Budgets should help citizens, not just ‘taxpayers’

Posted on February 11, 2014 in Governance Debates

NationalPost.com – Full Comment
February 11, 2014.   Peter Clutterbuck, National Post

As we move towards another federal budget that promises deficit reduction and tax breaks, expect further government program spending cuts. On target to slay the deficit before the next election, Finance Minister Flaherty is primed to deliver his latest gift to the traditional notion of the middle class family in Canada, which is income splitting between spouses to reduce the family’s tax burden.

This means that, once again, a family benefit is provided by government through the tax system, which seems to have replaced all other forms of government support in the last decade or so. Our relationship to government is increasingly becoming more like a one-to-one banking transaction. The notion of a nationally defined public good designed and provided for the people as a collective is quickly disappearing.

Following the Second World War, the federal government assumed a more active role in developing and providing basic income, health and social supports to the Canadian population. Medicare initiated in Saskatchewan by the NDP Premier Tommy Douglas was quickly adopted by the Pearson Liberals and the other provinces to become a national health insurance program by 1966. The social insurance model was further advanced in the 1960s and 1970s by upgrading Old Age Security, originally a means-tested benefit introduced in 1927, to a universal benefit at age of retirement, plus a Guaranteed Income Supplement for Canadians without other pension provisions. And, most importantly, the creation of the contributory Canada Pension Plan, which, combined with OAS, reduced seniors’ poverty in Canada from more than 30% to below 5%.

Further, unemployment insurance originally introduced during the Great Depression was enhanced in 1971 to provide greater eligibility and more income support to unemployed workers until they found new jobs. The federal government also entered a cost-sharing arrangement with the provinces to provide both income and service support to people on social assistance through the Canada Assistance Plan (CAP) in 1966.

This critical base of national programs began to erode in the 1990s with changes to employment insurance that greatly reduced its coverage, conversion of CAP into the annual Canada Health and Social Transfer, pressure to privatize and de-list health services under the Canada Health Act, and greater reliance on individual retirement saving through tax deductible RRSPs. Meanwhile, the benefit levels of CPP and OAS failed to keep the rate of seniors’ poverty down.

The fate of the last major initiative that offered some hope for re-establishing a national commitment to a shared public good is symbolic of the reframing of Canadians’ relationship to our federal government. Prior to the 2006 election, then-social development minister Ken Dryden had completed negotiations with the provinces to establish a National Childcare Program. This landmark development was abandoned by the Harper government, which introduced the Child Care Tax Benefit, a monthly payment of about $100 per child to families, a rate, of course, well below the cost of regular daycare.

Pooling our tax capacity for national health and social programs makes us a more equitable and inclusive society

Just as the federal government’s relationship to the provinces has become reduced to the transfer of revenues, so too is its relationship to Canadian individuals and families becoming reduced to a set of financial transactions. Direct benefit payments for seniors, low-income families and persons with disabilities are important and not to be disparaged. But when national programs that join us in a collective commitment to community needs and interests are foregone entirely, we lose an important connection to each other as a national people.

“Pocketbook” issues dominate our political discourse. “Tax cutting” becomes the constant political mantra, which results in draining the public treasury of any capacity to design and implement national programs. We have come to define our political identity as “taxpayers”, which inevitably focuses us strictly on our own and our family’s economic self-interest. The more we identify only or primarily as taxpayers, the more we diminish our shared bond of citizenship in this society.

Pooling our tax capacity for national health and social programs makes us a more equitable and inclusive society. Always looking to the next individual and family tax break only weakens our commitment to each other. In the end, the power of one is still really only one.

Peter Clutterbuck is community planning consultant with the Social Planning Network of Ontario and provides coordinating support to the Poverty Free Ontario cross-community network.

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