Federal Budget 2007 Does Little To Address Poverty
March 20, 2007
The 2007 Federal Budget tabled yesterday in the House of Commons brings little relief to low-income families. OCASI is deeply concerned that the government missed an opportunity to address the increasing poverty among immigrant and racialized communities.
Additional spending was promised in several areas including childcare, education and tax relief for low-income families. However it will not serve to eliminate or significantly transform the status of recent immigrant and racialized families living in poverty.
According to the 2001 Census, the average income in Ontario was $35,185. The median income was $28,027 indicating that the majority of Ontario residents were receiving less than the average income for the province. In contrast, the average income for immigrants who had arrived in Canada between 1995 and 1999 was $25,398, while the median was $20,006.
Immigration and Settlement
The 2007 Budget restates the announcement made in the 2006 Budget to sustain investment in immigration settlement made last year. $196 million for the 2007/2008 period was promised in the 2006 budget.
The 2007 Budget also repeated last year's announcement that the government would create an agency for foreign credential recognition, now branded foreign credential referrals, that would complement existing initiatives by provinces and territories. There has been no movement on the creation of the agency since last year's budget announcement. OCASI is deeply disappointed that the government missed the opportunity to invest in initiatives that would lead to stable, living-wage employment for immigrants, and not merely referrals for credentials recognition.
The Budget restates the recent announcement that residents on temporary work permits and recent international graduates from Canadian post-secondary institutions will be able to apply for permanent resident status from within Canada. The government expects that this will account for 25,000 new immigrants who would be counted within current immigration levels.
These measures are directed towards temporary residents "with significant skilled work experience who have shown that they can succeed in Canada, that they have overcome many of the traditional barriers to integration, and that they have formed attachments to their communities and jobs" (Source: Budget 2007 documents).
It is therefore inexplicable that the government would not wish to extend the same consideration towards thousands of individuals with less than full immigration status who are already living and working in Canada and have formed attachments to their communities. OCASI urges the government to regularize the status of these immigrants so that their participation in our communities and the Canadian economy becomes legitimized and their living conditions improve accordingly.
Labour Market Integration
Budget 2007 announced that it would review and eliminate systemic barriers to labour force participation for under-represented groups, specifically youth, seniors and people with disabilities.
The budget also announces that the government would work with provinces and territories to improve access to training and skills development for workers. This is a restatement of the work currently undertaken by the governments of Canada and Ontario, through the Labour Market Development Agreement (LMDA) signed in November 2005 and which came into effect in January 2007. Click here for the LMDA.
This announcement does not significantly improve the labour market integration prospects of recent immigrants. A large number of immigrants and women are employed in contingent types of work including contract, temporary and part-time employment which does not allow them to qualify for Employment Insurance benefits, even though they pay into the government E.I. fund.
The Canadian Centre for Policy Alternatives notes in its Alternative Federal Budget 2007, that only about four in ten unemployed workers can collect E.I. benefits, a reduction from the 80% of workers that qualified in 1990. OCASI urges the government to make the necessary changes to allow those in contingent work to qualify for E.I. benefits and obtain access to E.I. training dollars. These concerns are addressed in a recent letter from the Toronto City Summit Alliance to Prime Minister Stephen Harper, signed by several community organizations including OCASI. The letter calls on the Prime Minister to act to help working low-income adults to lift themselves out of poverty. Click here for the letter.
The federal government had also signed a Labour Market Partnership Agreement (LMPA) with Ontario, an agreement that includes immigrants as a priority target population. However, this agreement has been virtually ignored since it was signed. OCASI therefore urges the government to fund and implement the measures of the LMPA. Click here for the LMPA.
The Budget also promises an income tax benefit for the working poor through a refundable tax credit.
Access to Education
Budget 2007 announces an additional investment of $800 million a year in post-secondary education for 2008-2009 through the Canada Social Transfer to provinces and territories. This will address to a limited extent the billions that were cut from federal funding for post-secondary education in the 1990's. Meanwhile, the lack of transparency and accountability in the transfer payments mechanism raises questions about how the federal government would ensure that provinces and territories would actually spend the money in post-secondary education.
The Budget also promises a review of the Canada Student Loans Program (CSLP) in consultation with provinces, territories and stakeholders, leading to changes that are expected to be announced in the 2008 Budget. The review is intended to simplify the Program instruments, make them more effective, and ensure integrated administration and efficient delivery.
It would more useful to give serious consideration to retooling the CSLP to ease student debt loads, and to bring back student grants for post-secondary education. Student grants were also eliminated in the 1990's. The government has missed the opportunity to make post-secondary education affordable for all students and to reduce the massive student debt load.
In their 2006 submission to the Standing Committee on Finance, the Canadian
Federation of Students (CFS) reported that students completing a four-year program
would have an average debt of $25,000. With interest on the loan, repayment
would cost on average nearly $50,000. CFS also reported that tuition fees have
nearly tripled since 1990. Given the high levels of poverty in immigrant and
racialized communities, this has put post-secondary education out of
the reach of many students from those communities. Ontario has some of the highest
tuition fees in Canada, second only to Nova Scotia. Click
here for the CFS submission.
Childcare Plan
The 2007 Budget is significant in its lack of a national childcare plan. The
absence of a national childcare strategy, and the lack of affordable childcare
has its greatest impact on low to middle income families, and significantly
affects women's' labour market participation.
Instead, the government has offered a tax credit to businesses to create licensed
childcare spaces for their employees. The Budget restates the promise made in
last year's budget to transfer $250 million to provinces and territories for
early learning and childcare. This is significantly less than the $3 billion
that would have been paid to provinces and territories through the childcare
agreements signed in 2005, and that the current government cancelled. Instead,
Ontario will now receive only $97 million.
The Ontario Coalition for Better Childcare reports in its Childcare Fact Sheet
2006, that less than 9% of Ontario children under 12 who need some form of non-parental
care have access to a regulated childcare space. Click
here for the Fact Sheet.
The Budget also promises a child tax credit that can be worth upto $310 per child. Being a tax credit, this benefit is out of the reach of low-income families. It will not make any difference to immigrant and racialized families, many of who work full-time and whose earnings are below poverty levels.
Status of Women
Budget 2007 promises Status of Women Canada (SWC) $20 million over two years, including the $5 million funding announced recently by the government. The funding is intended for direct service projects for women, and for joint projects with other government departments to address certain issues pertaining to women.
In September 2006, the federal government cut the SWC operating budget by 40% leading to the closure of regional offices across the country, with only 4 offices remaining open. Other changes made at the same time included the elimination of almost all funding for research on women and women's issues, making it impossible for women's organizations engaged in advocacy to qualify for funding, and making for-profit organizations eligible for SWC funding.
The policy change narrowing the criteria for organizations and activities to qualify for funding would have the greatest negative impact on the ongoing struggle for equity for women. It would set back efforts to bring much-needed systemic change to address issues such as violence against women and effective labour market integration. The government has failed to address women's inequality through this budget.
Conclusion
Budget 2007 falls far short of addressing critical issues such as the growing levels of poverty in Canada and growing poverty of immigrants and refugees. It fails to address the urgent needs of families in need of affordable childcare and access to affordable post-secondary education. Despite evidence of severe homelessness and under-housing, especially in vulnerable communities, the Budget makes no commitment to investing in affordable housing. The investments named in the Budget are more likely to benefit middle and high-income families and medium to large corporations.
OCASI will continue to monitor further announcements from the government that would impact on refugees and immigrants as well as the sector, and provide periodic updates.
Click here for full Budget
2007 documents
Click
here for Alternative Federal Budget 2007 from the Canadian Centre for Policy
Alternatives