Canadian context); how it is, and will Development Goals in several ways. They are be, engaging different actors in society in de- universal where the MDGs applied only to developing and implementing this plan; and veloping countries. They are ambitious, seek- how it will measure progress on realizing ing not to halve poverty or food insecurity but the Sustainable Development Goals through to put an end to both. The SDGs are inclusive, national and subnational data (noting any aiming to leave no one behind, with an em- gaps) disaggregated by age, race, ethnicity

Getting There: Alternative Federal Budget 2018 137 and gender, among other factors. Indigen- should rank high in this plan and must in- ous issues—an area where the SDGs fall tegrate the recommendations of the Truth short, with Indigenous rights, knowledge, and Reconciliation Commission. cultures and economies notably absent—

Sustainable Development Goal Alternative Federal Budget Action

Goal 1: No Poverty · Introduce a yearly $4-billion transfer to the provinces and territories to boost social assistance benefits and achieve clear poverty reduction targets. · Create a GST credit top-up focused on low-income Canadians. · Re-establish a federal minimum wage of $15 per hour. · Increase the income exemption for the Guaranteed Income Supplement and improve the GIS top-up. · Index the Old Age Security pension to the growth in the average industrial wage. · Expand the Canada Pension Plan replacement rate to 50%.

Goal 2: Zero Hunger · Invest in local and regional food processing, storage, transportation and distribution infrastructure, and in capacity-building through training, giving priority to those operating under community-based and local co-operative ownership. · Establish an effective national agriculture extension program to help farmers develop low-input production methods and strategies.

Goal 3: Good Health · Fund a 10-year Health Accord with a 5.2% escalator to increase the federal share and Well-being for People of health spending. · Implement a mental health program. · Implement a national pharmacare program. · Establish a federal commission to explore health-centred approaches to the regulation of currently illegal drugs.

138 Canadian Centre for Policy Alternatives Sustainable Development Goal Alternative Federal Budget Action

Goal 4: Quality Education · Invest in universal child care, increasing the investment until total spending on early learning reaches the minimum established international benchmark of 1% of GDP. · Eliminate tuition fees for all post-secondary students in all programs. · Restore federal funding for post-secondary education (PSE) and establish appropriate standards through a federal PSE Act. · Lift the cap on federal funding for Indigenous PSE learners and ensure existing waiting lists are emptied. · Invest in skilled trades apprenticeships and adult education.

Goal 5: Gender Equality · Invest in a fully resourced National Action Plan to Address Violence Against Women, bringing federal per capita spending on the issue in line with provincial spending. · Increase funding for Status of Women Canada. · Invest in a living wage for care workers. · Mandate the tracking and transparency of rates of pay and promotion. · Pass proactive pay equity legislation.

Goal 6: Clean Water · Invest in water infrastructure in First Nation communities. and Sanitation · Strengthen the Clean Water and Wastewater Fund to replace poor infrastructure and adequately fund public or community-run water and wastewater infrastructure. · Commit $100 million annually for water infrastructure in small municipalities. · Commit $75 million annually for ongoing water operator training, public sector certification, and conservation programs. · Establish water quality and quantity monitoring frameworks. · Implement a comprehensive action plan to protect the Great Lakes. · Commit $3 million toward a groundwater protection plan and $1 million to complete a review of virtual water exports from Canada.

Goal 7: Affordable · Fund energy efficiency retrofits for low-income Canadians. and Clean Energy · Remove all federal fossil fuel subsidies. · Enforce a stringent national carbon pricing standard.

Getting There: Alternative Federal Budget 2018 139 Sustainable Development Goal Alternative Federal Budget Action

Goal 8: Decent Work · Ensure full and consistent implementation of employment equity to include and Economic Growth racialized immigrants. · Invest in foreign credentials recognition support. · Give all migrant workers access to permanent residence. · Establish a strategic training fund to support advanced skills training and apprenticeships. · Introduce a Young Workers Initiative, including a Workforce Renewal Fund to be managed by a new Youth Labour Market Planning Board. · Create over 600,000 jobs through the aggregate impact of the AFB.

Goal 9: Industry, · Increase short-term funding for social infrastructure and create a National Innovation Community Development Agency (NCDA) to oversee community economic and Infrastructure development. · Increase short-term funding for green infrastructure and the Low Carbon Economy Fund. · Establish a Just Transition Transfer to the provinces to support workers and communities negatively affected by decarbonization policies.

Goal 10: Reduced · Implement a Canada Action Plan Against Racism. Inequalities · Adopt a human rights framework to guide poverty reduction efforts and re- establish an arm’s length body to track progress. · Eliminate the Canada-U.S. Safe Third Country Agreement. · Eliminate the 30% increase in the low-income cut-off for family class sponsorship income requirement; end immigration detention in non-security-related cases. · Re-establish the National Council of Welfare. · Set a universal EI entrance requirement of 360 working hours to level the playing field for precarious workers. · Issue open work permits for the Temporary Foreign Worker Program and allow migrants to obtain parental benefits.

Goal 11: Sustainable · Invest an additional $3.5 billion annually on affordable housing in Canada. Cities and Communities · Increase short-term funding for public transit and electrification initiatives and modify the current mandate in order to achieve the greatest possible greenhouse gas emissions reductions.

140 Canadian Centre for Policy Alternatives Sustainable Development Goal Alternative Federal Budget Action

Goal 13: Climate Change · Enforce a strong, harmonized carbon price in all Canadian jurisdictions. · Develop a trade promotion strategy that helps shift Canada toward a zero-carbon economy. · Create stronger environmental data and science systems at Statistics Canada. · Develop a National Decarbonization Strategy that puts workers and communities first while growing the zero-carbon economy.

Goal 14: Life Below Water · Create a hierarchy of water use that prioritizes environmental needs and human rights above commercial use.

Goal 15: Life on Land · Invest in developing and managing a stronger network of protected areas.

Goal 16: Peace, Justice · Invest in First Nation governments. and Strong Institutions · Make UN peacekeeping and sustainable peace a Canadian defence priority. · Reject Canadian participation in costly, unproven weapons systems like the F-35 fighter jet and U.S. ballistic missile defence. · Ensure that sales of Canadian-made weapons are consistent with the Arms Trade Treaty and Canada’s own export control policy. · Lead an initiative within NATO to end the organization’s reliance on nuclear weapons.

Goal 17: Partnerships · Commit to annual increases of 15% to the International Assistance Envelope. for the Goals · Dedicate 0.12% of GNI to development co-operation for least developed countries by 2022-23 and 0.15% by 2027-28. · Align government policy with the SDGs through a whole-of-government framework. · Place a moratorium on comprehensive free trade agreement negotiations and re- engage with partners on a sector-by-sector basis and in multilateral forums. · Contribute Canada’s fair share of global climate financing.

Getting There: Alternative Federal Budget 2018 141 Water

ALTERNATIVE FEDERAL BUDGET WATER 2018

¢ There were 167 drinking water advisories in First ¢ Adequately fund water and wastewater Nations in 2017. infrastructure in municipalities and First Nations. ¢ 99% of lakes and rivers in Canada are still not ¢ Fund robust environmental assessments and protected by the Navigation Protection Act. strong water science and research. ¢ ¢ SITUATION The proposed Kinder Morgan pipeline alone puts Safeguard the Great Lakes, groundwater and 1,355 waterways at risk. other freshwater sources. ¢ 197 billion litres of raw sewage was flushed into DESTINATION ¢ Exclude water as a tradeable good, service or waterways in Canada in 2016. investment in Canada’s trade and investment ¢ Canada’s trade and investment agreements do not agreements. adequately protect water policy from costly investor-state disputes.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background action, ensure affordable water services for everyone, and create accountability mech- Canada needs to put water protection and anisms and legal remedies. water justice at the heart of all policies and The Canadian government recognized practices affecting water sources and servi- the human rights to water and sanitation ces. The government could take a step in that at the 2012 UN Conference on Sustainable direction by recognizing water as a human Development, but it has yet to take action right, a shared commons and a public trust. to make these rights meaningful. The fail- Beginning in 2010, the United Nations ure of the Trudeau government to take these passed several resolutions recognizing the rights seriously, as the Liberals promised human rights to water and sanitation. These in the 2015 election campaign, will impact intentions were asserted again in the 2015 the availability and access to clean water Sustainable Development Goals. The UN for generations to come. Human Rights Council has called on governments to develop comprehensive plans and strategies for water management, assess the implementation of these plans of

142 Canadian Centre for Policy Alternatives Drinking water in Indigenous assets is $575 billion, according to the same communities report. The Federation of Canadian Munici- palities (FCM) estimates the cost of replacing Prime Minister Trudeau promised during the systems graded “poor” or “very poor” to be 2015 election campaign to end boil water ad- about $61 billion.4 visories in First Nations within five years of The Liberal government committed $2 forming a Liberal government. There were billion over four years to a new Clean Water 167 drinking water advisories in 98 First and Wastewater Fund. However, there are Nations in fall 2017,1 and there are routine- concerns this money will lead to the priva- ly more than 100 water advisories in effect tization of public water assets in the same at any given time, with some communities way the new Canada Infrastructure Bank having lived under advisories for nearly will prioritize funding for income-gener- 20 years.2 ating projects (e.g., public-private partner- A 2017 report by the David Suzuki Foun- ships). Canada needs a long-term plan to dation and the Council of Canadians found adequately fund public or community-run that the federal government will not meet water and wastewater infrastructure that is its commitment to end all drinking water more accountable and cost-effective than advisories without increasing funding and the private alternatives. making significant changes to current pro- Over 197 billion litres of raw sewage was cesses. In 2011, a government study estimat- flushed into waterways in Canada in 2016.5 ed that $889 million is needed annually for The federal government has introduced First Nations water and wastewater facili- stricter wastewater standards, but again ties, which includes projected operating and these did not come with adequate funds for maintenance costs. In 2017, the Parliament- municipalities. The FCM calculates that the ary Budget Officer reported that the Trudeau regulations will cost at least $20 billion for government allocated, at most, 70% of the plant upgrades alone. The federal govern- funding needed to end water advisories. ment should be working with provincial governments to harmonize reporting re- Public water and wastewater quirements, with the goal of reducing the infrastructure cost of administering regulations.

According to the 2016 Canadian Infrastruc- ture Report Card, one third of Canada’s mu- Water protection legislation nicipal infrastructure is at risk of rapid de- During the 2015 election campaign, the terioration, 36% of wastewater infrastructure Liberal Party committed to restoring and is rated at fair to poor condition and 29% improving water protections gutted by the of drinking water infrastructure is in fair to former Conservative government from the very poor condition.3 The total replacement Canadian Environmental Assessment Act, value of water, wastewater and stormwater the Fisheries Act and the Navigation Pro-

Getting There: Alternative Federal Budget 2018 143 tection Act (NPA). Between 2016 and 2017, the cancellation of several liquefied fracked these laws were reviewed by parliament- gas (LFG) plants, including Petronas’ Pacif- ary standing committees and expert pan- ic Northwest facility, there are still propos- els, which also gathered public input. The als to build LFG plants and run supertank- government is expected to table its proposed ers along B.C.’s coast. regulatory amendments by spring 2018, but The Kinder Morgan pipeline would they will likely leave 99% of lakes and riv- cross 1,355 waterways, and Line 3 runs from ers unprotected under the NPA. Hardisty, Alberta to the shores of Lake Su- perior in the Great Lakes Basin. The Lib- eral government approved both pipelines Impacts of extreme energy projects without Transport Canada assessing their Creating one million climate jobs and en- impacts on navigable waterways, since the suring a just transition for workers cur- current NPA exempts pipelines. These pipe- rently employed in the extractive sectors lines would transport tar sands bitumen or would not only protect waterways but also fracked oil, exacerbating climate change and grow Canada’s economy in sustainable ways putting water, food and public health at risk. for future generations (see Just Transition Despite promising to protect freshwater chapter). Instead, this government plans to and oceans, the Liberal government has ap- pursue many extreme energy projects and proved other extreme energy projects like the environmentally destructive policies fa- Site C dam and the NOVA fracked gas pipe- voured by the Harper government. line (owned by TransCanada), signalling lit- Extreme energy projects require more tle change from the previous government’s water, energy and effort to realize, and are extractivist policies. In December 2017, the more destructive to watersheds, the environ- B.C. government approved the Site C dam ment and surrounding communities than proposal despite the impact it will have on conventional energy development.6 The ex- the Peace River Valley, Indigenous rights traction of extreme energy, such as fracked and farmland. gas and tar sands oil, and their transporta- There is a significant lack of independ- tion via pipeline, rail and ships, leaves mu- ent scientific data on the consequences of nicipalities and Indigenous communities diluted bitumen spills in water, including vulnerable to potentially high clean-up and how the oil reacts in waterways and the health care costs. challenges involved in cleaning it up. The For fracking, these costs include drink- government’s moratorium on tankers on ing water contamination, poor air quality, the northern coast of B.C must include LFG earthquakes, health risks and increased tankers to protect communities and marine greenhouse gas emissions. Atlantic prov- ecosystems. inces have placed moratoria on fracking, but governments in Western Canada continue to endorse the risky practice. Despite

144 Canadian Centre for Policy Alternatives Water withdrawals ing investor-state dispute settlement (ISDS) and trade agreements provisions in deals like NAFTA or Canada’s foreign investment protection agreements It is a myth that Canada has near infinite (FIPAs) would make it much harder for for- supplies of freshwater. Droughts, climate eign corporations to use trade treaties to change and over-extraction continue to im- sue governments for laws or policies that pact what are actually limited water sources. protect water. Each year, Canada exports 59.9 Bm3 of vir- For example, Lone Pine Resources is tual water (the amount of water used to pro- suing Canada for US$119 million under the duce or process a good or a service). Can- investor-state dispute process in NAFTA in ada is the second highest net virtual water response to Quebec’s moratorium on frac- exporter in the world.8 king in the St. Lawrence River — a decision Bottled water companies such as Nestlé made, in part, to protect water. In 2011, Can- directly withdraw from freshwater supplies, ada settled another NAFTA dispute from Abi- including groundwater aquifers, which are tibiBowater (now Resolute Forest Products) the main drinking water source for one-third in which the company a claimed proprietary of Canadian communities. A 2015 study right to the water used at its former paper published in Nature Geoscience found that mill in Newfoundland and Labrador — a right only 6% of groundwater around the world that does not exist under the law. is renewable.9 Droughts and flooding have By excluding water from trade agree- financial impacts on farmers and local in- ments, and eliminating this lopsided industries and provide strong incentive to pro- vestment protection system (see the Inter- tect local watersheds. national Trade and Investment chapter), Water is defined as a “tradeable good,” the government could avert threats to water “service” and “investment” in trade agree- sources in Canada and avoid costly trade ments. As such, trade agreements can dra- challenges. The government must also pro- matically limit a government’s ability to protect the rights of municipalities, provinces hibit or regulate the transfer or sale of water and territories to regulate water takings and across borders. The federal government create new public monopolies for the deliv- must ban all bulk water and bottled water ery of water services and sanitation, with- exports, as these projects are tremendously out having to worry about trade and invest- costly, require vast amounts of energy and ment challenges.10 pose serious threats to watersheds. Removing water as a “service” would help protect water as an essential public good. When services are provided by private corporations, these provisions limit the involvement of the public sector. Remov- ing water as an “investment” and exclud-

Getting There: Alternative Federal Budget 2018 145 AFB Actions Action: Ensure the safety and sustainability of freshwater in Canada. Action: Strengthen public and community water and wastewater infrastructure. • Implement a comprehensive action plan to protect the Great Lakes (cost: $500 • Strengthen the Clean Water and Waste- million in year one and $950 million a water Fund with a requirement that it be year in each of the following four years). used to improve public or community- run water and wastewater infrastructure • Establish water quality and quantity (cost: $6.5 billion a year for six years, $2.5 monitoring frameworks; increase the billion a year in year seven and beyond). number of monitoring stations, train staff in water monitoring, and create a • Implement the Wastewater Systems Ef- new water ministry to co-ordinate the fluent Regulation (cost: $1 billion a year more than 20 departments that set fed- over 12 years). eral policies affecting water (cost: $327.5 • Commit $100 million annually for water million over three years). infrastructure in small municipalities. • Commit $3 million toward a groundwater • Commit $75 million annually for ongoing protection plan and $1 million to com- water operator training, public sector plete a review of virtual water exports certification and conservation programs. from Canada.

Action: Support and fund environmental impact assessments. Notes

• Conduct assessments of all energy and 1 Health Canada. “Drinking Water and Wastewater.” mining projects in consultation with af- Ottawa. Online at http://www.hc-sc.gc.ca/fniah-spnia/ fected communities, and seek the free, promotion/public-publique/water-eau-eng.php#adv; First Nations Health Authority. “Drinking Water Advis- prior and informed consent of Indigen- ories.” Online at http://www.fnha.ca/what-we-do/ en- ous communities in the process (cost: vironmental-health.

$50 million annually for three years). 2 Health Canada. “First Nations and Inuit Health: Drink- ing Water and Waste Water.” Online at http://www.hc- • Conduct an in-depth, independent study sc.gc.ca/fniah-spnia/promotion/publicpublique/water- of the effects of tar sands development eau-eng.php#s2d. on the environment and health (cost: $30 3 Informing the Future: 2016 Canadian Infrastructure million annually for two years). Report Card. Canadian Infrastructure. http://www. can- adainfrastructure.ca/en/index.html.

• Reinstate federal funding for water pro- 4 Ibid.

grams at the departments of Environment 5 Elizabeth Thompson. “Billions of litres of raw sew- and Climate Change Canada, Fisheries age, untreated waste water pouring into Canadian water- and Oceans Canada and Transport Can- ways,” CBC, December 12, 2016; 2016 statistic from email from Wastewater Program, Environment and Climate ada (cost: $60 million for three years). Change Canada. November 7, 2017.

146 Canadian Centre for Policy Alternatives 6 Informing the Future: 2016 Canadian Infrastructure 9 Emily Chung. “Most groundwater is effectively a Report Card. nonrenewable resource, study finds.”CBC News, Nov- ember 15, 2015. 7 Carol Linnitt. “Why is Trudeau Backtracking On B.C.’s Oil Tanker Ban? These 86 Meetings with Enbridge Might 10 Scott Sinclair. (2015). “NAFTA Chapter 11 Investor- Help Explain.” DeSmog Canada, October 20, 2016. State Disputes to January 1, 2015.” Canadian Centre for Policy Alternatives. 8 Nabeela Rahman, Maude Barlow, and Meera Karunan- anthan. (2011). “Leaky Exports: A Portrait of the Virtual Water Trade in Canada.” Ottawa: Council of Canadians.

Getting There: Alternative Federal Budget 2018 147 Youth

ALTERNATIVE FEDERAL BUDGET YOUTH 2018

¢ Precarious, insecure work is on the rise ¢ Introduce a Young Workers Initiative to among young workers. help transition youth into the workforce. ¢ Canada’s laws governing employment ¢ Collect better statistics on youth standards and EI are outdated. employment to allow for better public policy

SITUATION ¢ Public policy does not reflect any measure of decisions and planning.

intergenerational equity and all but ignores the DESTINATION ¢ End unpaid internships in federally needs of younger generations. regulated sectors of the economy and better enforce current laws related to misclassification of unpaid interns.

POLICYALTERNATIVES.CA/AFB2018 #AFB2018

Background sires and challenges of young people. But it is a gross oversight. Approximately one-fifth of Canada’s popula- The economy and labour market young tion (over seven million people) are between Canadians encounter today when they begin the ages of 15 and 29.1 In contrast, nearly looking for work demands “flexibility” — an one-third (over 10 million people) are 55 expectation they will be working part-time, or older. The population is aging, with the insecure, short-term and even unpaid jobs.4 median age rising markedly from 27.1 years The shifting political economy of work in in 1974 to 40.2 years in 2013.2 Canada has affected young people’s abil- For the first time since the country began ity to make a living, as well as their ability collecting national statistics, there are more to engage fully in civic life, which is having Canadians of “retirement age” (55–64) than profound effects on the fabric of our society. there are entering the labour force (15–24).3 Labour market regulation and policy have Given the demographics, it is perhaps not simply not kept up with this new reality. surprising that social and economic policy Young adults are cramped by dramat- often fails to address the complex needs, de- ic increases in home prices, which aver- aged $505,937 in Canada in 2017, and are

148 Canadian Centre for Policy Alternatives far more expensive in the Lower Mainland In the 1980s, during another high-point of B.C. ($1,042,300) and Ontario’s Greater in youth unemployment (it surpassed 20%), Toronto Area ($747,800).5 They earn lower the federal government introduced several wages than their parents did at the same measures under the umbrella of a “youth age, despite having higher debts and more employment initiative.” They included wage education. Most are unable to set aside an subsidies for employment-disadvantaged adequate portion of their earnings for re- young people, funding for community pro- tirement and stable pension plans are be- jects with a youth focus, and youth units at coming a fading memory.6 Canada employment centres.10 Despite these modern realities, there is While a Youth Employment Strategy a lack of intergenerational equity in public with a similar basic structure has survived, policy directed at young Canadians, and no significant adjustments have been made intergenerational fracturing appears to be to respond to the current rate of youth un- taking hold within the national discourse employment and the rise of precarious work, and official politics. Too often, decisions the effects of these shifts on young people’s are not taken with any recognition of the security and well-being, or differences in how the impacts will play out across the employment outcomes among youth from age spectrum. equity-seeking groups.

Precarious work and unemployment Misclassification and unpaid internships Worldwide youth unemployment has reached crisis proportions, with 73.4 million young One continuing threat to young people’s people unemployed globally.7 The situation economic security is the substantial rise in Canada is not as dire — 13.3% of work- and spread of unpaid internships and the ers aged 15–24 are unemployed here — but misclassification of employment. It is esti- young Canadians continue to be overrepre- mated that between 100,000 and 300,000 sented in precarious jobs that lack perma- young people are working for no pay across nence, benefits and stability.8 the country.11 Moreover, recent declines in the youth Unpaid internships were once the do- unemployment rate have been traced to main of journalism, teaching and social young people dropping out of the labour work, among other industries, and usu- market rather than finding employment.9 ally led to full-time paid employment. To- This is especially problematic given that day they have been appearing in federally many critical and expensive moments in a regulated sectors such as media and tele- person’s life (e.g., relationship and family communications (e.g., at Bell Mobility, the formation, post-secondary education, pur- Canadian Broadcasting Corporation and chasing a home) typically occur in young Rogers Communications), and are often not adulthood.

Getting There: Alternative Federal Budget 2018 149 connected to any future paid work with the today’s youth labour market. Building same employer.12 on the report, Fairness at Work: Feder- The federal government committed in al Labour Standards for the 21st Century, Budget 2017 to reform the Canada Labour the Labour Program and Employment Code to address the issue of unpaid intern- and Social Development Canada (ESDC) ships, but these reforms have not yet been will retain an expert panel to review any enacted. statutes that touch labour market activities and consider whether they reflect current labour market conditions, and Employment insurance conditions that exist throughout the eco- Most young workers cannot access employ- nomic cycle (cost: $7 million).15 ment insurance (EI) — especially those mov- • Ensuring that jobs have people and ing from one part-time, temporary or on- people have jobs, and that employers call job to another — because it’s difficult in take on more of the responsibility for these situations to meet eligibility require- training employees. A youth labour mar- ments including minimum hours worked. ket (YLM) planning board will be tasked Thus, in 2013, only a small percentage of with working with relevant sectoral de- unemployed young workers (18% of men velopment councils (see the Just Tran- and 8% of women) were able to collect EI.13 sition chapter), in co-ordination with This is troubling enough, but because Statistics Canada (see below), to gath- many active labour market programs are de- er quantitative data on job openings, signed specifically for EI recipients, young labour market characteristics, unpaid people are cut off from critical retraining internships, and placement rates at uni- opportunities.14 Fundamental reforms are versities, as well as qualitative data on needed to bring EI in line with the realities the labour market experiences of young of today’s labour market and to bridge the people (cost: $30 million). school-to-labour-market transition (see the Employment Insurance chapter.) • Applying a training tax on firms with payrolls greater than $250,000. This measure is guided by the assumption AFB Actions that businesses that invest in training their employees will be more likely to Action: Introduce a Young Workers Initia- retain those employees full time and tive, targeted at people aged 15–34, encom- on a permanent basis. Businesses with passing the following six priorities: a payroll greater than $250,000 will be required to invest the equivalent of 1% • Reviewing and updating the Canada of their payroll in training young em- Labour Code and Employment Insur- ployees.16 Those who fail to meet that ance Act so they are more in line with amount will need to pay the difference

150 Canadian Centre for Policy Alternatives into the national fund for the Young education, employment or training (cost: Workers Initiative. $1 million).

• Offering modest financial assistance to Action: Implement reforms to the Canada firms that implement job-sharing plans Labour Code (limiting unpaid internships pairing retirement-age workers with new in federally regulated sectors) set out in the hires. The idea is that older workers may 2017 federal budget. voluntarily go down to half-time and Action: Ensure that the federal Labour Pro- half-pay while serving as mentors for gram, alongside ESDC, Canada Revenue new hires for three years preceding the Agency and other departments, engages former’s retirement. The YLM planning in proactive enforcement and advocacy/ board will oversee a Workforce Renewal advertising to identify employers that use Fund that will help firms cover the hu- unpaid interns, misclassify young workers, man resources costs of these job-shar- or exploit young migrant workers or inter- ing plans, and to top up salaries if half national students, and penalize any practi- of a senior employee’s salary is not ad- ces that are illegal under an amended Can- equate for a new hire (cost: $100 million). ada Labour Code (cost: $20 Million). • Requiring all Canada Infrastructure Bank-funded projects to reserve, at a minimum, one-quarter of the jobs they Notes

create for young workers; a minimum of 1 CANSIM Table 051-0001: Estimates Of Population, By one-tenth of the overall jobs created by Age Group and Sex, Canada, Provinces and Territories, bank-funded projects will be reserved for Annual. Statistics Canada. young workers from historically margin- 2 CANSIM Table 051-0001: Estimates Of Population, By Age Group and Sex, Canada, Provinces and Territories, alized and equity-seeking groups. Annual. Statistics Canada.

• Renewing the federal government’s role 3 CANSIM Table 051-0001: Estimates Of Population, By in internship programs by providing Age Group and Sex, Canada, Provinces and Territories, Annual. Statistics Canada. funding to not-for-profit organizations 4 Leah F. Vosko. (2009). Managing the Margins: Gender, for 20,000 six-month paid internships Citizenship, and the International Regulation of Precarious on an annual basis (cost: $300 million). Employment. Oxford: Oxford University Press.

Action: Direct Statistics Canada to collect 5 National Average Price Map. Canadian Real Estate Association. data, on a monthly basis, related to unpaid 6 BMO Financial Group, “80 Per Cent of Young Can- internships, unpaid labour and volunteer- adians Concerned About Their Ability to Save for Re- ism (cost: $1 million). The agency will also tirement,” 2013. collect new data, again on a monthly basis, 7 Global Employment Trends for Youth 2013: A Gener- related to workers not currently engaged in ation at Risk. Geneva: International Labour Organiza- tion (2013).

Getting There: Alternative Federal Budget 2018 151 8 CANSIM Table 282-0087: Labour force survey (LFS), columbia/bell-accused-of-breaking-labour-lawwith- by sex and age group, seasonally adjusted and unadjust- unpaid-interns-1.1356277. ed. Statistics Canada. 13 Canada. Parliament. House of Commons. Standing 9 Standing, 2012. Cf. Latouche, Serge. (2014). Farewell Committee on Finance. (2014). Minutes of Proceedings. to Growth. London: Polity Press; Klein, Naomi (2014). 41st Parliament, 2nd session, meeting no. 23. Retrieved This Changes Everything: Capitalism Vs. The Climate. from the Parliament of Canada. http://www.parl.gc.ca/ Toronto: Random House. HousePublications/Publication.aspx?DocId=6472412& Language=E&Mode=1&Parl=41&Ses=2. 10 On historical trends in youth unemployment, see “Youth unemployment high, but lower than in most 14 Guntther Schmid and Bernd Reissert. 1996. “Un- of 1990s.” Labour Force Survey: 2011 Year-End Review. employment Compensation and Labour Market Tran- Statistics Canada. For the Youth Employment Strat- sitions.” In International Handbook of Labour Mar- egy (YES), see http://actionplan.gc.ca/en/initiative/ ket Policy and Evaluation, edited by Gunther Schmid, enhancing-youth-employment-strategy. For an evalua- Jacqueline O’Reilly and Klaus Schomann, 235–76. Lon- tion of the YES program from 1997–2002, see Human Re- don: Edward Elgar Publishing Limited, p.248. sources and Skills Development Canada. (2004). “Youth 15 Harry Arthurs, “Fairness at Work: Federal Labour Employment Strategy (YES) 1997–2002: Summary of Re- Standards for the 21st Century,” Government of Can- cent Summative Evaluation Results.” http://www.hrsdc. ada, 2006: http://digitalcommons.osgoode.yorku.ca/ gc.ca/eng/publications_resources/evaluation/2007/sp_ cgi/viewcontent.cgi?article=1166&context=reports. ah_211_05_04e/page01.shtml. On economic transforma- tions in Canada and globally since 1980, see Vosko, 2009. 16 Tom Zizys. (2014). Better Work: The Path to Good Jobs is Through Employers. Metcalf Foundation. 11 Aleksandra Sagan. (2013). “Unpaid Internships Ex- ploit ‘Vulnerable Generation.’” CBC News. July 02, 2013. http://www.cbc.ca/news/canada/unpaidinternships- exploit-vulnerable-generation-1.1332839.

12 Kathy Tomlinson. (2013). “Bell accused of breaking labour law with unpaid interns.” CBC News. June 24th, 2013. http://www.cbc.ca/news/canada/british-

152 Canadian Centre for Policy Alternatives Acknowledgements

The AFB starts from a set of social justice tyne (Child Care Now [formerly Child Care values — human dignity and freedom, fair- Advocacy Association of Canada]), Maroine ness, equality, environmental sustainability Bendaoud (McMaster University), Michèle and the public good — embraced by repre- Biss (Canada Without Poverty), Joe Bough- sentatives of a broad spectrum of civil so- ner (Association of Canadian Financial Offi- ciety organizations: labour, environment, cers), Diana Bronson (Food Secure Canada), anti-poverty, faith-based, students, teach- Ryan Campbell (Professional Institute of the ers, education and health care, arts, cultur- Public Service of Canada), Amy Casipullai al, social development, child development, (Ontario Council of Agencies Serving Im- international development, women, disabil- migrants), Janice Chan (Calgary Home- ity, Indigenous. less Foundation), Gavin Charles (Canadian We would like to acknowledge the gen- Council for International Co-operation), erous financial assistance provided by its Tony Clarke (The Polaris Institute), Eve- funders. Lyne Couturier (l’Institut de recherche et This document was prepared thanks to d’informations socio-économiques), Graham the invaluable volunteer contributions of Cox (Canadian Union of Public Employees), many people. Those contributions may or Hamal Docter (Canadian Arts Coalition) may not reflect the views of the authors’ or- (Communication, Energy and Paperwork- ganizations. They include: ers Union of Canada), Nick Falvo (Calgary Lynell Anderson (Child Care Now [for- Homeless Foundation), Leilani Farha (Can- merly Child Care Advocacy Association of ada Without Poverty), Sid Frankel (Cam- Canada]), Jill Atkey (British Columbia Non- paign 2000: End Child and Family Poverty Profit Housing Association), Morna Ballan- in Canada), Martha Friendly (Childcare

Getting There: Alternative Federal Budget 2018 153 Resource and Research Unit), Colleen Ful- Labour Congress), Bill Robinson (Rideau ler (PharmaWatch Canada), Avvy Go (Chi- Institute), David Robinson (Canadian As- nese and Southeast Asian Legal Clinic), Tam sociation of University Teachers), Madeline Goossen (Urban Alliance on Race Relations), Rodriguez (Association of Canadian Finan- Joe Gunn (Citizens for Public Justice), Joel cial Officers), Dan Rohde (Income Security Harden (Canadian Federation of Students), Advocacy Centre), Toby Sanger (Canadian Guillaume Hébert (l’Institut de recherche et Union of Public Employees), Robin Shaban, d’informations socio-économiques), James Paul Shaker (Civicplan), Jan Slomp (Na- Hicks (Council of Canadians with Disabil- tional Farmers Union), Adrienne Silnicki ities), Cathy Holtslander (National Farmers (Canadian Health Coalition), Vicky Small- Union), Dennis Howlett (Canadians for Tax man (Canadian Labour Congress), Steven Fairness), Guio Jacinto (United Steelwork- Staples (Public Response), charles smith ers), Andrew Jackson (Broadbent Institute), (Cultural Pluralism in the Arts Movement Frederic Julien (Canadian Arts Presenting Ontario), (Canadian Arts Coalition), Jim Association), Anita Khanna (Campaign 2000: Stanford (Unifor), Greg Suttor (Wellesley End Child and Family Poverty in Canada), Institute), Michael Toye (Canadian Com- Elizabeth Kwan (Canadian Labour Con- munity Economic Development Network), gress), Jennefer Laidley (Income Security Andrew Van Iterson (Green Budget Coali- Advocacy Centre), Andrew Langille (Youth tion), Howie West (Public Service Alliance and Work), David Leacock (Unifor), Keith of Canada), Dan Wilson (Assembly of First Lowe (CCPA Manitoba), Mike Luff(Can - Nations), Angela Wong (Chinese and South- adian Labour Congress), Emma Lui (Coun- east Asian Legal Clinic). cil of Canadians), Angella MacEwen (Can- adian Labour Congress), Liz Majic (Canada The dedicated staff, volunteers, and re- Without Poverty), Peggy Mason (The Ri- search associates at the Canadian Centre deau Institute), Jedd Matechuk (Calgary for Policy Alternatives, as always, pull the Homeless Foundation), Jessica McCormick AFB project together with no deficit of en- (Canadian Federation for Students), Sarah thusiasm, generosity and good humour: McCue (Canadian Federation of Students), Peter Bleyer, Simon Enoch, Lynne Fernan- Bob McGahey (Canadian Teachers’ Federa- dez, Alex Hemingway, Trish Hennessy, Ig- tion), Harriett McLachlan (Canada Without lika Ivanova, Seth Klein, Marc Lee, Katie Poverty), Emily Norgang (Canadian Labour Loftus, Molly McCracken, David Macdonald, Congress), Steve Pomeroy (Focus Consult- Kate McInturff, Hadrian Mertins-Kirkwood, ing), Robert Ramsay (Canadian Union of Jason Moores, Alyssa O’Dell, Katie Raso, Tim Public Employees), Carol Reichert (Canadian Scarth, Erika Shaker, Scott Sinclair, Gauri Federation of Nurses Union), Fraser Reilly- Sreenivasan, Stuart Trew, and Emily Turk. King (Canadian Council for International Special thanks to this year’s progressive Co-operation), Chris Roberts (Canadian economics fellow Jesse Whattam.

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