Federal Budget 2011 tabled in the House of Commons on Tuesday March 22 by Finance Minister Jim Flaherty is disappointing in its failure to address pressing needs in areas such as labour market integration, housing and education. It is also disappointing in its lack of comprehensive social programs that would lead to poverty reduction.
OCASI is deeply troubled that there was nothing in the Budget about reversing cuts to immigrant settlement funding. On March 2, 2011 the House of Commons voted to concur in the eighth report of the Standing Committee on Citizenship and Immigration, putting forward a motion that called to reverse $53 million in funding cuts to settlement services.
The silence in the Budget confirms that the federal government does not intend to honour the will of Parliament and reverse the cuts. Negotiations are presently underway between the federal and provincial governments to renew or sign a new immigration agreement. The current Canada-Ontario Immigration Agreement (COIA) is set to end on March 31, 2011. See links below for more information on the funding cuts.
On the positive side, the Budget offers limited relief to the lowest income seniors through an increase in the Guaranteed Income Supplement (GIS), providing a maximum top-up of $600 per year for individual seniors and a maximum of $840 per year for couples. The increase is targeted to seniors with a monthly income of $2000 or less and would only benefit approximately 600,000 individuals, well below what would be required to address the growing poverty in this group.
The Budget mentions that the government will look at options to make modest enhancements to the Canada Pension Plan (CPP) by working with provincial and territorial governments, but does not make a commitment to improving CPP. The Alternative Federal Budget released by the Canadian Centre for Policy Alternatives had proposed changes to the Canada Pension Plan (CPP), Guaranteed Income Supple¬ment (GIS), and Old Age Security (OAS) that would help to eliminate poverty among the elderly, particularly among elderly women.
Improving income security for low-income seniors is a policy priority for OCASI. The Council is also concerned about income security challenges faced by low-income immigrant seniors from countries that do not have a Social Security Agreement with Canada, and who must therefore wait at least ten years to qualify for OAS and GIS. Canada has agreements in place with many immigration source countries. But there are no agreements with China, India, Pakistan and Iran which are among the top ten source countries for immigration, or with Ukraine and Russia which are source countries for other numerically significant immigrant populations in Canada.
OCASI is encouraged that the Budget provides relief on EI premiums to small businesses that create new jobs. However this is only a one-time tax credit of up to a disappointingly low amount of $1000. There is some hope, but no assurance that those most in need of support for labour market integration would benefit. Access to good jobs and good wages continues to be one of the biggest challenges for recent immigrants and members of racialized communities. They and members of other equity-seeking groups such as those who are differently abled face specific barriers to labour market integration. While measures that stimulate job growth and new hiring are always welcome, they would have to be targeted to be of benefit to these groups.
On the positive side, the Budget provides a limited extension of $4.5 million a year to the Wage Earner Protection Program. It also extends two EI pilot projects for a year (project to base benefits on the best 14 weeks of earnings in 25 high unemployment regions, and the Working while on Claim project which allows workers more flexibility to combine EI with temporary work opportunities), and temporarily extends existing and recently expired work-sharing arrangements. However, since immigrants are under-represented among those who qualify for EI it is doubtful whether they would benefit from these measures. It is also troubling that the Budget does not address the glaring under-representation of women and Ontario workers among those who qualify for EI benefits.
The Budget contains a vague promise to facilitate labour market integration for immigrants through exploring ways to cover training and tuition costs associated with foreign credential recognition. While OCASI welcomes the spirit of the announcement, given the lack of detail it is too early to tell how this might benefit immigrants.
OCASI had suggested at various opportunities that the government should develop targeted labour market integration measures such as offering a tax incentive to employers to hire immigrants, racialized individuals and members of other equity-seeking groups. On March 21, the day before the Budget was tabled, the Wellesley Institute and Canadian Centre for Policy Alternatives highlighted the growing wage gap between racialized and non-racialized workers in the report Canadas Colour Coded Labour Market: The gap for racialized workers. Co-authored by Grace-Edward Galabuzi and Sheila Block, the report described the ongoing racialization of poverty in Canada and speaks to the need for targeted interventions that could be delivered through the Budget.
We are deeply troubled that the Budget contains little to address the growing income gap in Canada, and growing poverty among equity-seeking groups including women, seniors, Canadas first peoples, racialized individuals and immigrants. There was no mention of investment in social housing, or measures to address homelessness and under-housing. There were no new measures directed towards childcare or reduction of child poverty. There was however a modest childrens art tax credit.
In the absence of a national housing strategy and a national childcare plan, these exclusions ignore the realities that face many Canadians residents. On Tuesday March 22, the Ontario Association of Food Banks released the report Running On Empty: A decade of hunger in Ontario. Among other facts, the report notes that food bank use in Ontario has grown by an unprecedented 28% since the start of the recession in 2008 and that a growing number of seniors are turning to this resource. The report also notes that on average, food bank users spend 65% of their income on shelter. The benchmark for housing affordability is generally held to be 30% of gross household income (Source: Statistics Canada).
Despite the high cost of post-secondary education and increase in student debt-load, the Budget offers only a few limited relief measures. They include an increase (from $50 to $100) in the income exemption allowed to full-time students from Canada student loans and grants, increase in family income thresholds for part-time students, and making the cost of fees for occupational, trade and professional exams tax deductible.
Low-income students would have been better served by a national strategy to address the cost of post-secondary education, including an increase in education transfer payments to the provinces. The Canadian Federation of Students (CFS) notes that student loan debt owed to the federal government surpassed $15 billion for the first time in September 2010, and that federal transfer payments for post-secondary education remains approximately $800 million short of 1992 levels when accounting for inflation and population growth.
The Budget proposes some investments in palliative care, initiatives to encourage primary healthcare practitioners to provide care in remote and rural communities, and a modest tax credit (Family Caregiver Tax Credit) for those providing home care for a sick family member. Low-income families who are the least able to afford medical expenses would likely not benefit from this measure. What is missing is a comprehensive approach to, and investment in healthcare. The government also missed the strategic opportunity to facilitate labour market integration of internationally-trained healthcare professionals while addressing the general shortage of primary healthcare providers in urban and rural areas.
The 2011 Federal Budget as presented on Tuesday March 22 does not address OCASIs key priorities of labour market integration, housing, education, healthcare and poverty reduction in a meaningful way. Disturbingly, the Budget includes significant cuts to federal program spending including the operational budget of several federal departments. OCASI will continue to monitor and update our membership on these developments.
Federal Budget 2011 - full text
OCASI position on CIC cuts to Ontario Settlement Funding
Alternative Budget 2011- Canadian Centre for Policy Alternatives
Canadas Colour Coded Labour Market: The gap for racialized workers. March 2011, Wellesley Institute & Canadian Centre for Policy Alternatives
Running On Empty: A decade of hunger in Ontario. March 2011, Ontario Association of Food Banks