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CAUT Bulletin Archives

May 2012

A Budget of Politics Disguised as Economics

By Wayne Peters
The recent federal budget was a huge disappointment for the post-secondary education sector. Federal transfers to the provinces remain woefully inadequate to meet inflation and increasing enrolments at our institutions. This will leave them unable to create more student spaces, to hire more teachers or to deal with deteriorating infrastructure. As well, no relief was provided for students faced with high tuition fees and increasing loan debt.

But a more disturbing aspect is the 2012 budget signals a major shift in the science and research policy in this country. Stephen Harper’s Conservative government appears committed to the notion that Ca­nadian businesses and industry must be more innovative to flourish in a competitive global economy. To this end, future federal investments will support a narrow, short-term innovation and commercialization strategy that links research outcomes directly to business interests, while neglecting investigator-driven research.

No additional federal dollars were provided to the three federal granting councils which support basic academic research. Not only will funding for each be cut over the next two years, but this budget continues targeting financial support to a number of specific research institutes and projects across the country. In a bolder move, the National Research Council will be restructured to cater directly to the needs of business and industry, leaving its own basic research program to languish.

In essence, more university-based research in this country will now be set politically to serve commercial interests and not by academic researchers through peer-review and merit evaluations to serve scientific and public interests.

As sad as this is for post-secondary education, as public intellectuals, we should be much more troubled by the broader implications of this budget for Canadian society. Faced with a $25 billion deficit, the Conservative government has identified more than $5 billion in cuts, which will eliminate many programs and services and more than 19,000 public sector jobs, to meet its commitment to balance the budget by 2015.

As stated in CAUT’s budget analysis, this budget “eliminates rather than creates jobs, plunges more seniors into poverty, ignores the environmental crisis we face, and does virtually nothing to address scandalously high levels of youth unemployment and student debt.” In fact, this budget will very likely slow economic recovery in this country and force a huge financial and social burden on individual Canadians.

Of course, the approach adopted by our Prime Minister mirrors those implemented by many other developed countries in past and current financial crises. It relies on “deficit hysteria” to validate tough austerity measures aimed at deficit reduction through shared sacrifice. But is it justified?

Canada’s debt-to-GDP ratio is among the lowest of the industrialized countries. Since the government’s fiscal update in November 2011 — a mere six months ago — our deficit for 2011–2012 dropped about 20 per cent ($6 billion) under the previous budget regime. It could easily be argued that we don’t have a deficit problem and that this, in fact, is a time to support the still-fragile economy through federal investments in programs and jobs in areas such as health, social services, education and research.

Mr. Harper’s tactics, however, are part of a broader ideology advocated by right-wing, business-minded neoliberals. It is not just about the math. It is politics pure and simple — not economics — that seeks to slash big government and its intervention in the market economy, thereby giving the private sector substantial influence over the political and economic priorities of the country.

The most effective way to accomplish this is to eliminate tax revenue. Business coalitions such as the Ca­nadian Federation of Independent Business and the Canadian Council of Chief Executives have been very successful at lobbying for corporate tax reductions as a means to stimulate job creation and econo­mic growth in the private sector. And the government has been all too accommodating.

It is estimated that tax cuts intro­duced by the Conservative government in the 2011­–2012 year alone amount to more than $50 billion in lost revenue — twice the amount of the deficit for the same fiscal period. Combined with overspending, it does not take long to realize a significant deficit. At this point, then, the stage is set to claim, as the Conservative government has just done in its 2012 budget, that spending restraint and not tax increases are needed to balance the books.

Sadly, the next steps round out the neoliberal philosophy. Demonize, devalue and defund the public sector and the programs it provides. Identify this as a burden on the taxpayer that can no longer be afforded. Declare public sector wages and benefits too extravagant compared to those in the private sector. Garner support from the business sector for bringing them more in line with the private sector, encouraging a race to the bottom that can only end badly for everyone. And of course use all of this to justify eliminating social programs, cutting public sector jobs and privatizing government services.

But this attack on the public sector does not have to go unchallen-ged. Workers in the public sector represent a significant portion of the total Canadian workforce and a majority are unionized. Public sector unions hold considerable power to set the political tone for the remaining working class. They have the ability to expose the outrageous inequalities in our society and the manner in which the financial elites influence what our elected governments can and will do.

Working together through organizations like the Canadian Labour Congress, provincial federations of labour and other coalitions such as Canadians for Tax Fairness, the public sector can mobilize the working class into a significant social and political force that can shape our society. The alternative is to sit by while the neoliberal right dismantles public services crucial to our standard of living and which are the product of hard-won battles fought by those before us.