Federal Budget 2018: A Kiss and a Promise

Statement by the Central Executive Committee, Communist Party of Canada


If the Liberal government’s goal with its Feb. 27 budget was to expose the Tories as advocates of austerity, unable to see or respond to the crisis of falling wages and living standards, they  probably succeeded. And if they also hoped to expose the NDP’s weaknesses, they may have succeeded in revealing that the NDP has stepped away from the progressive policy ideas it was once known for, in its campaign to gain Big Business support.   

With this budget, full of promises but short on delivery, the Liberals aim to create the impression that they are the only progressive alternative, and that working people can count on them to protect their interests.

In fact, the Liberals represent the interests of the banks and the multi-national corporations. They are the preferred party of Big Business, after a decade of the discredited Harper Tories.

They continue to run big deficits that will eventually be paid off by the public, rather than force the banks and the corporations to pay taxes on their enormous wealth and profits, much of it hidden in offshore tax havens exposed by the Panama and Paradise Papers. At most, the government aims to recover $1 billion in unpaid corporate taxes, instead of the estimated $50 billion lost every year. There is no mention of the tax reform pledge made during the 2015 election, and nothing about raising the capital gains tax, restoring the capital tax, raising the corporate tax rate, or introducing wealth and inheritance taxes on the rich.  

This budget makes lots of promises, but implementation is all very vague, and contingent on working people paying the shot when it comes to delivery.

Finance Minister Bill Morneau identified many of the key concerns working people have, without delivering any long-term solutions and, in the case of childcare, without even a short-term solution. His much vaunted budget gender lens simply magnified the complete absence of a key determinant of women’s equality: a universally accessible, affordable, quality public childcare system  which is essential and long overdue (and which the Chretien Liberals promised in their 1993 Red Book).

At the same time, other social programs have been seriously eroded. Last year’s cuts to health transfers (base escalators) contributed to dangerous under-funding of health care and hospitals across the country, and encouraged provinces to allow privatization of services such as Saskatchewan’s privatized MRI. The government could and should have restored the base escalator for the Canada Health Transfer to a minimum of 6% (a mere 0.8% above actual costs). It can and should enforce the Canada Health Act and stop the escalating privatization of healthcare across the country.  

The announcement that pharmacare will be studied by former Ontario Health Minister Eric Hoskins has raised the hopes of millions of Canadians. But pharmacare has already been studied and recommended, most notably by the Romanow Royal Commission in 2002. What’s missing is implementation of a plan for pharmacare. The Romanow Commission also recommended expanding Medicare to include vision, dental and long-term care, but this is also missing.

Morneau’s Feb. 28 speech to the Economic Club of Canada clarified that the Liberal agenda is not pharmacare; it’s government purchase of drugs, which will not interfere with pharmaceutical company profits.  Canadian Doctors for Medicare warns that the Finance Minister’s business interests should preclude him from any involvement in this project, or in any discussions or decisions on public healthcare policy.

Public opinion must be brought to bear to demand a plan to implement a real pharmacare program, which should sooner or later include nationalization of the pharmaceutical industry in Canada.  Sooner would be better for working people who pay the bills for Medicare.

The budget promises pay equity for federal employees and those contracted by the federal government. This is the result of a massive struggle by postal workers and other public sector unions who have combined the fight for pay and employment equity for women with bargaining for these rights in their collective agreements. This government has been forced to accept what women, unions, arbitrators and the public have fought for over decades – equal pay for work of equal value – in one small section of the federal public service.  

But the gender pay gap, which has grown wider under successive Liberal and Tory governments, has been a big contributor to Big Business profits. The pay gap forced onto racialized workers has also suited Big Business’ profits very well.

The government could and should legislate pay and employment equity legislation with teeth, covering all workers. This would substantially raise the wages and living standards of huge numbers of workers across the country. Further, this budget should also have increased the federal minimum wage, indicating strong support for higher minimums across the country.  

The budget doesn’t address the crisis of precarious work facing millions of part-time and low-paid workers. The new jobs created recently are almost all part-time, with a huge and growing proportion of those being precarious jobs – temporary, casual, or single contract self-employed, and generally with low-pay and lacking benefits, pension plan, job security or protections of any kind. The low-waged economy is the new normal under the free trade deals: the race to the bottom for workers, the race to the bank for employers. This is what the government refers to as ‘full employment’ today.

This budget should have laid out a plan to rebuild value-added manufacturing and secondary industry, as part of a sustainable industrial strategy for Canada. This should include a machine tool industry, agricultural implements, appliance industry, ship-building, and it should create jobs and apprenticeships for youth as a priority. Expanding public services will also create jobs,  as will development of renewable sources of energy.

This budget should have substantially increased Canada Pension Plan and Old Age Security benefits, which condemn many seniors to live in poverty and to work well into their retirement years. The voluntary pension age should be cut to 60, enabling older workers to retire with dignity and security, and enabling young workers to enter the workforce.

This budget promises to do something to protect pensions in bankruptcy proceedings – but what? The government should change bankruptcy legislation to put pensions and wages at the top of the list of creditors to be paid out. Pensions are deferred wages. Further, it should introduce plant closure legislation with teeth, requiring companies to show just cause before public tribunals before they are able to close or move their operations out of Canada.  

While increasing parental leave to a combined 40 weeks, the budget should have substantially increased EI benefits so that parents can afford to stay home with their newborns. Within the current EI rules, less than 44% of unemployed workers, and only 37% of unemployed women, are able to qualify for benefits. EI should have been expanded to include part-time workers, and first-time job seekers, many of whom are impoverished and living in precarious circumstances.

Affordable social housing is not on the Liberal agenda, though the crisis of affordable housing and rents is front-page news. An emergency program to construct a million units of affordable social housing for rent and for sale is urgent. So is infrastructure spending that would create thousands of construction jobs and spin-offs in manufacturing and services.

Post-secondary education is not in the budget, even though accessibility is a huge issue for tens of thousands of students because of sky-rocketing tuition fees. The budget proclaims the importance of science and technology, but makes it impossible for many students to access these important areas of study and work. The bar is financial. This budget should have eliminated tuition fees, and taken steps to adequately fund post-secondary institutions, so that they can deliver quality education without depending on private corporate funding. The annual cost of eliminating tuition fees across Canada is $10 billion – a very good investment in youth, in education, and in the future. This would also stop the drive to privatization of these publicly owned institutions.

The budget commits almost $5 billion to Indigenous communities, including funds to finally comply with four Human Rights Tribunal rulings that the federal government engages in 

racial discrimination by underfunding of indigenous children’s welfare. The initial funding shortfall that led to the human rights complaint by the AFN and the Caring Society in 2007 has taken 11 years to  finally address.

This budget funding sets a target date of 2021 to end the boil water advisories that still exist on 90 indigenous reserves and communities. Some funds have been earmarked for housing, though not nearly enough to address the housing crisis on reserves across Canada. The funds budgeted don’t come close to meeting either the immediate needs or the long-term rights of Indigenous nations.

This budget ignores the biggest single producer of carbon emissions and climate change in Canada – the Alberta tarsands. The Liberals continue to push pipelines that threaten the environment and negate their promises to respect Indigenous sovereignty. Public ownership and control of energy would enable the government to close the tarsands, and focus on clean energy projects, to generate real action to combat climate change, employ the tarsands workers, and develop a new relationship of equality with Indigenous nations.

This budget is ominously silent about important issues including military spending, taxation, and trade. The Prime Minister has stated the government will raise military spending by 70% over the next 20 years, from the current $18.9 billion to $32.7 billion, but without raising corporate taxes. Big Business is demanding cuts to the corporate tax rate following massive US tax cuts. Cuts to social program spending will pay for this increase of $13.8 billion for the military, ensuring that Canada is even more deeply involved in US/NATO dirty wars, including nuclear war.  This military spending increase should be canceled, and the current spending levels should be cut by 75% as a shift away from militarism and war, towards a foreign policy of peace and disarmament.

The budget boosts funding to the Communications Security Establishment, a body given new powers under Bill C-59 to actively engage in mass surveillance and disruption of domestic and foreign cyber operations. This Bill has sparked public opposition, as did the Harper government’s Bill C-51, for funding activities that are a threat to civil society, democracy, and peace.  

Meanwhile, program spending is being shaved down, as is spending on healthcare, education, and pensions.  More and more programs and public assets are being privatized and public services contracted out. Will US procurement policies demanded by Trump in NAFTA renegotiations be agreed to by Canada, and if so will universal social programs, health and education be opened up to US corporations? Will Canadian farmers go belly up because our supply management system has been dumped? Will plant closures and mass lay-offs be the future for Canadian workers?

The truth is that the Liberals may do some or all of these things if the pressure from Big Business in the US and Canada is strong enough.

But if greater pressure is exerted by the labour and democratic movements – by the public – the government may be compelled to deliver on at least some of its promises. That’s how Canada got Medicare in the first place, along with unemployment insurance, maternity leave, pensions, and more. These gains were never given by governments; they were won by public opinion and mass independent labour political action.

The reason this budget has a ‘gender lens’ is because women are angry and on the move. So are Indigenous Peoples, workers, and young people trying to get a foot in the door. Fed up with the status quo, they all want the real change that this government and Parliament are unwilling to deliver.

Working people want pharmacare, childcare, pay equity, pension protections, EI improvements, good jobs, higher wages and living standards, security, affordable housing, accessible education, environmental action, and reconciliation with Indigenous Peoples, to name the most urgent issues. But it will take an organized campaign of mass labour and public action to force Parliament to act, issue by issue. A new Parliament is needed, with strong voices inside – working with the labour and people’s movements outside – to win.  

The old-line parties can’t deliver, because they represent the big corporations and the very wealthy. Working people need to look left, to the Communist Party and others committed to fight for working people, to win these policies, starting with proportional representation which will open the door to real change in the composition of Parliament and in the class interests represented there.  

Real change in policy requires real change in politics. A people’s agenda needs a people’s coalition, and the election of a people’s majority in Parliament.  

It’s time.

Sign up for regular updates from People's Voice!

You will receive email notifications with our latest headlines.