Living cutbacks

Canadian Centre for Policy Alternatives

The federal government of Canada continues to prioritize deficit reduction at all costs. Federal program spending as a share of the economy is at its lowest level since the 1950s and the lowest of any national government in the industrial world. Cuts to federal-provincial health, social, and equalization transfers alone will amount to $60 billion over the next decade. The result has been a reduction to health and social services for Canadians at the time when they need them most—during Canada’s slow recovery from recession.

The impact of the government’s austerity measures are beginning to become evident in rising inequality. While inequality in Canada may be less extreme than in the U.S., it is growing at a faster rate in Canada. By 2011, the average after-tax income of the richest 10% of non-elderly households was 21 times that of the average incomes of the poorest 10%, higher than at any point on record since 1976.

Income inequality in Canada is also highly racialized and gendered. Women, Aboriginal peoples, new immigrants, people with disabilities and racialized communities all carry a disproportionate burden of lower incomes and lower employment rates. For example, employment rates for working age Aboriginal men are 15% lower than for their non-Aboriginal counterparts. Aboriginal women’s employment rates are 5% lower yet. For every dollar earned by white Canadians, racialized Canadian workers earned only 81.4 cents. For every dollar earned by men in Canada, women earn 76.7 cents (working full-year, full-time).

Social assistance rates for Canadians living below the poverty line have remained virtually unchanged across most of Canada. Most social assistance incomes in Canada remain well below the low income measure (LIM). Poverty as measured by the LIM was 12.6% across Canada in 2011, slightly higher than before the recession. While poverty has modestly declined in recent years for children, likely reflecting some success of provincial poverty reduction plans, this measure captures a disturbing re-emergence of poverty among seniors.

The National Council of Welfare, now itself defunct as a result of federal funding cuts, has demonstrated that investing in programs aimed at eliminating or alleviating poverty “costs less than allowing it to persist.” They point out that “the money it would have taken to bring everyone just over the poverty line—was $12.3 billion [in 2007]. The total cost of poverty that year was double or more using the most cautious estimates.”

As individual Canadians struggle under austerity measures, corporate Canada is flush with cash, hoarding a new high in 2013 of $572 billion, an amount that is equivalent to 92% of the entire federal government debt. In other words, corporate Canada’s cash holdings could pay off all but 8% of the federal debt. Despite already strong balance sheets, Canadian corporations continue to pad their bank accounts instead of investing in Canada’s economy, socking away an additional $38 billion dollars more than they had at this time last year.

At the same time the federal government continues to make minimal investments in addressing a problem that is currently costing Canada’s economy over $9 billion dollars a year: violence against women and girls. Status of Women Canada, the government body tasked with addressing violence, spent just over $14 million in 2011-2012—a wholly inadequate response to a problem that directly affects an estimated one in six Canadians.

The federal government has consistently refused to institute an inquiry into the persistently high levels of violence experienced by Aboriginal women and girls in Canada. A recent report from the Royal Canadian Mounted Police reveals that nearly 1200 Aboriginal women and girls have been murdered or gone missing over the past thirty years. The level of violence experienced by Aboriginal women and girls in Canada has been condemned internationally and spurred visits by two United Nations expert bodies in the past year.

At the same time, Canada has become increasingly critical of the United Nations, particularly its human rights monitoring mechanisms.  The visit of the Special Rapporteur on the Right to Food to Canada in May 2012 was described by the Minister of Citizenship and Immigration as “completely ridiculous.” The Special Rapporteur was told that he should not get involved in “political exercises in developed democracies like Canada.” This characterization of UN special mechanisms and monitoring bodies is not unique.

Canada accused the Committee Against Torture of engaging in “bureaucratic mission creep” when it posed questions about violence against women and human trafficking. When the UN Special Rapporteur on the Rights of Indigenous Peoples expressed concern about conditions in the First Nations’ community of Attawapiskat, where the Red Cross had intervened to provide adequate shelter, food and water, the office of the Minister of Aboriginal Affairs and Northern Development characterized that statement as a “publicity stunt.” Yet by the government’s own account, 89 First Nation’s communities are without safe drinking water. A 2011 evaluation of on-reserve housing concluded: “despite ongoing construction of new housing on-reserve, the shortfall still exists and appears to be growing rather than diminishing.”

Canada’s record on environmental sustainability earned it the ‘fossil of the year’ award from environmental organizations and criticism from other state governments during the Copenhagen Summit on Climate Change. Since Copenhagen, Canada has actually lowered its emissions targets for 2020. Domestically, greenhouse gas emissions are rising. Those living in northern Canada have seen significant impacts on their environment and their well-being. According to a 2011 report by the Pembina Institute: “Canada’s Arctic has already experienced a warming of more than 1.7°C and an increase of 4 or 5°C is projected.” Inuit communities report the decline in access to their traditional sources of food and an overall degradation of their environment and well-being. This degradation is further exacerbated in northern and rural regions of Canada by the mining and extractive industries.

Canada’s mining industry has a strong presence internationally as well as domestically. Canadian-based companies make up over 40% of the world’s extractive industry. Although Canadian civil society is playing a leading role in monitoring the industry through initiatives such as Publish What You Pay, the Kimberly Process and the International Conference on the Great Lakes Regional Certification Mechanism for conflict minerals, Canada has not yet agreed to adopt a system of regulation similar to the U.S. Dodd-Frank Act or to comply with the guidelines set by the Extractive Industries Transparency Initiative.

On the international stage, Canada’s rate of international assistance is set to decline for the next three years: “between fiscal year 2011/12 and fiscal year 2014/15, the International Assistance Envelope for Canadian aid is set to decrease by 7.6%, from $5 billion in 2011 to $4.66 billion in 2014/15. Between 2011/2012 and 2015/16, when the time period to reach the MDGs will have elapsed, Canada will have reduced Canadian ODA by close to $1.2 billion.” According to the Canadian Centre for International Cooperation, these cuts will bring Canada’s level of ODA from “0.34% of Gross National Income (GNI) in 2010 to 0.25% of GNI by 2014/15,” well below the global target of .7%.

The Canadian Official Development Assistance Accountability Act (2008) requires that Canadian development assistance “contribut[e] to poverty reduction, tak[e] into account the perspectives of the poor and [be] consistent with international human rights standards.” Many civil society organizations see the Act as a very promising mechanism for integrating human rights concerns into international development policy and programming. However, a report from the Canadian Council for International Cooperation, a civil society coalition, suggests that there has been little or no implementation of the Act by the Government.

The economic crisis has pushed civil society to renew its engagement with economic policy debates. Governmental and non-governmental actors alike are grappling with the question of how to achieve their goals within a constrained fiscal environment. But the question of how best to stimulate economic growth and ensure economic stability is a question of means, not ends. Ultimately, the focus must remain on the society being built by that growth. Just as social justice organizations have had to grapple with the economic implications of their goals, those responsible for economic policy must face the human and environmental cost of their choices.

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