To the Editor:
Feeble jobs and trade data last week underscore what most Canadians know only too well – the national economy continues to falter and Stephen Harper’s long-delayed budget did little to help.
On trade, Canada has just posted a massive monthly trade deficit at $3-billion – second worst ever. That’s on top of 51 previous monthly deficits during the Harper government’s tenure. By contrast, preceding Liberal governments between 2003 and 2006 always ran trade surpluses.
So, for all their boasting about signing a bunch of bilateral deals, the Conservative trade record is disappointing. And it’s still not at all clear whether their biggest deal – with Europe – is actually settled. It has not yet been ratified, let alone implemented, and the EU continues to balk.
On jobs, the figures for April were again troubling. Almost 20,000 jobs were lost. The unemployment rate stayed flat at 6.8 per cent, only because almost 20,000 Canadians dropped out of the labour force. For young people, the situation is twice as bad – their jobless rate is 13.6 per cent. And sadly, this is not just a one-time blip.
The recession (which Mr. Harper blames for everything) ended six years ago, but we’re still nowhere near full recovery. There are some 200,000 MORE jobless Canadians today than BEFORE the recession. The participation rate in today’s jobs market is down by two points. Canada is showing virtually no economic growth. In two of the past four months, the national economy actually shrank.
In such circumstances, one of the great risks is growing inequality. Sadly, this is the type of “growth” for which the Harper government is best known. And their budget will make things worse.
It’s built around an expensive “income splitting” tax break for wealthier folks. That measure provides no help whatsoever to a single Mom at the poverty line, while those earning a quarter-of-a-million will get a $2,000 bonus. That’s what the late Jim Flaherty meant when he said it was unfair. It worsens inequality – as do several other Harper tax schemes which, according to the Parliamentary Budget Officer, are “increasingly skewed toward high-wealth households”.
As a better alternative, Justin Trudeau has announced the beginning of a plan for greater fairness and growth for Canada’s middle-class and all those working so hard just to get to the middle-class.
One part of it is a new and more generous “Canada Child Benefit”. It would replace a confusing, unfocused jumble of existing benefits with a single, clean, monthly, tax-free payment that will provide significantly more support to 9 out of 10 families. And that’s coupled with a middle-class tax cut – i.e., a 7 per cent reduction in the personal tax rate applicable to incomes in the “middle” bracket (which runs from about $45,000 to about $90,000), saving those taxpayers about $3-billion per year.
The only tax rate increase proposed by Mr. Trudeau is applicable to the highest 1 per cent of Canadian incomes, above $200,000 per year. The rate at this level of wealth would rise to 33 per cent from 29 per cent. All the extra revenue raised in this way would be used to pay for the rate cut in the middle bracket.
The Trudeau plan is being welcomed by economic and social policy experts as “… powerful, progressive, fair, transparent and efficient …” in helping to fight poverty and improve the incomes of middle-class families.
Ralph Goodale
Member of Parliament Wascana
