Austerity Chokes Canada’s Down-And-Out As Harper, Flaherty Look The Other Way

The Austerity Brothers – Who Is Canada’s Meanest Politician?

By Nick Fillmore

(A Brief Note from NAL publisher Doug Draper – Before Niagara At Large was so rudely interrupted this July by flooding rains that knocked out our basement offices for the better part of two months, I was pleased to hear from long-time journalist colleage Nick Fillmore.

A veteran Canadian journalist who worked for CBC, This Magazine and the not-for-profit Canadian Association of Journalists, an organization dedicated to fighting against enormous odds to keep fearless news coverage and commentary alive in this country, Nick fortunately found his way through cyberspace to this independent news and commentary site and offered to share with Niagara At Large some of the commentary he writes for his own online site ‘A Different Point Of View …’ which offers up a provocative gathering of thoughtful opinions on so many of the issues challenging us today, and which we will provide a link to at the end of this, his latest contribution to NAL, which begins now.)

The 'austerity brothers', Canada's finance minister Jim Flaherty and Prime Minister Stephen Harper. It means more bags of gold for the upper one per cent and austerity for most of the rest of us.

The ‘austerity brothers’, Canada’s finance minister Jim Flaherty and Prime Minister Stephen Harper. It means more bags of gold for the upper one per cent and austerity for most of the rest of us.

Who is the meanest politician of them all, Canadian Prime Minister Stephen Harper or Finance Minister Jim Flaherty?

It must be Harper because he has proudly given billions-of-dollars to corporations and the 1 per cent while there has been an increase of 31 per cent of Canadians using food banks since he came to power.

On the other hand, it could be Flaherty. He is removing a staggering $10-billion a year from government revenues so the Conservatives don’t have the money to help look after the chronically poor, the working poor, and those with mental issues, etc.

Take your pick.

The exceedingly aggressive austerity cuts carried out by Prime Minister Stephen Harper and Finance Minister Jim Flaherty over the past seven years have come home to roost as millions of Canadians, depressed and without hope, are succumbing to its worst consequences.

Program cuts and tax reductions for corporations and the wealthy have had a huge, disproportionate impact on the poor, working poor, underemployed, and those with health problems including mental illness.

The massive austerity program results in less income, decreased services, and reduced health care for many of Canada’s most vulnerable people. It appears that more than 3.5-million Canadians – mainly the poor, the unemployed/underemployed and the under-privileged – are struggling.

The attacks on the vulnerable began soon after the Conservatives came to power in 2006. They launched cuts that were a broadside attack on the government’s ability to finance many of its activities, including these much-needed employment and social support programs.

Ignoring the needs of Canadians living in desperate conditions, Harper and Flaherty initiated the extremely aggressive austerity program because of their determination to reduce the deficit and cut the size of the federal government.  Their decisions were based largely on their own neo-liberal economic beliefs.

Needless, brutal cuts.

There are numerous examples of needless, brutal cuts. Claiming it was concerned that some people don’t have enough incentive to work, Harper-Flaherty toughened up the Employment Insurance rules. They took millions of dollars away from mostly seasonal workers, leaving them vulnerable.

Human Resources and Skills Development Canada (HRSDC), the government department that provides the most hands-on support for the poor, is being cut more than any other department. It will lose 5,700 positions – one-quarter of its workforce by 2016. The largest cut in absolute terms is to the Citizen-Centered Services Program, which helps Canadians access government services by phone and online.

Harper also cut funding to the National Aboriginal Health Organization (NAHO) and to a number of Aboriginal women’s health organizations – crucial programs on suicide prevention, women’s health, and diabetes. They also cut the Women’s Health Contribution Program, which funds six women’s health organizations across the country.

The austerity cuts are based on Harper and Flaherty’s determination to cut the deficit and reduce the size of government. The two unwaveringly believe in neo-liberal economics, which enriches corporations and the wealthy at the expense of the rest of us. Unfortunately, the problems of the less fortunate are not acknowledged in the PMO or Department of Finance.

Two moves early on by Harper and Flaherty eliminated the ability of the Conservatives to fund the kind of generous, liberal-minded government Canadians have been used to.  First, a two-per-cent cut in the Goods and Service Tax income in Flaherty’s first two budgets cost the government a staggering $10-billion to $12-billion annually in revenues that had been used to help support government services.

In addition, Flaherty has cut $60-billion in corporate taxes since the Conservatives took power in 2006 – needlessly reducing the country’s corporate tax rate to the lowest among G8 countries.

The austerity program and other government cuts have had disastrous consequences for millions of Canadians. There are staggering disparities in life expectancy based on the amount of education a person receives and their amount of education. On average, people living in rich neighbourhoods live an average of 86.3 years, while those living in a poor neighborhood live only 65.5 years – a difference of 21 years.

Use of food banks still increasing

There is more hunger across the country than ever before. In March, 2012, 882,188 people received food from a food bank in Canada – 31 per cent higher than in 2008, when austerity was being launched.

Children are not spared from the suffering. According to UNICEF’s most recent report, Canada is 21st out of 29 top countries for relative child poverty  , and 27th for the percentage that were overweight.

Between the years 2007 and 2011, Statistics Canada reported a 20 per cent rise in people who said their mental health was deteriorating.  Mental illness is already the number one cause for disability claims in the workplace. According to the Mental Health Commission of Canada, awards for mental injury at work have dramatically increased in recent years because of pressure placed on workers to produce more during the austerity period.

It’s also likely been an increase in suicides in Canada due to the distress suffered by individuals as a result of the austerity program. Two international researchers, David Stuckler and Sanjay Basu, have documented substantial increases in suicide in several European countries and the United States as a result of austerity cuts.  Suicides in Canada increased from 3,512 in 2005 to 3,890 in 2009, which takes in the early part of the austerity period. However, Statistics Canada is three years behind in posting its deaths statistics, so no information is available covering a large period of austerity. But, assuming that Canada is experiencing roughly the same fallout as are Europe and the U.S., it is safe to predict a sizeable increase in suicides here.

Flaherty pushes ahead with austerity program

Throughout the Conservatives’ seven years in office, independent economists argued that the austerity program was not achieving its stated goal of preparing the country for an economic recovery, but Flaherty refused to budge.

Then in April, the world was shocked when the austerity experiment, which was had destroyed the lives of millions in Europe, was totally discredited. Thomas Herndon, a young University of Massachusetts Amherst graduate student in economics, discovered that an influential paper endorsing austerity practices as a way of rebuilding beleaguered economies was incorrect because of spreadsheet coding errors and selective data.

Amazingly, Flaherty continued with the austerity experiment.  “What I worry about is those that suggest that austerity should be abandoned,” he noted. “I think that’s the road to ruin quite frankly.”

So more cuts that will affect the poor the most are on the way. Harper and Flaherty will chop another $11.8-billion from government spending by 2014-15; job losses in both the public and private sectors will be 90,000 by 2014-15; and there will be 1.4-million unemployed workers in the country in 2015.

If Harper and Flaherty really wanted to balance the budget and look after people at the margins, they could work harder to collect the $29-billion the government is owned by the rich and corporations in unpaid taxes.

They also could try harder to find the $3.1-billion that was given to the anti-terrorism program but that cannot be accounted for.

Canada a ‘rouge state’ internationally

When it comes to complying with international law concerning the rights of its citizens, Canada is a rogue state. We have signed international laws that oblige us to provide certain benefits to all citizens. This means ensuring the right to adequate standards of living involving access to food, housing and clothing, the right to participation in the labour force and community, as well as providing citizens with the opportunity to report violations of these rights.

However, more importantly, the Harper government has neglected to adopt the part of the Covenant that would establish a complaints mechanism that would allow groups or individuals to go to the UN to protest the treatment they receive. They’ve made sure the process doesn’t work and that there will be no complaints.

Nick Fillmore is a freelance journalist who worked in many areas with the CBC over nearly 30 years. He is a former member of THIS magazine’s editorial board and was publisher of The 4th Estate, an independent weekly in Nova Scotia, during the 1970s. Nick was also a founder of the Canadian Association of Journalists. Niagara At Large encourages you to visit his online site ‘A Different Point Of View …’ for more commentary on the issues challenging our communities in this country and countries were are linked with around the world, for better or worse, by clicking on nickfillmore.blogspot.com .

(Niagara At Large also invites you to share your views on this post, remembering that we only post views by individuals who also share their real first and last name.)

8 responses to “Austerity Chokes Canada’s Down-And-Out As Harper, Flaherty Look The Other Way

  1. Gerry Chamberland

    In his book Austerity by Mark Blyth, he explains why austerity does not work and gives example after example where it has not worked, using economic and historical records. It simply does not work and anyone who has any understanding of economics would know this. This would explain Harper and his cronies irresponsible behaviour. What Harper and Flaherty have done is follow the rule book. First they cut revenue and then they tell the citizenry that they can’t afford it. Just like Harris did in Ontario. It has absolutely nothing to do with governing for all Canadians and their needs. Harper is a disturbed individual who needs to be let go. 2015 can’t come soon enough.

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    • Well let’s look at what a non-Austerity Liberal/Socialist strategy has to offer:
      ALL DAY Kindergarten I mean DAYCARE (of course using over resourced UNION teachers as opposed to baby sitters), HUGE MISGUIDED SUBSIDIES to wind energy (I am sure some Liberal cronies are getting rich!!!), vote influencing (power plants…) to name a few.
      Billions of dollars lost in Ontario. Our credit rating reduced. Taxes on the rise. Services that matter slashed.
      What does this book have to say about that! To quote ONE study or book as gospel is not responsible.
      Rather than slamming Harper on trying to maintain a grip on the economy ( you can’t argue we have not done well comparatively speaking).
      You and the author of this article should focus your attention on the waste that exists at ALL levels of government that could be used to address the issues presented rather than the efforts to reign in spending.
      I would rather have austerity than bankruptcy which is what we get if we don’t have common-sense budget management. I would rather have what Harper has to offer when compared to the NDP/LIBERAL socialist spend and tax parties have to offer.
      Just sayin…….

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  2. Mr. Chamberland your comments reflect a sense of knowledge and to some knowledge is hidden “IN CAMERA” ..Yes “ALL” Your comments
    are “Right On” Including Harper’s …Keep the Faith and just maybe the light will shine through the corrupting forces in this great country.

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  3. I am all about smaller government and encouraging businesses to invest here. If you think things are bad now, think about what it will be like with fewer jobs as a result of less business investment. We saw what happened in Ontario under McSquinty et company and their attack on all industrial sectors with the exception of the Green sector.
    I am all about reducing the tax burden on ALL Canadians while maintaining a REALISTIC safety net that is balanced (the government can NOT be EVERYTHING to EVERYONE).
    I am all about reducing waste in all levels of government because we all know a public sector project always seems to cost twice as much as a similar private sector project!
    I am all about reducing resource costs. I maintain if it were not for the outrageous unions demand in the public sector that these cuts would largely be avoidable. Come on people, that’s the elephant in the room and it is time that politicians (notice I am not using the leader term) at ALL levels of government show some leadership. It’s not the 1% that is getting the golden handshake! It’s ALL the public sector employees. Do the math.

    One has to wonder whether these austerity cuts were also designed (however naively) to encourage the affected departments to look for savings and increase efficiencies from within. It’s funny (not so), that in the private sector this would work because there you have shareholders and are driven to profit from activities. It seems that the public sector just doesn’t seem to understand how to increase efficiencies, reduce cost AND maintain service levels like the private sector does. Or is it just unwilling to because we all know that typically leads to job/union membership cuts?

    The cost side of the equation has to be addressed. That is what I see the Harper government doing. We are already paying more in taxes, and then some, than we take home in income at the end of the day. How does one justify that. This has to change.

    So yes, while it may appear that this government is harsh ( I am not a Conservative party member), I am hopeful (however naively) that in the long-term the results will be lasting and will benefit all.

    Just sayin…..

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  4. Gerry Chamberland

    To Gregg Middleton. There are no stats and no data that has ever shown that austerity works. In fact all the data and research ever done conclusively shows the opposite. However what the data does show is that increasingly, industry is hollowing investment in the western world and applying it to other countries that have cheaper labour, no regulations and little infrastructure. The upshot is that provinces (other than those that have oil in the ground) are losing vast amounts of investment dollars. Further, Forbes Magazine (a highly right wing business magazine) a while ago had an article indicating that cutting taxes and reducing government will further erode our economies.

    Now if you could shown me the stats that state business was doing poorly then perhaps you would have a point. Instead, we have corporations making the most profits ever made, refusing to re-tool and re-invest. There was an article in the National Post a few weeks ago indicating that corporations were not re-tooling or reinvesting and thus created a productivity issue but blaming it on labour and unions. Added to this frustration the Harper government reduced the one tax (GST) that was the most progressive of taxes and reduced corporate tax to one of the lowest of all OECD countries. It did not work as one can see. The PM then used a strategy that any investor would never do and that is he put all his eggs in one basket and gambled on oil only and forgetting all other provinces. The result is more people out of work, less investments and less revenue from corporate tax, less revenue from low wage jobs which culminates in higher taxes for those earning a living.

    I would even give you the benefit of the doubt if you could show me that banks are losing money or investment houses were losing money but instead what we find is that they are all doing better than any other time in history. Further, the hollowing out of the middle class is occurring as a few billionaires fatten their already bulging wallets. As a point of reference, may I remind you that in the 50’s and 60”s, taxes were higher yet everyone prospered. I suggest you do a bit of reading. May I suggest a few books that might just open your eyes to what is happening: Power Inc. Auterity and Plutocrats are a few that come to mind. All were written by business people as well as economists. You may also want to read up on free trade agreements and how they have affected a countries population. We all know how great it was for corporations but little is said about how it actually affects citizens.

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  5. Ahhh you have touched some wonderful points.
    Companies moving to other jurisdictions….. why? labour costs and taxes. If they didn’t have a reason to move they wouldn’t!
    Why are taxes high? Government Waste/inefficiency and outrageous labour union demands. its not rocket science. Cause…. Effect!
    I challenge you to manage your own personal finances on a spend more than you make basis and we’ll find you at one of those food banks before long..
    Thank you for making my point for me.
    It’s because of airy fairy economics dreamt up by left-wing liberal socialists that gets countries into trouble.

    Just sayin…..

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  6. Gerry Chamberland

    Mr. Middleton: I think you missed the point I was making altogether. If you are going to use the logic of high wages for labour as the major cause of our situation then at least follow that logic. One would assume then that you would agree that our labour costs should be commensurate with our competitors. Further, you would then agree that in addition to matching labour costs you would lower taxes to again match our competitors and remove any “perks” such as benefits, pension plans, regulations on food safety etc. You see, you can’t have it both ways. If you want health care, education, good infrastructure, pensions for the elderly, etc. this comes from taxes and if your tax base has been eroded because the average citizen is making fifty cents an hour, these “perks” would not be available. In addition, investments come from a few sources of which some are large pension pools and union savings as well as discretionary spending. These would no longer be available since the average citizen would just be living on sustenance.

    Your penchant on anti socialism is rather apparent. Some of the most prosperous countries are social democracies. I cite Germany (the most unionized country of all OECD), Sweden, Norway, Denmark, the Netherlands, etc. as countries that succeed with balanced budgets or surpluses. Further, Canada did not get hit as hard because of government regulations of banks which is the exact opposite Harper would have done. And while we’re at it, there has never been a Conservative government in the history of Canada that has had a balanced budget. I am not agreeing that “socialism” would be a good thing for Canada. What I am arguing is that Canada look at what is best for all Canadians using a balanced approach and peer reviewed research rather than political ideology.

    By the way. It’s interesting that you mention food banks that seem to be needed more than ever today. Was there such a need in the 50’s and 60’s while unions were strong and taxes were high both with the average citizen and corporations?

    I again would bring you back to reality. The disparity between the very wealthy and the average person has never been so huge. The coffers of corporations have never been so full. Something is amiss. Whenever you have a few who prosper from labour at the cost of the many, you can expect issues. History is replete with such situations.

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  7. The reality is….. spend more than you make you go broke. Simple!
    The reality is…… 10’s of BILLIONS of dollars can be saved in public sector wage decreases.
    The reality is …… Government waste to the tune of more 10’s of BILLIONS could be curtailed to support those services you mentioned.
    The reality is…..Tax and spend philosophies only result in wealth and capital moving from one jurisdiction to a cheaper one.
    The reality is….. If a government provides too many services the incentive to strive on the part of the population is reduced and hampered. Why do you think we have to import temporary farm workers when we have an unemployment rate of 7.5%?

    What is best for ALL Canadians? Lower personal and corporate taxes across the board. delivered through decreased waste and government spending across the board. Eliminate the deficit and deficit budgets so that the interest paid to service that debt can be directed to those services you refer to.

    What you DON’T do? Increase taxes and treating your corporate and individual citizens like a bottom-less revenue pit. I challenge you to show some more creativity in coming up with a solution to the challenges that this country is faced with.

    It’s about time this government behaved like a responsible corporation and I am encouraged that it is not bowing to pressure from tax and spend liberal/ndp socialists.

    Just sayin…..

    Like

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