by Ian Beeching
As its government boasts to the world that Canada has escaped the worst of the 2008 world financial collapse, a sharp economic downturn is taking hold in the country. Its most visible expression is a sharp rise in unemployment as factory and natural resource production drops. Now, cuts to government spending on social programs, and sharp hikes in the share of taxes paid by working people, are rearing their heads.
The ten provincial governments in Canada have the primary responsibility for delivering social programs. Three of the most prosperous – British Columbia, Alberta and Ontario – are staring at record or near-record budget deficits for fiscal 2009-10. As tax revenues drop like a stone, they are turning to spending cuts, and the pace of those cuts will accelerate in coming months. These have already provoked angry protests in B.C. over arts funding and in Alberta over health care.
Cuts begin in British Columbia
In its latest budget forecast, announced on September 2, the Liberal Party government in British Columbia announced a $2.8 billion deficit for the coming year, up from $495 million in a pre-election announcement in February. It’s the first time since the party’s first election in 2001 that the government will contradict its dogma that running a government deficit is akin to inviting the Devil to dine. Economic output is predicted to decline by 2.9 per cent over the next year and unemployment is projected to rise to 8.3 per cent, double the rate of 2008.
The budget outlines cuts in social services, including some $360 million in health care, and the introduction of a new sales tax regime that would “harmonize” the 7 per cent provincial sales tax with the 5 per cent federal Goods and Services Tax. The new tax gives major breaks to big business but adds to the tax burden on consumers. A wage freeze on public sector employees was announced.
Despite the budget shortfalls, the government is pressing forward with massive spending and tax relief projects that amount to giveaways to construction, tourism and mining industries. Among these are the 2010 Winter Olympics and related infrastructure projects and policing expenses, totalling several billions of dollars; expansion of coal, oil and gas extraction and hard-rock mining projects worth billions; and a multi-billion dollar road and rail expansion in the Vancouver region.
Artists speak out
Arts companies and organizations are seeing their funding cut in half, from $47.8 million this year to $23.1 million next year. Other, general, arts funding will be cut from $19.5-million in 2008-09 to $2.25-million in 2010-11 and $2.2-million in 2011-12. Many arts organizations traditionally funded by casino levies could be getting millions less. No other province in Canada has cut the arts so deeply.
The Alliance for Arts and Culture held an angry protest meeting on the day the budget was announced with some 300 to 400 artists present. Strategies on how to react to the cuts were debated for more than two hours. Many in the arts community are urging a boycott of performing at the Olympics.
A rally was held on September 9 at the Vancouver Art Gallery attended by more than one thousand people, many dressed in sombre grey.
Greenwashing taking a hit
The Campbell government has been falsely painted by many mainstream environmental groups as committed to environmental enhancement. Most of that praise comes by virtue of a two cent per litre gasoline tax, a so-called “carbon tax,” introduced in 2008. These groups are now questioning their appraisal.
One reason is that the Ministry of Environment budget has been cut from $225-million in 2008-09 to $184-million by 2012. Another is that industries responsible for massive expansions in carbon emissions, including present and future oil, coal and gas development in the southeast and northeast of the province, continue to benefit from huge tax breaks and subsidies. A proposed natural gas development in a pristine area in the mountainous southeast of the province has stirred up significant protest by environmentalists and state governments in the northwest United States
Eighteen million dollars has been cut from a fund intended to deal with the infestation of beetles that has devastated the province’s vast pine forests and is caused by rising winter temperatures.
In the lucrative salmon fishery on the Fraser River, the world’s largest salmon fishery, this year’s sockeye species has suffered a catastrophic decline. More than ten million adult fish were expected to make the return to the river’s spawning grounds; just over one million arrived, forcing a cancellation of the fishery. The decline is strongly linked to the provincial and federal governments’ forestry policies causing deforestation and destruction of salmon habitat, their promotion of destructive urban development, and the proliferation of polluting salmon farms along the province’s coastline.
The public transit authority in the Vancouver region faces growing demands for services but has been denied the funding it needs. At the governments’ direction, it sank $2 billion into a new rapid transit line that will serve the Olympic Games and profit real estate developers but serve only a small percentage of the region’s population. The majority of residents have poor or non-existent transit service while fares are rising sharply and the government sinks billions into roads.
“We’ve all taken some pain in this budget, but I’m a bit shocked by the cuts,” said Jeffrey Young from the David Suzuki Foundation, a well-known environmental group that has become infamous for supporting the provincial government’s greenwashing policies.
Students have plenty of reason to be angered with the budget and the state of education in the province. By the year 2011, more will be paid by students in post secondary tuition–$1.14 billion– than in corporate income tax–$1.038 billion. That’s a dramatic turnaround in the tax regime. The budget also implemented a $17 million cut to student aid.
The government has eliminated $110 million in expected grants intended for repairing schools. According to Connie Denesiuk, president of the British Columbia School Trustees Association, school districts will face “staff layoffs of carpenters, electricians, painters and so on. It’s going to be difficult to get some of these people back again.”
With student debt already in the billions, the cuts impact accessibility to training required for an economy that is already short of nurses, doctors and other trained professions and trades.
Health care faces the axe
In August, Health Minister Kevin Falcon told health authorities to cut $360 million from their budgets. The Fraser Health Authority, serving the suburbs of Burnaby, New Westminster and the Fraser valley, is facing a budget shortfall of $160 million. Health authorities are suggesting reductions in “elective” surgeries in fiscal 2009-2010 in the order of 10% to 15%.
The Interior Health authority (interior regions of the province) has a shortfall of $28 million in its administration and support budget and it could soon face a further $12 million shortfall for surgeries, resulting in cutting or postponing elective surgeries, CT scans, MRIs and other diagnostic procedures.
A recent report from Vancouver Coastal Health Authority (Vancouver region) outlined potential closing of 13.5 operating rooms between now and March 2010; postponing 5,800 surgeries in areas such as neurosurgery, vascular surgery, ortho trauma, ophthalmology and general surgery; reducing operating-room and hospital-ward staff by an estimated 112 full-time-equivalent jobs; and cutting 13 anaesthesiology positions.
The government is cutting $1 million in grants to community organizations for seniors’ day care programs, $450,000 from programs to assist isolated seniors, and $450,000 from mental health and addiction grants, including supports to victim of abuse.
“We know that on the front lines, we are losing jobs and we are losing services,” Debra McPherson, president of the British Columbia Nurses Union, said in Victoria. “We are losing services for frail seniors that would allow them to stay longer in their homes. We are losing public health nurses on the eve of an H1N1 epidemic and mass immunization drive.”
To meet the budget shortfall, the recent budget announced a six per cent increase in the monthly Medical Services Plan fees that income earners must pay. B.C. is the only province that still collects this regressive tax.
According to Judy Darcy, head of the Hospital Employees’ Union, a projected increase in some areas of health care spending will be less than required to meet demands: “It means longer wait times for surgeries, it means seniors’ programs are cut, services like labs and diagnostics are all facing budget cuts – that is going to have a direct impact on the quality of patient care.”
Higher sales tax
The provincial government has moved to harmonize its sales tax with Ottawa’s Goods and Services Tax, creating a new, so-called Harmonized Sales Tax (HST). As a result, businesses will pay $2-billion less in taxes while items that were not taxed under the outgoing provincial sales tax will now be paid under the HST. These include household utilities, vitamins, over-the-counter drugs, taxis, restaurant meals and haircuts. Seniors and low income families will be hit the hardest.
Agencies that run care homes for the elderly say the HST will increase their costs by more than $10 million. It will also add thousands of dollars to the already outrageous cost of buying a house.
Anti-HST rallies were held in some 19 cities on September 19. About 1,000 people rallied outside the Trade and Convention Centre in Vancouver. With over 80 per cent of the province opposed to the new tax, the rallies have included participants from across the political spectrum.
Added pressure on working people is coming from blackmailing by paper and other forestry manufacturers in seven towns in the interior of the province. They are refusing to pay tens of millions of dollars in municipal taxes, potentially crippling the vital services that municipalities provide. The companies want sharp reductions in the taxes they pay.
Challenge facing the labour movement
The September budget marks only the beginning of a new round of sustained attacks on the social wage. The government has loads of experience in such attacks. It will roll them out in bits and pieces over the coming months so as to better blunt and divide anticipated opposition. This presents a considerable challenge and responsibility on the trade unions.
One of the first lines of defence against deepening cuts to the social wage is the unions. What’s more, the unions should be at the forefront of struggles to tackle rising unemployment, poverty-level minimum wage and welfare rates, and the ongoing degradation of the environment. Are they up to the task?
The last serious challenge to the government was the 2005 teachers strike. That ended in a victory for teachers and public education. But strikes have been rare in BC in recent years, and victories even rarer. Far more consequential than the teachers’ strike was the defeat of the hospital workers strike in 2004. There, a broad movement towards a general strike in support of the 40,000 striking health care workers was cut short by a panicked BC Federation of Labour and its political affiliate, the New Democratic Party.
Since 2004, the union movement has simply lost much of its will and capacity to fight. One glaring manifestation of that is the disgraceful minimum wage-it has sat frozen at $8 per hour since 2001 and is now the lowest in Canada.
Civil liberties groups are decrying the police-state apparatus and policies being assembled for the 2010 Winter Olympic Games, and social rights groups contrast the lavish spending on the Olympics with cuts to education and health care. Many are preparing energetic protests against the Games in the face of threats of arrests and extreme repression. The unions, the NDP and “progressive” municipal parties are deeply compromised in their capacity to champion these issues because they supported the Games from the get go. In fact, it was the pre-2001 NDP government that initiated the bid for the Games.
The labour movement and other social activists could learn a thing or two from the resistance of Indigenous peoples to the Liberal assault. For several years, the provincial and federal governments have been promoting a “Recognition and Reconciliation Act” that aimed to abolish land ownership and other rights of self determination of the approximately 200,000 Indigenous peoples in the province.
In exchange for abolition of Aboriginal title, Indigenous governing authorities would be granted powers equivalent to those of municipal governments. Meanwhile, Indigenous organizations and leaders would gain a slice of revenue from mining and other natural resource projects. The Liberals hoped this deal would be a green light to projects that are presently stalled by the uncertainties surrounding existing or future Indigenous land claims and other social rights.
The proposed act was dropped earlier this year when Indigenous leaders supporting it ran into a solid wall of opposition as they tried to sell it in their communities.