USW Canada: APRIL 2006 - Brief Submitted to the 2006-07 Pre-Budget Consultations

We are pleased to have the opportunity to present our perspectives in this year’s budget on behalf of the 280,000 men and women who belong to the United Steelworkers in Canada. Because the political cycle this year has interrupted the budget cycle, this is actually our second opportunity to be consulted on the 2006-07 federal budget. Although the political context is now very different, the economic challenges facing the country are much the same now as they were a few months ago, so we will take the opportunity to re-emphasize some of the points we made in a submission to the House of Commons Standing Committee on Finance. Our full brief can be found on the Steelworkers website,

You ask about our expectations for the government’s first budget. They are to some degree optimistic. We are hopeful that the government will demonstrate the capacity to address the economic and fiscal realities of Canada as they are, rather than attempt to force reality into the campaign-based strictures of five ideological priorities. In particular, our members are painfully aware that the current economic boom in commodities, finance and construction co-exists with near crisis conditions in manufacturing and forest products. The recent waves of lost jobs in these areas, stemming in large part from rising and volatile power rates and exchange rates, threaten to be just the beginning of the tsunami if the federal and provincial governments do not commit themselves to decisive action.

The Steelworkers are strong believers in focused sectoral strategies that can harness the energies of government, business, labour and communities to improve our economy. We are very pleased to be part of the Canadian Steel Partnership Council, announced last year as a forum where we can all work together to ensure the sustainability of this strategic industry. This approach has worked well in the auto industry, where companies, governments, labour and other stakeholders have been very effective in building support for productive new investments.

We would like to see the same kind of approach in many other sectors of the economy, but perhaps the most urgent case is the forest products industry. We don’t need to belabor the challenges on this front, including arrogant disregard of treaty commitments by our largest trading partner, skyrocketing energy prices, ineffective governments and marauding insects. A sectoral strategy for forest products won’t solve all these problems, but it’s essential if we are to find a way to restore health to one of the industries that Canada’s prosperity is founded upon.

While the government makes sure that companies who provide manufacturing jobs in Canada have an opportunity to prosper, it is also important to strengthen measures to guarantee corporate accountability. Whatever benefits are under consideration must be fully transparent and must be strictly conditional on actually achieving targets relevant to the goals, such as creating high-paying jobs, developing innovative products or delivering benefits to the community. In a wider sense, new laws are needed to ensure that the companies making profits in Canada also invest in Canada in such areas as plant and equipment, worker training, environmental control and research and development.

Other steps the government could take in response to this crisis include:

Reforming the Canadian International Trade Tribunal to give a role for workers and communities in a process now dominated by corporations.

Overhauling pension regulations to improve retirement security for workers whose companies hit financial troubles, including creation of a federal Pension Benefit Guarantee Fund.

Increasing the federal minimum wage.

The new government is drafting its first budget in a remarkably positive fiscal context. The federal budget has been swimming in surplus in recent years, and the current situation provides no excuse for failing to follow through with creation of a national child care and early learning system. The long awaited move to a make high quality, developmental child care a practical reality available to parents everywhere in Canada should be a high priority of the federal budget. As to the government’s campaign commitment to provide direct support for families with young children, this could best be accomplished by increasing the existing child tax benefits, which focuses the help on those who need it most. In any case, taking action on this direct assistance need not and should not imply reneging on the federal government’s commitment to enable creation of child care spaces.

There is an urgent need to expand federal training initiatives to ensure that workers can upgrade their skills or, if necessary, retrain for new jobs in ways that help create full employment and more prosperous communities everywhere in Canada. It would also be timely in this year’s budget to take concrete action to protect the retirement security of Canada’s workers. The federal Finance Department has been consulting on ways to improve pension protection. We continue to advocate strongly for creation of a federal Pension Benefit Guarantee Fund, as has already been done in Ontario and the United States, to step in when pensions are at risk in corporate bankruptcies.

This budget should also see effective action taken towards meeting Canada’s treaty commitments to reduce greenhouse gases under the Kyoto accord. The previous government’s feeble record should be a reason to accelerate Canada’s initiatives, not scale them back or abandon the goal.

Another area in which the previous Liberal government failed to deliver on promises and expectations is Overseas Development Assistance. The United Steelworkers, through our Humanity Fund established in 1985, are proud of our leadership role in promoting global economic and social justice. Several other trade unions have joined us in creating similar funds, which have worked co-operatively with each other and with the federal government on overseas development. It is time for Canada to commit to achieving the target of 0.7% of its GDP devoted to ODA.

The minister asks in his letter announcing the pre-budget consultations for ways the government can spend less or deliver programs in a more efficient and effective way. The best single step the government could take in this respect would be to abandon the drive to squeeze private profits out of more and more government services.

This issue is most sensitive in health care, where proponents of private-sector investment, private-sector management or sometimes private payment for services threaten the foundations of our publicly provided, publicly administered, single-payer system, of which Canadians are justifiably proud and protective. The government is no doubt aware of how unpopular it would be to promote greater private profit in health care. But it also should take note of accumulating evidence that this would also be more costly and produce less favourable health outcomes. We applaud the new government’s commitment to reduce waiting lists for vital health services. But this must not be used as an excuse to allow new private health clinics or other increased private sector involvement in the health sector.

Under the previous Liberal government, promotion of public-private partnerships extended far beyond the health sector. If the new minister is looking to cut wasteful spending, he could do no better than to halt the government’s efforts to push the P3 model, especially in the area of public infrastructure. Expanding P3s would increase costs to cover profit margins, shield in secrecy a great deal of information about projects that ought to be in the public domain, scrub future obligations that are just like debt from the fiscal books to make governments look more prudent than they are, and create many more opportunities for corruption. Halting this trend would be an excellent step in the right direction.