Alternative Federal Budget would lift 855,000 Canadians out of poverty

Think tank calls on feds to alleviate income inequality, not make it worse
February 5, 2014

OTTAWA— The Canadian Centre for Policy Alternatives (CCPA) warns a so-called “do-nothing” federal budget is anything but, and is likely to worsen Canada’s slowing economy.

The CCPA’s 2014 Alternative Federal Budget (AFB) shows what the federal government could do if it decided to seriously address Canadians’ largest social, economic, and environmental concerns. It delivers a plan that would lift 855,000 Canadians out of poverty, reduce income inequality, boost the economy, lower unemployment to 5.4%—and still balance the budget one year later than the federal government plan.

“The labour market is much weaker than the federal government would like us to believe. In fact, only one in five of those who came off unemployment rolls since September 2009 found a job, and four of five gave up looking,” says David Macdonald, CCPA Senior Economist. “It is time for the federal government to act to drive down income inequality and create the new jobs Canadians need.”

This year’s AFB raises the bar on transparency by providing an analysis of the distributional and poverty impacts of its tax measures—a first for any budget. Under the AFB:

  • The poverty rate for seniors would drop by 46% and child poverty by 26%.
  • The bottom 60% of Canadian families will see improved incomes from the AFB’s tax measures.
  • Upper-middle class families would see tax increases of under 2% of their family income.
  • The top 5% of families would see the largest tax increases (6% of their family income) as tax loopholes used by the rich are closed.

“Reducing inequality is not only possible, doing so would boost the economy from the bottom up,” says CCPA Senior Economist Armine Yalnizyan. “Instead, the federal government is pledging to increase inequality by continued cuts to services in 2014, paving the way for tax cuts, such as income splitting, that will provide the greatest benefit to those who need it least.”

Concerns about low inflation and a slowing economy need more than a status quo response. The Alternative Federal Budget shows how the federal government can strike a better balance and deliver substantially improved services for all Canadians through affordable child care, expanded health care, and improved infrastructure while still fighting the deficit.


Alternative Federal Budget 2014: Striking a Better Balance is available on the CCPA website:

For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306, or [email protected]