Recommendations for the January 2009 Federal Budget

The following are notes submitted and presented by the Prince Edward Island Advisory Council on the Status of Women at a Town Hall Meeting on the January 2009 Federal Budget hosted by Malpeque MP Wayne Easter and Charlottetown MP Shawn Murphy on January 6, 2009, at the West Royalty Community Hall.

If you wish to add your voice to the discussion, contact the MPs a.s.a.p.

Wayne Easter: eastew1@parl.gc.ca

Shawn Murphy: MurphS1b@parl.gc.ca

•     A thank-you note. Many thanks to Malpeque MP Wayne Easter and Charlottetown MP for hosting a public forum to gather input from citizens about what we want and need to see in the federal budget that is coming at the end of this month.
•    The PEI Advisory Council on the Status of Women supports political parties working willingly together in the public interest of Canadians. Consultation with the public and with civil society is a vital part of open, responsive, collaborative government. Additionally, we, as Canadians, have twice consecutively voted for a minority government and given a strong mandate for parties to work collaboratively. We ask parties to make the House of Commons work, and work well, to support citizens to thrive. Women’s equality goals are central to public interest and should be central to policy and budget negotiations. As political parties work together, we call on them to negotiate to enhance women’s equality and never to compromise it.

Women and the Federal Budget: Past & Present

•    Women and men should benefit reasonably equally from investment and bear reasonably equally the burdens of cutbacks. Some of the most important and interesting analysis of federal budgeting of late has come from the Feminist Alliance for International Action (FAFIA). The PEI Advisory Council on the Status of Women is a member of FAFIA through the National Coalition of Provincial and Territorial Advisory Council on the Status of Women. In 2005, FAFIA commissioned a ten-year retrospective gender-based analysis of federal budgets from 1995 to 2004. Their analysis showed that the federal government’s decreased investment in social spending had a disproportionately negative effect on women. Further, the majority of new investments during this period did not proportionately benefit women. In other words, women suffered most during times of cutback and accessed less benefit during better economic times. FAFIA’s ongoing work on federal budgets and gender budgeting is well worth examining: http://www.fafia-afai.org/en/fafias_federal_gender_budgeting_initiative
•    Federal budget decisions should be supported by strong, across-the-board evidence-based gender and diversity analysis that draws out the differences in impact of federal policies for women, men, and diverse groups. Recent analysis by FAFIA suggests that gender-based analysis to support decision-making for government is uneven across federal departments, and few departments are doing satisfactory evidence-based analysis on the potentially different effects on women and men of federal budget decisions.
•    Steps towards incorporating increased “income splitting” in tax policy should be opposed. FAFIA’s recent interventions with government have focused on “income splitting” in federal tax measures and suggests this practice may disproportionately disadvantage women. Income splitting allows households to consider partners’ income as a unit so they can “split” the tax load between them, ostensibly so someone with a higher income can share their tax load with a lower-earning partner. But FAFIA’s gender-based analysis shows income splitting mostly benefits the partner with the higher income, and more men than women are the highest earners in their households: therefore, more men would usually benefit from “income splitting” than other partners. Further, income splitting discourages women’s paid workforce participation, because women are more often the lower-paid partner. In the US, where income splitting is allowed, women facing family break-up are sometimes left with a “split” tax bill, but with no taxable income of their own to pay it and little recourse.

Economic Stimulus

•    The federal budget must recognize that economic stimulus measures are not all created “equal.” Many of the infrastructure-focused stimulus ideas that appear to be the focus of governments — building or improving highways and bridges, constructing public buildings, developing green technologies or biosciences or aerospace — create jobs that are still mostly held by men. There is not overnight method for us to re-proportion the workforce so that we see equal numbers of women and men in trades and technology.
•    The federal budget will need to look beyond infrastructure investment if women are to benefit equally from economic stimulus. In addition to infrastructure- and technology-focused stimulus measures, Canadians — especially Canadian women and their families — will benefit most from additional or parallel stimulus measures in sectors that are traditionally dominated by women. In practical fact, this probably means investment in the voluntary (civil society) sector and most especially (in partnership with the provinces)  in the caring professions, including child and elder care, primary education, and health care. It is worth noting that many of these investments would also support poverty reduction, which we discuss in more detail below.
•    Tax cuts alone are not an adequate answer to the country’s economic challenges. Further reducing the government’s fiscal capacity through tax cuts alone is not an acceptable option. An economic stimulus focused on tax cuts will definitely doom Canada either to long-term debt or to drastic cuts to government programs and services. The Ad Hoc Coalition for Women’s Equality reminds us that “Tax cuts don’t help 38% of women because their incomes are so low they don’t pay taxes. Women benefit far less from tax cuts than men because women who do pay taxes still earn far less than their male counterparts: an average of 62% (an average of $26,900 annually compared $43,700 for men). Over two thirds of women in Canada fall into the lowest tax bracket. Recent tax cuts for this tax bracket represent only 1.5% of total tax cuts.” We would encourage the Opposition parties in the House of Commons to defeat a budget that creates economic stimulus mostly through tax cuts, unless these are sufficiently balanced by adequate investment in social programs.

Finding Common Ground in Parties’ Platforms

•    Focus on areas that the majority of parties support as priorities for negotiation and collaboration. During the 2008 federal election, the PEI Advisory Council on the Status of Women did a thorough comparison of the four Canada-wide parties’ platform promises for women’s equality. This analysis is available here: https://peiacsw.wordpress.com/2008/10/08/federal-election-2008-comparing-the-platforms
The national Ad Hoc Coalition for Women’s Equality developed a checklist that included Bloc Quebecois positions on a similar range of issues. It is available here: http://www.womensequality.ca/election2008.html
•    Opposition parties should come together to support the Conservative minority government’s best proposals. The best proposal to enhance women’s equality in the Conservative election platform was to extend access to maternity and parental benefits to self-employed Canadians. This measure should most certainly be included in and supported as part of the January 2009 budget.
•    Several budget-related issues stand out as areas for collaboration among Opposition parties to create impetus for budgeting that supports women’s equality. There is overlap that amounts to consensus among Opposition parties’ in their policies on several women’s equality issues. We encourage Opposition parties to work together to press for budget investment in support of affordable housing, pay equity, early childhood care and education, and support for women’s equality-seeking organizations. The solid majority of Canadians voted for parties that support budget investment in support of these goals.

  • Affordable housing: All the Opposition parties in the Commons are committed to increased investment in affordable housing, led by the BQ and NDP who promised a commitment of 1% of federal spending for affordable housing, and supported by the Liberals who commit to increasing social housing units in Canada.
  • Pay Equity: All the Opposition parties in the Commons pledged during the election to introduce new pay equity legislation based on the recommendations of the Pay Equity Task Force; this commitment would require budget backing.
  • Childcare: All the Opposition parties in the Commons support publicly funded childcare and acknowledge principles such as quality, universal access, affordability, and focus on children’s development. They all pledge investment beyond the inadequate Universal Child Care Benefit. (Granted, the Bloc’s focus is on supporting Quebec’s good public childcare system, but their support for childcare as a principle is a vital basis for cooperation.) The evidence is almost incontrovertible that investment in childcare is good for women, good for families, good for communities, and good for economies.

Poverty Reduction

•    Ensure the budget includes measures that will effectively reduce poverty. Action on some of the women’s equality issues noted above (notably affordable housing, pay equity, and childcare) would certainly reduce women’s poverty. In their platforms, all parties except the Conservatives promised a comprehensive package to reduce poverty in Canada. Poverty reduction is essential to enhance women’s equality and to support citizens to attain livable income for their families. While it will likely not be possible to negotiate a comprehensive poverty reduction plan into the January 2009 budget, ensuring the January 2009 federal budget includes some measures that will reduce poverty must be of highest priority. Poverty reduction measures must go well beyond supports delivered through the tax system. Sound investment in social programs is essential for women to benefit equally with their male counterparts. A survey by the Canadian Centre for Policy Alternatives has found overwhelming support among Canadians for government leadership on poverty reduction, including very strong support among Conservative voters: http://www.policyalternatives.ca/Reports/2008/10/ReportsStudies1990/
•    Don’t close ranks on Canada: keep global poverty on the agenda. An economic downturn in Canada must not be an excuse to turn away from our responsibility to commit considerable resources to alleviate poverty worldwide. Most of the 1.2 billion people who live in abject poverty around the world are women. The 2009 federal budget must put Canada on-track to meet the UN Millennium Development Goals and to commit at least 0.7% of Canada’s Gross National Income to international aid.

1 Comment »

  1. Frank Stokes said

    You oppose income splitting and state “income splitting mostly benefits the partner with the higher income”. You are making the assumption that even under tax rules that would allow income splitting the low- and high-earners would keep their income and their tax liabilities to themselves. You are mixing paradigms. Frame your thinking within the paradigm of sharing spouses — ones who follow a lifestyle of informal or formal sharing of all income and the benefits from it. Many marriages are structured that way, and many more might become so, often to the benefit of the low-earner, if income splitting became a tax option. Fears of high earners failing to share income and tax liabilities after taking advantave of income splitting can be answered by checks and balances in the tax rules, for example the requirement for a signed agreement by both spouses, as is done now when seniors want to split pension income under the new pension splitting rules. Remember that income splitting on taxes would not be mandatory — spouses who would not want to do it can veto it for the couple (a very good card for the low-earner to hold). The signed agreement could also allay the fears of a low-earner who is considering more engagement in the paid workforce, because it could bring the high-earner to share the increased income tax liability. As in pension splitting, the agreement would have to be re-made and signed each year, thus keeping the high-earner committed in the practical sense as well as the legal. As for marriage breakup, this special case can also be covered by tax rules — like ones that allow the low earner to claim non-liability for their spouse’s tax. Ultimately this all boils down to freedom of marriage lifestyle choice for a couple, especially the childbearing one.

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