One thing that really stands out about the Conservative government’s budgets and spending priorities is just how heavily they have focused spending in male-dominated sectors of the economy, while largely ignoring sectors where women predominate.
The 2015 Federal Budget, like previous budgets, gave priority to increased spending in infrastructure, construction, resource industries and in defence and security. Employment in each one of these sectors is heavily dominated by men, with women making up less than a fifth of their workforces. Sectors of the economy where women form a larger share of the workforce—health care, education, and social assistance—are almost completely ignored, as they have been for many years.
Once you get past the hundreds of pages of budget documents, their carefully targeted baubles, the reactions, media commentary, the tweets and retweets, the promotional advertising and smoke and mirrors—if you’re still paying attention—there’s something basic underlying both federal and Ontario budgets neither admit to: the big squeeze on public spending is still on.
Austerity may be out of political fashion, but it’s clearly still in practice. They’ve just been doing it in slow-motion, hoping the public doesn’t notice.
Week in Review April 17, 2015
- Fight for $15 gains momentum
- What about $70K minimum?
- Inflation rising
- Economic growth declining
- Federal cuts killing jobs, services and safety
- No P3 penalties for corporate crime
- Hydro Gone?
- Whack-a-union bill back in Senate.
Graphic by Jocelyn Renaud, CUPE.
Once the federal budget is balanced, the Harper government plans to introduce income splitting: allowing couples with children under the age of 18 to shift up to $50,000 a year in income to the lower income spouse for tax purposes. What does that mean for Canadian families?
The argument for income splitting is that couples with one spouse who makes significantly more than the other pay a higher overall tax rate than couples with relatively similar incomes. For example, a family where one spouse stays home with no employment income and the other makes $100,000 a year pays more in income tax than a family where both spouses earn $50,000, because of our progressive income tax system. The system is considered unfair by some, and a disincentive for parents to stay at home.
If the federal government can afford to reduce taxes on families so one parent can stay at home with the kids, what’s not to like?
Plenty, it turns out.
The Harper government is set to squeeze the federal government’s role to the smallest it has been in seventy years. As shown in the fall Update of Economic and Fiscal Projections, federal government spending is projected to drop to a 14 per cent share of the economy by 2018-19—the lowest since at least 1948.
Overall federal taxes and revenues are already at their lowest rate in 70 years. Total federal revenues as a share of the economy declined to 14 per cent in 2012-13, with tax revenues down to 11.5 per cent. They haven’t been this low since 1940. That’s before Canada had national public health insurance, the Canada Pension Plan or unemployment insurance. If revenues and spending associated with these are excluded, we have to go even further back to find a time where the relative role of the federal government in Canada was so small. And if the Harper government follows through with its plan to allow income splitting for tax purposes and to increase the annual limit for Tax-Free Savings Accounts, revenues will be even lower.
While the federal government’s tax revenues have declined as a share of the economy, many Canadians might not feel any better off, or more lightly taxed. That’s because there’s been a major shift in where the federal government gets its money.