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OTTAWA – Public investment in public services provides a better boost to productivity than corporate tax cuts, Paul Moist, national president of the Canadian Union of Public Employees (CUPE), told the Standing Committee on Finance today.

“It is remarkable that anybody takes seriously the argument that more corporate tax cuts will spur investment,” said Moist. “The evidence demonstrates that the enormous tax cuts and record corporate profits of the last five years have done little to increase investment or productivity.”

Moist noted that the 2000 federal budget brought in over $100 billion in tax cuts ostensibly to increase investment and innovation. But since then corporate profits and executive compensation have soared while Canada’s investment rate dropped and productivity stagnated.

The union’s submission on the 2006-07 federal budget says that increased investment in public services, along with full employment and fairer taxation policies, will increase productivity, improve our quality of life and lead to greater social inclusion.

“Quality public services increase productivity in a number of concrete ways,” said Moist. “Public investments in child care, education, health care and infrastructure all demonstrate very high direct rates of return – for all of us, not just the wealthy.”

Moist noted that many European countries such as France and Norway have much higher levels of productivity than the United States because social investment makes people more productive at work and improves their overall quality of life.

Moist also encouraged the federal government to choose global justice over domestic corporate tax cuts.

“Further corporate tax cuts are not socially or morally defensible while Canada fails to live up to its commitment to provide 0.7% of our national income to development assistance,” he said.

CUPE represents over 540,000 Canadians working in the broader public sector in communities across the country.


Paul Moist, National President, cell (613) 558-2873
David Robbins, CUPE Communications, cell (613) 878-1431