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EconomicInequality.ca — Choose a more equal society
EconomicInequality.ca

Bulletin No.12 — Dec. 17th, 2012.

This Bulletin is published by the group that has created the web site  Economic Inequality.ca, and has initiated a series of public meetings about what we can do about economic inequality in Canada. The Bulletin is published every few weeks to convey useful information about how we can change economic inequality.

In this Bulletin:
 

1. An Action Plan
 
2. Next Steps
 
3. Report of 25 in 5

 

An Action Plan

It was been some months in the making, but we have finally arrived at an action plan. Earlier drafts had been very specific about the programs that should be put in place and the amounts allocated to each, but as we consulted widely we found that they proved contentious. Instead, we have outlined the many options and tools, and have asked political leaders first for their commitment to reducing economy, and then to develop a plan with broad public consultation to move forward.

Here’s the plan:


Three steps to reducing economic inequality
 
1. Leaders and governments must agree in principle to reduce economic inequality.
 
2. Public discussion, conducted in a timely fashion, of the exact programs to be implemented, the funding involved, and the sequencing
 
3. Implement the changes resulting from this discussion

The Problem
 
Growing economic inequality in Canada is a problem that has seemingly become ingrained into public consciousness, and a talking point that shows no sign of slowing down. Total taxation rates in Canada have been steadily declining since the 1970s in parallel with reductions in funding social programs; changes that are reflected in increased economic inequality.
 
The damage that this inequality causes, not only to individuals but to the economy as a whole, is a subject that the public are not only aware of, but are actively worried about and, as the Broadbent institute notes, in wide support for taking action for change.
 
There is significant data from around the world demonstrating that countries with less economic inequality can appreciate some of the below benefits:
 
• Lower crime rates
 
• Improved individual health
 
• Higher rates of education
 
• Less social unrest
 
• Lower rates of drug and alcohol abuse

• Greater rates of personal happiness
 

Taking Action
 
It is critical that the Government takes immediate action to reduce the trend of growing economic inequality. Government must use all the tools within their reach - fiscal, social and labour market policy - to reduce inequality. There is wide scope for action. Here are some of the changes needed:

Changes to Fiscal Policy
 
• Increase tax rates on higher incomes
 
• Review, limit and/or eliminate tax expenditures:
- i.e. foregone tax revenue resulting from tax deductions and credits, many of which disproportionately benefit the wealthy
 
• Tax income from capital (including capital gains) at the same rates as employment income:
- including limiting or eliminating tax free savings accounts which disproportionately benefit the wealthy. Alternatively, consider some form of inheritance tax.
 
• Eliminate tax minimization approaches such as offshore tax plans, family trusts, income splitting strategies, etc., which benefit primarily the wealthy.


Changes to Social Policy
 
• Increase Ontario Child Benefit
 
• Increase accessible, affordable child care
 
• Expand affordable housing
 
• Reform Ontario Works and Ontario Disability Special Program, and increase payments
 
• Support for human rights, legal aid, youth justice and programs
 
• Strengthen the public education system
 
• Introduce a living wage for full time employment

• Implement an Ontario Housing Benefit



Changes to Labour Market Policy
 
• Increase minimum wages
 
• Encourage good living wage jobs
 
• Enhance employment insurance
 
• Strengthen strategic skills training, apprenticeship, school-to-work transition programs
 
• Increase the Working Income Tax Benefit
 
• Reinforce fair working conditions, enforcement of labour standards and support for employment equity.

There are good opportunities for all politicians to take positive action. We must demand commitments from elected leaders to agree in principle to reduce economic inequality, then press for changes implementing that commitment.

The plan in a printed format fits on two sides of a 8 x 11.5 paper. It can be downloaded here (MS Office). Please print it out and distribute it widely.


Next Steps
 
We will be sending the action plan to elected leaders at all levels of government, particularly the provincial level, and also to candidates for the leadership of the Liberal Party of Ontario, asking for meetings to discuss this proposal. We’ll be asking for endorsements from groups and prominent individuals. If you have contacts that you can make – or that you think we should make - please let us know at info@economicinequality.ca


25 in 5 Report

The 25 in 5 Network for Poverty Reduction has a straightforward goal: to reduce poverty in Ontario by 25 per cent in five years, and 50 percent in 10 years.
 
Its most recent (fourth annual) report notes that between 2008 and 2010 the Ontario government reduced child poverty by more than 6%, lifting 29,000 children and their families out of poverty. The point is, there are good (and popular) actions that government can take to reduce inequality. Sadly, this gain leaves `only’ 370,000 Ontario children living in poverty.
 
The full report can be found on their website. The report notes recent backtracking on several fronts, including child benefits, social assistance, housing, and other areas, which does not augur well.
 
One of the backtracks is around the Start-Up fund, a provincial program for people on social assistance. Its purpose is to provide funding so people can either find housing or remain housed and it has much greater flexibility than most government assistance initiatives. It can cover a number of housing-related costs such as needing to move to get a job, leaving an institution like a hospital and needing to find a place to live, leaving an abusive situation, being evicted, paying for utilities, paying first and last month’s rent, buying furniture.
 
But the province has decided that as of January 1, 2013, the program will cease to exist. Instead, the provincial will give 50 per cent of the money to municipal programs for housing, although municipalities won’t be required to have a program in place until 2014. It’s a cut and a change that creates more inequality. To read more, look at Russ Ford’s blog. As the blog makes clear, Russ is a different kind of Ford than either Rob or Doug, the two jokers on Toronto city council.

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