Federal Budget 2009:As the rich get richer, women are still left in the cold
Budget 2009 was promised as an ‘economic recovery’ and ‘stimulus’ budget, and a plan to ensure that those who are most economically vulnerable would get support during a period of recession.
Women had every reason to hope they would be seen as equally able to stimulate the economy and would enjoy protections too, as women make up over half the population in Canada and many women are among the most economically vulnerable.
As a group, women are poorer; hold less secure jobs; own less property; have fewer savings; and have less pension income. Forty percent (40%) of women in Canada do not even make enough money to pay income taxes even in the best of times. The poorest are Aboriginal women, racialized women, immigrant women, women with disabilities, single women with children and older women who live alone.
Federal Budget 2009:
As the rich get richer, women are still left out in the cold
(prepared by FAFIA in collaboration with tax policy advisors
Kathleen Lahey, Queen’s University and Lisa Philipps, Osgoode Hall)
Women are virtually excluded from Budget 2009.
Budget 2009 does not recognize women’s contributions to the economy, nor does it support women’s jobs, or provide the help women need in a time of economic downturn.
The Budget Promise
Budget 2009 was promised as an ‘economic recovery’ and ‘stimulus’ budget, and a plan to ensure that those who are most economically vulnerable would get support during a period of recession.
Women had every reason to hope they would be seen as equally able to stimulate the economy and would enjoy protections too, as women make up over half the population in Canada and many women are among the most economically vulnerable.
As a group, women are poorer; hold less secure jobs; own less property; have fewer savings; and have less pension income. Forty percent (40%) of women in Canada do not even make enough money to pay income taxes even in the best of times. The poorest are Aboriginal women, racialized women, immigrant women, women with disabilities, single women with children and older women who live alone.
But the World Bank recently concluded that “the business case for expanding women’s economic opportunities is becoming increasingly evident; this is nothing more than smart economics.” Women, and particular vulnerable groups of women, are hardest hit during times of economic crisis and also have the greatest potential to contribute to the
economy.
The 52nd UN Commission on the Status of Women concluded similarly that there is“ a growing body of evidence demonstrating that investing in women and girls has a multiplier effect on productivity, efficiency and ustained economic growth….” Investing in women translates into investing in local communities and in the Canadian economy.
The Reality of the Budget
The Conservative’s Budget 2009 abandons those who are in the lowest income brackets and offers little to the majority of women. Historically, in hard economic times, women have had to increase their care giving and support roles in their families and communities, carrying more unpaid work, in addition to the paid work they do. Apparently, it will be no different this time. But during this crisis, as women struggle to keep daily life intact, they will do so without support from their government through this economic ‘recovery and stimulus’ plan.
The government hit women in two serious ways on budget day, through not only the budget, but also through the carrying-over of measures announced in the fall economic statement of 2008, including limits on pay equity, a fundamental human right.
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Women are left out of the Conservative Budget 2009 in the following ways:
Infrastructure Spending
Women will mainly not benefit from Budget 2009’s $16 billion infrastructure spending.
The infrastructure spending planned is $8 billion per year, for the next two years. But the government has targeted infrastructure spending for roads, bridges, and transportation. Jobs that are created by this infrastructure spending will mainly be held by men. Currently, only 7% of construction workers are women, and only 7% of those in the trades and transportation are women. Only 22% of engineers are women. Only 21% of those in primary industries are women. No money has been targeted to social infrastructure, including social assistance, childcare, health care, home care – programs which provide essential supports to women and where jobs are mainly held by women.
Further no equity measures have been attached to infrastructure spending. Provincial and municipal governments, and corporations that receive dollars for infrastructure, are not required to make concerted and documented efforts to train and employ women in infrastructure jobs.
The government’s choice to invest heavily in construction and transportation infrastructure, and not in social infrastructure, discriminates against women.
Social Infrastructure
Childcare
No investments have been promised that will improve child care and assist women to be in paid work or attend job training programs.
Childcare is social infrastructure that benefits women. Although this is a key moment to spend money on a national child care program, there is no money in Budget 2009 for child care. The Budget does nothing to provide or improve access to affordable childcare, which is crucial in ensuring women’s equal access to training and paid work.
The inadequacy of child care in Canada is well-documented. In a recent OECD study Canada ranked last among developed countries in terms of access to early learning and child care spaces. Canadian families pay among the highest child care fees in the world.
Employment Insurance
Many women will have no Employment Insurance when jobs are lost.
Because of EI rules, two out of three women who pay into EI cannot get benefits when they are unemployed. While the budget includes an additional five weeks of coverage for those who are already eligible to receive benefits, it does nothing to change the eligibility rules that have discriminated against women since the 1996 changes to the EI system.
The gender discrimination in EI resulted in 3 times as many men qualifying for EI during the last reporting period as did women. The rules discriminate against women because women are more likely to work part time, or intermittently in order to accommodate primary child care responsibility in the family. Many women cannot achieve the required number of qualifying hours to collect employment insurance even though they pay EI premiums.
Social Housing
Women who need affordable housing will not get rent supplements or housing allowances
The investment of $2 billion in new affordable housing is potentially a positive component of Budget 2009. Half of these dollars are targeted toward renovating existing housing stock. The other half is to be spent on the creation of new social housing units, but is dependent on the federal government reaching agreements independently with each of the provinces and territories. These agreements are traditionally very slow to produce results, and the results produced are often quite modest.
In this and other ways, Budget 2009 the budget fails to address the critical and immediate issues of poverty, homelessness and hunger in Canada – each of which is experienced disproportionately by women and particular groups of women. As a result of the economic crisis, many more households will be forced to rely on social assistance, but there is no commitment to raising social assistance levels to cover the cost of basic necessities. Many more women (especially those who are single mothers, older or younger, disabled and/or racialized women) will find it difficult or impossible to pay rent or make mortgage payments when faced with job loss, but Budget 2009 contains no funding for rent supplements or housing allowance programs which would provide immediate assistance. Budget 2009 makes no commitment to a national housing strategy – despite the fact that United Nations human rights treaty bodies have repeatedly recommended that a national strategy be adopted by the Government of Canada. Economists recognize that much of the tax relief provided to higher income earners in the budget may be put into savings, whereas assistance to women and others in need would have resulted in immediate expenditure on basic necessities
Tax cuts
Tax cuts favour men over women and those with higher incomes over those with lower incomes.
The personal income tax cuts are not well targeted to lower and middle income earners, the people most likely to spend every extra dollar on consumer goods.
Women earn an average income of $27,000 per year, while men’s average income is $45,000.
The Organization for Economic Cooperation and Development (OECD) has repeatedly criticized Canada for failing to support women's economic participation despite the fact that they have been 'the mainstay' of income growth. Canada has also been criticized by the OECD for continually implementing complicated tax cuts that expand the gap between rich and poor during both good economic times and bad. Budget 2009 continues that trend.
Women who pay income taxes will see a benefit from the increase in the personal tax exemption. But this benefit amounts to only $33 per year. Only 60% of women will see this $33 extra dollars compared to the nearly three-quarters of all men who will get it.
Even this small tax cut is clearly designed to help those who need it the least.
Taxpayers in the 15% income tax bracket (which includes all those with about $40,000 in taxable income) will see a $132 tax cut. But only 14% of women will enjoy this tax cut, while 30% of men will.
Taxpayers in the 22% income tax bracket (which includes all those with about $71,000 in taxable income) will see a tax cut of $151, but only 6% of all women taxpayers will enjoy this tax cut compared to 14% of all men.
In both of these income tax brackets, about one-third of the value of these tax cuts will go to women and two-thirds will go to men.
All taxpayers with incomes of $81,000 and up will receive the full benefit of the total $317 in tax cuts – while those with the lowest incomes will get nothing.
Corporate Income Taxes
Men will also be the main beneficiaries of corporate income tax cuts
Corporate tax cuts amount to $6.3 billion in 2009/10 and $4.2 billion in 2010/11. Men dominate in CEO and director positions, and corporate ownership; at best, women’s share of the financial value of these cuts will be (perhaps) 37%.
Home Renovation Credit
Most women will not qualify for the home renovation or home buyers tax credit.
Renovation Tax Credit:
For the renovation credit you must own your home and have enough savings to afford the renovation. If you have to borrow at usual rates the credit will likely not be worthwhile or could drag people into more credit card debt when they are already having more trouble making ends meet
Home Buyer’s Tax Credit:
To take advantage of the home buyer’s tax credits you have to have savings in an RRSP to move into a home purchase plan, these tax credits are not refundable and purchase credits can only be claimed by those who can afford to purchase a home. As underscored earlier, not many women can meet these conditions because of lower incomes.
Working Income Tax Benefit:
The current Working Income Tax Benefit (WITB), a refundable tax credit which provides some small tax relief for low income individuals and families who are already in the workforce, provides $522/year for a single individual and $1044 for a single parent.
Budget 2009 promises an additional $580 million each year to enhance these benefits. However, there is no data available to allow for a gender analysis of the WITB since this program was only introduced in 2007. Women who require child care to be able to increase their paid work are likely to have this credit eroded through child care costs.
The Child Tax Benefit (CTB):
The Child Tax Benefit did not increase for the neediest parents
The Child Tax Benefit can be used to target assistance to low income earners. For those who earn incomes so low they do not pay income tax, the CTB is a credit that is received as a cheque.
Budget 2009 saw an increased in the Child Tax Benefit. However, the new money introduced in Budget 2009 extended access to the CTB higher up the income scale. Parents with low incomes saw no increase to their benefit.
Those supporting their kids on $20,000 or less got nothing from Budget 2009.
Women who are welfare recipients in most provinces already have the Child Benefit Supplement clawed back from the amount of their welfare ensuring that the poorest children in Canada receive no benefit from this federal program. The federal government has the power to stop this clawback when they transfer money to the provinces for welfare but has refused to do so, even in good economic times. Failure to do so now puts the most disadvantaged women and their children at further risk.
Pay Equity
Pay equity is a fundamental right of women and as such is not negotiable.
Proposals regarding pay equity that were contained in the October Economic Statement were highly threatening to women workers. Notwithstanding the protest over this, Budget 2009 carries over the proposal from the Economic Statement that pay equity for federal public servants be treated differently and be negotiated and resolved solely through collective bargaining.
Budget 2009 appears to propose that employers and unions be made jointly responsible and accountable for negotiating salaries that are equitable. At the end of the day, it is employers who ultimately retain the power to set wages and determine job content and duties.
The Government has promised to introduce new legislation on pay equity, which they indicate will remove the right of women public servants to make complaints about pay equity violations to the Canadian Human Rights Commission. The Government will limit pay equity legislation to apply only to federal public sector employees. Women need proactive federal pay equity legislation that applies to all federally regulated employers
The government has also stated that it aims to ensure that federal public servant salaries are in line with those paid in private sector workforces. Any such move by the government will result in reproducing the salary discrimination that still exists in the private sphere – salary discrimination that public sector unions have worked long years to eliminate in the federal public service.
Conclusion
The federal government has broken its commitment to evaluating spending and tax provisions through the lens of gender. The Standing Committee on the Status of Women recently called on Finance Canada to ensure that budgets serve women’s needs and priorities equally.
Clearly the government has failed to look at how Budget 2009 will affect women. This is a budget that ignores and excludes women, not a budget that takes women lives and conditions into account.
In November 2008, the United Nations Committee on the Elimination of All Forms of Discrimination against Women released its recommendations to Canada, following its 2008 review of Canada’s compliance with the Convention on the Elimination of All Forms of Discrimination against Women. The UN Committee outlined significant government actions that are required to improve the conditions of women in Canada, including increasing social assistance rates, improving access to child care and legal aid, and adopting an integrated strategy for addressing the disadvantaged conditions of Aboriginal women.
Budget 2009 provided an important opportunity to move forward on these recommendations, but the Government of Canada has not done so. Instead, it has produced an array of spending and tax measures that will contribute to further widening the equality gap between women and men in Canada.
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