Austerity chokes Canada’s down-and-out as Harper, Flaherty look the other way

This article was last updated on April 16, 2022

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The exceedingly aggressive austerity cuts carried out by Prime Minister Stephen Harper and Finance Minister Jim Flaherty over the past seven years have come home to roost as millions of Canadians, depressed and without hope, are succumbing to its worst consequences.

Program cuts and tax reductions for corporations and the wealthy have had a huge, disproportionate impact on the poor, working poor, underemployed, and those with health problems including mental illness.

The massive austerity program results in less income, decreased services, and reduced health care for many of Canada’s most vulnerable people. It appears that more than 3.5-million Canadians – mainly the poor, the unemployed/underemployed and the under-privileged – are struggling.

The attacks on the vulnerable began soon after the Conservatives came to power in 2006. They launched cuts that were a broadside attack on the government’s ability to finance many of its activities, including these much-needed employment and social support programs.

Ignoring the needs of Canadians living in desperate conditions, Harper and Flaherty initiated the extremely aggressive austerity program because of their determination to reduce the deficit and cut the size of the federal government.  Their decisions were based largely on their own neo-liberal economic beliefs.  

Needless, brutal cuts

There are numerous examples of needless, brutal cuts. Claiming it was concerned that some people don’t have enough incentive to work, Harper-Flaherty toughened up the Employment Insurance rules. They took millions of dollars away from mostly seasonal workers, leaving them vulnerable.

Human Resources and Skills Development Canada (HRSDC), the government department that provides the most hands-on support for the poor, is being cut more than any other department. It will lose 5,700 positions – one-quarter of its workforce by 2016. The largest cut in absolute terms is to the Citizen-Centered Services Program, which helps Canadians access government services by phone and online.

Harper also cut funding to the National Aboriginal Health Organization (NAHO) and to a number of Aboriginal women’s health organizations – crucial programs on suicide prevention, women’s health, and diabetes. They also cut the Women’s Health Contribution Program, which funds six women’s health organizations across the country.

The austerity cuts are based on Harper and Flaherty’s determination to cut the deficit and reduce the size of government. The two unwaveringly believe in neo-liberal economics, which enriches corporations and the wealthy at the expense of the rest of us. Unfortunately, the problems of the less fortunate are not acknowledged in the PMO or Department of Finance.  

Two moves early on by Harper and Flaherty eliminated the ability of the Conservatives to fund the kind of generous, liberal-minded government Canadians have been used to.  First, a two-per-cent cut in the Goods and Service Tax income in Flaherty’s first two budgets cost the government a staggering $10-billion to $12-billion annually in revenues that had been used to help support government services.

In addition, Flaherty has cut $60-billion in corporate taxes since the Conservatives took power in 2006 – needlessly reducing the country’s corporate tax rate to the lowest among G8 countries.

The austerity program and other government cuts have had disastrous consequences for millions of Canadians. There are staggering disparities in life expectancy based on the amount of education a person receives and their amount of education. On average, people living in rich neighbourhoods live an average of 86.3 years, while those living in a poor neighborhood live only 65.5 years – a difference of 21 years.

Use of food banks still increasing

There is more hunger across the country than ever before. In March, 2012, 882,188 people received food from a food bank in Canada – 31 per cent higher than in 2008, when austerity was being launched.

Children are not spared from the suffering. According to UNICEF’s most recent report, Canada is 21st out of 29 top countries for relative child poverty  , and 27th for the percentage that were overweight.

Between the years 2007 and 2011, Statistics Canada reported a 20 per cent rise in people who said their mental health was deteriorating.  Mental illness is already the number one cause for disability claims in the workplace. According to the Mental Health Commission of Canada, awards for mental injury at work have dramatically increased in recent years because of pressure placed on workers to produce more during the austerity period.

It’s also likely been an increase in suicides in Canada due to the distress suffered by individuals as a result of the austerity program. Two international researchers, David Stuckler and Sanjay Basu, have documented substantial increases in suicide in several European countries and the United States as a result of austerity cuts.  Suicides in Canada increased from 3,512 in 2005 to 3,890 in 2009, which takes in the early part of the austerity period. However, Statistics Canada is three years behind in posting its deaths statistics, so no information is available covering a large period of austerity. But, assuming that Canada is experiencing roughly the same fallout as are Europe and the U.S., it is safe to predict a sizeable increase in suicides here.

Flaherty pushes ahead with austerity program

Throughout the Conservatives’ seven years in office, independent economists argued that the austerity program was not achieving its stated goal of preparing the country for an economic recovery, but Flaherty refused to budge.

Then in April, the world was shocked when the austerity experiment, which was had destroyed the lives of millions in Europe, was totally discredited. Thomas Herndon, a young University of Massachusetts Amherst graduate student in economics, discovered that an influential paper endorsing austerity practices as a way of rebuilding beleaguered economies was incorrect because of spreadsheet coding errors and selective data.

Amazingly, Flaherty continued with the austerity experiment.  “What I worry about is those that suggest that austerity should be abandoned,” he noted. “I think that’s the road to ruin quite frankly.”

So more cuts that will affect the poor the most are on the way. Harper and Flaherty will chop another $11.8-billion from government spending by 2014-15; job losses in both the public and private sectors will be 90,000 by 2014-15; and there will be 1.4-million unemployed workers in the country in 2015.

If Harper and Flaherty really wanted to balance the budget and look after people at the margins, they could work harder to collect the $29-billion the government is owned by the rich and corporations in unpaid taxes.

They also could try harder to find the $3.1-billion that was given to the anti-terrorism program but that cannot be accounted for.

Canada a ‘rouge state’ internationally

When it comes to complying with international law concerning the rights of its citizens, Canada is a rogue state. We have signed international laws that oblige us to provide certain benefits to all citizens. This means ensuring the right to adequate standards of living involving access to food, housing and clothing, the right to participation in the labour force and community, as well as providing citizens with the opportunity to report violations of these rights.  

However, more importantly, the Harper government has neglected to adopt the part of the Covenant that would establish a complaints mechanism that would allow groups or individuals to go to the UN to protest the treatment they receive. They’ve made sure the process doesn’t work and that there will be no complaints.

Nick Fillmore is a freelance journalist who worked in many areas with the CBC over nearly 30 years. He is a former member of THIS magazine’s editorial board and was publisher of The 4^th Estate, an independent weekly in Nova Scotia, during the 1970s. Nick was also a founder of the Canadian Association of Journalists.  To see other articles, visit Nick’s blog: nickfillmore.blogspot.com