Ottawa just makes income inequality worse
TheStar.com – Opinion/Editorials – Finance Minister Joe Oliver pays lip service to global push to stop income polarization, while his government makes it worse.
Feb 17 2015. Editorial
Canada’s Joe Oliver joined finance ministers from the world’s 20 most influential countries last week promising to “ensure that growth is inclusive, including through policies that address income inequality.”
The ritual was familiar, the outcome predictable: On the international stage, Canada solemnly agrees that a small minority has acquired too much of the world’s wealth. Back home, Ottawa does nothing to stem – or even slow – the trend. The gap between rich and poor has increased sharply on Stephen Harper’s watch. The Prime Minister’s policies – spending cuts, tax credits for select groups and downloading of federal responsibilities – have made Canada less equitable and less inclusive.
Oliver simply followed the script. But wake-up calls are getting louder. Last December, the Organization for Economic Co-operation and Development cautioned that the increasing concentration of wealth in the top echelon of society weakens economic growth and forecloses opportunities for the young. “Policies to reduce income inequalities should be pursued not only to improve social outcomes but also to sustain long-term growth,” the 34-nation body urged.
A year ago, the International Monetary Fund pointed out that rising inequality makes growth more volatile and slowdowns more serious. “Low tax and low public spending are clearly not the route to prosperity,” the agency said. And two years ago, the World Bank advised global leaders that excessive inequality impedes progress in health and educations, contributes to crime, exacerbates national instability and erodes the trust needed to do business.
Just three weeks ago, at the World Economic Forum in Davos, top thinkers and power-brokers issued a 14-point plan to tackle income equality. It includes higher minimum wages, stronger social safety nets and government encouragement of union membership.
Turning a deaf ear to these alarm bells, the Harper government has:
– Reduced spending on social programs and capped transfers to the provinces, curtailing their resources for health care, education and social assistance.
– Restricted eligibility for employment insurance. Fewer than 40 per cent of Canada’s jobless now qualify for coverage.
– Stifled debate on income inequality. The Conservatives used their majority to quash a Liberal motion that MPs “set aside partisan politics and work together to identify solutions to Canada’s growing problem of income equality.”
– Introduced an array of tax breaks targeted at well-off families: the children’s fitness tax credit, the children’s art tax credit, the overseas employment tax credit, the tax credit for donations of cultural property to charity, the safety deposit box tax deduction and dozens more.
Most recently, the Prime Minister announced a plan allowing parents of young children to split their income for tax purposes. The chief beneficiaries will be middle- and upper-income couples who exemplify the “traditional family values” favoured by the Tories advocate: a high-earning spouse and a stay-at-home partner who cares for the children. Single parents will get nothing. Low-income working couples, who don’t make enough to pay taxes, will also be shut out.
These measures, combined with the government insistence that its role is to foster economic growth – not redistribute income – have accelerated income polarization. Last year, Canada surpassed the United States to become the country with the most rapid growth of inequality. (It still has the largest income gap, but Canada is rapidly catching up.)
Both opposition parties, numerous think-tanks, a vanguard of business leaders, the former governor of the Bank of Canada and many concerned citizens have called on the government to temper market forces. The response has been empty gestures like Oliver’s endorsement of the latest G-20 communiqué or assurances that economic growth will bring gains for everyone.
That formula hasn’t worked for five years. It isn’t working anywhere else. The rest of the world is waking up while Canada continues to slumber.
< http://www.thestar.com/opinion/editorials/2015/02/17/ottawa-just-makes-income-inequality-worse-editorial.html >
Tags: budget, economy, featured, globalization, ideology, tax
This entry was posted on Tuesday, February 17th, 2015 at 11:50 am and is filed under Equality Policy Context. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
Leave a Reply
Recent Comments