A budget for the bankers

From the People's Voice, March 1995

Finance Minister Paul Martin's February 27 budget aims to chop nearly all federal programs and services, eliminate over 45,000 public service jobs, and pass a virtual death sentence on Canada's social safety net. It was greeted with unanimous approval - even chortles of self-congratulation - by the bankers, bond-traders and other corporate interests at home and abroad. But the response from labour and other democratic movements, including women's, student, seniors, welfare rights, and anti-racist organizations, was anger and outright rejection.

The contents of the budget had been largely anticipated. For months, the Chrtien government and the mainstream corporate media conducted an orchestrated campaign to convince Canadians that drastic deficit-reduction measures were necessary, preparing the public for massive lay-offs, cutbacks and wholesale dismantling of key programs and services. Part of this campaign was to paint the worst possible, "doomsday" scenario, to make the actual budget appear somewhat less mean-spirited by comparison.

In fact, the Martin budget constitutes the single greatest attack on social programs and vital public services in Canadian history. And it does less than nothing to create new jobs or to stimulate economic growth. Over the next two years, spending will be cut by some $13.4 billion, reducing the ratio of total federal government spending on programs - from old-age pensions and medicare to meat inspections, customs controls, and general government services - to 13.1% of Canada's Gross Domestic Product by 1996-97. This is the lowest ratio since 1950-51, and well below the current ratio of 16.2% of GDP.

Virtually every federal department will come under the knife, with over 45,000 jobs lost in the federal public service. Many thousands more spin-off jobs will also disappear as a result of the cuts. Unemployment Insurance has been cut by a further $700 million (on top of the $5.5 billion cut last year in Martin's first budget); more cuts are expected next July when Human Resources Minister Lloyd Axworthy brings forward legislation to "reform" the UI system.

The budget is full of right-wing changes and cutbacks: the odious $975 "head tax" on refugees and immigrants; the 20% cut to foreign aid; the privatization of CN Rail and sell-off of Petro-Canada; reductions to CBC and other cultural programs; and the abandonment of a national child care program, to name but a few.

The most fundamental - and dangerous - change is the merger of the Established Programs Financing and the Canada Assistance Program into the new "Canada Social Transfer." Under the CST, all federal support funds for medicare, social assistance, and post-secondary education will be lumped and transferred to provincial treasuries. These transfer payments will be cut by a total of $7 billion by 1998, creating budgetary havoc in all, but especially "have-not" provinces.

Particularly alarming is the decision to "un-tie" these transfers, allowing provinces to spend transferred funds as they wish, not necessarily to deliver the social programs for which they were intended. This change will greatly increase disparity, tempting poorer provinces to dig into these revenues for other purposes. According to most analysts, the removal of conditions on federal transfers will accelerate the elimination of universality and the gutting of social programs, including Medicare, despite the Chrtien government's promise "hold" provinces to the principles of medicare, based on the Canada Health Act.

While big business and the pro-corporate media, from the Business Council on National Issues and the Canadian Manufacturers Association to Alberta Premier Ralph Klein and the Wall Street Journal, were praising Martin's "courage", the labour movement and other democratic forces denounced the Martin budget as a vicious attack on the unemployed and the poor.

CLC President Bob White condemned the budget for ignoring the country's continuing unemployment crisis. "The number one problem is still job insecurity and unemployment, yet there are no job targets... this budget caters to Wall Street, and does next to nothing for most Canadians."

Public Service Alliance president Daryl Bean condemned the proposed lay-offs of 45,000 public service workers as a crude violation of job security provisions in the current collective agreement, and promised to mobilize a fightback. "There will be confrontation," Bean predicted.

Steelworkers national director Lawrence McBrearty slammed the Liberals' "conscious choice" to protect the wealthy at the expense of social programs. "The hysteria generated by currency speculators... has finally permeated our ability to maintain a society that cares about its citizens. Instead, we have a federal budget driven by greed and excess of a privileged minority."

Guy Caron, Chairperson of the Canadian Federation of Students, criticized the new CST system of provincial transfers, the staggering cuts to post-secondary education, and the massive tuition increases which will result. "Our future is being taken away by a government that refuses to recognize the devastating impact of its short-sighted obsession with the deficit," Caron said.

Pensioners' groups expressed anger at the changes to Old-Age Security, and voiced concern about the proposed review of the whole pension system announced by Martin. Jack Phillips, president of the B.C.-based Council of Senior Citizens Organizations, warned of the government's intentions. "I interpreted [Martin's] remarks as indicating there will be clawbacks," Phillips said.

Numerous other organizations, including the National Farmers Union, child care advocacy, immigrants and refugee rights and other groups joined in assailing the Martin budget. Sunera Thobani, president of the National Action Committee on the Status of Women (NAC), summed up the general response of many organizations with her succinct observation - "This is a bankers' budget, a businessman's budget!"

The People's Voice is published monthly by New Labour Press.

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