Federal Budget Again Fails Workers Hurt By Economic Crisis

January 27, 2009, 5:30 PM EST

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The federal government's refusal to address the shortfalls of Employment Insurance in the January 27 budget is a slap in the face to hundreds of thousands of unemployed workers, said CAW President Ken Lewenza. "Temporarily extending the benefit period by a mere five weeks is not enough to fix the crisis faced by unemployed workers."

"The bigger problem is that most unemployed workers can't qualify for benefits and this budget does nothing to change that."

Only two months ago the Harper Conservatives were claiming that Canada could avoid a recession and balance the federal books, but the sudden about-face, as demonstrated by the budget, is a consequence of pressure from the unified opposition coalition and a public concerned about the growing economic crisis, said Lewenza.

"They have reluctantly admitted the need for government to inject billions of new public investment into our struggling economy and training supports for unemployed workers," Lewenza said.

"We've wasted two months since then - two months when the government could have been acting," Lewenza said. "The Conservatives have still not admitted responsibility for the huge economic and political error they made in November."

The deficits outlined by Finance Minister Jim Flaherty over the next two fiscal years amount to less than two per cent of Canada's GDP, which is smaller than other countries were experiencing, even before the onslaught of this recession. By comparison the U.S. deficit this year will equal close to nine per cent of GDP.

"How long are the Harper Conservatives willing to provide the stimulus needed to get our economy moving forward again?" Lewenza asked. "We're likely to need support from new government spending measures for three to five years, unlike their plan which pulls back spending after just a year or two."

A major mistake is the decision to devote $20 billion in funds over six years to a permanent personal income tax cut - which almost does nothing to stimulate the economy during a recession, said CAW Economist Jim Stanford.

"People tend to save most or all of their tax refund, rather than spending it," Stanford said. "Also tax cuts do nothing to help people who have lost their jobs - since they will pay little, if any tax at all. Assistance should be focused on the hundreds of thousands of workers who have lost their jobs and who need help the most."

This budget also did nothing to help those people who have lost tens of thousands of dollars in retirement savings, said Lewenza. "The government must come up with a strategy to help Canadians who had their savings suddenly evaporate when the markets crashed this past fall. There is an urgent need to increase public pensions so that the country's aging population won't be condemned to poverty."

Lewenza said he was greatly disappointed that the federal government did not include any Canadian-content requirements for the billions in new public spending announcements. He said the failure of the government to enact a Buy Canadian policy will mean that Canadian industry will not reap the maximum benefit from our own infrastructure spending.

With massive military purchases under consideration, the case of the government recently awarding a $254 million contract for 1300 medium duty trucks to be built by Navistar in Texas is an example of why Canadian-content requirements are needed. At the same time, Navistar is laying off hundreds of truck plant workers in Chatham, Lewenza said.

Lewenza called the budget's housing measures, including the funds allocated for renovations and energy retrofits for social housing, new housing for low-income seniors, northern communities and people with disabilities encouraging, yet long overdue. 

The $1 billion for a Green Infrastructure Fund is also a move towards renewing the country's traditional progressive stance on climate change, but still much more must be done to "green" the country's economy as Canada has already fallen behind other industrialized nations, said Lewenza.

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