Thank you very much.

Thanks for inviting the Canadian Union of Public Employees to present to the committee. We're Canada’s largest union, with over 700,000 members. Our members work in a broad cross-section of the economy, such as health care, education, municipalities, libraries, universities, social services, public utilities, emergency services, transportation and airlines.

The current moment is unlike any previous economic recession or depression that Canada has seen. In this environment, it's essential that we continue to put absolute priority on the health of Canadians, which includes income supports to help households make ends meet and continued support of public services to meet their needs. This will not just help to contain the pandemic, but will also ensure that our economy, our small businesses and our communities can bounce back faster once the public health crisis has ended.

The federal government acted quickly to put supports in place at the beginning of the pandemic, such as the emergency response benefit, the wage subsidy and other liquidity programs. These made a real difference for millions of people in Canada. We think there is some room for improvement on the transparency, particularly of corporate supports. To ensure the effectiveness and fairness of public spending, we think the federal government should strengthen conditions and improve transparency and accountability.

Some of the ways in which you could do this include making public more information about how public money is being spent; include clauses that mandate labour protections for workers, including protections for benefits and the implementation of health and safety protocols; include penalties if these clauses are not upheld; and ensure protection for whistle-blowers. As well, where there is a union in the workplace, include them in the negotiations for wage subsidies and other supports. Also, for up to a year after corporations have received public subsidies or loans, we recommend that the government implement prohibitions on dividends, capital distributions and share repurchases and implement clear and transparent executive compensation restrictions.

In terms of stimulus, we think it's really important to prioritize spending. Even though the federal government is forecasting a significant deficit for this fiscal year, we don't think that's any reason to panic or pull back now. The rate for 30-year federal government bonds, as you all know, is at 2%, and 10-year bonds are below 1%. The Bank of Canada is supporting both federal and provincial governments by purchasing bonds directly and in secondary markets, ensuring that governments have a willing lender at low cost. This expands the supply of money that can be directed to public use. Arguably, the cost of borrowing compared to the return on the investment you make is a good fiscal guideline for this moment—better, perhaps, than debt-to-GDP ratio or other proposals currently on the table.

The federal government has the ability and the responsibility to shoulder the majority of the cost of the pandemic response and recovery, as well as a higher share of social spending going forward. Public investments in sectors such as health care, child care, livable communities and energy-efficient buildings will have a stronger impact on economic growth, alongside lower inequality and improved well-being. This recession is different. It has affected different industries, occupations and communities—especially women, low-income service workers, racialized workers and migrant workers—much more severely, so the federal government should take into account the ways that the pandemic has had an unequal impact and should design solutions in partnership with those hard-hit communities.

It seems clear to us that our economic recovery depends on the recovery of the care economy. Women’s economic participation plummeted to levels not seen in 30 years as COVID-19 shut down the economy and many workers were forced to leave their paid work to care for loved ones. Investment in the care economy, including health care, child care and social services, will have social and economic returns far higher than the current cost of borrowing. A vibrant, accessible care sector ensures that everyone can participate in the workforce, which will be essential throughout the economic recovery. Government investment in care improves labour market outcomes for women and improves productivity, allowing governments to recoup those upfront costs later on.

We note that quality public infrastructure is also essential for increasing the productivity of Canadian people and businesses. We strongly support increased funding for public transit, affordable housing and social, community and green infrastructure. All of these are important components of a healthy economic recovery.

We think the government, in order to fund the recovery, should consider tax fairness. Tax cuts since 2000 have reduced federal revenues by over $50 billion annually, and the major beneficiaries of these tax cuts have been large corporations and the wealthiest Canadians. These cuts have left a huge hole in federal budgets and had a ripple effect across provincial budgets as the federal government has stepped back from funding essential public services.

As an example, one of the first priorities of this government, after being re-elected in 2019, was to introduce another $6-billion tax cut that primarily benefited higher-income families. We recommend that the federal government reverse this regressive tax cut. That would save it $3 billion now and $6 billion per year when the cut was fully phased in.

The federal government, through the following fair tax measures, could increase revenues by over $50 billion without increasing tax rates on middle- and low-income Canadians. Restoring the federal corporate tax rate to 21% would raise $13 billion. Eliminating wasteful and regressive tax loopholes would raise another $14 billion. Cracking down on tax avoidance by taxing multinational corporations based on their real economic activities would raise over $8 billion. A wealth tax of 1% on estates over $20 million and an inheritance tax on estates over $5 million could raise another $8 billion. A financial activities tax on compensation and profits in the financial sector could raise $7 billion. As well, we recommend an excess profits tax to ensure that those who have been lucky enough to benefit from the pandemic, such as Canada’s big banks, which are announcing record profits, pay their fair share of the cost of supporting those who were not so lucky—those Dan Kelly was just talking about, who are about to go bankrupt.

Thank you very much.

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