Federal budget leaves unemployed in the cold

January 27, 2009

OTTAWA -- Today’s federal budget leaves hundreds of thousands of vulnerable Canadians hanging on a very short rope and won’t provide the immediate stimulus our economy needs, says the Canadian Centre for Policy Alternatives (CCPA).

The budget fails to expand Employment Insurance (EI) to ensure laid-off Canadians are eligible for benefits and its infrastructure promises require the provinces and municipalities to match funding -- a condition that will stall many projects.

“This budget is not equal to the challenges facing the country, nor does it live up to the rhetoric of the Throne Speech delivered only 26 hours before which claimed to protect the vulnerable,” says CCPA Senior Economist Marc Lee.

The omission of major EI reforms in the face of massive unemployment stands as its biggest weakness, says CCPA Senior Economist Armine Yalnizyan.

“Canada is facing a potentially massive wave of economic dislocation as out-of-work Canadians turn to an EI system that is not recession ready,” Yalnizyan says. “Six out of 10 Canadians don’t get EI and everyone agrees that’s a problem, but this government inexplicably decided to ignore the problem – and that will lead to disaster for many.”

Broad-based tax cuts are also a problem, says CCPA Analyst David Macdonald.

“Only 5% of today’s budget is actually devoted to tax measures to help vulnerable low income Canadians,” Macdonald says. “In the coming recession, the government will help you adjust the colour palette of your kitchen, but if you’re poor you’ll be on your own.”

The average Canadian will only get a $300 tax break with low-income Canadians receiving a maximum of only $33, Macdonald says.

Finally, the budget injects much needed infrastructure dollars that could be the engine of job creation. But for every dollar spent in federal infrastructure stimulus, provinces and municipalities must pony up 73 cents for the money to flow -- delaying critical job-creating projects that should be stimulating Canada’s economy this year, not next.


For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306