Federal Conservative budget gives to the rich, again

Lana Payne
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Prime Minister Stephen Harper has found a new way to redistribute wealth in Canada: take from the unemployed, women, the just-getting-by and the middle class and give to the banks, the investors, the doing-just-great and the wealthy.
Budgets generally reflect a government's values. Last week's third Harper budget did a good job of reflecting Conservative ideology and an abysmal job of delivering on what Canadians value or even on the things that Canadians say they want action on - like the environment and the growing gap between the rich and the rest of us.
And if you are a woman, you are probably wondering if this government knows you even exist.
Far from being gender neutral, Finance Minister Jim Flaherty's budget continued along the vein of his past budgets and economic statements - a few crumbs for the masses, but mostly a deluge of policies and breaks for investors and the rich, while draining much-needed funds from social programs and infrastructure.
But then, what else can we expect from a finance minister who is busy diverting attention from his pathetic budget and his lack of compassion and action on the things that matter to Canadians by picking a fight with the premier of Ontario.
Usually a finance minister, after laying down a budget, will spend some time bragging about that budget. Not Flaherty.
Instead, he spent as much time the day after the budget criticizing Dalton McGuinty as he did talking up his fiscal muscle. This might be a sign that the government didn't have that much to brag about in this budget.
After giving away $60 billion in tax cuts just a few months ago, Flaherty had little to work with, resulting in a skimpy budget that included a new tax shelter for the rich and a loss of billions in EI funds to working people.

Affluent advantage
The Tax Free Savings Account (TFSAs), a cornerpiece in this 2008 budget, is just another big break for the affluent. It allows individuals to tuck away $5,000 a year. According to economist Marc Lee, this further shifts Canada's tax system to one where tax on investment income is not treated equally as taxes on work.
The bottom line, according to Lee, is, "if you go out and work and earn a buck, you pay tax at the full legislated rate, but if you get income from investments or the gain in the value of your assets, you pay little or no tax."
A friend, working in a rural community, jokingly said to me last week that she was going to take out the $5,000 she had under her mattress and stuff it into a Flaherty tax shelter and then next year she'd do the same with the $5,000 she had under the box spring.
In my last column, I referred to a report by Roger Sauve done for the Vanier Institute on the Family. It pointed out that Canadian families, for the most part, do not have any money to save. In fact, they are spending more than they are making. Household debt loads are 127 per cent of incomes - a 42 per cent increase since 1990.
People on low incomes are struggling and juggling and often going without. They most certainly don't have extra money to save and then invest on the stock market. Pretty much everyone else is living at and beyond their means.
This begs the question of who will actually be able to take advantage of Flaherty's latest giveaway, a tax break that the minister says will become "quite expensive" for the government over time.
Once again, the federal Conservatives have helped those who need it the least.
Perhaps the biggest transfer in income from those with the least to those with the most has been the confiscation of the $54 billion in Employment Insurance surpluses - money paid by workers and their employers and used for everything except for what it was intended. The EI surpluses were mostly used to finance tax cuts to corporations and the wealthy, and to pay down the debt.

Ottawa tradition
The Liberals started this process of wealth redistribution and the Conservatives have been happy to continue with it. Over the years, while these surpluses in the EI account were accumulating, tens of thousands of working people were unable to obtain benefits. And those lucky enough to qualify were collecting inadequate benefits for shorter periods of time.
In this latest budget, the federal government has said it will create an arms-length Crown corporation to govern the EI fund. But the new Crown corporation will not take the $54 billion in surpluses with it, just $2 billion.

Denying debt
This sets the stage for the federal government to officially write off what amounts to a $52-billion debt to the unemployed.
So, on the one hand, the federal Conservatives have created a tax shelter for those with the most and, on the other hand, it has moved to write off its debt to the unemployed.
Budgets are about values, but they are also about choices.
And Canadians - especially the poor, the unemployed, women, and even the middle class - will be living with and suffering from the choices of this government for years to come.

Lana Payne is a former journalist who is active in the labour movement. She can be reached by e-mail at lanapayne@nl.rogers.com. Her column returns March 16.

Organizations: Employment Insurance, Conservatives, Vanier Institute on the Family

Geographic location: Canada, Ontario, Ottawa

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