As Canadians grapple with the continuing COVID-19 pandemic, exorbitant rises to the cost of living, and the intersecting crises around health, housing and the environment, an organization has released a blueprint for the 2023 federal budget that would address all of these challenges and more.
The Alternative Federal Budget (AFB) 2023 was drafted by the Canadian Centre for Policy Alternatives (CCPA) with the help of experts and public sector workers. It was released last month.
The AFB seeks to make life more affordable for low-income Canadians, by providing non-market and co-op housing, as well as funding support for child care and income support for groceries to alleviate food insecurity. The plan would also see post-secondary education become both more affordable and accessible. By helping Canadians with the rising cost of living, the AFB has an ultimate goal of cutting poverty in half by 2026, while eliminating homelessness across the country by 2032.
When it comes to inflation, the AFB would rely on mortgage-regulation tools to moderate housing prices through targeting investors.
The AFB would also take a stronger and swift approach to combating the climate crisis by legislating stricter national standards on large carbon emitters in hopes of making Canada net zero by 2040.
In addition to the funding allocations designated in the budget plan, the AFB would push for the introduction of a federal Anti-Racism Act.
Paying a fair rate
How would the federal government pay for it all? That’s simple, says the CCPA: increase taxes on the ultra-wealthy and corporations who touted revenue gains during the COVID-19 pandemic. The additional taxpayer dollars would help revitalize the country’s healthcare system by saying no to privatization and implementing national care programs specifically tied to dental care, mental health care, substance use support, and national pharmacare.
What would a new wealth tax look like? The CCPA calculated a one per cent tax for wealth over $10 million, a two per cent tax over $100 million, and three per cent for over $1 billion. The tax would only cost Canada’s ultra-wealthy between one and three cents for every dollar above the designated threshold, and could generate close to $26 billion every year.
Wealthy individuals wouldn’t be the only ones seeing tax increases. So would large corporations that earned record profits throughout and as a result of the COVID-19 pandemic. The AFB would raise Canada’s general corporate tax rate to 20 per cent, a move that would generate an additional $11 billion per year. Another $11 billion would enter the public sector through the introduction of a windfall gains tax, in an effort to undercut corporate profiteering. The plan would also cap tax deductibles for executive pay.
The authors refer to the AFB in their report as “a budget with conviction,” offering a comprehensive well-being budget for Canadians.
Lifting Canadians out of poverty
“The (AFB) can’t right the wrongs of past government mistakes and negligence,” the report reads. “It can’t solve COVID-19. But it can hold out hope that a better way is possible, that viable alternative policy solutions are within reach.”
The budget prioritizes the rights and dignity of workers through job creation and job training. It also proposes an overhaul of the country’s current Employment Insurance (EI) program to ensure those who find themselves out of work are able to make ends meet as they prepare their next steps.
Cutting poverty in half over the next four years — an act that would lift 862,000 people out of poverty across Canada — may seem like an ambitious goal, but it’s something the United States accomplished in 2021. The U.S. Census Bureau reported last month that a second year of emergency COVID-19 financial supports from the federal government saw poverty reach its lowest levels on record in 2021, with the number of children living in poverty cut by nearly half.
The CCPA proposes creating a new Canada Livable Income Benefit that would provide up to $5,000 for individuals with a net income under $19,000, or $7,000 for couples with a net income under $21,000. Poverty rates would be slashed further by the implementation of a Canada Disability Benefit that would provide $11,040 a year until recipients are able to reach a net income of $15,000 a year.
Following the reduction in child poverty rates in 2016 due primarily to the Canada Child Benefit, the AFB recommends creating a new End Poverty Supplement to help cut child poverty by a further 50 per cent, lifting 264,000 children out of poverty.
“Rising to the challenge costs,” the report reads. “But those transfers will come with strings attached—they can’t be turned into provincial tax cuts or slush funds.”
PSAC supports budget
The AFB has also gotten the attention of the Public Service Alliance of Canada (PSAC), one of the country’s largest labour unions.
“If PSAC were to write the federal budget, it would look a lot like the CCPA’s Alternative Federal Budget for 2023,” reads an October 3 press release, calling the AFB both ambitious and attainable.
PSAC recognized the plan as an important contribution in discussing how progressive movements “can ensure people are put before profits and that racial and gender-based human rights, reconciliation with Indigenous peoples, and social justice are the foundations of all decisions.”
Detailed and thorough, the CCPA’s Alternative Federal Budget offers the federal government a road map to address the climate crisis, the economy, health-care and more. How much the feds will borrow from the AFB remains to be seen.
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