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On the heels of federal-provincial budget talks: a real plan to deal with the economic crisis

Cutting interest rates is not enough

Author Ken Georgetti is president of the Canadian Labour Congressby Ken Georgetti

December 18, 2008 — The federal finance minister met with his provincial and territorial counterparts this week to talk about the budget that Ottawa will table in January 2009. On behalf of the 3.2 million Canadian workers represented by the Canadian Labour Congress, I am calling on Mr Flaherty and Prime Minister Stephen Harper to take decisive action to protect Canadians from the devastating economic crisis that is ravaging our country.

Statistics Canada reports that 75,000 working people lost their jobs in November, the worst one-month drop in 25 years. These numbers are at least as bad as those we saw in the brutal manufacturing-led recession of 1989 to 1992. We have lost almost 400,000 manufacturing jobs since 2002, and things will get worse unless governments respond to this crisis quickly and in a determined way. Other countries have taken steps to protect their citizens. In the United States president-elect Barack Obama is promising prompt and decisive action. Yet Mr. Flaherty's economic update in November provided no plan to protect the jobs, savings and pensions of Canadians.

The Canadian Labour Congress has a plan to stimulate the economy at a time when jobs are being shredded and people are losing confidence. Cutting interest rates, as the Bank of Canada has done, is not enough. Our economic blueprint would create jobs by making badly-needed investments in public infrastructure and in retrofitting homes and public buildings. The plan would provide support to our hard-hit manufacturing, mining and forestry sectors, it would improve Employment Insurance and training opportunities for laid-off workers, and it would protect the pensions of Canadians.

Here is what we are calling on the federal government to do:

1. Increase Employment Insurance benefits. Workers have paid billions into EI but benefits have been drastically reduced. The average weekly benefit is just $335, and less that 50 percent of unemployed workers actually qualify for benefits under today's rules. The EI fund is running a huge surplus and it should be used to improve access to benefits for unemployed workers. Ensure that laid-off workers have access to training and adjustment programs.

2. Launch a major public investment program to create good jobs in infrastructure, manufacturing and public services, and link this program to a Made-in-Canada procurement policy.

3. Provide a pension guarantee fund for workers' pension, such as exists in the United States. Phase in increases to the Canada and Quebec pension plans and immediately raise Old Age Security to protect retirees and reduce reliance on private pensions and RRSPs.

4. Invest directly in sector renewal strategies designed to save jobs and promote successful restructuring in hard-hit industries such as auto and forest products. Pursue strategies to support cultural industries, environmental technology, renewable energy and other promising sectors.

5. Maintain equalization and other transfers to provinces and cities for infrastructure, public services and social programs.

This is an opportunity to build for the future. Our investments on public infrastructure will address a huge deficit that has been allowed to build up over the past 20 years of spending cuts. The Federation of Canadian Municipalities estimates that infrastructure deficit to be $123 billion and it consists of roads, bridges and buildings not repaired, and of water plants and rapid transit ways never built.

A study by the Ottawa-based firm Infometrica Ltd. shows that $1 billion in additional spending in basic infrastructure would create 11,500 jobs, half in construction and half in other sectors. Infrastructure spending goes mainly into local wages and into buying Canadian-made materials. Energy conservation projects such as retrofitting homes and buildings are even bigger job creators. Investments in community social services like child care and home care also create many jobs for the money invested.

People look to their unions for help when they are in trouble. We will do everything in our power to protect the livelihood of our members and to work for solutions that are in the best interests of all Canadians. We must keep up pressure on our federal government because the future of millions of workers and families depends on our taking action now.

Ken Georgetti is president of the Canadian Labour Congress, the largest union federation in Canada with 3.2 million members.

Posted: December 18, 2008

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