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There’s a few drops in a lot of buckets but at the end of the day, it doesn’t amount to much.

After ten years of broken promises, Jean Chrétien’s legacy budget finally provides some funding for health care, child care, water systems and housing, but the amounts are far short of what’s needed – or what was possible, given current surpluses.

To make matters worse, the budget will open the floodgates to privatization, pushing P3s in urban services and funneling social spending through big business, which means services will suffer to bolster corporate profits.

National President Judy Darcy welcomed the new funding for social programs – especially child care – but she says today’s budget doesn’t erase Jean Chrétien’s real legacy – a decade of budget cuts that have been devastating for Canadians. “After years of bread and water, a Timbit looks like a feast,” says Darcy.

The funding for child care in 2003, for example, will create only 3,000 new spaces across the country. And the infrastructure funding for this year – only $100 million – wouldn’t cover half the cost of a water plant.

But it’s not just that the funding represents a drop in the bucket. Worse still, the budget allows corporate leaders to make huge profits from Canadians’ hard-earned social programs.

“When you strip away all the spin, this budget puts more money into the pockets of big business than it does into services,” says Darcy. “It allows corporations to cream off fat profits while leaving many Canadians out in the cold.”

The budget puts no restrictions on new health spending to ensure that health dollars are earmarked for public, not-for-profit delivery. And new funding for infrastructure is tied to public-private partnerships.

“John Manley is just proving he’s Paul Martin’s clone,” says Darcy, “funneling tax dollars into schemes that make corporations richer while providing fewer, poorer and more costly public services.”

Given this budget, it’s clear CUPE members will have to keep up the pressure for increased funding and redouble our efforts to stop privatization.

Analysis by sector

Health Care

What we needed

A new Canada Health Transfer (CHT) with funding going only to publicly delivered, not-for-profit health care services – not to privatization.

Increase health spending by $19 billion

  • $5.5 billion in 2003 – 04

  • $6.0 billion in 2004 – 05

  • $7.5 billion in 2005 – 06
Establish a new cash floor for CHT of $20.2 billion in 2005-06 or 25 per cent of health spending.

Bring all home care and palliative care services under the Canada Health Act. Establish a national drug agency, and begin to develop a national prescription drug plan.

Pay attention to the broader determinants of health, and take measures to reduce poverty and inequality, improve housing, support early childhood development, and protect the environment. These would all contribute to improving the health of Canadians and in the long term reduce health care costs.

Measures to ensure the federal government is held accountable for spending tax dollars on publicly delivered services.
What we got

The federal government stuck true to form and mirrored the First Ministers’ Accord struck earlier this month. Provinces are free to spend health transfers on for-profit health care providers and public-private partnerships.

A new Canada Health Transfer will come into effect on April 1, 2004.

The budget “confirms” $34.8 billion over next 5 years

  • $2.5 billion immediately to relieve existing pressures

  • $9.5 billion over next 5 years to improve service

  • $16 billion over 5 years for Health Reform Fund targeted to primary care, home care and catastrophic drug coverage

  • $1.5 billion for improved access to publicly funded diagnostic services

  • $600 million for electronic health records

  • $500 million for research hospitals

  • $1.6 billion in direct Health Accord initiatives (compassionate leave, National Health Council)

  • $1.4 billion for health reform (home care, drugs, primary care)

  • $1.3 billion for health programs for First Nations and Inuit
But because some of the money was already included in the last budget, the ’real’ new money is

$3.5 billion in 2003 – 04
$4.1 billion in 2004 – 05
$6.1 billion in 2005 – 06
$7.4 billion in 2006 – 07
$8.3 billion in 2007 – 08

New money over 3 years is only $13.7 billion

New money over 5 years is only $29.4 billion

Funding for a National Health Council. The government claims the council is part of its new accountability measures yet the new health council will be controlled by the provincial ministers of health. It will not be able to ensure federal health spending goes to not-for-profit care.

Child Care

What we needed

A major new investment totaling $9 billion over three years in early childhood care and education. Within three years federal funding would reach $5 billion per year. Within five years a universal program would be established.

What we got

$900 million over 5 years to increase child care and pre-school spaces.

$100 million over next 2 years.

  • $25 million in 2003 – 04 – enough for approximately 3000 new regulated spaces

  • $75 million in 2004 – 05

The federal government is finally taking steps to fund child care programs. New money is tied to quality, regulated child care spaces. Provinces can use the money to create new regulated spaces or to subsidize existing regulated child care spaces.

But given the meager funding, the federal government will have no leverage to bring provinces to the table to hammer out an agreement on child care.

As a result, child care will continue to be unavailable for most parents outside Quebec. Currently 40 per cent of the 600,000 regulated child care spaces in Canada are in Quebec.


What we needed

A National Environmental Infrastructure Investment Program with $6 billion per year ($2 billion from each level of government) to address pressing needs in water and sewage systems, roads, urban transit, etc.

A national Infrastructure Investment Authority with $500 million for low-interest loans to encourage renewal of urban services.
What we got

$ 3 billion over the next 10 years

$100 million in 2003 – 04
$150 million in 2004 – 05

$2 billion over ten years for Canadian Strategic Infrastructure Fund. These are for projects of a minimum size of $75 million in larger provinces and

$10 million in smaller provinces. This money is available to both government and private corporations.

$1 billion for municipal infrastructure over 10 years – for smaller projects, available to municipalities only.

The federal government is looking to provincial, territorial and local governments – along with the private sector – to boost the investment to $7 billion. This means we can expect to see more public-private partnership initiatives for infrastructure.


What we needed

A Kyoto Implementation Fund with $1.25 billion each year over the next seven years to provide training and benefits for displaced workers, assist in meeting Kyoto targets, invest in new green technologies, and make Canada a world leader in sustainable industries.

New money to clean up abandoned mines and contaminated areas, and to establish new national parks and protected areas.
What we got

$710 million over two years for climate change initiatives, primarily for sustainable development technology.

$505 million in 2003 – 04
$205 million in 2004 – 05


What we needed

$2 billion over three years for new housing, including a flexible grants program to assist provinces and municipalities working with community-based housing organizations

A sustainable social housing program that builds 20,000 new units and refurbishes 10,000 each year.
What we got

$320 million over five years

$80 million in first two years

The previous program of $660 million created only about 20,000 units. So, the new money will create only 10,000 units over the five years – far short of what is needed.

Post – Secondary Education

What we needed

New national system of needs-based grants funded at $750 million per year over next three years.

Reduced tuition fees and measures to prevent student debt.
What we got

The Canada Student Loan program will increase exemptions for income earned while in school and allow for some debt reduction for loan repayments.

$27.1 million in 2003 – 04
$32.1 million in 2004 – 05

Nothing on tuition reduction.

Nothing to prevent debt from occurring in the first place.

Nothing to address the appalling decline in infrastructure in Canadian post-secondary institutions, and the maintenance which has been deferred for too long.

$500 million for Canadian Foundation for Innovation – a research infrastructure project for Canadian universities which requires public-private partnerships as a condition of financing. This new money is for health research facilities.

Unemployment Insurance

What we needed

Use all of the revenue from the Employment Insurance fund to provide income support to unemployed workers.

Improved benefits and increased support for family leave and training.
What we got

EI premiums for employees are lowered from $2.10 to $1.98 per $100 of insurable earnings in 2004. For employers, premiums fall from $2.94 to $2.77 per $100 of insurable earnings.

A new Family Care Leave Benefit provides for compassionate leave of up to six weeks to care for a gravely ill or dying spouse or parent for those eligible. The program is expected to cost between $200 and $250 million. While this will be welcome relief for some, it is not a national home care program with publicly funded and delivered palliative care. Many part time workers and women will not qualify because of a lack of hours,

Instead of spending the EI surplus on unemployed workers the government has decided to cut EI premiums and ’consult’ Canadians on how to cut premiums further in the future. Meanwhile, benefits are kept low and some, like flight attendants, may not be eligible at all. Training needs are not addressed.

Defence Spending

What we needed

A funding commitment to peace, justice and sustainable development.
What we got

Increases in military spending of $2.195 billion over three years

$270 million + $125 million contingency in 2002 – 03
800 million + $200 million contingency in 2003 – 04
$800 million in 2004 – 05


What we needed

Reverse the 2000 personal income tax cuts as necessary over three years to allow program spending that would meet the urgent needs of Canadians.

Implement a tax on transfers of more than $1 million between generations. Reverse the changes to the capital gains tax made since 2000.
What we got

Capital tax on businesses will be eliminated over 5 years.

Limits on registered retirement savings plan (RRSP) contributions will rise to $18,000 by 2006.

$14,500 in 2003
$15,500 in 2004
$16,500 in 2005
$18,000 in 2006
Indexed in 2007

These moves increase the tax benefits of a retirement income system that already favours high-income earners. It ensures full tax deductibility for contributions on earnings up to $100,000. Given other priorities, it is difficult to understand how greater tax benefits for the top three to four per cent of tax filers can be justified.