Simple enough statement right? When faced with an economic free fall, high unemployment, and a shrinking GDP – one needs to encourage spending as a means of stimulating the economy. That is the idea that has seen governments from around the world respond to the current economic crisis. 

Budget 2009 proposes cutting SIN taxes on alcohol (something we tax for a number of reasons, but in particular due to it’s proven impact on the cost of health care) while raising taxes on all kinds of things we need to be encouraging folks to buy like new homes, in addition to adding an extra 8% on many basic food items, electricity bills, gasoline and other aspects of daily life. 

In general, on sales taxes at least, it would be fair to say that I am supportive of the status quo. I don’t think an economic crisis is a good time to introduce any kind of anti-stimulus as it gives people reasons to both put off big purchases and shrinks the value of a dollar (this is what causes inflation). That being said, cutting sales taxes isn’t something I would support either. The $1000 bucks a year for a couple or $300 bucks for a single person, with respect, will in many cases not make up for the negative impact this will have on people’s pocket books, certainly not on big ticket items.

Barriers to Economic Participation Remain

The budget lacks new money for childcare, something that like it or not is extremely important in allowing low and single income families the opportunity to improve their situations by enabling them to fully participate in our economy. A single mother for example is simply unable to work without having childcare and in times like these especially, it is important for government to be an enabler to economic participation. With a lack of vision to leverage skills training, or government supports like subsidized daycare to remove barriers for entry into the workforce, the 2% increase in social assistance is inadequate. A single person living on social assistance in Toronto, lives in what can only be described as extreme poverty, and faces barriers to re-entry to the workforce that turn utilizing social assistance into a ‘trap’ of sorts. 

Now more than ever it makes sense to address social assistance rates to ensure that folks who find themselves in difficult times can live with dignity. By combining this with a removal of barrier to economic participation, government could rest assured that folks would seek out opportunities that could see them removed from the social assistance rolls and build a better life. 

Culling 5% of the Workforce is a Bad Idea.

An arbitrary decision to lighten the provincial government workforce by 5% to me also seems inappropriate at times like this. The reality is if there is 5% of the workforce that is unnecessary, it shouldn’t take an economic crisis to fix that. Should the only reason for targetting 5% of the public service be that the government needs to find savings, I would suggest this is probably the wrong place to look. Having interfaced with government a lot in my life, I wonder how service delivery would suffer if one in twenty employees were removed. Perhaps the Cabinet should look closer to home and cull the same percentage of political staff, so that Cabinet Ministers themselves have to make some really hard decisions of their own by deciding who in their office they will let go. Having worked at Queen’s Park, I know there isn’t a single Minister who would want to cut a single true believer from their team, but perhaps this needs to be part of the thought process as they force their Deputy Minister’s and their senior staff to make the same difficult, arbitrary decisions.