“The major economic problem faced by Canadians is a very slow recovery and weak job market, not government deficits or rising debt. But public spending cuts at the federal and provincial level will make the real problem even worse.” -- Andrew Jackson, Chief Economist, Canadian Labour Congress

Attacks on jobs, wages and services in a time of rising profits Summer 2012

 People who depend on public services – which is everybody – are seeing many of those services weakened or wiped out entirely  The 2012 Ontario Budget will cut $17.7 billion from public services over the next three years

 Public employees are facing direct attacks on their jobs and wages  The government is cutting jobs and demanding a wage “freeze” (really a wage cut equal to the rate of inflation) for all provincial workers  Private sector wages are not keeping up either. In Ontario, overall wages went up just 0.7 per cent from Feb to Feb But inflation was 2.9 per cent. In other words, real wages (after inflation) fell by 2.2 per cent

 Premier Dalton McGuinty is making these big problems worse  McGuinty says more deep cuts to public services, wages, and jobs are needed to get the deficit to zero by

 The government has exaggerated how bad the deficit is  In the early 1990s there were five years when the deficit was worse than it is now  The deficit is manageable

 Taking advice from banker Don Drummond, McGuinty wants cuts that are deeper and last longer than those of the 1990s  Drummond was happy to ignore options for raising revenues because it helped “keep the screws on” spending  Based on this, you might think the deficit was caused by public spending. It wasn’t

 Ontario’s deficit was caused by the recession, which cut tax revenues to governments everywhere  Ontario had balanced budgets for three years before the recession  Ontario has the lowest spending per person of any province in Canada

 Ontario’s program spending is 11 per cent lower than the average of the other provinces  Spending is not the problem

 Spending cuts will hurt the economy and reduce government revenues  The Centre for Spatial Economics, a mainstream forecasting firm, estimates that the 2012 Budget will cost 7,000 jobs in 2012  But by 2015, Ontario will have 105,000 fewer jobs  In 2015, the unemployment rate will be 0.9 per cent higher as a result of the Budget

 Of the 105,000 jobs missing in 2015, 65,000 will be public sector jobs and 40,000 will be private sector jobs

 Cutting spending on public services hurts the economy more than an equivalent increase in taxes: “Raising taxes rather than cutting spending imposes lower costs on society in terms of reduced jobs and GDP while achieving the government’s objective of reducing the deficit.” - Centre for Spatial Economics, April 2012

 Cuts and privatization will cut wages and jobs for workers while creating more profit opportunities for investors.  They won’t help struggling households – in the public sector or the private sector

 Consumers and governments have been propping up corporate profits for close to three decades – by going into debt  Meanwhile, corporations in Canada are sitting on $527 billion in cash that they are not spending or investing

 The global economy is like a Monopoly game in which one player has all the money and the others are broke  It’s time to start a new game. That can only happen by redistributing money from corporations and high-income individuals to workers and governments to get the economy rolling again

 Around the world, citizens are fighting back, demanding solutions that don’t mean lower wages and higher profits, or fewer public services and more private ones

In the last two years, OPSEU has:  promoted fair taxation at the G-20  campaigned to reveal the link between the McGuinty wage freeze and corporate tax cuts  launched the satirical “People for Corporate Tax Cuts” campaign  Supported the Occupy movement and its opposition to growing inequality  sponsored the Commission on Quality Public Services and Tax Fairness

 The 2012 provincial Budget deal that raised taxes on those earning more than $500,000 a year will raise around $500 million a year for public services  More needs to be done to support jobs, wages, and public services  In 2012, we are fighting “austerity” in our communities and at the bargaining table  Working people did not cause Ontario’s problems….

Photo: Jackson Chui