JUST SAY NO TO AUSTERITY
Independent economic report pushes back against Greene report, offers alternative vision of N.L.'s future

if an austerity agenda is tabled more people will be driven toward the social programs that the province's taxation system then needs to pay for.

Wed., May 19, 2021


Jessica McCormick, co-facilitator of People's Recovery, says if an austerity agenda is tabled more people will be driven toward the social programs that the province's taxation system then needs to pay for. (Mike Simms/CBC - image credit)

A new economic report, released as an alternative to The Big Reset, is offering up a different vision of how to knock down Newfoundland and Labrador's debt by rejecting cuts and austerity measures, and focusing instead on taxes and other initiatives.

"We don't need to slash. There are other solutions to the deficit," reads the People's Recovery report, released Tuesday.

The 50-page report was created by a team independent from Premier Andrew Furey's economic recovery team chaired by Moya Greene, which released The Big Reset on May 6 with recommendations for deep cuts and other measures to help the province climb out from under its current fiscal crisis.

People's Recovery co-facilitator Jessica McCormick told CBC News her group wants to talk about paying down the province's debt and deficit in a way that doesn't harm people and communities who rely on social programs and public services.

"When we enact austerity measures, which is a lot of what's found in the Greene report, we know that the people who are harmed most by those measures are the folks who rely on social programs," McCormick said.

"So if we extend an austerity agenda in Newfoundland and Labrador, we'll likely be driving more people toward the social programs that our taxation system needs to pay for, and that's why we need to balance both of those approaches in economic recovery."

The People's Recovery report suggests a series of tax increases over cuts to programs and services. (CBC)

Push back against Thatcherism

The report says major spending cuts would have a "tremendously negative impact" on children, students, parents, patients, seniors, and workers — especially women, which the report says makes up 71 per cent of teachers and 80 per cent of health professionals in Newfoundland and Labrador.

The report continues on to say major cuts would put people out of work, while also hurting businesses that provide government with goods and services.

"The concerning theme throughout the Greene report is that kind of dated, tried, tested and proven to not work ideology of Thatcherism — essentially, that we need to cut and gut and slash public services in order to address the deficit ... we just don't feel that that is the way forward," McCormick said, referencing the 1980s conservative politics of British prime minister Margaret Thatcher.

"There are difficult choices that need to be made, but those choices and those cuts shouldn't be borne by the most vulnerable people in our society. We've proposed revenue measures that can address the structural deficit but not harm working people. "

The process to create the People's Recovery report started five months ago, when a group of more than 60 people — including labour leaders, academics and activists — felt they weren't represented by the premier's economic recovery team. Among the report's contributors is union leader Mary Shortall, who left the premier's team in January after raising concerns over what she said was a lack of collaboration and transparency.

Tax increases and ideas

The People's Recovery report does offer ideas toward bolstering the province's revenue, among them a series of tax increases.

Its recommendations include an HST increase of one per cent, an income tax increase by two per cent in the top two brackets, and a wealth tax with a lower threshold than outlined the Greene report.

Further, the report recommends increasing the corporate income tax rate for large corporations by two per cent, extending the six per cent capital tax to all large corporations, working with other governments to eliminate tax competition and the use of tax havens, taxing capital gains the same as wages, as well as an improvement of the carbon tax and energy efficiency.

Richard Alexander, executive director of the Newfoundland and Labrador Employers' Council, says nobody is asking for slashes and cuts across the board, but throwing money at government issues won't fix them.(CBC)More

"The fact is that the government can fully address the structural deficit, and begin to pay down the debt, without deep spending cuts," the report reads.

The report also stands against public-private partnerships and privatization, whereas the Greene report suggests cuts to health, education and selling off the Newfoundland and Labrador Liquor Corporation.

The report said privatizing liquor stores in Alberta and other jurisdictions has been shown to lead to higher consumer prices, as well as larger social impacts such as health problems. "At the same time, government revenues tend to be lower with privatization," the report reads.

People's Recovery also dips into Newfoundland and Labrador's poverty, food security and living wage issues, with recommendations on increasing the minimum wage to $15 and protecting and improving public services and programs for people who have already been marginalized by existing social and economic structures.

Including all options: Coady

Richard Alexander, executive director of Newfoundland and Labrador Employers' Council, told CBC News there needs to be public spending reform, and a modernization of government to provide programs and services in a stable public sector without bankrupting the taxpayers. He said austerity measures will be worse in the future if nothing happens.

"The longer that we wait to take action on spending reforms the bigger the hole gets and the harder it is to get out of it," he said.

In a statement to CBC News, Finance Minister Siobhan Coady said the province is undertaking "a robust consultation process" to discuss the recommendations made in the Greene report. Coady said the provincial government is considering all views and opinions, including those of the People's Recovery.

"We thank them for their work to date and we look forward to continuing the conversation on the future of Newfoundland and Labrador," Coady said.