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Summary


Introduction

The Canadian Union of Public Employees is Canada’s largest union representing close to 500,000 working Canadians in 2,300 locals. CUPE members work in urban and rural communities across this country.

CUPE welcomes the opportunity to present our views and discuss the upcoming federal budget with the House of Commons Standing Committee on Finance. Today we will address important issues that affect the lives and the communities of every Canadian.

The Economy

We share the joy with which Finance Minister Paul Martin announced that Canada is now worthy of a Triple A Bond Rating. We say it is time for the people of Canada to reap some benefit for the hard struggle fought to bring the economy into its present robust and healthy shape. The time of sacrifice is over.

Our Communities

We believe the time is right for increased federal investment in our public sector. Canadians should not be denied the public services and the vibrant communities to which they are entitled. The upcoming federal budget must be a “Community Budget.”

CUPE calls on the federal government to:
  • take a more active role in strengthening our communities, so they become safe, peaceful communities, free of violence, discrimination, and poverty, and where families of all kinds can thrive in dignity.
  • make this budget what Canadians want, a true community budget.
Taxes

CUPE stands in opposition to tax cuts. Tax cuts lead to the under-funding of public services and put our public services at risk from privatization, increasingly through public private partnerships with multinational corporations, exposing public services to market-forces.

CUPE calls on the federal government to:
  • stop tax cuts to rich Canadians and business interests.
  • use our public monies saved from not cutting taxes to address the widening gap between the rich and the poor in Canada.
Canada Health and Social Transfer

The last several years has seen billions of dollars cut from federal transfer payments. With the change to CHSTs also came the greater bundling of transfers. No longer are specific amounts earmarked for each sector. This allows the provinces to spend the funding as they wish and also makes it difficult to determine the amounts the provinces have dedicated to each of the sectors, thereby reducing public transparency and accountability.

CUPE calls on the federal government to:
  • increase its spending, setting its share at 25% of provincial and territorial spending and to earmark specific amount for each sector.
Infrastructure

The 2001 federal budget brought little in new investment monies for municipal infrastructure, water, and the environment. What we needed last December and what we need now is a clear commitment to funding for needed municipal infrastructure, especially as it relates to water and wastewater management.

CUPE calls for:
  • a National Environmental Infrastructure Investment Program with an annual investment of $6 billion per year, shared equally by all three levels of government.
  • a National Infrastructure Investment Authority, seeded with $500 million.
Health Care

In spite of the many warnings from CUPE that the federal government is starving our health care system, the deprivation continues. The Romanow Commission is hearing testimony and evidence from people across Canada, people who want the federal government to play the leadership role in ensuring a strong public health care system. More money without substantive policy leadership does not produce effective programs.

CUPE calls for the federal government to:
  • restore the billions of dollars in cuts since fiscal 1996-97.
  • establish new programs such as Pharmacare, and home and continuing care, and that these programs be funded on a 50/50 cost sharing basis with the provinces.
  • make the financial commitment necessary to secure and sustain a strengthened and expanded Medicare system.


Post-Secondary Education

University students are increasingly being forced to accept impossible debt loads or forfeit higher education. Public post-secondary institutions are desperate for academic and infrastructure funding, forcing these institutions to consider privatization and corporatization. While university workers are finding their jobs gone and their workplaces being contracted out.

CUPE calls upon the government to:
  • restore the billions of dollars that has been cut from post-secondary education since 1993.
  • establish a national system of student loans based solely on need.
  • the federal government to enact a federal Post-secondary Education Act that will prohibit the establishment of private, for-profit educational institutions and end any current initiatives involved in public private partnerships.
  • end the Canadian Foundation for Innovation. Stop making research-funding contingent upon private sector donations and stop under-funding research councils like the Social Sciences and Humanities Research Council.
Social Services

Our last federal budget saw billions of dollars earmarked for national security. Canadians need more than secure national borders. We need social security. Decreased CHSTs over the years, worth billions of dollars, has hit the social services sector the hardest.

CUPE calls upon the federal government to:
  • earmark specific amounts to social services and bringing the amounts up the 1996-97 levels.
National Child Care

Canada needs an affordable, national child-care program. Under-funding of public child-care programs will continue the downward pressure on public sector child-care wages, and will increase the push toward privatized, inferior, and unregulated child-care.

CUPE calls for:
  • an immediate investment of $2 billion in a national child-care program, with an additional $500 million in each of the next four years.


Poverty

Canada has one of the worst child poverty rates among the 23 industrialized nations. A report by Campaign 2000 (May 2002) has 18.5% or 1.3 million Canadian children living in poverty. Child hunger persists in Canada. As Canadians we should be appalled, and this budget should be addressing this issue.

CUPE calls for the federal government to:
  • set national standards for income assistance, including earmarking funding especially for social assistance
  • increase the income floor to 60% of the LICO, increasing to 75% by 2004.
  • a 10% increase in the Guaranteed Income Supplement and another increase in 2003.
Affordable Housing

We know there is a tremendous lack of affordable housing in Canada. In Toronto alone, there are 64,000 people on the waiting list for social housing. According to the 1996 census, 516,000 families with children live in housing that is in need of major repair, is overcrowded, or cost more than 30% of pre-tax income.

CUPE calls for:
  • a financial commitment by the federal government to ensure secure social housing for the hundreds of thousands of Canadian families who need it.
Security for an Equity Participation Foundation

Canadians are struggling against a growing social inequality in Canada. Visible minorities, persons with disabilities, First Nations Peoples, gay men, lesbians, transsexual and transgendered persons, all need their voices heard. They offer a variety of alternative voices to the voice of the business community and will never be heard in the absence of financial support.

CUPE calls upon:
  • the federal government to put forward $200 million to support and restore the crucial work of social activist and advocacy groups in Canada.
Employment Insurance

March 2002 saw our national unemployment rate at 7.7% compared to 6.9% in March 2001. This rise in the number of unemployed Canadian workers is made more critical by the low number of workers able to qualify for UI benefits. Revamping the UI system in 1997 without reducing unemployment has been a windfall for the federal government. It is anticipated that by 2003, the UI surplus account may reach $50 billion. The federal government has increased its coffers at the expense of ordinary workers, and has used the UI surplus to meet its deficit reduction targets.

CUPE calls for:
  • a universal requirement of 360 hours to qualify for insurance benefits.
  • increasing the UI benefits to at least 2/3 of weekly pay based on the best 12 weeks of earnings over the previous twelve months.
  • extending sickness benefits up to one year.
  • addressing the needs of instructors. HRDC considers them as “teachers” and therefore not actually laid off during the summer months.
  • addressing the concerns of PSE academic workers who, because of employment restrictions, will not work the required minimum number of hours to qualify for UI.


Introduction

The Canadian Union of Public Employees is Canada’s largest union representing close to 500,000 working Canadians in 2,300 locals. CUPE members work in urban and rural communities across this country. Our members are employed by municipalities, hospitals and long-term care facilities, libraries and universities, social service agencies, public utility commissions, airlines, and other public institutions that deliver services to Canadians. CUPE has a long history of supporting and defending our communities and we have played a key role in making sure municipalities meet the needs and interests of their citizens.

CUPE welcomes the opportunity to present our views and discuss the upcoming federal budget with the House of Commons Standing Committee on Finance. Today we will speak to issues that affect the lives and the communities of the people of Canada. The quality of life in our towns and cities is declining in an alarming way.

The quality of life in our towns and cities is declining. The downloading of responsibilities to local government, without adequate financial support from higher levels of government is a major cause. Our towns, cities and rural communities face incredible pressure to commercialize and privatize all public services. There is a desperate shortage of adequate housing in many cities. Cuts have been made to waste management, family services, libraries and recreation services. Schools are being closed and the ones that remain are overcrowded. There is inadequate access to emergency health services and not enough public transit. Violence as a result of homelessness, racism and homophobia is on the rise. There has been a frightening increase in youth suicides in Aboriginal communities. While the big cities have effectively been calling attention to their plight, rural towns are also struggling to maintain public services.

This decline of services and quality of life in our communities is not inevitable. We urge the federal government to make a serious investment in turning this around. The real solution to the fiscal problems of Canada’s municipalities lies not in public spending restraint, but in increased levels of funding. Canadians desperately need increased federal funding for the Canada Health and Social Transfer, for public infrastructure, for housing and for unemployment insurance.

Today we draw your attention to the state of the economy, our communities, taxes, infrastructure, CHSTs, health care, post-secondary education, social services and unemployment insurance.

The Economy

Following on the heels of a near-recession in 2001, Moody’s Investors Service reports that Canada’s fiscal house is robust and for the first time in eight years is worthy of a Triple A Bond Rating.i The International Monetary Fund recently predicted Canada would have growth of 2.5% for the whole of 2001, and 3.6% next year, the fastest growth rate of any country in the G7.ii Moody’s has also noted that Canada’s current account, its balance of payments in goods and services with the rest of the world has swung into surplus.iii Canada posted a current account surplus of $29.1 billion in 2001 or 2.7% of gross domestic product and our economy is expected to post a 5.5% growth in the first quarter, slow to 4% in the second and pick up again in the second half of the year.iv The federal government is also expected to report an $8-billion to $10 billion surplus for 2001 - despite last year’s near recession - this follows a $17 billion surplus in 2000.v

Finance Minister Paul Martin reacted to the triple A rating by saying “this is a victory for all Canadians, who have made tough choices and sacrifices in our efforts to reinvigorate our economy and get our fiscal house in order”. I am pleased that Moody’s has recognized Canada’s remarkable economic and fiscal turnaround over the past seven years.”vi Canadians can now expect their hard work and sacrifice to pay off with more and better public services, infrastructure, and social programs that fill the needs and the gaps that have been created by these same sacrifices.

We strongly believe this upcoming federal budget needs to refocus on investing in the public sector. Past federal budgets have delivered severe cuts to public sector spending, harming our communities. Now as our economy grows, we say the time of sacrifice is over.

Our Communities

We believe the time is right for increased federal investment in the public sector. As our economy begins an upswing, we say Canadians should not be denied the public services and the strong vibrant communities to which they are entitled. Past cuts to provincial and federal programs, the downloading of responsibilities to provinces and municipalities, our eroding infrastructure, municipal mergers and amalgamations, privatization, and loss of local control are conspiring to cause unacceptable and negative changes in the communities where we live and work.

We believe the upcoming federal budget should be a “community budget”, implementing programs and funding that will give us the ability to create sustainable, quality communities, supported by renewed and reinvigorated public services.

CUPE calls on the federal government to:
  • take a more active role and to take immediate steps to strengthen our communities, so that they become safe, vibrant, peaceful communities, free of violence, discrimination, and poverty, and where families of all kinds can thrive in dignity.
  • · make this budget what Canadians want, a true “community budget.”
Taxes

CUPE stands in opposition to continuing with a $100 billion in tax cuts. We do not agree that tax cuts contribute to the overall health and well being of the majority of the Canadian population. With our economy moving and growing stronger all the time, cutting taxes will only serve to decrease the amount of money the federal government will have for spending on much needed public services, infrastructure, and social programs. Cutting taxes will continue the practice of taking public money and giving it to private enterprises and the rich. From our point of view, tax cuts only lock-in the under-funding of public services and put our public services at risk from private investment, public-private partnerships, and market-forces.

CUPE calls on the federal government to:
  • stop tax cuts to wealthy Canadians and business interests.
  • use the public monies saved from cutting taxes and the money in our expected surplus to address the widening financial gap between the rich and the poor, and to address the social inequalities in our country.
Canada Health and Social Transfer (CHST)

With the introduction of the CHST in fiscal 1996-97 to replace existing EPF and CAP federal transfer programs, deep cuts worth billions of dollars have been made to federal transfer payments. The federal share of provincial and territorial spending for health, post-secondary education, social assistance and social services has fallen from a high of 26.1% in 1979-80 to a low of 10.0% in 1998-99. The Budget 2000 injection of $23 billion has reversed the downward trend, moving the federal portion up to the 14-16% range, but still far below the 26.6% in 1979-80.

Another change that came with the CHST was an even greater bundling of funds. No longer are specific amounts earmarked for health care, post-secondary education, or social services. This allows the provinces to spend the funding as they wish and not necessarily where the money should be spent. This also makes it difficult to determine the exact amounts the provinces have dedicated to each of the sectors, reducing public transparency and accountability.

CUPE calls upon the federal government to:
  • increase its spending, setting its share at 25% of provincial and territorial spending and to earmark specific amounts for each sector, holding the provinces publicly accountable for proper distribution of the monies.
Infrastructure

The December 2001 federal budget brought disappointingly little in new investment monies for municipal infrastructure, water, and the environment. The government continued with its Infrastructure Canada Program and the Highway Infrastructure program. Neither of these programs has been given new money. The government did create a new Strategic Infrastructure Foundation that will receive a minimum federal contribution of $2 billion but it is contingent upon there being a year-end surplus.

In the last budget the federal government did a lot to encourage public private partnerships, a new form of privatization, both by inadequately funding infrastructure and also be explicitly opening the door to P3 arrangements in the Infrastructure Canada Program and the new Strategic Infrastructure Program. Canadian communities, facing urgent infrastructure needs, are being pushed to rely on the private sector, turning the ownership and operation of vital public assets over to private corporations, often large trans-nationals.

What we needed last December and what we need now is a clear commitment to funding for needed municipal infrastructure, especially as it relates to water and wastewater facilities and an increase in funding for green municipal projects.

CUPE calls for:
  • the federal government to invest in environment-related infrastructure. The Canadian Water and Wastewater Association estimates that between $80 billion and $90 billion would be needed over a fifteen-year period to maintain and improve existing water and wastewater infrastructure.
  • the establishment of a National Environmental Infrastructure Investment Program as a funding vehicle. To fund this, an annual combined investment of almost $6 billion per year from the three levels of government would be needed. This is $2 billion annually from federal, provincial, and municipal governments.
  • a National Infrastructure Investment Authority, seeded with $500 million. This would allow for low-cost borrowing of investment capital by municipalities and provinces. This could be generated through issuing federally guaranteed bonds, soliciting investment from pension funds.
Health Care

In spite of the many warnings from CUPE that the federal government is starving our health care system, the deprivation continues. Some provinces, such as Ontario, British Columbia, and Alberta, have voiced the opinion that the only way to meet federal funding shortfalls is through increased private sector involvement. The response from the federal government has been silence, as they continue to do nothing to stop the erosion of our national health care system. The Kirby Senate Committee is promoting increased privatization of health facilities, services, and insurance. The Romanow Commission is hearing testimony and evidence from people across Canada, people who uniformly support the idea that the federal government should play the critical leadership role in ensuring a strong public health care system. The federal government needs to recognize the integral link between policy and funding. More money without substantive policy leadership simply does not produce effective social programming. The federal government needs to increase its funding without public private partnerships.

We call on the federal government to:
  • restore the billions of dollars in cuts since the introduction of the CHST in fiscal 1996-97.
  • increase its share of provincial health care expenditures to 25% over the next five years without resorting to public private partnerships.

We call for:
  • new programs such as pharmacare, home and continuing care, and that these programs be funded on a 50/50 cost sharing basis with the provinces.
  • the federal government to demonstrate its support for publicly funded and delivered health care services by making the financial commitment necessary to secure and sustain a strengthened and expanded Medicare system.
  • an investment in retention and recruitment strategies that will serve to alleviate health care staffing crises across the national health care system.
Post-Secondary Education

University students are increasingly being forced to accept impossible debt loads or forfeit higher education. Public post secondary institutions are desperate for academic and infrastructure funding, forcing them to consider privatization and corporatization as solutions. While university workers are finding their jobs gone and their workplaces being contracted out.

One study estimates Canadian society suffers a $4 billion dollar loss in income due to failure to complete high school.vii Most new jobs require post-secondary education, especially those that pay well enough to support a family. We cannot neglect our responsibilities to invest in affordable, accessible, public post-secondary education, allowing all members of our society to pursue education and training.

We know that education allows the disadvantaged in our society the opportunity to experience and demand equity and social justice. Our democracy is premised upon simple notions of equality, social justice, rights and freedoms. Public education is a right.

We call upon the federal government to:
  • restore the $7 billion dollars that has been cut from post-secondary education and training since 1993.
  • establish a national system of student loans based solely on need and at the minimum invest $0.5 billion in the first year and $75 million in subsequent years.viii
  • enact a federal Post-secondary Education Act that will prohibit the establishment of private, for-profit educational institutions and end any current initiatives involved in public private partnerships.
  • the government to end the Canadian Foundation for Innovation (CFI). Stop making research-funding contingent upon private sector donations and stop under-funding research councils like the Social Sciences and Humanities Research Council (SSHRC).


Social Services

Our last federal budget (December 2001) saw billions of dollars earmarked to strengthen our national security. Canadians need more than secure national borders. We need social security. While our social needs were ignored, the federal government continued with its $100 billion tax cut. This is money that could have addressed some of the funding inadequacies for social services.

Earmarking CHST

The lion’s share of CHST funding traditionally goes to health care and post-secondary education, leaving the social services sector with the least amount of funding. Decreases over the years, worth billions of dollars, have seen the social services sector hit the hardest. As it now stands, there is no obligation on the part of the provinces to spend any of it CHST funds on social assistance and social services.

CUPE calls upon the federal government to:
  • change the CHST funding formula, earmarking specific amounts to social assistance and social services and bringing the amounts up to the 1996-97 levels.
National Child-care

Canada needs an affordable, high quality national child-care program. Under-funding public child-care programs will continue the downward pressure on public sector child-care wages, and will increase the push toward inferior and unregulated child-care and see an increased threat of privatization.

CUPE calls for:
  • an immediate investment of $2 billion in a national child-care program, with an additional $500 million in each of the next four years.
Poverty

In the last federal budget, the issue of poverty was largely ignored. It is a shocking statistic, but Canada has one of the worst child poverty rates among the 23 industrialized nations. A recent report by Campaign 2000 (May, 2002) has 18.5% of Canadian children living in poverty.ix This represents 1,300,000 of our children. Child hunger persists in Canada. As Canadians we should be appalled, and we should be immediately addressing these issues. In Canada, 56% of single-parent families headed by women are poor.

CUPE calls for:
  • the federal government to set national standards for income assistance, including earmarking funding especially for social assistance.
  • increasing the income floor to 60% of the low-income cut-off, increasing to 75% by 2004.
  • a 10% increase in the Guaranteed Income Supplement with an additional increase in 2002-03.


Affordable Housing

We know there is a tremendous lack of affordable housing in Canada. In Toronto alone, there are 64,000 people on the waiting list for social housing. Canadians need housing that is safe and affordable. Research indicates that housing conditions and type of neighbourhood has an effect on children’s well being. According to the 1996 census, 516,000 families with children live in housing that is in need of major repair, is overcrowded, or cost more than 30% of pre-tax income. The continued lack of funding for public housing is increasing the move toward private or public private partnerships in housing.

CUPE calls for:
  • a greater financial commitment by the federal government to ensure security for social housing and for the hundreds of thousands of Canadian families who need it.
Security for an Equity Participation Foundation

Canadians are struggling against a growing social inequality in Canada. Lack of funds has set back advocacy and activism in Canada. Visible minorities, persons with disabilities, First Nations Peoples, gay men, lesbians, transsexual and trans-gendered persons, all need their voices heard. They can offer alternative voices to the voice of the business community but will never be heard in the absence of financial support. Without them, our downward spiral toward social inequality will continue.

CUPE calls upon the federal government to:
  • put forward $200 million to support and restore the crucial work of social activist and advocacy groups in Canada.


Employment Insurance

March 2002 saw our national unemployment rate at 7.7% compared to 6.9% in March 2001.x This rise in the number of unemployed Canadians is of national concern, but it is made more critical by the low number of workers who are now able to qualify for UI benefits. With the advent of qualifying “hours” instead of qualifying “weeks”, fewer workers become eligible for unemployment insurance. In 1990 more than 87% of jobless Canadians qualified for UI benefits, now approximately two-thirds of jobless workers will be denied coverage. Canadians who do qualify find that their benefits are now lower and the coverage period has been shortened. The present system, as it is interpreted and applied by HRDC is having a particularly negative impact on school board and post-secondary workers.

Revamping the UI program without reducing unemployment has been a money windfall for the federal government. With fewer people able to qualify and the benefits reduced, the resulting surplus has ballooned in the past few years. In 1994-95 the UI surplus was $4 billion. It is now anticipated that by the year 2003 the surplus amount in the UI account may reach $50 billion. The federal government has increased its coffers at the expense of ordinary workers, and has used this surplus to meet its deficit reduction targets. These rates of unemployment, the system of qualifying for UI, and the size of the UI surplus are national disgraces.

CUPE calls on the federal government to:
  • implement a universal eligibility requirement of 360 hours, with these new requirements applying to regular, maternity, sickness, and parental benefits.
We call for:
  • an increase in the entitlement period for regular benefits to 1 week for every 30 hours of work, up to a maximum of one year.
  • increasing UI benefits to at least 2/3 of weekly pay based on the best 12 weeks of earnings over the previous twelve months. This new benefit increase would also apply to all forms of UI benefits.
  • extending sickness benefits up to one year.
  • addressing the needs of instructors, many of who are women. Many of these workers do not qualify for UI benefits because HRDC considers them “teachers” and therefore are not on lay-off during the summer months. HRDC considers teachers as year-round employees and not laid-off during the summer months.
  • addressing the concerns of university and college academic workers who, because of employment restrictions, will not work the required minimum number of hours per year and therefore cannot qualify for UI benefits.
Conclusion

Strong healthy vibrant communities can only be sustained with appropriately funded public services, programs, and infrastructure. The federal government has been ignoring the plight of ordinary people, while allowing private and global interests to advance their for-profit ventures. It is our governments that have the responsibility to provide us with safe affordable housing, safe drinking water, affordable public childcare, education, pharmacare, and a well funded and secure national Medicare program.

It is time for this government to accept its responsibilities and stop promoting privatization and the destruction of public services, a move that is costing ordinary Canadians their livelihoods and their communities. It is time for this government to make direct financial contributions to our communities.

We call on the federal government to act now, act in the public interest, invest in public services and public infrastructure and give us back our once strong and vital publicly serviced communities.
i. Finance Canada News release, May 3, 2002, (Ottawa: Government of Canada, 2002-038).

ii. J. Thorpe, “Moody’s gives Canada top Mark” The National Post (04 May 2002) A1 / Front / Business.

iii. Ibid

iv. Ibid

v. Ibid