Budget 2021: Hits & Misses
Posted April 20, 2021
Posted on April 20, 2021
BUDGET 2021: HITS & MISSES
ACORN Canada Wins the First Step towards Ending Predatory Loans in Budget 2021
– Great first step in Stopping Predatory Lending by agreeing to do a consultation on lowering the federal interest rate. This has the potential of lowering the NSF fee.
– $10/day Child Care: 6 years is too long to wait! We also now need the provinces to step up!
– $15/ min wage for federal workers – Only 26,000 people nationally affected but a good step.
Bad news on corporate accountability:
- No effort to Stop Corporate Landlords – REITs in particular from destroying the existing affordable housing stock.
- Complete disregard for low-income urban people trying to afford outrageous internet prices.
- Only a slight Luxury Tax and No Wealth Tax
Chrystia Freeland, the Finance Minister started the Budget speech by saying, “If COVID has taught us anything, it is that we are in this together”. However, numbers clearly show that it is the low-wage works, women, racialized communities, people on social assistance, seniors – who have been disproportionately impacted by the pandemic when the wealthiest have amassed more wealth than ever before!
First, some good news. For years, ACORN members have been fighting to end predatory lending. We released a national report in February 2021 with nationwide actions to demonstrate that there is a massive surge in installment loans and that the government needs to stop 2 Tier Banking. Although it’s not full Fair Banking Reforms that are needed by people, today, the government took a first step by launching a consultation on lowering the criminal rate of interest in the Criminal Code of Canada applicable to, among other things, installment loans offered by payday lenders. ACORN members will be watching those closely as this evolves!
The Budget also takes an important step in moving towards affordable high-quality childcare, an issue again that ACORN members have been fighting for. This investment, which if sustained, will go a long way in ensuring women’s economic participation as well as boosting the economy.
However, that’s where the good news gets over. The budget does not offer anything at all when it comes to affordable housing or affordable, high speed internet for low-income urban Canadians.
ACORN members highlighted the adverse impact of the huge tax subsidies that the federal government gives to Real Estate Investment Trusts, popularly called REITs who are Canada’s biggest landlords. Analysis of seven residential REITs shows that if they were taxed at the same rate as non-REIT Canadian corporations, they would have paid over $1.2 billion more in taxes since 2010. CAPREIT, Canada’s biggest REIT, CAPREIT would have paid over $425 million more in taxes.
Budget 2021 was a historic opportunity to correct this anomaly by closing the tax loophole in the Income Tax Act but that opportunity is lost! Moreover, except for the very modest increase in Rapid Housing Initiative (RHI)and some other initiatives such as the Canada Housing Benefit. The analysis by Steve Pomeroy showed that the funding for RHI is not designed to enable non-profit acquisition of modest rent properties. Further, the CCPA analysis showed that the Canada Housing Benefit is too little and will reach too few tenants.
ACORN members have been demanding a Federal Rent Relief Program so that millions of tenants struggling to retain a home during the pandemic are able to do so. The feds lost another opportunity to help low-to-moderate income people realise their right to housing.
The budget also failed to do anything at all when it comes to access to the internet among urban low-income Canadians. Except for the mention of broadband fund in rural areas, the budget makes no mention of ensuring that struggling Canadians will get any support to access the internet. The pandemic made it clearer than ever that everyone needs the internet.
Tax the Rich and Stopping Pandemic Profiteering
Lastly, the budget also does nothing to stop pandemic profiteering. Canadians for Tax Fairness’s report showed that 34 of Canada’s most profitable corporations will walk away with record profits adding a combined $8 billion to their bottom lines during the pandemic. Some of them used federal public subsidies to pad their profits and returns to their shareholders and billionaire owners. However, the Federal Government only introduced a luxury tax which won’t make the slightest dent in growing inequality, nor would it do anything to help pay for the pandemic or recovery.
Modernizing EI and Workers Benefit
The budget brought some important changes to the EI system for at least some time – maintaining uniform access to EI benefits across all regions through a 420-hour entrance requirement for regular and special benefits, extension of the EI sickness benefit to 26 weeks and support individuals with multiple jobs by ensuring that all insurable hours and
employment count towards a claimant’s eligibility, as long as the last job separation is found to be valid.
However, all other critical issues brought forward by labour unions and ACORN members that would have made the EI system more accessible and non-discriminatory remain unaddressed. ACORN has been calling for to raise the benefit rates for all workers to 75% of earnings and 100% of earnings for Low Wage Workers. Many low wage workers earn below the poverty line and EI’s 55 percent income replacement rates result in even deeper poverty, undermining its core purpose. The budget allocates some amount for a consultative process to discuss the long-term reforms to EI which we hope would include the people it affects the most.
Disappointingly, the budget while extending the Canada Recovery Benefit from 38 weeks to an additional 12 weeks, lowers the benefit rate from $500 to $300 per week. So, while, the first four of these additional 12 weeks will be paid at $500 per week, the remaining 8 weeks of the extension period will be paid at a lower amount of $300 per week. All new claimants after July 17, 2021 would also receive the $300 per week benefit, available up until September 25, 2021. This is quite problematic given that it is impossible to survive at this amount.