For the third consecutive year, FAFIA has commissioned Armine Yalnizyan to provide a gender based analysis of the federal budget which will be available in the coming weeks. In advance of this, to help our members, partners and friends understand what the implications of this budget are; we have compiled the following responses from a range of sources.

Summary

In 2005, in response to a question asked in the House of Commons regarding the conclusions from FAFIA’s 10-year retrospective federal gender budget analysis, the Finance Minister made a commitment to conducting a gender based analysis of all forthcoming federal budgets. FAFIA understood this to be a commitment on the part of the government. However, there is little evidence that this federal budget was subjected to such a gender analysis during its development. While there are a few measures which will benefit women in this budget (such as the increase to settlement program funding and new monies for the establishment of an accreditation agency), many of the issues that preoccupy millions of women, including access to childcare, skills development and training, as well as income support programs (e.g. social assistance and employment insurance) are not meaningfully addressed in this budget.

In addition, the government has charged the Treasury Board with identifying one billion dollars to be cut from federal spending by the fall of 2006. FAFIA hopes to see the government conduct a gender analysis on these proposed cuts, and any forthcoming cuts, to ensure that women are not disproportionately adversely impacted by them.

Initial Comments from Armine Yalnizyan

“We’re investing in the creation of 23,000 soldiers (on top of the 8,000 Martin invested in) and not one more nurse or daycare worker.”

“[This budget] is actually turning the clock back on the measly progress “women” made through the child care agreement. Aboriginal communities got a bit of a nod (some money for clean water) but Aboriginal women did not. The lack of housing strategy in the welcoming basins for immigrants (Vancouver, Toronto, Montreal) is inexplicable. The biggest spending goes to the military.”

“Employment Insurance remains untouched. The tax breaks on textbooks and student loans, etc. do nothing to offset the soaring costs of tuition. The ‘universal’ children’s allowance provides more money to a stay-at-home mom with a spouse earning six figures than a single parent struggling to provide for the household.”

Highlights

General Spending and Cutting Patterns

• In all, the government is proceeding with over $21 billion in tax cuts over the next two years and only $8 billion in spending. Most of the new spending is going to the Conservative child care benefit, municipal infrastructure, police, defence and security. (Canadian Union of Public Employees - CUPE)
  
  
• The budget goes well beyond the government’s five stated priorities. Instead, it marks a significant retreat from the active leadership needed to create a more equal and caring Canada. (Canadian Labour Congress - CLC)
  
  
• While this budget does give some tax relief, those who will benefit the most are higher income earners. The 1% decrease in the GST amounts to a savings of $300 on a purchase of $30,000. The government states that as a result of their personal income tax and GST reductions, families earning between $15,000 and $30,000 a year will be better off by almost $300 in 2007. Those earning between $45,000 and $60,000 will save almost $650. So the more you have, the more you save; and the more you spend, the more you save. But you have to have in the first place. (National Council of Women)
  
  
• In addition to tax cuts, particularly the many corporate tax cuts contained in the budget, the Conservatives are slowing government spending at a time when the economy is growing. They're also instituting another round of expenditure review, cutting $1-billion in each of the next two fiscal years. (Public Service Alliance of Canada -PSAC)
  
  
• The budget serves up cuts to education, training, research and development, aboriginal Canadians and the environment. There is no new money for cities and communities and only small amounts of additional funding for health care. (CUPE)

Impacts

Access to Legal Aid, Social Assistance and Anti-Violence measures

The Conservative government commits to resolving the “fiscal imbalance” with provinces and territories by devoting additional funding of up to $3.3 billion for provinces and territories to help address immediate pressures in post-secondary education, affordable housing (including Northern and off-reserve Aboriginal housing) and public transit. This is good news, though it is contingent on sufficient funds being available from the 2005–06 surplus. FAFIA encourages the federal government to also support the provinces and territories in the delivery of other essential social services, including legal aid, social assistance, and antiviolence measures, which are key for the realization of women’s full equality. (FAFIA)

Aboriginal Women/Canadians

"According to the Native Women's Association of Canada (NWAC), this federal budget is a confusing change to the mutually developed approaches that were addressed in Kelowna. The government has taken a strong turn in a completely different direction that is leading Aboriginal peoples down a completely unknown course. It is unclear how the cuts in funding to child care, education, water and housing will adversely affect Aboriginal women, who already are the most marginalized population in Canada. The $150 million in 2005/2006 and $300 million in 2007/2008 are inadequate to address all these diverse areas of concern. (NWAC)

"The money allocated to address the critical socio-economic and infrastructure gaps faced by First Nations is more realistically described as a portion of the two-year, $450 million funding commitment that has been earmarked for "Aboriginal Canadians." That money is a drop in the bucket when compared to the $17 billion surplus, and is only a third of the money that had been allocated to improving quality of life for First Nations and other Aboriginal Canadians under the corresponding first two years of the Kelowna targets. (Assembly of First Nations)

Child Care

Working parents who had hoped that the Conservatives would reconsider their position on the creation of new child care spaces will find little relief in this budget. The government is offering only $250 million to create new spaces, fully $4.75 billion less than the previous government had negotiated with the provinces. (PSAC)

In canceling the child care agreements with the provinces, the Harper government took $3.6-billion away from Canadian communities. This funding was to expand early learning and child care options for over 100,000 families; improve access, particularly for low income and rural families and for children with special needs; and enhance intervention services for children at-risk. It was particular vicious of this government to single out aboriginal children for a $25-million cut. (Child Care Advocacy Association of Canada - CCAAC)

Tax breaks and cuts will not build a system of early learning and care. (YWCA)

Immigrant Women/Canadians

As committed, the Right of Permanent Residence Fee drops from $975 to $490, effective immediately. Settlement program funding will rise by $307 million. There is also an allocation of $18 million over a two-year period for the establishment of an agency for the assessment and recognition of foreign credentials that would allow millions of trained newcomers to fully contribute to the productivity and growth of the Canadian economy. (NOIVMWC)

Immigrant women and families will benefit from many of the economic measures announced in the Budget since so many immigrants, both new and even second and third generation families are continuing to live below the poverty line. The actions to support families are much needed and will go towards raising immigrant families standard of living (National Organization of Immigrant and Visible Minority Women of Canada- NOIVMWC).

But some measures in the Federal Budget are not nearly enough to meet the needs of immigrant families, particularly women workers. An extra hundred dollars in the pockets of families to pay for child care is woefully inadequate, and will hardly pay for part time baby sitting services, let alone full time child care for a working family with only one child. (NOIVMWC)

Supports for the Disability Community

In terms of disability measures, there are no investments in disability programs and supports. Without an investment in disability related supports, Canadian women with disAbilities cannot access the necessary supports to get a job, get an education, and participate in community life in Canada for that matter. Women with disabilities in Canada won't benefit from this budget which clearly benefits Canadians with taxable income (DAWN Ontario: DisAbled Women’s Network Ontario).

Here's what DAWN Ontario would have wanted to see in the budget:

• an investment in disability related supports through a transfer payment to the provinces, though the feds are not supportive of this for reasons of visibility, accountability and reporting.
  
  
• making the Disability Tax Credit (DTC) refundable -- As you may recall from the Report on Disability Tax Fairness, the final recommendation was not for more tax measures but for an investment in programs and services. A refundable DTC would primarily assist seniors, and our priority is at the other end - youth, working age women etc. A refundable tax credit would only provide about $1000 to each eligible individual, it is not substantive enough to make a big difference in the area of purchasing disability supports.
  
  
• a wage subsidy program for low income earners with disabilities -- This option was put on the table by Saskatchewan, it would have limited impact and would more appropriately be implemented by labour market ministers.

Job Improvement

It appears that the federal government intends to download too much to the provinces. This will widen regional disparities and weaken opportunities for working people. In the area of training, for example, Ottawa must consistently invest in apprenticeship, literacy and immigrant settlement programs which meet national skill needs and also create opportunities for workers to move to good jobs. (CLC)

Post-secondary Education

The Harper Government's first federal budget will do very little to provide relief for students and their families who are struggling with escalating fees for postsecondary education. Although the budget contains minor tax changes for students, it will not fundamentally improve access to post-secondary education (Canadian Federation of Students - CFS).

The proposed tax changes for students include a $65 a month tax credit for textbooks, and eliminating the taxation of scholarships. Currently, scholarships are tax free up to $3,000. Many students the changes will have no impact. A lot of students don't even earn enough taxable income to use all of their existing tax credits. (CFS)

Research and Innovation

Monies in the new federal budget are targeted at postsecondary education and university research, as well as the new government's recognition of the importance of research to increasing Canada's productivity and Canadians' standard of living. In addition to increased funding for the three federal research granting agencies and for the Canada Foundation for Innovation, a critical investment for universities is the $40 million towards indirect costs, which will help cover the additional expenses borne by universities as a result of research activities. The increased investment in Budget 2006 will raise the average reimbursement rate to about 27 per cent of the direct costs of research – an important step in the right direction (Association of University and Colleges of Canada – AUCC).

Low Income Canadians

Tax incentive based mechanisms have proven to be a very ineffective way to deliver social programs. The best examples are day care and affordable housing tax incentives used by the Harris government in Ontario, which produced hardly any day care spaces or new affordable housing units. Tax credits for public transit passes are a very expensive way to reduce greenhouse gas emissions. The same amount of money invested in public transit infrastructure or invested in energy conservation retrofits for houses of low-income families (something that was cut by the Conservatives in this budget) will deliver a much greater bang for your buck. (National Anti-Poverty Organization – NAPO)

Tax credits don’t help if you don’t pay taxes. The poorest Canadians, including many students, who don’t have enough income to have to pay taxes will get no benefit at all from the tax credits for textbooks, public transit passes or children’s fitness programs which are non-refundable, meaning they can be deducted from what you have to pay in taxes but if you don’t pay taxes you don’t get anything.

Municipalities/Housing

As expected, federal budget 2006 allocates $1.4 billion for new affordable housing over the next three years to the provinces and territories. This will add to the $474 million in federal funding that has been allocated to the provinces and territories starting in 2001 but remains unspent. Federal budget 2006 doesn’t offer specific plans on how to get the new and previous money flowing to new affordable housing, including co-op and non-profit homes (Michael Shapcott, Senior Fellow in Residence: Public Policy, Wellesley Central Health Corporation).

There is no word on other key housing and homelessness initiatives, such as an extension of the federal homelessness and housing rehabilitation programs (which are due to expire this year); nor any support for the ramping up of federal spending to meet the nation-wide affordable housing crisis. In summary, the Flaherty budget is a stand-pat document when it comes to housing and homelessness. No new spending – despite the urgent national need – but the 2006 federal budget does take a step towards allocating housing spending approved by the last Parliament (Wellesley update).

Military and Security

Canada's military will see its budget increased by $5.3 billion over the next five years, including money to speed up recruitment of 13,000 regular armed forces and 10,000 more reservists. The extra money for the armed forces will also go toward new equipment, such as transport planes to replace the country's fleet of aging C-130 Hercules planes. In keeping with the government's stated focus on security, the budget also includes $303 million over two years for border security and $161 million over two years to expand the number of RCMP officers and hire additional federal prosecutors (from CBC web news)

Environment

The minority Conservative government will shift some environmental funding to public transit programs, and a "made-in-Canada" program to tackle climate change. Commuters who buy monthly bus, subway, train or ferry passes will receive a 15.25 per cent income tax credit, said Finance Minister Jim Flaherty Tuesday, as he delivered his first budget. That amounts to about $150 per year for someone who buys an $80 monthly pass. The money to fund the tax credit will come from existing climate change programs, with $2 billion over five years reserved for a "made in Canada" climate change program (from CBC web news)

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