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As expected, the Federal Government has earmarked billions of dollars to beef up security in the aftermath of the terrorist attacks of September 11th. But Canadians need more than just secure borders – they also need social security. The Federal Government has chosen to pursue other priorities (including $100 billion in tax cuts) while the social needs of Canadians are once more ignored.

Inadequate Funding For Social Services

Ottawa funds Social Services through the Canada Health and Social Transfer (CHST). The CHST was introduced in the 1996-97 fiscal year. It replaced the former Canada Assistance Plan (CAP). The CHST provides bulk funding for health care, education, social assistance and some social services. The lion’s share of CHST funding has traditionally gone to health care and education. What this means is that social services has historically received the least amount of CHST funding. Because CHST funding is provided in one lump sum it is oftentimes difficult to determine exact amounts allocated to social services.

Ottawa’s lack of support and vision for social services in Canada is evident when one considers that the federal government rarely acknowledges that social services and assistance is a vital component of the Canada Health and Social Transfer.

Huge Funding Cuts

Since its inception in fiscal 1996-97 billions of dollars have been cut from the CHST, despite the fact that $23 billion in health and early childhood development funding was announced in September 2000. During the period 1993-94 to 2001-02, $25.2 billion has been shaved from 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.

Change The CHST Funding Formula!

The federal government could remedy these dilemmas by substantially increasing CHST funding to the provinces and earmarking specific amounts to each of the three CHST components (health care, education, and social services). Earmarked social services funding would also ensure that the provinces actually allocate those funds for social supports and assistance. As it now stands, the provinces are not obligated to spend any CHST funds on social services.

What We Needed

Security For Child Care And Children

  • An affordable, and high quality national child-care program with targets and timelines for implementation. Cost: $2 billion in immediate funding with an additional $500 million in each of the following four years.

What We Got

  • $160 million over 2 years to enhance Early Childhood Development Initiatives (ECDI) (e.g., child-care and head start) and Special Education Needs (SEN) for First Nations’ children living on reserves. Breakdown: ECDI - $100 million over 2 years; SEN - $60 million over 2 years.

What It Means

The Continued Underfunding , Fragmentation And PrivatizationOf Child-Care

The federal government ought to be commended for its commitment to Aboriginal children who are among the most vulnerable of all Canadian children. And yet the Chretien government could do much more for Aboriginal peoples who suffer the highest unemployment rates and poverty levels in Canada.

Unfortunately the budget provides no new money under the CHST to pay for much needed social services. Just this year, Prime Minister Jean Chretien “committed his government to establishing an investment timetable that will allow us to make real progress in ensuring opportunity for all of Canadian children” (CCSD (2001), “The Progress of Canada’s Children: the good news and the bad news”). It is evident however that Chretien’s “investment timetable” excludes a national child-care program.

In September 2000, Ottawa, the provinces and territories agreed to spend $2.2 billion over 5 years on the Early Childhood Development Initiative (ECDI). The federal government could build substantially on the ECDI by committing to a funding framework for a national child-care program. An affordable and universal national child-care program is needed for several important reasons:

  • Parents are spending more time on paid and unpaid work.
  • Higher-income families are more likely than lower-income families to use child-care.
  • Most school-aged children in Canada have mothers who work outside the home. Approximately 80% of women with school-aged children were in the labour force in 1999.
  • Affordable child-care arrangements allow women (single mothers especially) the opportunity to remain in the workforce, support themselves and their children, plan for retirement, and contribute to the economy.

Unfortunately, CUPE child-care workers will continue to witness ongoing threats to funding, downward pressure on wages, the push to inferior and unregulated child-care and increased threat of privatization. The situation is worsening dramatically as deep federal cuts to social services funding is prompting provincial governments to rethink its commitment to child-care. In Ontario, for example, a leaked government document suggests cutting $200 million from the $470 million child-care budget.

Child-care advocates claim that a 45% funding cut would spell the death of regulated child-care in Ontario. The federal government’s continued refusal to provide sufficient child-care funding to the provinces opens the door wider to unregulated and for-profit child-care arrangements. And as the case with Ontario suggests, insufficient federal funding may also tempt provinces to drop its child-care commitments altogether.

What We Needed

Security For Income Support And Social Services

  • National Standards for income assistance including earmarked funding especially for social assistance.
  • An income floor of 60% of the low-income cut-off increasing to 75% by 2004.
  • An immediate 10% increase in the Guaranteed Income Supplement with an additional 10% increase in 2002-03.
  • A Special Needs Fund that would help improve the quality of life for persons with disabilities.

What We Got

  • An increase in the Canada Study Grant for Persons with Disabilities. The Grant will increase from $5,000 per year to $8,000 per year. Presently, the Grant is offered to more than 4,500 students with disabilities to help offset special costs associated with higher education (e.g., tutors, transportation, equipment, etc.).
  • A supplementary grant of up to $2,000 per year for students with disabilities who find that their maximum student loans are insufficient to meet assessed needs.
  • Cost of both measures: $10 million annually.
  • Elderly benefits will increase by $ 3.1 billion by 2003-4.

What it Means

Statistics Canada data for 1998 reported by the Canadian Council on Social Development (CCSD) show that 36.4% of persons with a disability in Canada had attained some form of post-secondary education. For persons without a disability the figure was much higher at 51.4%. Canadians without a disability are far more likely to attain a post-secondary education and acquire full time employment.

Measures announced in the federal budget to help persons with disabilities are a positive but small first step. Much more still needs to be done to help this often ignored segment of our population, especially children with disabilities. 1994 data indicates that approximately 21% of Canadian children aged 6 to 11 have some form of disability. However, a CCSD survey of community-based agencies has discovered that children and youth with special needs are not being adequately served due to such factors as inadequate levels of funding for agency services and family’s lack of financial resources.

The $3.1 billion increase in elderly benefits is a much-needed improvement. 1997 data indicate that 18.7 % of Canadian seniors (65 years and older) are poor. In real numbers, 662,000 seniors are living in poverty and the majority of them are women. Although the budget provides increased income security for the elderly it fails to address the other victims of poverty, namely children, persons with disabilities, First Nations’ Peoples, and female-headed households.

Poverty Largely Ignored

There is nothing in this budget that will help the working poor, those on social assistance, and people living in poverty. Recent statistics (1997) on poverty rates in Canada is staggering. Consider the following examples:

  • 17.5% of all Canadians are living in poverty. That’s an estimated 5,222,000 people or 1 in 6 Canadians.
  • Approximately 1 in 5 Canadian children live in poverty, which works out to 1,397,000 children.
  • 56% of single-parent families headed by women are poor.

It is widely known that First Nations’ People and persons with disabilities are more likely to live in poverty compared to the population as a whole. It may come as a surprise to some but Canada has one of the worst child poverty rates among the 16 industrialized nations. In 1998, 19% of Canadian children under 18 lived in poverty.

We know that child hunger persists in Canada. Children under age 18 make up 39% of food bank recipients. 62,000 children went hungry at least once in 1996. Of those, 22% went hungry at least once a month. The numbers are real. The people are real. It’s high time the federal government got real and provided security for income support and social services.

What We Needed

Security For Social Housing

  • Expenditures of $2 billion over two years for Social Housing with matching contributions from the provincial and municipal governments.

What We Got

  • Nothing new

What it Means

A Continued Lack Of Affordable Housing

In November 2001 the federal government committed $680 million to be spent on affordable rental housing over 5 years with matching contributions from the provincial and territorial governments. However, only $85 million of this funding will be spent in 2002-03. Moreover, $680 million is a mere fraction of the $2 billion that is needed to address the lack of affordable housing options.

Negative Impacts On Children

Social housing that is safe and affordable is strongly associated with positive outcomes for children. Research indicates that housing conditions and type of neighbourhood has an effect on children’s well-being. And yet, according to the 1996 census, 516,000 families with children live in housing that is in need of major repair, is overcrowded or that consumes more than 30% of pre-tax income.

Canadian families are finding it increasingly difficult to access safe and affordable housing. A greater commitment is needed from the federal government to ensure security for social housing and the hundreds of thousands of Canadians families who need it most.

Increased Privatization

The continued lack of affordable housing options in Canada has put public housing in jeopardy. In Toronto, for example, the City may soon lose control over public housing. Council is backing a merger between the Toronto Housing Corporation and Metro Toronto Housing Corporation. The merger would result in the creation of the largest landlord in North America. The merger agreement opens the door to privatization, which could lead to lower service levels, the sell-off of housing units, and loss of accountability to the public. There is a fear that should the merger occur there could be more homeless people in the city, which would make the housing crisis worse. Currently, there are 64,000 people on the waiting list for social housing in Toronto.

What We Needed

Security for an Equity Participation Foundation

  • $200 million to restore the crucial work of advocacy and activism to groups representing women, Aboriginal Peoples, visible minorities, persons with disabilities, gay men, lesbians, transsexual and transgendered persons.

What We Got

  • Nothing

What it Means

The voices of persons seeking to advance an alternative to the business community will never be heard in the absence of financial support. We need the concerns of social justice groups to be heard. Without them we will continue down the road of growing social inequality.


The federal government should have committed more resources in the face of a lack of affordable and regulated child-care, the relative scarcity of employment opportunities for persons with disabilities, sustained poverty and child hunger, lack of affordable public housing, and rising unemployment. Instead, Ottawa has chosen to largely ignore its social responsibilities and once again pander to the interests of the business community by way of tax cuts and growing national security concerns.

This budget lacks a clear vision for Canada and for Canadian communities in particular. It will do little or nothing to close the huge social inequalities that exist in our country and for those who live at the margins of our society: the poor; the homeless; persons with disabilities; First Nations’ Peoples; visible minorities; gay men; lesbians; transsexual and transgendered persons. This budget will do nothing to promote the kind of communities most Canadians want: communities that respect, accept and care for those peoples at the margins of our society. A commitment to a balance of priorities means recognizing that social security is just as important as national security. Unfortunately, for millions of disadvantaged Canadians, the federal government has chose as its top priority the latter alternative.

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.