Federal Budget Must Focus on Job Creation, Not More Cutbacks, CAW Cautions

March 20, 2013, 11:20 AM EST

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The CAW is calling on federal Finance Minister Jim Flaherty to focus on job creation, not more spending cutbacks in his 2013 budget, to be unveiled tomorrow.

"Canada's public debt is small, relative to past history and to the debt problems faced in other regions, such as Europe," said CAW National President Ken Lewenza.

"Committing to wipe out the deficit by 2015, above any other economic or social priorities, is a serious mistake that will undermine our already-fragile economic recovery," Lewenza said.  Flaherty has pledged to eliminate the deficit completely by 2015 despite the recent economic slowdown, and slower-than-anticipated growth in federal revenues.

"Minister Flaherty should put pragmatism ahead of ideology, and recognize that Canada's economy needs more support from its federal government, not less," Lewenza added.  Ottawa's deficit has been cut by two-thirds since the worst days of the recession, program spending has been pared back by over 2 percentage points of GDP, and the government debt burden (measured as a share of GDP) is already falling.

"The assumption that we face some kind of fiscal emergency is simply untrue," Lewenza said.  "Government should not be adding to the woes of our private sector with its own downsizing.  That only makes matters worse."

Lewenza called on Flaherty to reverse planned spending cuts, and make targeted new investments in key program areas - including support for public infrastructure, job-creation measures in manufacturing and other key sectors, and repairing the EI system.

The CAW endorsed the emphasis on skills training that the government has indicated will be an important part of its 2013 budget, but warned that Ottawa must be prepared to pony up real resources.

"Let's see if this budget matches rhetoric with real spending."  It will not be enough, Lewenza said, for Ottawa to simply reallocate funds that are already flowing through provincial labour force programs - that is a "shell game."

The CAW also urged Minister Flaherty to make continuing investments in Canada's manufacturing sector.  "Despite the growth of energy exports, manufacturing is still far and away Canada's most important export industry, and the sector is poised for a rebound" on the strength of U.S. recovery and a softening Canadian dollar, Lewenza noted.
"The federal government can boost this recovery with timely investments and supports for auto, aerospace, food processing, and other critical sectors."

Lewenza called on the government to abandon its ill-advised and punitive EI regulations, which "punish the victims" of unemployment through unprecedented surveillance and relocation requirements. 

"There are still 2 million effective unemployed in Canada. The problem is not the attitudes of the jobless; the problem is the lack of jobs.  They deserve to be able to access this system when they need it."  In 2012 on average, just one in three officially unemployed Canadians could qualify for regular EI benefits, and that number will fall further with the government's new directives.

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