Federal Budget - Far from "Progressive"

by John Wilson

Liberal Finance Minister Chrystia Freeland's April 16 federal budget offers little to the majority working class population. Still, there has been an orchestrated attack on it in the corporate media centered on one part that is ostensibly the most "progressive" item. That is the proposed increase in the tax on capital gains. According to the acolytes of the rich, in the high finance sector, this will ruin the economy, despite the fact that 99.87% of the public are unaffected by it. There is no wealth tax, no excess profits tax -- which is unsurprising to anyone who's been paying attention. The new tax applies only to capital gains above $250,000 for individuals. Don't we all wish that there was a similar provision for income tax! And the increase still falls short of the rates charged in many other wealthy imperialist countries which do have this kind of tax.

The creation of a federal disability program is the only other major "progressive" item.  It would give disabled people a minuscule payment of $200 a month at a time of recent high inflation. The shortfall has been denounced by advocates for disabled folks. Meanwhile, the government continues to deliver billions in subsidies to oil and gas companies, making only a pretense of fighting climate change.

$2 billion dollars is earmarked to set up a school food program to offer free lunches to students, something that could and should have been done years ago. But nowhere is there any plan to eliminate the need for food banks, which are now facing a huge and still growing demand.  Food banks are now as overstretched as the public healthcare system. Unlike in revolutionary Cuba, there is no right to food, shelter, healthcare and education proclaimed in the Canadian constitution.

Housing is touted as the priority.  Homelessness is a huge problem, growing ever faster thanks to stratospheric house prices, extortionate rents, and the bottomless greed of a bloated and parasitic finance sector, not to mention the speculator-riddled real estate racket.

The budget does not provide any solution.  Fast implementation of some items might put a few dents into the dire shortage, but that's all. (And in this government, fast implementation is unknown, except for strike-breaking laws.) Nowhere is there a mention of housing to be built by the public sector, historically the only way to build mass, affordable housing as was done by the first Labour government in Britain and the Hugo Chavez government in Venezuela. The Liberal regime remains obsessed with the goal of neoliberalism that everything ought to be in the private sector and make a profit. Even publicly owned corporations in this country are run as if they were private-for-profit enterprises, run mostly by obscenely overpaid management hacks from the private sector; the post office is a prime example.

Probably the most ludicrous idea is that of allowing 30-year mortgages, but only for newly built houses. All that will produce is another windfall profit for the finance sector and land developers. While current mortgage holders could reduce their monthly payments, they would face a mountain of added debt because of increased interest charges. But the budget fails to acknowledge that the vast majority of the population can't even consider acquiring a residence of any kind, not even a condo.

The supposedly brilliant idea of barring foreign purchases of newly built residences misses the mark. It ignores the existence of Canada-based real estate speculators who dominate the condo market. They buy multiple condo units (mostly on credit, of course) and then demand the highest rents they can get to pay their borrowing costs, and more. Always more.

Much of the 400-plus page eye-popping budget document details seemingly endless subsidies, mainly to businesses. No mention of the necessity of universal and strictly enforced rent control. While rent control is a provincial jurisdiction, there's nothing to stop the federal government from advocating it. (The Liberals profess to be good at advocacy, if not much else.)

Low profile are the massive increases planned for military spending. $33.8 billion for 2024-25 rising to $44.2 billion in 2025-26. A $10.2 billion increase in one year. (This is supposedly 'justified' by war-mongering demonization of Russia and China.) We can think of many better ways to spend tax revenues.

The truth is that we are very unlikely to see a workers' budget until capitalism is uprooted and destroyed -- replaced by a workers' state moving towards socialism. That's what Socialist Action aims to realize. Join us!