Tough Questions for Conservative Party Candidates On Canada s Economic Fundamentals On June 12, 2006, Finance Minister Jim Flaherty said that Canada s fundamentals are as solid as the Rock of Gibraltar. On February 27, 2008, Finance Minister Jim Flaherty said this: I'm proud as a Canadian to be able to say that we have the strongest economic fundamentals in the G7. Despite Jim Flaherty s attempt to shed some positive light on the state of Canada s economy, our real GDP (the total goods and services produced in the economy) actually shrank during the first half of 2008. To make matters worse, the OECD suggests in its most recent Economic Outlook that Canada is expected to have the second-worst economic growth of all the G7 economies this year with real GDP growing just 1.2 percent (only Italy s forecast growth is worse). If we adjust for population growth our real GDP per capita is falling, and we are actually the worst of the G7. According to Statistics Canada, average productivity (which many economists consider the most fundamental measure of economic efficiency) in Canada s business sector has declined since Harper took office in January 2006. Do you believe that Canada s economic fundamentals today are as solid as the Rock of Gibraltar? What is the fundamental purpose of the economy, if not to produce more goods and services, as efficiently as possible? With falling real output and declining productivity, how are Canada s economic fundamentals strong?
On The Canadian Dollar On January 29, 2008, Finance Minister Jim Flaherty said this: "The Bank of Canada has targeted a range of 95 to 98 cents or so for the dollar, and that remains the target of the Bank of Canada, which we support. Apparently the Harper government officially supports a Canadian dollar near to par with the U.S. dollar. Yet according to international organizations (like the Organization for Economic Cooperation and Development), the true fair value (based on purchasing power) of the Canadian dollar should be about 80 cents (U.S.). With our dollar therefore about 25% above its fair value, Canadian products (especially manufactured goods) are too expensive to foreign buyers. That s largely why we ve lost 200,000 manufacturing jobs during Harper s term in office, and why our trade balance (for everything other than petroleum) has deteriorated dramatically. Do you believe that the Finance Minister should endorse a particular trading range for the Canadian dollar that is close to par with the U.S. dollar? How can Canadian products compete in international markets when an inflated currency has artificially increased their costs by 25%? On Workers and The Auto Industry On February 20, 2008, Finance Minister Jim Flaherty said this: "These Band-Aids for individual companies, it's picking winners and losers. Governments aren't good at that." In Windsor on September 4 (three days before calling the federal election), while announcing $80 million over 5 years in financial support for a Ford Canada investment, Prime Minister Stephen Harper said this: "This is not money that is being thrown around on the eve of an election. For two-and-a-half years, the Harper government stated it was wrong to provide targeted aid to support key industries, companies, or projects, no matter how important their operations in Canada are to our overall economy. Then, with the election about to be called, the Harper government announced important (and badly-needed) support for major investments undertaken by Ford, General Motors, Bombardier, and others.
Which policy will the Harper government adopt toward supporting key industries, if it wins re-election on October 14? The policy of not picking winners that it followed for all but one week of its term in office? Or the policy of supporting key industries and investments, that it followed during its last week in office? Manufacturing Jobs On September 16, 2007, Finance Minister Jim Flaherty said this: We're seeing a lot of resilience in Canadian manufacturing businesses. Since the Harper government was elected in January 2006, 200,000 manufacturing jobs have disappeared from Canada. That s the loss of 200 jobs (or one medium-sized factory) every day. Dozens of plants have closed. Real GDP in manufacturing has declined in 7 of 9 quarters (three-month periods) since the 2006 election and has now fallen by 9 percent in total. And Canada s manufacturing trade deficit has more than tripled in just three years, from $16 billion in 2005 to over $50 billion this year. Do you think Canada s manufacturing industry is crisis? How do you define resilience? Do you think that manufacturing has any special importance in Canada s economy, or are other sectors just as important? Unemployment Insurance Canada s unemployment insurance system is supposed to be there for us when we need it. Every week we contribute to EI in our pay cheques. But only 41% of unemployed Canadians are receiving EI benefits at any given moment. The rest either didn t qualify in the first place or their benefits ran out. EI benefits are also at an all-time low, just 55% of normal earnings. Your government only wants to talk about its new EI financing board. But it s the government s failure to change the EI Act that concerns working people. With so many layoffs and closures, the sorry situation with EI benefits is hurting families as well as entire communities. Why hasn t the Conservative government committed to necessary changes in the EI Act, including: A reduction in the number of hours to qualify for EI? An increase in EI benefits and an end to deducting severance pay? An increase in the number of benefit weeks?
Bankruptcy Laws Our bankruptcy laws send workers to the back of the bus when an employer declares bankruptcy or is put into receivership. We re deprived of severance pay and other benefits that are owed to us. Even the new federal Wage Earner Protection Program excludes severance and benefits and has a limit of about $3,000 for unpaid wages. Studies show that workers receive, on average, only 13 for each $1 owed. And 75% of workers receive nothing at all for their labour. Workers should come first. We re not ordinary creditors like banks. During this election campaign, will Stephen Harper and the Conservatives commit now to introduce the following reforms: 1. A new Super-Priority in the Bankruptcy Act for all wages, vacation pay, termination pay, benefit premiums and severance owing workers? 2. A second Wage Earner Protection Program to cover entitlements that are not currently covered during bankruptcies (like termination pay, benefits and severance)? 3. A new federal Pension Guarantee Fund to fund all pension contributions required upon bankruptcy? On the Federal Budget On March 11, 2008, Jim Flaherty said this: "Our government told Canadians we would maintain a balanced budget and we intend to keep our word. From fiscal 2000-01 through fiscal 2007-08, the federal government ran large annual surpluses that averaged $10.3 billion per year. However, for the current fiscal year, Jim Flaherty had predicted a surplus of $2.3 billion, and for next year just $1.3 billion. This means the federal surplus has declined by over 80 percent, compared to the levels that prevailed earlier this decade. If Canada s economic growth does not match federal expectations (the government predicted real GDP growth of 1.7 percent in 2008 and 2.4 percent in 2009 neither of which is likely), then the budget balance will be worse. Indeed, the government did slip into deficit during April and May of this year and it could end up in the red for the year as a whole if the economy worsens. By allocating almost all of its spare fiscal room to tax cuts (including corporate tax cuts that will cost almost $15 billion per year when fully phased in by 2012), the government has left no room for contingency in its budget, and created a significant risk of future deficits. But if the government encounters a deficit problem, Mr. Flaherty indicated he will cut spending, not restore corporate taxes.
If an economic recession causes a federal budget deficit, which will you preserve: Canada s health care and social programs? Or lower corporate income taxes? On Investing in Ontario On February 29, 2008, Finance Minister Jim Flaherty said this: "If you're going to make a new business investment in Canada, and you're concerned about taxes, the last place you will go is the province of Ontario." In most countries, the Finance Minister does everything in his or her power to win new investment. In Canada, to score partisan points, our Finance Minister actually discourages investment. He made these comments at the same time as suggesting that if Ontario had cut its corporate income tax rates (as he did with federal rates cutting them by about one-third by 2012) then the province s manufacturing sector would not be in trouble. When a company is losing money, a reduction in its income tax rate actually hurts it because it s after-tax loss is larger than it otherwise would have been. Do you believe that the Finance Minister should publicly discourage companies from investing in Ontario? Can you explain how a corporate income tax reduction provides any benefit to companies (like the major North American auto companies) which do not have positive profits and hence do not pay income taxes? On Health Care During their campaign leading up to the 2006 election, the Harper Conservatives promised a Patient Wait Time Guarantee. Yet since then, they ve failed to work with the provinces to provide timely care. The 2002 report of the Romanow Commission set out a series of recommendations calling on the federal government to increase its share of health funding to cover 25 per cent of public health services, with a mechanism to ensure funding would keep pace with economic growth. As well, the 2003 First Ministers Health Accord outlined a program to improve rural and Aboriginal health care, by setting up specialized funds to attract health care professionals and ensure consistent, sustainable care.
Why hasn t the Harper government moved forward (in any meaningful way) on any of the recommendations of the Romanow Commission or the action plan set out in the First Ministers Accord, despite major criticisms levied by the Health Council of Canada and the House of Commons Standing Committee on Health? On Foreign Policy The Harper government had promised Canadians that they would raise foreign aid spending to the OECD country average by 2010 (of 0.42% of gross national income), and would be more generous in spending than the previous Martin government. In 2007, despite an 8% increase, Canada s foreign aid spending under Harper stood at 0.33% and actually fell in 2008 to 0.28%, ranking us 16 th out of 22 OECD nations. Why has Canada s foreign aid fallen embarrassingly under the Harper government, effectively breaking the government s own promise to do otherwise? The people of Africa are desperately seeking help from the world to end severe poverty, hunger and disease. Why has Stephen Harper shifted Canada s aid priorities away from the African continent? On Poverty Recent statistics show that 3.4 million Canadians (about 1 in 10) live in poverty, which includes 750,000 children and youth. Statistics Canada and OECD reports indicate that Canada s overall poverty rate is worse than in 18 other industrial economies. In terms of social spending (one of the key components to a poverty reduction strategy) Canada ranks 25th among 30 industrial economies. The living conditions in many First Nations communities in Canada are appalling. Today, more than 100 reserves remain under boil-water advisories and one in every 30 homes has no running water. Rather than provide the necessary investment dollars to improve these conditions, the Harper government effectively squashed the landmark $5 billion Kelowna Accord Why hasn t the Harper government committed resources to develop a comprehensive national poverty reduction strategy with clear targets and timelines?
Why hasn t the Harper government addressed the deplorable living conditions for Aboriginal peoples and provided the necessary funds in a timely manner, when they are so desperately needed? On the Environment Canada is one of the worst polluters in the world, relative to its population. Steven Harper has been outspoken about his opposition to Canada s participation in Kyoto and successfully tore Canada away from the international agreement. Instead of developing strategies that promote wholesale investment in our economy to create new green jobs the Harper government continues to promote the heavily-polluting tar sands industry in Western Canada as the key source of future economic growth. Why has the Harper government torn Canada away from the Kyoto Protocol and its greenhouse gas emissions reduction targets, despite the fact that 36 other industrialized countries (including the EU) have committed to work toward Kyoto s goals? Why has the Harper government chosen to implement intensity-based emission reduction targets for major industrial polluters, when evidence suggests that even by meeting these intensity targets greenhouse gas emissions can actually increase? Does he still believe that climate change is merely a socialist scheme? On Equality The Harper government cut the operating budget of the Status of Women by 40 percent, effectively forcing the organization to close 12 of its 16 regional offices. The Harper government even removed the word equality from the organizations mandate. The Harper government also cancelled the planned universal child care system that was initiated by the previous government, which would have ensured all Canadian families enjoyed the benefits of free, accessible public child care. Why would Stephen Harper cut and slash the budget of an important public organization designed to promote women s economic, social, political and legal equality? What are the results of Stephen Harper s child care plan so far? Has it provided Canadian families with free, accessible child care? AD/jwcope343