Public Service Alliance of Canada BC

By Dennis Howlett, Coordinator, Make Poverty History

There is little or nothing in the 2007 Federal Budget that will help to make poverty history.

Several measures that appear to address poverty, on closer examination turn out to be inferior versions of previous Liberal initiatives or actually deliver more benefit to rich families and less or nothing to poor children who need assistance the most.

A case in point is the Child Tax /Credit/ announced in this Conservative budget, which should not be confused with the Canada Child Tax /Benefit/ that Make Poverty History has been campaigning to have increased to $5100 per child. The Conservative Child Tax /Credit/ will do absolutely nothing for the poorest children whose families have no taxable income.

The $2,000 Child Tax /Credit/ will provide up to $310 per child of tax relief, if you have enough income to pay taxes. The 2007 Budget papers acknowledge that, “Given the average number of children per family, the measure will provide tax relief of about $430 on average for those with incomes less than $37,000 and about $505 on average for those with incomes between $37,000 and $74,000.”

It will cost about $1.5 billion a year when fully implemented. It would have been far better to apply this funding to improving the pre-existing Canada Child Tax /Benefit/ and the National Child Benefit Supplement which provides assistance to a broad range of families but provides more benefit to those in greater need, including those with no taxable income.

The Conservative government’s 2007 Budget announcement of a Working Income Tax Benefit also pales on closer examination. It will provide up to $500 a year for individuals and $1000 for families with the goal of helping to remove the barriers to employment for people on social
assistance.

But $1.37 a day does not make up for loss of drug and dental benefits faced by those moving from social assistance to low-wage jobs.

For this program to work it would have required double the level of benefit as was proposed by the previous Liberal government in its mini-budget in the fall of 2005. That proposal earmarked $1 billion while the 2007 budget includes $550 million per year for this program.

In the absence of an above poverty line minimum wage, this program also has the danger of simply subsidizing low wage employers. The federal government should have reinstated a federal minimum wage and set it at $10 an hour to signal to the provinces the importance of raising minimum wages from the inadequate levels they are now.

The 2007 budget included $300 million for the development of a housing market in First Nations communities, $20 million for First Nations Participation in Integrated Atlantic Commercial Fisheries and $105 million (over 5 years) for an Aboriginal Skills and Employment Partnership program.

But these amounts are a drop in the bucket compared to the $5.1 billion pledged by the previous Liberal government as part of the Kelowna Accord signed by Federal, Provincial, Territorial and First Nations leaders in the fall of 2005. The new Conservative government canceled that long-overdue first step in enabled addressing aboriginal poverty in its previous 2006 budget.

The Conservative Budget 2007 announced $250 million per year starting in 2007-08 to provinces and territories for the creation of new child care spaces. But this is down from $700 million earmarked in 2005-2006 and is far less than the $1.2 billion a year promised by the previous Liberal government.

There was nothing in this year’s budget do deal with the crisis in affordable housing, even though the previous budget allocated $1.4 billion for this purpose. Social housing cannot be delivered effectively with on and off funding but requires years of planning and sustained, predictable funding if badly needed new housing units are to be built.

There were increases in transfers to the provinces, but there is no guarantee that these funds will be used for poverty reduction. The money could just as likely be used to deliver tax cuts as deliver badly needed social programs. Quebec Premier Jean Charest has done just that by promising to deliver $ 700 million in tax cuts, if re-elected, with the new federal money.

The Conservative Budget also fails to deliver on commitments to the world’s poor. Prime Minister Harper had pledged to boost aid spending beyond Liberal government’s planned 8% annual increases to achieve the average aid donor country performance by 2010. While the 2007 Budget reported that $315 million would be added to Official Development Assistance for this current year, 2006/07, it promised no new funding initiatives for 2007/08.

The Canadian Council for International Cooperation calculates that Canadian ODA in 2006/07 will be **$4.6 billion or 0.33 %** of our Gross National Income (GNI), **and will remain at $4.6 billion in 2007/08 but fall to 0.32% of our GNI. **This is not even half of the UN target of 0.7% to which other donors have committed.

It’s not as though they did not have the necessary means to do the right thing by the poor. With a large surplus to work with the Conservative government could have done a lot better.