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This budget continues the government’s agenda of privatization and the trampling of our border making way for increased trade. In doing so it threatens our economic and social security. Martin has committed 1.2 billion for infrastructure and security at our border. Yet no new money is committed to the Canada Health and Social Transfer, despite Canadians’ increasing insecurity because of a lack of affordable decent housing, accessible public health care, quality public child care, national pharmacare, uncertain water quality, rampant unemployment, and poverty.

Our government has made no new commitment to building strong healthy communities. Our ability to reach our national and individual potential is being severely hampered by our federal government. The fact is no country can develop its potential without meeting the basic needs of its people. The path our government has chosen purposely ignores our needs.

Program Spending Remains Low

It is misleading to criticize this budget for increasing government spending to unsustainable levels. The entire fiscal year 2000-01 program spending, as a percentage of GDP, will only be 11.3 per cent, keeping it hovering around a post-war, record low level. This is approximately 5 per cent below 1993-94 levels. Billions of dollars have been withheld from our social programs, yet are urgently needed to improve our quickly deteriorating quality of life. Canadians are in need of help and will be relying on the public sector to provide the assistance needed.

Canadians know that public services provide the foundation for social and economic security. Nonetheless, this budget failed to deliver much new spending. The lion’s share of new program spending in this budget is on military and police security measures, including border measures. This really does little to increase our general economic and social security. Security is not just military and police security measures. In a democracy, personal, social, and economic security share equal importance. Our government must increase program spending on public, social services and job creation to provide Canadians with real encompassing security.

No New CHST Spending

The Canada Health and Social Transfer (CHST) was introduced in fiscal 1996-97 to replace federal transfer programs for health and post-secondary education through EPF and social assistance and social services through CAP. The CHST introduced deep cuts, worth billions of dollars, to these federal transfers.

During the period 1993-94 to 2001-02, $25.2 billion has been shaved from the federal spending through the CHST. Adjusted for inflation, the real cash cut to the CHST for the period is in excess of $32 billion. Funding cuts have hit social services and social assistance the hardest.

In September 2000 the federal government, responding to pressure from the provinces, announced that $23 billion would be spent in health and early childhood development funding. This announcement was recycled in the 2001 federal budget. No new money was brought forward.

While the $23 billion commitment over five years does replenish some of the previous cuts, it still falls far short of the amount that is needed to bring us back to former funding levels and it fails to address outstanding needs such as child care, home care and pharmacare.

The federal share of provincial and territorial spending for health, post-secondary education, social assistance and social services has fallen dramatically from the high point of 26.1% in 1979-80. It reached a pathetic low of 10.0% in 1998-99. The September 2000 infusion of cash started to reverse this trend, sending the federal proportion back up to the 14% - 16% range, but still leaving it far below a 25% goal.

Tax Cuts Continue, Poverty Continues

The government is continuing with the $100 billion tax cut announced in the last budget. This money that the government will not receive, could have been used to inject billions of dollars into our shrinking social programs. We could feed and clothe our poor and insure that there is decent affordable housing for all Canadians. In 2000 it was estimated that the tax cut scheme would see a typical CUPE member making $30,000 a year (a single earner with one child) save approximately $375 this year (2001), about the cost of a cup of coffee a day. Choosing to address social policy through tax systems instead of direct funding to social programs leaves some Canadians at the margins of society.

According to Statistics Canada, 2.5 million people in Canada went hungry for lack of money at some point in time during 1998/99 (the latest available stats). We have over 600 food banks that served 700,000 Canadians in March 2000. Thousands of people are homeless. The Canadian Centre for Policy Alternatives reports that growing social inequalities are likely to result in the deteriorating health of Canada’s population.

Tax cuts will not increase the economic, social, or personal health of Canadians. Tax cuts lead to the locking-in of under-funding of public services. Tax cuts are the vehicle that encourages the opening up of public services to public private partnerships, full privatization, and profit taking, leaving public services to be driven by market forces. This continues to leave some Canadians on the margin, in poverty.

Rising Unemployment, Inadequate Job Creation

The jobless rate is at its highest since mid 1999. November’s jobless rate has hit 7.5 per cent, up from 7.3 per cent in October, an increase of 45,500 fewer employed Canadians. The number of jobless in Canada is a staggering 1,186,600. Increased spending on much-needed public social and infrastructure programs would reduce our number of out-of-work Canadians. Creating jobs stimulates the economy.

Fund Public Programs, Not A Contingency Reserve

The government will move a total of $6 billion dollars over three years into their Contingency Reserve ($1.5 b in 01-02, $2 b in 02-03, and $2.5 b in 03-04). This means that considerable money has been moved into a fund that has been used in past years to pay down the debt. If any of the $1.5 billion contingency fund exists at the end of fiscal year 01-02, these monies will be used to finance the Strategic Infrastructure Foundation, a P3 (public private partnership) initiative. Instead of moving money into the Contingency Reserve and privatizing infrastructure investment through P3s, these billions of dollars could be spent on social programs and public infrastructure projects. These programs and projects would create thousands of good public service jobs and stimulate our economy. Saving money in a contingency reserve for the unexpected is not a stimulus to our economy and is the wrong decision. Spending money on public programs is a stimulus and the right decision. Canadians expect it.

Strong Healthy Communities

If there was ever a time for our government to step forward and join us in pledging to do everything we can to build strong healthy communities, this was the time. We need to transform our communities into places where the people of Canada have a say over the direction of their lives. We need communities free of poverty, violence, inequality and discrimination of any form. We need communities where families can thrive.

See other CUPE Facts on the 2001 Federal Budget for more detailed information about particular sectors. They are available from the National Research Branch or at www.cupe.ca.

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