The federal budget is coming down on Tuesday, January 27th, and I have something to say about it! I hosted a budget consultation in my riding with community groups and asked for their feedback and priorities to help
stimulate our economy. I’m including a summary for your information.
One overwhelming concern that emerged, not surprisingly, is the need for affordable housing. I subsequently hosted a press conference on this critical issue, to demand that the federal government give specific priority to a national housing program. The federal government must meaningfully address the travesty of homelessness, and dearth of affordable housing, in
Canada, a crisis that exposes a deep social injustice in one of the richest countries in the world.
Libby Davies, MP (Vancouver East)
Summary Report of Vancouver East Federal Budget Consultations (January 2009)
Prepared by the office of Libby Davies, MP
I. KEY PRINCIPLES
* All participants agreed on the centrality of accountability as a guiding
principle of any federal economic stimulus package.
* Of central importance was accountability on the spending of federal transfers to provinces (i.e. many participants suggested specific, accountable targets on housing, childcare, etc., rather than simply “transparency in reporting”).
* Provinces, municipalities should not be allowed to “claw back” new transfers (i.e. don’t use new federal money to displace existing funding – new federal money should be in addition to existing provincial and municipal commitments and funding levels).
* Participants generally agreed on a bigger role for cities. When feasible, increased direct transfers to municipalities can be a way to avoid pitfalls of any relationship with the provinces (i.e. provinces rolling transfers into general revenues, jurisdictional haggling, etc).
* A commitment to public ownership and non-profit operations of facilities and equipment purchased with federal transfers.
* Any government financial support to the private sector must be used in socially, fiscally and environmentally responsible ways, and these transfers must have clear oversight, targets and accountability. People want
assurances that public money won’t go to fattening executive salaries and benefits, or encouraging environmentally unsound production.
Social Infrastructure should be supported just as much as physical infrastructure
* The definition of infrastructure should be broadened to include social infrastructure, such as childcare and housing, and make efforts to protect and create jobs in those sectors. There’s an important gender dimension to
this, as a focus exclusively on physical infrastructure tends to have most impact in economic sectors with predominantly male workers.
* Any stimulus package should have specific policies aimed at helping youth and women, who are often “last hired and first fired” in an economic downturn.
* Investment in non-profits, co-ops, community economic development, volunteer and community social service agencies should be part of any stimulus package. Jobs and services in these sectors actually account for a
significant proportion of Canada’s GDP, and increased capacity in these sectors has significant long term benefits in improving the quality of life, social cohesion and health indicators in local communities. Many of these organisations will likely be facing revenue shortfalls as private donations decrease because of the recession.
* A childcare program would directly create jobs for women, and also allow more women to enter and remain in workforce.
Balance between immediate and longer term stimuli
* There was broad consensus on the need for a balance between immediate economic stimulus (often through increased allocations through already existing programs) and longer-term projects (like new housing, infrastructure construction, etc). While larger scale projects are a necessary component of an effective stimulus plan to deal with what could be long recession, lengthy start-up times for these types of projects mean that they don’t do much to help people in the short term.
Little support for broad tax cuts, but some support for specific targeted tax incentives for job creation
* The consensus from most respondents was that across the board tax cuts don’t benefit those who most need help right now, and simultaneously reduce the government’s capacity to take action. Social and physical infrastructure spending were considered by most participants to be superior forms of economic stimuli.
II. POLICY THEMES AND RECCOMMENDATIONS
* There was almost universal support from seniors, women’s organisations, anti-poverty groups, youth agencies, labour, and evens some business respondents etc. for a large scale, well funded national housing program to increase the overall supply of affordable housing in Canada. Housing supply, affordability and homelessness are at crisis levels in Vancouver and other
centres across Canada, and construction of housing could also create good jobs in construction and forestry sectors. Over the long term, investment in housing construction is likely the most cost effective stimulus available. Studies in US context suggest that every $1 spent on construction adds an additional $2.70 to the overall economy.
* CMHC should be allowed to extend its program of direct, low-interest loans to co-ops and social housing projects. This is a simple, revenue-neutral
change that requires no provincial negotiations, and will allow for protection and improvement (even increased capacity) of existing affordable
housing stock. For example, leaky co-ops in BC facing expensive building envelope repairs are currently potentially being pushed into bankruptcy or
having to reduce number of subsidized suites to finance mortgage costs of redevelopment/repairs/renovations. The renewal of existing direct loans from CMHC would allow co-ops to borrow at a lower rate (potentially cutting
repayment costs by 50%), making repairs economically viable and reducing pressure on co-ops to eliminate subsidized suites. The Cooperative Housing Federation says some Conservative MPs seemed receptive to this idea at recent hearings of finance committee.
* A continuum of housing is needed, ranging from shelter beds, to supported housing, to independent living, to co-ops and subsidized social/family housing. BC provincial government focus right now seems skewed towards providing for the needs of those at most desperate end of spectrum (such as shelter beds and very small units for people with very serious health & addiction problems), leaving a vacuum in provision of new affordable housing for the working poor, families, seniors, etc. Increased support for wider range of social and affordable housing would work as a preventive
measure, helping people before they end up in desperate situations on the street and in need of shelter beds. The lack of affordable options right now means that even some working poor are turning to shelter beds.
* A number of groups consulted suggested tax and regulatory incentives for private sector construction of affordable rental housing, in order to increase supply and affordability. Some also suggested regulatory and tax change to discourage forms of property speculation that make housing unaffordable in urban centres.
* There was broad support for green housing retrofit programs, including the specific proposal of a revolving $30 million fund (probably managed by CMHC)
for green retrofits of housing co-ops.
* Legislate mandatory CMHC/financial sector reinvestment in community/housing (apparently there are programs like this in some US jurisdictions), and develop programs to help homeowners prevent foreclosures.
* Increase federal funding of the existing Youth Skills Link program, from current level of $131 million to $200 million. This successful, already in place program helps train youth at risk, increase labour force attachment
and prevent homelessness and associated social and economic costs of problems associated with poverty and unemployment.
* Increased funding for free/affordable education and training can be a productive way to help people through period of increased unemployment, and position them to benefit from opportunities as economy recovers.
* Investment in public transit was widely supported, with the caveat that support should focus on efficiency, environmental sustainability and affordability for users, including youth and low-income people. Large scale, expensive projects, like Skytrain lines, don’t always produce maximum benefits for majority of transit users, which should be the key determinant
of decision making on transit projects.
* There was almost universal support for a national childcare program. Canada is at the bottom of OECD rankings for childcare provision. Childcare
needs to be treated as essential building block of social and economic infrastructure, not as a non-essential ‘social service’ that can be delayed
* There was general support at our consultation forum for the Child Care Advocacy Association of Canada’s recommendation that the 2009 budget should commit up to $2.2 billion to provinces and territories for child care capital expansion and operating support that meets criteria of 2003 Multilateral Framework on Early Learning and Childcare. There was also support for CCAAC’s additional principles around accountability, quality, inclusivity and public ownership and operation as criteria for provincial receipt of federal transfers.
* A national childcare program should not focus exclusively on numbers of childcare spaces, but should also prioritise affordability to parents, adequate wages for child care workers and stable funding to ensure the
long-term viability of the program.
•An increase is needed in Guaranteed Income Supplement (GIS), with no clawback from provincial programs. This would be one step in addressing the growing problem of poverty amongst seniors. Some seniors have lost up to 40% of their private pensions.
* There is an urgent need for increased provision of specific social and affordable housing for seniors. Affordability in Vancouver and elsewhere in BC is a major problem, and there are problems with units in formerly seniors-only social housing being re-allocated to younger “hard to house” people with mental health and addiction problems. This has sometimes led to safety and quality of life concerns for seniors.
Arts and Culture
* Arts and culture can play an important role in an economic stimulus plan, especially in centres like Vancouver where large numbers of people are employed in arts and cultural sectors. Spending on arts and culture can also improve the quality of life in urban centres, and provide indirect stimulus to other sectors of the economy.
* Restore arts and culture funding cut by the federal government last year, including funding to PromArt and Trade Routes programs. PromArt and Trade Routes were relatively inexpensive programs that helped artists, musicians and other Canadian cultural producers tour and develop new overseas markets
for their products.
* Youth employment programs in arts and culture sector can help reduce youth unemployment, as well as provide skills, training opportunities and opportunities for students to earn money for post-secondary education.
* Increase transfers to municipalities for arts/culture funding.
* The arts sector could benefit from tax incentives for artist incomes (for example income averaging), and also increased tax breaks for arts and culture patronage by donors and foundations (i.e. donations to museums,
foundations, public art projects, etc.).
Forestry and manufacturing
* The Canadian forestry sector (and also construction trades) could be stimulated through large scale public purchasing of Canadian softwood lumber, wood and paper products for use in public housing, infrastructure
and other public projects.
* Support for private sector industries should be conditional on innovation and restructuring of industry around environmental priorities. For example,low emissions, increased fuel efficiency, and development of alternative fuel technologies should be required for federal support of the auto industry.
* The BC shipbuilding sector could benefit from lengthened loan terms and changes in the calculation of depreciation rates on ships. These changes could act as incentives for increased private investment in Canadian
* Expand eligibility, lengthen benefit periods and increase EI linked training opportunities. For too long, EI premiums have been diverted away from workers and funnelled off into general government revenues.
* Women have been particularly hurt by the federal government’s misuse of EI funds, with only a small percentage of women receiving EI when they need it. EI funds could be used to support specific training and employment programs for women and youth, who are likely to be disproportionately affected by the economic downturn.