The federal budget tabled in Parliament on Monday June 6, 2011 by Finance Minister Jim Flaherty includes $4 billion in cuts intended to aid deficit reduction. This was the biggest change from the last budget tabled on March 22, 2011 (see OCASI comments on the previous budget).
The budget provides no details on this massive spending cut, one that many economists have said is unnecessary at this time and would result in severe hardship for Canada's most vulnerable residents. The government has committed to preserve spending in only some areas such as transfer payments to the provinces and territories. Analysts suggest that the cuts may come out of sectors such as immigrant settlement services, civil service jobs and other areas.
Settlement and Integration
The national budget for Citizenship and Immigration Canada's (CIC) immigrant settlement services was cut by $53 million last year. As the recipient of the largest amount of funding, Ontario absorbed almost $44 million in cuts. This province is further disadvantaged by the phasing in to Ontario of the funding allocation model that ties funds to a per-immigrant formula on a rolling three year arrivals basis. Given the low numbers of arrivals in 2009, the continuing application of this formula will continue to result in decreases in settlement funding for Ontario.
CIC's implementation of funding cuts last year in Ontario, particularly in Toronto, was unprecedented. The cuts have left lingering feelings of uncertainty and destabilization for some local areas of Ontario's immigrant and refugee-serving sector, which is still in the process of dealing with the full effects. A further cut in funding could have serious consequences for the sector's continued stability, and ability to effectively meet the settlement and integration needs of immigrants and refugees.
In a period when the Province, municipalities and foundations like the United Way are facing fiscal challenges themselves, the Federal government who maintains responsibility for the economic and social integration of Newcomers to Canada (and who continues to maintain control over the administration of the settlement and integration program in Ontario) must not further exacerbate the difficulties that new Canadians are experiencing in their journey by reducing even more support for the programs that facilitate their successful integration.
Poverty
The promised $4 billion budget cut is also expected to result in cuts to the federal civil service, a move that would affect all Canadians by reducing the quality, scope and scale of public services but particularly those with the greatest need.
Apart from measures that offer relief to some low income seniors, a restatement of the benefits promised in March 2011, the budget is silent on a number of other priority areas that have an impact on low-income families and individuals. Specifically, there is no reference to critical areas of need such as childcare and early childhood education, affordable housing and income supports.
OCASI is deeply concerned that the government's goal of deficit reduction would be accomplished at great cost to the most vulnerable, including those from immigrants and refugee communities.
Employment
The budget contains no measures to address barriers to labour market integration, one of the biggest integration challenges faced by immigrants. Instead it includes a promise to test ways to help internationally trained immigrants to cover tuition and training, with more details to follow (a repeat from the earlier budget). This can be a positive initiative for immigrants who have been unable to pursue accreditation because of high costs if a grants program of some sort is what is adopted.
The budget provides a limited extension of the Employment Insurance (EI) pilot projects and a modest tax credit to small businesses against an increase in EI premiums resulting from new jobs. They are essentially a restatement of the promises in the March 2011 budget. These are welcome measures, but would benefit only those workers who qualify for EI. There is nothing for immigrants, racialized individuals and women who are over-represented in part-time, contingent work and often do not qualify for EI.
We urge the government to consider investing in initiatives such as a tax incentive for employers that hire and retain immigrants, and other measures that would help immigrants to become employed in their field.
Education
The budget is silent on the impact of the high cost of post-secondary education and high student debt load. According to the Canadian Federation of Students, the federal student debt surpassed $15 billion for the first time in September 2010 while federal transfer payments for post-secondary education were approximately $800 million short of 1992 levels when accounting for inflation and population growth.
This budget repeats the promises made in March 2011 by expanding eligibility for federal student loans but does not increase the amount. Relief for internationally trained immigrants via a tuition tax credit for professional licensing and certification exams is a welcome measure, but one that would benefit only a few.
Conclusion
OCASI is disappointed that the government missed the opportunity provided by a majority in Parliament to bring real change that would benefit the many Canadians who are still dealing with the effects of the recession.
The government is choosing to benefit a few through tax credits (individuals and families who cannot afford the activity cannot claim the credit) instead of investing in programs that would benefit all residents, but particularly those with the greatest need. There is also little in the budget that is new to benefit municipalities in the long-term, which is alarming given the public infrastructure challenges that municipalities will increasingly face over the next few years.
We urge the government to use the privilege of a parliamentary majority to invest in long-term planning that would strengthen Canada's economy and communities, particularly the following:
- National childcare strategy
- National housing strategy
- Labour market integration measures including skills training, paid internship and tax credits for employers who hire and retain workers from equity-seeking groups
- Maintenance of the Settlement and Integration program budget at current levels to ensure the integrity of the program.
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Click here for federal budget 2011.
Click here for OCASI comments on March 2011 federal budget.