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July 20, 2010 - No. 136

Federal Budget 2010-2011

Harper Government Dead Set Against Strivings of the Workers and People for a Way Out of the Crisis

The Senate in a 48 to 44 vote passed the Harper Budget Bill C-9 without amendments July 12, even though the Liberal Party continues to say it opposes the budget. The Liberal Party in the Senate could have defeated or amended Bill C-9, as the party still holds a majority of Senate members. Several Liberal members in the Senate stayed away from the vote allowing the bill to pass. While Liberals in the House of Commons still speak publicly against the Harper budget, they voted to pass it last spring to avoid an election. The following article discusses some of the issues raised by Harper's Budget.

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The Harper government budget was presented last March 4 and given Royal Assent July 12. The budget reveals a ruling class and government determined to block the struggles of the Canadian workers and people to defend the rights of all by restricting monopoly right and building a pro-social self-reliant economy that develops without crises. The Harper government sees no possibility or future for the Canadian economy other than one ensnared in the race among the rich and their monopolies to be competitive on the global markets even if this means crisis and chaos in the economy and in the lives of the workers and people in Canada and on the world scale. During the G20 Summit Harper said that Canada has no economy, as it exists only as a fragment within the global economy or more properly said, captured within the U.S.-led imperialist system of states.

The Harper budget reveals both a morbid preoccupation with the idea of leaving the economy at the mercy of the vagaries of the global markets and a hatred of anything that could be done to deploy the assets of the nation in a way to serve the needs of the Canadian people and engage in relations for mutual benefit with other countries. According to the Harper government and its budget, it is impossible and would be suicidal for Canadians to use their human and natural resources and socialized means of production to guarantee their own well-being and the health of Mother Earth, deploy the human factor in a socially conscious manner without destructive and wasteful unemployment and vest the decision-making power in the people. The Harper budget serves notice to Canadian workers and their allies that they must step up their independent work to build an effective workers' opposition as the only way to turn things around for the benefit of the people.

Non-military measures in the budget can be characterized as follows:

1) a budget that adamantly refuses to assist the workers and people affected by the global economic crisis;

2) a budget that puts all the assets of the nation at the disposal of the monopolies to assist them to secure their profits and compete and win on the global markets at the expense of the people and Mother Earth;

3) a budget that prepares for an assault of unprecedented intensity on social programs and public services under the hoax of returning to balanced budgets;

4) a budget that prepares for an anti-social revamping of the retirement income system.

Refusing to Assist the Workers and People Affected by the Crisis

The Harper government goes on record for its stubborn and dogmatic refusal to provide any assistance to workers and others who through no fault of their own are in the midst of a global economic crisis. Canadians have been losing their businesses and jobs by the hundreds of thousands and many are facing economic insecurity and even the prospect of abject poverty and civil death.

In this budget, the Harper government claims that it is providing $4 billion to assist the unemployed and to protect and create jobs. Of this $4 billion, $1.6 billion are said to go towards benefits for the unemployed, including a one-year extension of the work-sharing program. These measures are from the 2009 budget and extended into 2010-2011. They include five additional weeks of EI benefits to workers eligible for EI and the possibility that workers whom the government calls "long-tenured workers" will receive 5 to 20 weeks of additional benefits. "Long-tenured workers" are those who have been paying for EI for long periods but have never or rarely collected benefits. This budget extends the two measures from 2009 for one more year. (As an aside, workers should compare Harper's allocation of $4 billion for this unemployment program -- dollars that mostly stay in the economy as workers purchase necessities -- with the $9 billion to purchase 65 U.S.-made fighter/attack jets plus an additional $9 billion maintenance commitment -- dollars that mostly are taken out of the Canadian economy.)

The government does not say that close to 60 percent of unemployed workers across the country are routinely not eligible for any benefits at all. This is particularly the case amongst part-time, temporary, contract and seasonal workers. Besides, workers in non-standard categories, who now number tens of thousands, if not hundreds of thousands, if they lost their jobs in 2008-2009 have now exhausted their benefits and are moving in large numbers towards social welfare to survive. The government does not even acknowledge their situation or address the blatant discrimination of a system based on arbitrary criteria for eligibility, especially with respect to the number of hours that must be worked before a worker becomes eligible for EI. Such discrimination in the context of a global recession leads to tragedies in the lives of workers but the government turns a deaf ear on their situation and their demands and by doing so blames them for their plight. Instead of introducing emergency legislation to guarantee that no one suffers from lack of employment the Harper government is very busy concocting a rosy picture according to which the recession is mild in Canada compared to the G8 or G20 countries and that Canada is already experiencing recovery. Millions of workers are left to fend for themselves at the worst time in their lives. For decades workers have been demanding that the arbitrary criteria for EI be scrapped, particularly that the number of hours of work required be reduced so that all unemployed workers are eligible. But federal governments, including the Harper government, have flatly refused saying they do not agree with "hand outs" and are not going to finance workers on "vacation," as this weakens the iron fist of the labour market to keep workers submissive and without modern rights.

The government also announced that EI premiums would be allowed to rise again in 2011 after a temporary freeze. Workers will be forced to pay more in premiums for a program that 60 percent of them are not even eligible to access.

The outlook of the federal government does not recognize workers as the producers of all wealth in society and providers of services. The government's capital-centred outlook considers workers not as producers of social product but consumers and a cost of production. It views the legitimate claims of workers on the value they add through their work as a cost to the rich and their monopolies. The government falsely insists that the aggregate added-value annually produced by the Canadian working class transforming the bounty of Mother Earth is created by the monopolies and not the actual producers. With this obsolete view, any money returned to the workers through social programs to sustain their living standard is considered a waste while money taken out of the economy by the claims of the rich and their monopolies and through plunder of the state treasury in pay-the-rich schemes is considered to be positive and a means to create additional wealth and jobs.

The "job creation" work-sharing program, through which workers can allegedly avoid layoffs, requires workers to agree to work fewer hours and in return receive for a limited time a portion of their lost income through EI. This, however, does not begin to address the fact that entire sectors of the economy, such as forestry and manufacturing, are being decimated and that there is nothing to share.

A situation where workers are losing their livelihoods and means of subsistence and are being cast into ever more precarious situations must be considered a major problem for the society. To deny the producers of wealth and providers of services their crucial role and claims on the country's collective social product puts in peril the economy as a whole. General and sectoral unemployment are signs of the need to put in place emergency measures to defend the workers and their vital role in the economy. An economy that cannot function without destroying wealth and denying the actual producers their vital role and claims needs serious economic renewal. The budget refuses even to discuss the necessity of economic renewal. Instead, it is filled with capital-centred prejudice and non-scientific outlook, for example that the fall of the for-profit banking and credit sector could mean the end of the country but the collapse of industrial production seems to be something that Canada can very well endure.

Putting All the Assets of the Nation at the Disposal of the Monopolies

The federal budget sees no other way to deal with the crisis than to put all the assets of the nation at the disposal of the monopolies to secure their profits and to make them competitive on the global markets.

The budget refers to the need for Canada to be a leader in the opening of markets within the G8 and G20 countries. The Harper government states that Canada must be a major player in the opening of markets because "Canada is dependent on trade." This claim discourages any public discussion on what kind of trade that should be and what role international trade should play in a self-reliant economy. Canadians have the right to discuss in an effective way what kind of economy they want and the right to have real power over the economy's direction. The recent direct experience of the economic crisis has opened the eyes of many that economic renewal is necessary at least towards an economy that is pro-social and self-reliant and not so dependent on exports, an economy capable of overcoming destructive influences from abroad such as the dramatic crash of U.S. demand for Canadian made social product, an economy that deals seriously and scientifically with the obsolete business cycle and labour market.

The budget opposes the outlook that trade should be conducted on the basis of mutual benefit and not be an instrument to block the strivings of the people to be sovereign in all their affairs including their economic affairs. The most promoted measure of the budget in this regard is the elimination of tariffs on the import of machinery and equipment. The Harper government boasts that it has been progressively eliminating tariffs over the years and that 2010-2011 will see their total elimination. It presents this measure as being critical to Canada's long-term prosperity and a source of competitive strength for Canadian businesses. For Canadian workers and their economy, the elimination of tariffs on machinery and equipment means that the government is putting the nail in the coffin of an economy that produces its own means of production, an important component in the building of an all-sided sovereign economy. The government raises the issue of the so-called "competitive strength of Canadian business" to hide this extreme weakness of the Canadian economy, its lack of a diverse machine-building sector in all regions. This lack means that much of the heavy industrial equipment necessary in modern production, which are commodities containing the most added-value, must be purchased abroad draining our collective wealth and denying us work and expertise in this crucial sector and security of supply.

Another measure pertaining to what the budget calls the opening of markets is an "aggressive bilateral strategy that currently includes efforts to complete a Comprehensive Economic and Trade Agreement with the European Union, exploratory talks with India and the implementation of recently concluded agreements with Colombia, Panama and Jordan." Free trade agreements are an abdication of social responsibility by governments. They hand over the power over trade to the global monopolies that manipulate trade to their narrow benefit and to the detriment of both Canada and others ensnared within monopoly-controlled free trade agreements.

As well, the elimination of regulations limiting foreign ownership of Canadian subsidiaries of foreign monopolies is a move widely seen as the precursor to the broad sale of Canadian telecommunications and other companies to foreign interests.

Through all these measures, a view is presented that Canada's future is inextricably tied to increased foreign domination in all sectors of the Canadian economy. This comes at a time when the examples of U.S. Steel, Vale Inco, Xstrata and others show that the monopoly right of foreign owners to plunder our resources and to act as they please -- including leaving people stranded when the global monopolies decide to pack up and leave -- must be restricted.

The budget includes tens of billions of dollars in subsidies from the public treasury to assist monopolies to secure their profits within the context of the global economic crisis and to make them competitive and winners on the global markets. No broad discussion of this issue has taken place. To many it appears on the face of it as ludicrous to pay a monopoly to be competitive when its competition may also be active in Canada. If the strength and success of a monopoly wipe out a competitor how is the Canadian economy any further ahead or more secure? As well, when monopolies grow stronger this gives them increased capacity, ability and willingness to move their operations globally or control global production by limiting operations in their Canadian subsidiary not to speak of their greater strength to manipulate prices and drive down wages, benefits and pensions to the detriment of the economy. Encouraging monopolies to compete and win and paying them public funds to do so may make certain global monopolies winners but Canadians, their communities and economy are the certain losers.

The government is well known for its slavish regard for the monopolies in the energy and mining sectors, which are particularly notorious and opposed for their destruction of the natural and social environments in Canada and abroad and for the dirty role they play in feeding the war machine of the U.S. imperialists and their military allies. In addition to everything else Canada provides to private empires in the energy and mining sectors -- infrastructure, natural resources, a standing army of workers through the obsolete labour market, large numbers of public subsidies and incentives and low corporate taxes. These features allow the monopolies to reap enormous wealth from Canada both as arrogant spoilers of Mother Earth under the hoax of taking risks for development, and increasingly under the camouflage of using "green energy" and "green technologies."

Amongst these measures is the decision to further reduce the federal general corporate income tax rate, which was lowered to 18 percent January 1, 2010 and further down to 16.5 percent January 1, 2011 and to 15 percent on January 1, 2012. The Canadian government boasts that by 2012, Canada will have the lowest statutory corporate income tax rate in the G7. This deprives the public treasury of funds that should be allocated to social programs and public services, and to build public enterprises in each sector of the economy as the core of an economy that serves the people.

In the budget, plundering of the state treasury to finance private empires is done under the hoax of stimulating the economy to bring it out of recession and build the economy of the future. No discussion is entertained of a people's stimulus to ensure that public funds go only to strengthen public enterprises and not into the coffers of the rich to reinforce their private empires that pay the rich schemes are forms of corruption, privilege and backwardness. Also, no discussion takes place surrounding the origin of the stimulus money and that government borrowing acts as a safe-haven for capital during a crisis when there is nowhere else to invest. For example, this budget adds another $10 billion in subsidies to the monopolies ostensibly to rebuild Canada's infrastructure and to help distressed industries, but these programs serve to secure the profits of the construction monopolies and suppliers, and also the financial oligarchy in the context of a global economic crisis by providing risk free areas for the investment of their capital.

That specific part of the budget called "stimulating the economy" is scheduled to wind down at the end of March 2011. Even before the conclusion of the stimulus program, the Harper government is engaged in a propaganda campaign for "austerity to pay down the debt and bring down the deficits to a balanced budget." Those debts and deficits were incurred mostly from spending on pay the rich schemes, providing infrastructure for the monopolies and shifting claims of the people for modern healthcare, education and retirement with dignity away from companies to the public treasury. Austerity means paying down the debt on the backs of the people by limiting funding of social programs and public services, increasing individual taxation such as the HST and government fees of all sorts.

In this budget, the thrust of the plundering of the state treasury is shifted from what was called a "stimulus package" to what Harper is now calling mobilizing all the resources to ensure, "This country is going to emerge from this recession in the strongest position of any first-tier country." The growth he refers to in the budget is the growth of private capital and private empires on the global markets, not the planned growth of production within new relations that ensure that growth takes place to serve the needs of the people and the general interests of society.

Under the general theme of partnership with the private sector, the budget continues previously adopted measures to use public money to pay the rich. One set of these measures pertains to the increased financing of research done for the monopolies in research institutes and educational institutions. Programs include financing the development of the RADARSAT Constellation mission to monitor the operations of the Canadian armed forces in their aggressive role as annexed mercenaries to U.S. imperialism and to provide lucrative contracts to the aerospace industry, and other projects such as the College and Community Innovation Program. The budget states that all research and educational activity in the country makes sense only when geared towards what it calls "practical applications," which means putting the human and material educational and intellectual resources of the nation and public money at the disposal of the monopolies.

Within the theme of plundering the state treasury to pay the rich, much of the budget's emphasis is dedicated to what it calls a review and speeding up of the regulatory review process of projects proposed by the monopolies. The emphasis here is especially on projects in the energy and mining sectors, which are exactly the sectors where workers and communities in Canada and abroad are waging the most bitter struggles to restrict monopoly right. The example of BP's reckless destructive activities in the Gulf of Mexico is now burned into our consciousness but the Canadian government sees things in the opposite way and proposes to expedite the review process to allow these monopolies to do as they please without social and natural restrictions demanded by the people.

The budget states: "Canada has established itself as an energy superpower, being the third-largest global producer of gas, seventh in oil production, and the world's largest supplier of uranium. Our international reputation as a safe and reliable energy supplier creates unprecedented opportunities for exporting our energy products within an integrated North American energy market and to the rest of the world. Our substantial reserves of oil, natural gas and other energy sources make Canada an increasingly attractive destination for global investment. These major new investments will allow us to tap our abundant energy potential while contributing to faster economic growth, creating a significant number of high value jobs and rejuvenating communities, especially in remote and rural areas.

"The Government can play an important supporting role in promoting investment in major energy projects by ensuring that its regulatory approval processes are timely, predictable, and do not unduly delay investment decisions. In this budget, the Government is taking steps to accelerate regulatory reviews of major energy projects, while continuing to protect the environment and ensuring that Aboriginal peoples and other interested stakeholders are effectively consulted. These changes will lead to increased investment and economic benefits for Canadians."

Workers will note that the energy resources of Canada are considered by this government as annexed sectors of the U.S. empire (e.g., "an integrated North American energy market") and not precious assets of the nation to be used with extreme caution regarding the natural and human environments and as part of nation building and strengthening a diverse self-reliant economy with manufacturing as an essential component in all regions including the resource-rich ones. Workers will also note how the fact that these resources are largely located on Native lands is raised as a sideline issue and not as a matter of upholding the hereditary rights of the Aboriginal Nations and of Canada entering into nation to nation relations with those nations. This policy of marginalizing Aboriginal Nations is based on negation of their hereditary rights, elite accommodation through bribery and other means, increased violence of the social conditions and against those who refuse to submit, and criminalization of resistance. This must be opposed by all.

The budget's concern for the environment is a fraud. This is shown in part by the fact that the government is looking into ways to accelerate regulatory review of major energy projects as if speed is the problem, and by a measure in the budget that proposes that environmental assessments of energy projects will no longer be the responsibility of the Canadian Environmental Assessment Agency. This important task will be delegated to the National Energy Board and the Canadian Nuclear Safety Commission.

Again, as part of eliminating any obstruction to the impunity of the monopolies to do as they please, the budget announces the establishment of a new Red Tape Reduction Commission involving both Parliamentarians and private sector representatives to review federal regulations and reduce what is called the compliance burden on businesses.

Preparing for an Assault of Unprecedented Intensity on Social Programs and Public Services under the Hoax of Returning to Balanced Budgets

Returning to balanced budgets is another of the main themes of the budget. Prime Minister Harper was very blunt about his government's aim in his response to the March 3 Throne Speech: "There is a widespread understanding among Canadians of the need to return to balanced budgets when the recession is over, to ensure funds are freed for the private sector to create sustainable long-term jobs and growth." This is neoliberal gibberish. How do balanced budgets free funds for the private sector? A balanced budget is both an objective and subjective relation between revenue and expenditures. The government has great control over both aspects. A balanced budget could just as easily demand that the monopolies provide more tax revenue for the government thus increasing the amount of public funds available for social programs, public services, infrastructure and productive investments in public enterprise.

The budget announces a set of measures under the title: "Containing the Administrative Cost of Government." The main two measures are the following:

- in 2010-2011, the budgets of the departments are not going to be increased to fund the 1.5 percent annual increase in wages for federal public employees. The departments will have to finance that increase with their operating budgets.

- in 2011-2012, and 2012-2013, the operating budgets of the departments are going to be frozen at the 2010-11 levels.

The budget states that it is the expectation of the government that the other federal organizations such as the Crown Corporations will also freeze their operating expenses. The government is going to meet with the unions representing federal public service employees to assess the measures to be taken to review their claims for wages, benefits and pensions. In an ominous tone, the government states that it wants "better management" of those claims and to make sure that the organization of the work is "effective." A state-organized propaganda campaign against public service defined-benefit pensions has already begun in earnest.

Combined with this is the announcement of what is called "a strategic review of government operations." Under this category, all departments have to assess all their programs and identify 5 percent of their lowest priorities and their "lowest performing" ones. This review is to be done under the authority of the President of the Treasury Board. Part of the review is the assessment of ways to "improve service delivery" keeping in mind the two main measures mentioned above.

Grants and contributions emanating from the government are also to be reviewed to make sure that funding is tied to furthering the priorities of the government. Part of the review of what is called "corporate asset management" is now underway and will continue, with three possible options: status quo, amendments or divestment. Women's organizations have already revealed huge federal cuts in their grants and contributions.

Then the budget proposes to eliminate 245 Governor in Council positions. These are the management positions of state agencies and Crown corporations (e.g., Canadian Wheat Board, Canadian Grain Commission, Canada Post.)

The combination of these measures point to what could be an unprecedented assault on social programs and public services, and privatization and sell-off of public assets such as AECL, which is already a small shell of what once existed. The federal government does not share the view that social programs and public services are a necessary component of a modern society and with vibrant public enterprises in each sector acting as the core of an economy that serves the needs of the people and protects them and the economy from the downturns of the business cycle, downturns which are becoming more severe and prolonged. The Harper government sees social programs and public services as a cost to society, which must be reduced or eliminated so that more of the aggregate social wealth can be put at the disposal of the monopolies and in the hands of the rich. This includes leaving social programs and public services at the mercy of private profiteers. Neoliberals view every pore of the economy and social life as an "opportunity" for private gain at the expense of the public good. Across the country, public services such as public education and healthcare are under pressure from lack of funding and government support. The private profiteers demand more and more areas within public services be opened up and plundered by owners of capital.

The attacks on state agencies in the form of elimination of staff and continual restriction of financing and operations to within very narrow parameters are in line with government priorities. They reveal that under the hoax of a review of administrative costs, a state structure is being built that will proceed to dismantle and privatize public services as "purely administrative" measures without any say by the people and elected officials, and by criminalizing the opposition of the people. The repression of executive members of the Canadian Wheat Board in recent years shows what is meant by making these organizations more "effective" in line with the priorities of the government, such as offering more private monopoly controlled "choice."

The Public Service Alliance of Canada (PSAC) and the Canadian Union of Postal Workers (CUPW) have already pointed out that the further elimination of jobs and stepped up privatization in federal agencies underway at this moment are occurring under the hoax of improving "efficiency" and offering "choice." The Harper government is providing a template for similar cuts in provincial services and institutions such as the attacks on local provincial boards of education and their elected trustees.

The budget also announces an overhaul of the retirement income system without a single word about workers' pension monies that have been stolen by the monopolies with the blessing of the state and which must be returned to them. Harper's budget utters not a word of its social responsibilities to defend the well-being of the people such as the necessity to guarantee the pensions workers already have and extend Canadian standard pensions to all so that no senior is left insecure in retirement. The budget makes it very clear that the pension overhaul is to reform the retirement income system on the basis of all pensions becoming a savings fund and source of money capital for the rich. As with everything connected with the economy and social life, owners of capital want pensions and retirement as a source of private profit. They and the government do not view pensions as a social program that all Canadians deserve as a modern right, which must be funded from annual revenue of the socialized economy. Workers while active produce all the wealth of society and a portion of that social product must be allocated for elderly Canadians during retirement at a percentage of their previous average earnings with a guaranteed minimum Canadian standard for all.

This federal budget is a slap in the face of the struggles and the deep strivings of the working class and its allies who are facing the crisis with great courage by defending the rights of all and fighting for a way out of the crisis based on the renewal of the economy. The budget once more tells the workers that they cannot expect a remedy from the gods of plague and that it is up to them to build a society that is humane and advanced and works for the benefit of all.

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