The exceedingly aggressive austerity cuts carried out by Prime Minister Stephen Harper and Finance Minister Jim Flaherty over the past seven years have come home to roost as Canadians, depressed and without hope, are succumbing to its worst consequences. Programme cuts have had a huge, disproportionate impact on the poor and underemployed.
The massive austerity programme translates into less income, decreased services, and reduced health care for many of Canada’s most vulnerable people. It appears that more than four million Canadians – mainly the poor, the unemployed/underemployed and the under-privileged – are struggling.
Even though they had a budget surplus when they took over the government, Harper and Flaherty claimed there was a desperate need to cut back. They launched cuts that were a broadside attack on the government’s ability to finance many of its activities, including these much-needed employment and social support programmes.
The examples are numerous. Claiming it was concerned that some people don’t have enough incentive to work, Harper-Flaherty toughened up the Employment Insurance rules. They took millions of dollars away from mostly seasonal workers, leaving them vulnerable.
Human Resources and Skills Development Canada (HRSDC), the government department that provides the most hands-on support for the poor, is being cut more than any other department. It will lose 5,700 positions – one-quarter of its workforce by 2016. Drilling down to the programme level, the largest proportional cut by far is to the Social Development programme supporting homelessness initiatives, which suffers a 62 percent cut. The largest cut in absolute terms is to the Citizen-Centered Services Program, which helps Canadians access government services by phone and online.
Harper also cut funding to the National Aboriginal Health Organization (NAHO) and to a number of Aboriginal women’s health organisations – crucial programmes on suicide prevention, women’s health, and diabetes. They also cut the Women’s Health Contribution Program, which funds six women’s health organisations across the country.
There are staggering disparities in life expectancy based on the amount of education a person receives and their amount of education. On average, people living in rich neighbourhoods live an average of 86.3 years, while those living in a poor neighbourhood live only 65.5 years – a difference of 21 years. Children are not spared from the suffering. According to UNICEF’s most recent report, Canada is 21st out of 29 top countries for relative child poverty, and 27th for the percentage that were overweight.
The attacks on the vulnerable began soon after the Conservatives came to power in 2006. Even though they had a budget surplus when they took over the government, Harper and Flaherty claimed there was a desperate need to cut back. They launched cuts that were a broadside attack on the government’s ability to finance many of its activities, including these much-needed employment and social support programmes.
A two percent cut in the Goods and Service Tax income in Flaherty’s first two budgets cost the government a staggering $10bn to $12bn annually in revenues that had been used to help support government services.
In addition, Flaherty has cut $60bn in corporate taxes since the Conservatives took power in 2006 – needlessly reducing the country’s corporate tax rate to the lowest among G8 countries.
Flaherty pushes ahead
Throughout the Conservatives’ seven years in office, independent economists argued that the austerity programme was not achieving its stated goal of preparing the country for an economic recovery, but Flaherty refused to budge.
Then in April, the world was shocked when the austerity experiment, which destroyed the lives of millions in Europe, was totally discredited. Thomas Herndon, a young University of Massachusetts Amherst graduate student in economics, discovered that an influential paper endorsing austerity practices as a way of rebuilding beleaguered economies was incorrect because of spreadsheet coding errors and selective data.
Amazingly, Flaherty continued with the austerity experiment. “What I worry about is those that suggest that austerity should be abandoned,” he noted. “I think that’s the road to ruin quite frankly.”
So more cuts that will affect the poor the most are on the way. Harper and Flaherty will chop another $11.8bn from government spending by 2014-15; job losses in both the public and private sectors will be 90,000 by 2014-15; and there will be 1.4-million unemployed workers in the country in 2015.
If Harper and Flaherty really wanted to balance the budget and look after people at the margins, they could work harder to collect the $29bn the government is owned by the rich and corporations in unpaid taxes.
They also could try harder to find the $3.1bn that was given to the anti-terrorism programme but that cannot be accounted for.
The Council of Canadians says that if Harper and Flaherty really wanted to get the country out of its economic doldrums, they could continue to stimulate job growth through needed infrastructure projects (water, transit, green energy, roads, etc), and reverse corporate tax cuts. And not by suffocating those at the very bottom of the pyramid.
Nick Fillmore is a Toronto-based freelance journalist and social activist. His work at the CBC over more than 30 years included the broadcast of several investigative documentaries, some concerning key environmental issues. He was a member of the editorial board of THIS magazine and was a founder of the Canadian Association of Journalists. He blogs at nickfillmore.blogspot.com. Feedback is welcome at firstname.lastname@example.org.