2010 Alternative Federal Budget
Last Saturday, The Financial Post completed its Chopping Block, a series profiling federal programs that could be eliminated to balance the budget. A couple of weeks ago, the C. D. Howe Institute unveiled its Shadow Federal Budget, whichÂ advocated essentially the same approach. (Terry Corcoran deserves some credit for trying to identify quite specific cuts, as opposed to the Howeâ€™s proposal to save billions through general â€œreviewsâ€ of program and tax expenditures.)
Those looking for a real alternative should check out the Alternative Federal Budget (AFB), the initiative that inspired these pale imitations from the political right. The AFB released today proposes a fundamentally different path to balanced budgets.
First, the government should make substantial new public investments focussed on creating jobs. A positive side-effect of increased employment is increased tax revenues in future years.
Second, as the economy recovers, the government should reverse some of its recent tax cuts and broaden the tax base to include more capital gains, financial transactions, etc. Bolstering revenues would reduce the deficit while maintaining and improving needed public services.
Todayâ€™s AFB press release follows:
Federal budget task: Fix Canadaâ€™s job crisis
OTTAWA, March 1 – Canada faces its worst job crisis in a generation and the federal government needs to step forward with a solution in this week’s budget, says the Canadian Centre for Policy Alternatives (CCPA).
Along with the release of its annual Alternative Federal Budget, the CCPA proposes a six-point job plan to get Canada working again.
â€œThe global recession wiped out 486,000 full-time Canadian jobs within a year and those jobs arenâ€™t coming back on their own,â€ says CCPA Senior Economist Armine Yalnizyan.
â€œTo make matters worse, 810,000 Employment Insurance (EI) beneficiaries may run out of benefits within the next few months without a job in sight, which would be a disaster.â€
The CCPA jobs plan would:
1. Protect the Jobless: Reform EI to ensure over a million and a half jobless Canadians donâ€™t tumble into poverty or end up on welfare.
2. Sustain Stimulus Spending: Commit $15 billion a year, focussed on paying down a huge accumulated deficit in social and physical infrastructure investments.
3. Revive Canada’s Manufacturing Base: Invest $5 billion over three years to rejuvenate the industrial base of this country.
4. Create the Green Jobs of Tomorrow Today: Make Canada an environmental leader with a $5 billion plan over three years to green our economy.
5. Get Youth Working: Double summer employment efforts to ensure Canadaâ€™s youth don’t sit another year out on the sidelines.
6. Strengthen Consumer Confidence: Unleash a poverty reduction plan to help boost fledgling consumer confidence and get Canadians spending locally.
â€œIt took seven years to regain the full-time jobs lost in the 1990-91 recession,â€ says Alternative Federal Budget Coordinator David Macdonald. â€œOur plan would bring unemployment back to pre-recession levels by the end of 2011 and demonstrates there is a better way to reach fiscal balance through smart investments and smart taxation.â€
An piece worth noting on the extent of 2009-2010 year-end funds:
Who would want to balance the budget. That is a horrible idea. If you haven’t noticed we have a horrible economy. Let’s keep the infrastructure and not raise taxes. What are we too rich, now we need higher taxes to stop rampant inflation. There is nothing progressive about taxation, maybe we could raise the corporate income tax rate and capital gains rate without to0 big a disruption. But why would we want a VAT on Finance. Let’s invest in public investment and give people a payroll tax cut or raise the basic personal amount.