Thank you kindly, Mr. Chair.
The Confédération des syndicats nationaux , or CSN for short, would like to thank the Standing Committee on Finance for the opportunity to share its position as part of the pre-budget consultations for the 2015 budget.
The CSN is a trade union federation made up of nearly 2,000 unions representing some 325,000 workers. In my short presentation, I will speak to five themes that, in our view, should receive special attention in the next budget.
In its last budget, the federal government announced recurring and sizable surpluses beginning in 2015-16, as well as the gradual diminishing of the debt. This situation is the result of major cuts to government spending in the name of fiscal restraint. In addition to the impact those cuts had on jobs and working conditions in the federal public service, the government spending reduction strategy hurt public services and programs that are essential to the well-being of Canadians. The strategy's effects on Radio-Canada and federal detention centres are just two examples.
From the CSN's perspective, the government's obsession with balancing the budget and eliminating the debt clearly illustrate the government's desire to diminish the role of government. Government spending as a share of GDP has continued to drop and has hit an all-time low. That said, the federal government's budgetary outlook also denotes a fiscal imbalance with the provinces. As the provinces are called upon to respond to growing demands, the federal government has freed up significant room to manoeuvre by withdrawing their support from a number of programs, at the provinces' expense.
The federal government's unilateral decision-making when it comes to equalization payments and the Canada health transfer have had serious consequences on all the provinces. In Quebec, the fact that two caps have been imposed on the equalization program has deprived the public purse of $8.6 billion since 2009-10. Estimated losses resulting from the changes to the Canada health transfer will hit nearly $10 billion over the next 10 years.
Furthermore, the federal government announced that it would hold the indexing rate for the Canada health transfer and Canada social transfer at 3%. The social transfer helps to fund post-secondary education and social assistance. Even after allowing for inflation, these amounts are lower than they were in the mid-1990s. For Quebec, that means an annual shortfall of some $800 million.
It is clear: the federal government's decisions to pull back from financial commitments represent substantial amounts. The CSN considers this unacceptable. We are calling on the government to enter into talks with the provinces swiftly to rectify the fiscal imbalance. The equalization formula needs to be revised. The federal government also needs to improve health and social transfers.
I will now turn to the second component: jobs. With growth prospects being modest and weak, the state of the labour market is less than stellar. Job growth has been sluggish, and for over a year, any new jobs that have been created have primarily been part-time jobs. It is obvious that the many tax breaks granted over the years have not produced the expected results as far as private investment, enhanced productivity and high-quality job growth are concerned.
Corporate cash flow is not the thing that is lacking; demand is what remains weak. The government needs to change course and develop a true industrial strategy. Such a strategy must promote a strong manufacturing sector and support its development, including in Quebec. And larger investments in infrastructure would, without question, be a way of achieving that.
It is also crucial that the government make it an immediate priority to transition to a sustainable economy that produces fewer greenhouse gases and that it adopt serious measures to that end. The government must also ensure that such a transition generates green jobs.
For a number of years now, the CSN has, together with other groups, been calling for improvements to the EI system. The current state of the job market requires a total overhaul of the EI program, which is clearly not meeting its objective of providing income protection to the unemployed. It is unconscionable for the program to run a surplus when fewer than four out of ten unemployed workers receive benefits. The surplus must be used to enhance the program, not to lower EI premiums.
Today, Canada is among the lowest ranking OECD nations when it comes to the growth of income inequality, a situation that should concern the government. As institutions such as the IMF and the OECD now acknowledge, significant inequality hurts growth.
Before I wrap up, I would be remiss not to mention the government's decision to gradually eliminate the tax credit for the purchase of labour-sponsored fund shares. It is hard not to see the government's decision as an ideological one. Quebec is home to the two largest funds. They were set up by unions and do not focus exclusively on for-profit businesses; they also support social economy enterprises, cooperatives and specialty funds, particularly in the clean technology sector.
That is especially true in the case of Fondaction CSN. As the CSN sees it, the elimination of the tax credit reflects the government's contempt for the Quebec model. It is imperative that the government reverse its decision.
In conclusion, I want to express our concern over the fact that, in recent years, the government has made a habit of introducing mammoth budget implementation bills that very often contain measures unrelated to the budget. We question the use of such a practice in a democratic system.
Thank you, Mr. Chair.
