From Kathleen Lahey, a Law professor at Queen’s University:
Designed to Leave Women Behind – Again
The big picture: Women make up slightly more than half the population of Canada, and are directly responsible for caring for the majority of minor children in the country on a day to day basis.
The expectation: As an ‘economic recovery’ and ‘stimulus’ budget intended to concentrate scarce financial resources in the hands of the most vulnerable, Budget 2009 was expected to carefully identify and respond to the needs of those on the economic margins, and to move Canada further toward the goal of genuinely equal treatment of all.
The Budget: Budget 2009 not only fails to target the most vulnerable, but it seems to have been carefully crafted to exclude women from as much of the $64 billion in new deficit-financed spending and tax cuts as possible; women’s estimated shares of the first year’s worth ($22 bill.) are outlined in these notes:
Infrastructure spending: $8 billion per year, next two years
• No gender equity requirements have been included in these spending programs
• Very little of this spending will go to women because men dominate the ownership, labour force, and training programs associated with all aspects of the construction industry:
– Only 7% of construction workers are women
– Only 7% of those in the trades and transportation are women
– Only 22% of engineers are women
– Only 21% of those in primary industries are women
– Only 31% of manufacturing workers are women1
• None of this infrastructure spending will be allocated to building new childcare facilities, which are needed to enable women on the economic margins to enter paid work, or to funding the costs of running childcare facilities – even though these would also be ‘infrastructure’ spending
Corporate income tax cuts: $6.3 billion in 2009/10; $4.2 billion in 2010/11
• These tax cuts were announced previously, and have been implemented in stages stretching all the way to 2012
• The government has not even disclosed them in the budget, aside from an oblique reference on page 213, table 4.2
• These cuts are not being reported accurately, because the cumulative total cuts by the end of 2009/10 will be much higher than the $6.3 billion in new cuts scheduled for that year
• Men will be the largest beneficiaries of these cuts, because they dominate CEO, directors, ownership, and business positions; at best, women’s share of the financial value of these cuts will be (perhaps) 37%, thus increasing men’s shares of net after-tax incomes faster than women’s
• The government itself has admitted that corporate income tax cuts only weakly promote economic growth, so these cuts could and should have been postponed until the economic crisis is resolved
Home renovation tax credit $2.5 billion in 2009/10
Home buyers’ tax credits $ .2 billion in 2009-09/10
• Home renovation tax credit: Only available to those who (i) own a home; (ii) have enough income to afford to spend $10,000 on qualified renovations in 2009 to get a tax credit of $1,350; (iii) have high enough incomes to be able to take full advantage of this tax credit; and (iv) do not have to borrow to pay for the renovations while waiting for their tax credit to be paid the following year (after they file their taxes)
• Women’s average incomes are much lower than men’s:
– women’s average incomes: $27,000
– men’s average incomes: $45,0002
• Most women’s incomes fall into the three lowest income quintiles, all of which are net dis-savers – they end every year with net debt3
• If women use credit cards or lines of bank credit to finance renovations, the tax credit – which is calculated at the rate of 15% of the total amount spent on renovations (up to the maximum of $10,000) – may well end up being less than the credit card or bank interest rates, which range from 10% to 19.5%4
• Consumer durables like new appliances will not qualify as ‘renovations’
• Renters who make otherwise qualifying renovations cannot get this credit because they are not homeowners
• Home buyers’ tax credits: Similar limitations: credits are not refundable; money cannot be moved from an RRSP into a home purchase plan by those with no savings; purchase credits can only be claimed by those who can afford to purchase a home
Employment insurance $2 billion each year, next two years
• Since 1996, those working less than 35 hours per week during qualifying periods in the EI system have been denied benefits – women now receive less than half the EI benefits to which they were previously entitled unless they have been able to work full time
• Women’s work is well known to be ‘precarious’ – part time, seasonal, contract, off market, no benefits, and thus not qualifying for EI
• The EI enhancements being funded in Budget 2009 will only be available to those workers who would otherwise qualify for EI; they will not bring any other workers into the EI system
• The job training being funded from this allocation is only available to those already qualifying in the EI system
• New women workers who might qualify under these enhancements are those who have been staying at home for long periods of time with their children, not women who have merely taken maternity leave and then returned to non-qualifying work
• To illustrate the gender differences in EI coverage, note that nearly 3 times as many men qualified for EI during the last reporting period as did women
Personal income tax $1.885 billion in 2009/10
exemptions & brackets $2 billion every subsequent year
• $220 increase in the personal exemption = tax cut of $33: Only for taxpayers with at least $10,320 in assessable income in 2009
– This cut automatically excludes 40% of all women tax filers, because their
incomes are too low to bear any income tax liability in the first place
– This increase is not just limited to low incomes – every taxpayer gets it
– If this were limited to low incomes (under $25,000), the total cost would be
$141 million/year, 59% of which would go to women5
– Extending this cut to all taxpayers increases the total cost to an estimated $636
million/year, 54% of which will go to male taxpayers6
• $1,894 increase in the income bracket taxed at the 15% rate = tax cut of $132:
Only available to taxpayers with at least $51,046 in assessed income (which translates into $40,726 in taxable income after taking the $10,320 personal exemption; all of that $40,726 will then fall into this expanded bracket)
– Total cost: $786 million/year (estimated)
– Only 14% of all women taxpayers will enjoy this tax cut (and 30% of all men)
– Only 33% of this tax cut will go to women; 67% will go to male taxpayers7
• $3,788 increase in the income bracket taxed at the 22% rate = tax cut of $151:
Only available to taxpayers with at least $81,452 in assessed income (which translates into $71,132 in taxable income after taking the $10,320 personal exemption; all of that $71,132 will then fall into this expanded bracket)
– Total cost: $466 million/year (rough estimate)
– Only 6% of all women taxpayers will enjoy this tax cut (and 14% of all men)
– Only 30% of this tax cut will go to women; 70% will go to male taxpayers8
Working income tax benefit $580 million per year
• The current Working Income Tax Benefit (WITB) is $522/year for a single individual and $1044 for a single parent; the proposal is to spend an additional $580 million each year to enhance these benefits, probably to these levels:
– Single individuals: to $925 credit per year, phased out at income of $16,700
– Single parents: to $1,680 credit per year, phased out at income of $25,700
– This provision may be more equally available to both women and men, but no
data on it is available yet (it was only introduced effective in 2007)
– However, women who require child care to be able to increase their paid work
will not be able to take advantage of this increased credit
Canada child tax benefit $230 million/year
• The brackets measuring the phase-out of the Canada Child Tax Credit and the National Child Benefit Supplement are each being increased by the same $1,894 that is added to the 15% income bracket
• The result of this change is to increase at the top end of the brackets used to phase-out these two low-income benefits, adding a bit more to the after-tax income of the parents currently receiving the CCTB or NCB Supp the least
• No new money is going to parents at the low end of the income brackets used to measure qualification for these benefits, however
Business income tax measures $500 million/year (approx.)
• An assortment of business income tax provisions (accelerated CCA, increased small business corporation limit, mineral exploration tax credits, customs tariff reductions) will produce income tax cuts of approximately $500 million per year
• These will benefit men far more than they will women, based on data on ownership of businesses and corporate shares (men: 67%; women: 33%)
1. Statistics Canada, ‘Work Chapter Updates,’ Women in Canada (Ottawa: 2005); online: http://www.statcan.ca/english/freepub/89F0133XIE/89F0133XIE2006000.htm.
2. Canada Revenue Agency, Income Statistics 2007 [2005 tax year] (Ottawa: 2007) table 6, at 15-16; online: http://www.cra-arc.gc.ca/gncy/stts/gb05/pst/fnl/pdf/table6-eng.pdf.
3. Sauve, Vanier Insitute for the Family, 2005.
4. Canada, Financial Consumer Agency.
5. Based on data in CRA, Income Statistics 2007.
6. Based on data in CRA, Income Statistics 2007.
7. Based on data in CRA, Income Statistics 2007.
8. Based on data in CRA, Income Statistics 2007.