CUPE, the Canadian Union of Public Employees, is Canada's largest and most diverse union. We represent approximately 600,000 people who work and live in communities all across the country, who work in hospitals, schools, municipalities, universities, libraries, seniors' homes, child care centres, electric and water utilities, the transportation sector, and in many private businesses as well. Every day, we depend on and benefit from the work our members do.
As we all know, this past year has been an extraordinary year for the economy. For the first time in over 60 years, overall global economic output has fallen. Worldwide, this recession is expected to put 50 million people out of work by the end of this year, including an additional 500,000 in Canada. Just this morning, an OECD report came out that said unemployment is expected to rise to 10%. Just a week ago, the head of the IMF said that the unemployment problem is likely to be the third wave of this economic crisis.
The situation would be much worse if governments around the world had not taken unprecedented action to stimulate the economy. I think we really need to take this lesson to heart, as people are getting concerned about the deficit. There would not be growth in the economy now if governments had not taken this action. I commend you and government officials for recognizing the severity of this crisis and taking strong action. As a result, we are starting to see signs of growth in the economy and GDP.
Still, we are not out of this. While GDP and the stock markets may be rising, people are still unemployed, and unemployment is likely to keep rising through next year. Most economists expect this recovery to be relatively slow, sluggish, and fragile. There would be no economic growth without these stimulus actions, and withdrawing them too soon could plunge the economy back into recession.
For these pre-budget consultations, the committee asked two questions and requested no more than three specific recommendations. We have a lot more priorities than that, but we tried to stick to three.
The first question is what stimulus measures have been effective and how could they be improved? Our submission attempts to answer these broad questions, but I'd like to emphasize a few key points.
Public investment and spending and support for the unemployed and people with low income provides much more bang for the buck and generates many more jobs than tax cuts do.
Infrastructure and construction stimulus spending could be improved by focusing it on areas that would provide greater long-term benefits, for instance, as part of a national green investment plan.
Going forward, the federal government needs to reinvest more in public services and not use the deficit as an excuse to cut. Working families did not cause this recession and should not be forced to pay for it through reduced public services.
Even if GDP starts to grow this year, job markets and working Canadians will still be in recession through next year. That's why our three specific recommendations deal with immediate needs.
Our first recommendation is that the federal government create an economic recovery fund to provide funding for pressing social and economic needs, to be cost-shared with other levels of government. The recession has meant a big increase in the need and demand for social services and training and education, while the agencies and institutions providing these services are facing shortfalls in their revenue. As a result, we are seeing cuts in programs just when they should be expanding.
Our second recommendation is that the employment insurance system be improved. We have a number of recommendations on this. Extending the duration of benefits is a positive step, but we've also called for a uniform entrance requirement of 360 hours for access to regular benefits. Too many people, and especially women, who pay into this system are denied benefits when they become unemployed through no fault of their own.
Our third recommendation is that our public pension system be improved. We have a number of recommendations on this. We've called for a national pension summit and a phased-in doubling of CPP benefits, but neither of these is really a budgetary matter. Our priority recommendation in this area for the budget is that the federal government increase the guaranteed income supplement for seniors by at least 15%. This would help lift almost all seniors out of poverty and would cost approximately $1 billion per year. The cost of either of these measures for one year could be paid for by cancelling what we consider the wasteful billion dollar P3 fund that uses the public's money to subsidize privatization and private profits.
Thank you for inviting us to present this morning. I welcome any questions that members of the committee may have.