I am writing to support the proposal that your government develop a Fairness Test to evaluate the impact of key tax and spending policies in future provincial budgets on income inequality.
Recent studies have concluded that income inequality has been growing dramatically in our province and all of Canada. Poor and middle-class families have been falling behind while the wealthiest are taking more of the income gains from economic growth than ever before in recorded history. In fact, in the past decade, a third of all income growth went to the richest one percent of Canadians.
A recent report by the Conference Board of Canada concluded that income inequality has been rising at a faster rate in Canada than in the United States since the mid-1990s. Among 32 OECD nations, Canada has fallen from 14th most equal to 22nd.
The research shows that large and growing income inequality weakens economic growth and stability, undermines social cohesion and diminishes the quality of life of all Canadians. High income inequality also raises a profound moral question about fairness and social justice.
Income inequality has increased as a result of the global economic crisis which began in 2008. However, the economic crisis has had, and continues to have, a greater negative impact on women’s lives – and this is in the context of women having a tougher life / work balance and greater economic insecurity before the crisis began.
Since the start of the economic crisis, much of the attention has been on how workers in male-dominated industries (e.g. construction, automotive and forestry) have been coping. However, the private sector industries dominated by women (e.g. retail, hospitality and tourism) have also been negatively affected. These female-dominated jobs are often lower-paid, part-time and non-unionized compared to male-dominated industries. As a result, women have less support to cope with economic insecurity and income inequality.
Throughout the economic crisis, many employers in female-dominated industries have asked women (those still fortunate to have a job) to work longer hours and some have reduced or eliminated benefits. In addition, women working in these sectors who have had their jobs eliminated usually don’t have severance pay benefits and Employment Insurance benefits are not available to many of these women.
At the same time, the economic stimulus packages introduced by governments have not helped protect jobs in female-dominated industries or help women find new jobs. Instead, the focus of these stimulus initiatives has been infrastructure projects and support for the automotive and construction industries – where men are the vast majority of the workforce. There has been no similar economic investment in sectors which would mainly benefit women workers such as health care, child care, education and social services.
To add insult to injury, governments are now introducing austerity measures to reduce deficits. Public spending cuts in health care, education, child care and social services will have a much greater impact on women than on men. These services are dominated by women workers and they will be directly impacted by job losses and tougher working conditions. These spending cuts will also reduce the quality and availability of these critical public services which women rely on more than men. And women will have to take on more responsibilities of caring for family members who can’t access these public services.
The top priority of future provincial budgets must be to reduce income inequality for everyone but especially for women. This is critically important. If the wrong fiscal policies are chosen, income inequality will grow even larger, causing more damage to people’s lives, our economy and society and the government’s finances.
Once again, I urge your government to establish a Fairness Test to assess the impact of key tax and spending policies in budgets and determine whether they will reduce income inequality or make the problem worse. This test would embed the principle of fairness into public policy choices and ensure the poorest citizens and women are not hit the hardest by these choices. Such a test could be developed and applied by the Department of Finance and published in the budget as part of the fiscal planning framework.
The vast majority of people in our province recognize that the gap between the richest and the poorest is growing. They are concerned about the adverse effect this has on the quality of their lives and the social fabric of their communities. However, they also know that growing income inequality is not inevitable; it is preventable. They understand the provincial budget is a lot more than just an exercise in numbers. It is an opportunity to make policy choices about the kind of province we want to build – a province that has a more equitable and sustainable economy and society.
Establishing a Fairness Test for provincial budgets would be a transparent and verifiable way for your government to show, rather than simply assert, its commitment to the essential goal of reducing income inequality and improving the quality of women’s lives.
Women 4 Change
c.c. provincial Finance Minister