My name is D.T. Cochrane. I'm the senior economist for the Canadian Labour Congress, which is Canada's largest central labour body, with over 50 national and international affiliate unions, representing three million working people.
Thank you for inviting me today.
Housing, health care, climate, inflation and jobs, these are just some of the issues making our lives more uncertain. The federal government can reduce that uncertainty by strengthening our social safety net as part of a comprehensive green industrial strategy.
During the pandemic, we collectively learned just how quickly our lives can be turned upside down. However, we also learned how prompt and substantial the federal response can be. As the pandemic shut down huge parts of the global economy, that response protected people's incomes, kept them employed and stabilized our industrial and financial systems. Although we got a glimpse of what the federal government can do, that glimpse also exposed the inadequacies of our safety net. Canada's inadequate safety net was on display as soaring prices created an affordability crisis and even more uncertainty. Median wages have finally recovered their purchasing power, but the recovery is uneven and undermined by rapidly rising unemployment.
Canada's labour market weakness is the result of inappropriate monetary policy and inadequate fiscal policy. Both failures are the result of policy-makers accepting the doctrine of economists preaching free markets and minimal government. Among the harmful consequences of this influence was the largely unchecked growth of corporate power, which is implicated in the affordability crisis. Recent high inflation was precipitated by supply chain disruptions, but it was propagated and amplified by dominant corporations using the pricing power they had gained over decades of economic mismanagement by governments espousing naive market ideals.
Market fundamentalists howl that the government has never delivered a truly free market economy. However, their utopia is incompatible with democracy, because markets require governance. That can be elite governance by dominant corporations and their owners, or it can be democratic governance by public institutions. Fair economies depend on democratic governments whether we like it or not. This fact and the uncertainty that we face is why the federal government should adopt an industrial strategy aimed at strengthening our social safety net.
One, invest in housing by building more affordable non-market options including co-operatives and subsidized units, which can be facilitated through the CMHC.
Two, invest in our public care institutions. They are the keystones of our safety net as well as being economically important. We need this budget to deliver and expand universal pharmacare. Tie health fund transfers to improvements in pay and work conditions for frontline health care workers. Increase the Canada disability benefit and introduce the overdue safe long-term care act with the funding needed to achieve its goals.
Three, invest in workers who are navigating the employment impacts of shifting technology and global demand. That means improvements to our EI system, including reinstatement of the 420-hour entrance requirement and greater support for workforce development, including restoration of the $625 million top-up to the provincial and territorial labour market transfer.
Four, invest in a just and sustainable future economy by developing a green industrial strategy to transform our production systems. We need direction, coordination and financing at a scale that only the federal government can provide. A properly coordinated industrial strategy can guide our responses to the entangled sources of uncertainty, making sure they move us toward shared goals. For example, large-scale investment in building sustainable housing supports development and innovation in net-zero manufacturing and construction. Workforce development can be oriented toward the needs of Canada's emerging and developing post-carbon economies. Care work is low-emission work.
The final piece is to tax the ultrawealthy. The public investments we need have high upfront costs. The money spent to mobilize and coordinate resources will flow to workers and suppliers, whose spending will further stimulate the economy. It will also trickle up and concentrate with the ultrawealthy because of their ownership and power. This unearned wealth should be returned to public control through a higher corporate tax rate, an excess profit tax, additional top tax brackets and a wealth tax.
We cannot eliminate the darkness of the future, but we can make it less threatening by ensuring everyone trusts that, if calamity befalls them or a loved one—whether it's illness, job loss, disability or business failure—our shared safety net will be there to catch them.
Thank you.