Corporations Pleased with the Federal Budget

Statement by the Central Executive Committee, Communist Party of Canada

The Liberals’ second budget, delivered March 22, made the corporations happy, but left working people, youth and the unemployed looking for the beef promised during the 2015 federal election, and in last year’s budget.

For the corporations and the wealthy: no tax hikes, and no new taxes, and no loopholes closed, leaving the government with no revenue to deliver on their many promises. Pointing to the US, where big corporate tax cuts have been promised by the Trump administration, the Liberals say they can’t raise corporate taxes here. But they can and should, if they want to stem the tide of right-wing populism that has swept across the US and Europe, and is fueling the Tories and the far right in Canada.

Closing corporate tax loopholes would have generated an estimated $16 billion in revenue that could have been used to fund a new federal health accord, reduce tuition for students, fund social housing and public transit, and create jobs.

Raising the capital gains tax to 100% of the gain (realized and unrealized) could have been used to eliminate the bubble in housing prices across the country. It could have generated the funds needed to launch a system of universal, accessible, affordable, quality, public childcare in Canada, and enabled millions of women in the workforce to work full-time, to close the wage gap, and to also contribute and be eligible for full pensions and EI benefits. It would have put some real meaning into this much publicized gender-lensed budget that talks the talk, but is too weak to walk.

Introducing wealth and inheritance taxes, which most countries in Europe have had for decades, would have generated funds for an emergency program to create new jobs for youth, and to substantially raise the minimum wage.

Raising the corporate tax rate – now the lowest in the industrialized world – would have provided the funds for massive job creation, putting the country to work, building affordable social housing for sale and for rent right across Canada, building secondary industry and manufacturing that’s environmentally sustainable and will help reduce greenhouse gases, developing an infrastructure program using corporate tax revenues to build publicly owned infrastructure, not the widely discredited public private partnerships that are privatization on public infrastructure and services on a massive basis.

It could have restored funding to the EI account, which previous Liberal governments raided for corporate tax cuts, and increased EI benefits to 90% of previous earnings for the duration of unemployment, and covered all the unemployed including part-time and precarious workers and first-time job seekers. Instead the government will water down EI benefits over an extended 18 month period for some parents.

Raising the corporate tax rate could have been partnered with the elimination of taxes on incomes under $40,000, or introduced a guaranteed annual income above the poverty line.

But the government’s refusal to raise corporate taxes, or even close the gaping loopholes through which the corporations and the rich daily drive their Porsches, has increased the federal deficit (and provincial and municipal deficits as well in the trickle-down) and extended austerity measures imposed on working people, youth and the unemployed indefinitely. The government’s refusal to take decisive action to create jobs, raise wages and living standards, strengthen social programs, and address climate change will deepen the crisis of living that millions of working people face daily in Canada, and will create more fertile ground for the Tories and the extreme right.

Instead the government chose to post notice that it intends to mirror US tax rates once they are set by the Trump administration. Working people should ask: will Trudeau also match Trump’s right-to-work laws when they arrive in the US? Will Trudeau go along with Trump’s “tweaks” to NAFTA which target our softwood lumber, Medicare, our supply management system in agriculture, our manufacturing industries and auto jobs?

The biggest prize for big business is the establishment of the Canada Infrastructure Bank, which is intended to facilitate and speed-up the privatization of federal public assets and services. Euphemistically described as the means to “unlock and recycle the value of our public assets”, the bank will invite private investors to fund – and jointly own – what is now publicly owned infrastructure, including roads, bridges, water filtration, public buildings and land, etc. The P3 ownership arrangements that the bank will underwrite will make billions in profits for the private corporate investors, and bilk the public out of billions in new and higher user fees, and in the loss of publicly owned infrastructure. It is mass privatization.

The government’s willingness to cater to the corporations’ demands in Canada, and in the White House, over the needs of working people, is nowhere better exposed than in the absence of equitable funding for Aboriginal education and health and social services for children. The Canadian Human Rights Tribunal has ordered the government three times to pay the $382 million owing for First Nations child welfare. The $99 million in this budget is 30% of this legally required funding for 165,000 indigenous children across Canada, who are dying as a result of deliberate underfunding of services by this and previous governments, part of the genocidal policies that included the residential school system.

This government has lied about its willingness to change this horrendous policy towards indigenous people, just as they have lied about recognition of indigenous sovereignty while approving pipelines opposed by indigenous peoples, environmentalists, and a majority of working people. Like the 2016 budget, which promised $8.4 billion to address the crises in Aboriginal communities, the lion’s share of the funds will not be delivered before the next federal election – if ever. The government’s slow implementation of the Public Inquiry into Murdered and Missing Women and the recommendations of the Truth and Reconciliation Commission, prove that this the case.

This corporate budget will cost lives of the most vulnerable, and result in a further loss of Canadian sovereignty, jobs, and social security. It could have been different, it should have been different. Canada is a rich country. Working people will have to take their opposition to the streets, and demand that this government deliver on the promises made.

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