Federal Budget 2019
What we're looking for
No time to lose
Budgets are political documents—they are about choices and values. And the choices we make today will determine the long-term sustainability of our society and our economy for generations to come. Given the threats and uncertainties on the horizon, there is no time to lose in choosing to budget more equitably and cost-effectively—so that we are in a better position to face those challenges head on.
Unfortunately, a narrow focus on corporate taxes and preserving the status quo in the lead up to the fall fiscal update and 2019 budget ignores the magnitude of the challenges facing Canada and indeed much of the world: climate change, inequality in all its forms, and precarity. The 2019 Alternative Federal Budget (AFB) proves we have affordable, achievable options for addressing all of these challenges, as significant as they are.
The AFB continues to show that by focusing on people, the government’s fiscal power can be used in more egalitarian and democratic ways. We have the means to encourage strong, sustainable growth in climate-friendly industries while providing strong public programs that support our economy and make all our lives better. We should exercise those means.
FAIR AND PROGRESSIVE TAXATION
• Canada’s tax system is overly complex and riddled with expensive loopholes that worsen inequalities.
• We lose an estimated $47 billion annually to tax evasion, while Canadian companies have nearly $300 billion hiding in known tax havens.
• Multinational e-commerce firms are not paying their fair share of taxes, which puts domestic competitors at a disadvantage.
• Canada’s low corporate tax rate has encouraged cash hoarding and speculation, not economic growth.
• Tax breaks for the fossil fuel sector and the low carbon tax rate will not incentivize the transition to a greener economy.
• Eliminate regressive tax loopholes that almost exclusively benefit high-income earners.
• Crack down on corporate tax-dodging, in part through new reporting requirements for offshore subsidiaries of Canadian firms.
• Tax services provided by non-Canadian e-commerce firms to level the playing field and recoup foregone government revenues.
• Raise the corporate tax rate to 21% (in line with the new U.S. level) and create a new financial transactions tax to curb excessive speculation.
• Introduce a national $30/tonne carbon tax in 2018, to grow to $50/tonne in 2020, and invest part of the revenues in just transition measures.
ENVIRONMENT AND CLIMATE CHANGE
• Climate change threatens the prosperity and well-being of all Canadians.
• Federal and provincial governments climate policy, and Canadian contributions so far to global climate financing initiatives, does not reflect the ambition of Canada’s climate targets.
• Pollution and exposure to toxic substances have significant negative impacts on public health, the environment and our economy.
• Enforce and strengthen federal carbon pricing backstop systems.
• Remove all direct and indirect subsidies for fossil fuel exploration, development and transportation.
• Provide regulatory departments and agencies with sufficient funding for managing toxic substances, including pesticides.
• Contribute Canada’s fair share of global climate financing.
• The employment gap between men and women is costing our economy an estimated 4% in GDP growth.
• Women aged 25–54 continue to perform 10 hours more per week than men of unpaid work in the home and make up 89% of workers taking parental leave.
• Women and girls make up more than half of all victims of violent crime, and the clear majority of victims of sexual assault and harassment.
• Invest in sectors where women work and earn a living wage.
• Deliver accessible, affordable and universal child care and a paid paternity leave program.
• Increase funding to women’s organizations and implement a fully resourced national action plan to end violence against women.
• There were 4,000 opioid-related deaths in 2017; B.C. saw four drug overdose deaths a day in April 2018.
• One in five Canadians suffer from a mental illness, with associated costs topping $50 billion a year.
• First Nations, Inuit and Métis people face significant health inequities and lack equal access to culturally appropriate care in their communities.
• Seniors can’t access or afford the long-term care and home care they need; 34,000 seniors are on waitlists in Ontario alone.
• For-profit clinics and user fees threaten Canada’s public health system. • Lower federal spending will lead to a $31 billion shortfall over the next 10 years, all downloaded to the provinces.
• The shift away from nationwide health accords to bilateral deals erodes the universality of the health system.
• Increase government investment in health care to sustain and expand services.
• Enforce the Canada Health Act to protect the core values of medicare.
• Implement a national single-payer public drug plan.
• Provide universal home care, long-term care, dental care and mental health services.
• Establish national strategies on seniors’ care and mental health.
• Fully implement Jordan’s Principle so that Indigenous children enjoy equal access to health care services.
• Put a 5.2% escalator on federal health transfer payments to maintain current levels of services, and to improve accountability and consistency in public health care services.
HOUSING AND NEIGHBOURHOODS
• The federal government invested substantially in building affordable housing from the 1960s until the 1980s, minimally between 1994 and 2001, and can afford to allocate more than what has been budgeted for in the National Housing Strategy.
• Waiting lists for subsidized housing in Canada continue to grow. Some people become homeless while they wait.
• The proposed Canada Housing Benefit is a positive step, but it should be launched earlier than 2020-21 and enhanced with provincial/territorial support after that.
• Enhance the National Housing Co-investment Fund with an additional $1 billion in grant money for new builds.
• Allocate $1 billion annually to build new supportive housing for vulnerable populations.
• Allocate $1.5 billion immediately to the Canada Housing Benefit to help 250,000 low-income households afford their rent.
INDUSTRIAL STRATEGY AND JUST TRANSITION
• Taking serious action on climate change will require co-ordinated decarbonization of the Canadian economy.
• Women, racialized workers and other marginalized groups are underrepresented in the sectors poised for growth in the clean economy.
• Workers and communities in fossil fuel–dependent regions may be harmed by policies to phase out oil, gas and coal production.
• Develop a National Decarbonization Strategy that plots a path to a sustainable, equitable and prosperous Canadian economy.
• Establish a Strategic Training Fund to prepare workers—especially workers from historically excluded groups—for new jobs in the clean economy.
• Create a Just Transition Transfer to help the provinces and territories support fossil fuel workers and communities negatively affected by the shift away from fossil fuels.
INTERNATIONAL TRADE AND GLOBALIZATION
• Canada’s current trade and investment agreements make it difficult to tackle inequality, expand public services, reduce greenhouse gas emissions (GHGs), and otherwise set our economy on a more sustainable and socially just path.
• High tariffs imposed by the Trump administration on Canadian exports to the U.S. have the potential to significantly disrupt the Canadian economy and put jobs at risk.
• Canadian trade and investment agreements facilitate trade in fossil fuels and undermine domestic renewable energy promotion measures, which hurts our chances of meeting Canada’s Paris Agreement commitments on climate change.
• Hit pause on new free trade negotiations, except NAFTA, and organize a public review of Canada’s current trade and investment treaty model with the aim of developing a new model based on principles of social justice, economic inclusion and environmental sustainability.
• Create an adjustment fund to support workers and communities adversely affected by U.S. trade remedy actions.
• Develop a trade promotion strategy that helps shift Canada toward a zero-carbon economy and promote a “peace clause” on domestic measures globally that are meant to promote the transition to renewable power.
• The national poverty rate in 2016 was 13% (using LIM-AT) and 10.6% (using MBM), the equivalent of between 3.7 and 4.6 million people.
• Poverty rates are substantially higher for recent immigrants, Indigenous people, racialized people, senior women, single parents and people with disabilities.
• 863,492 Canadians relied on food banks in March 2016, 28% more than before the 2008 recession.
• About 35,000 Canadians are homeless on any given night, and over 235,000 experience some form of homelessness during the year.
• The federal poverty reduction strategy is taking a long time and may not produce any new initiatives prior to the next federal election.
• Reduce Canada’s poverty rate by 50% within three years and adopt rigorous targets for populations experiencing acute poverty.
• Base the federal poverty reduction strategy in a human rights framework and re-establish an arm’s length body to track progress as recommended by the UN.
• Introduce a yearly $4 billion transfer to the provinces/territories to boost social assistance benefits and achieve rigorous poverty reduction targets.
• Create a Dignity Dividend, modelled on the GST credit, to lift 370,000 low-income people, half of them children, out of poverty.
• Re-establish a $15 minimum wage for all workers under federal jurisdiction and ensure annual increases into the future.