Below are the speaking notes of OFL President Sid Ryan to Ontario’s Standing Committee on Finance and Economic Affairs.
To download the OFL’s comprehensive pre-budget submission, click HERE.
Thank you for having me here today. My name is Sid Ryan and I am the President of the Ontario Federation of Labour, which represents 54 unions and one million workers in Ontario.
We have a real opportunity with this budget to make meaningful gains for the people of Ontario. In recent months, Premier Kathleen Wynne has acknowledged what we have been saying for many years – that austerity is not working. In her words, “a misguided focus on austerity and short-term thinking will not help Ontario expand its economic prospects, [or] create jobs.”
Last year, the OFL travelled across the province to find out what Ontarians would like see in a People’s Budget. We heard that austerity was failing the people of Ontario, especially those who are most vulnerable, and that Ontarians want to live in a fair and equitable society.
While last year’s Ontario budget took some direction from the People’s Budget by investing in infrastructure, reforming social assistance, committing to youth employment and establishing a panel to advise on setting the minimum wage, it did not confidently break from the austerity approach of previous governments. Devastating spending cuts continued, justified by overstated deficit projections.
In November’s Fall Economic Statement, your government made a positive commitment to put investment in jobs, growth and families ahead of short-term deficit reduction. Following on this commitment, the 2014 Budget must put forward big ideas and take bold action to set Ontario on a new path.
It is time for your government to ensure an economic recovery for everyone by setting a People’s Agenda for Ontario – one that expands opportunities and reshapes the future of our province around fairness, equity and good jobs.
Ontario has still not recovered from the recession. Over 280,000 new jobs are needed today to return Ontario to 2008 employment levels. Unemployment has also been consistently hovering between 7 and 8 percent, much higher than the 2008 unemployment rate of 6.5 percent.
While employment numbers lag, austerity has also shifted the burden for driving economic growth in Ontario to working people. The 2013 Budget predicted that household spending would drive over half of economic growth in the next 4 years, indicating a dangerous over-reliance on debt-fueled consumer spending.
Investing in Jobs and the Economy
Today’s challenging economic context demands a bold approach to setting the economy back on track. One that sees your government embrace its role as an important driver of the economy.
First, strategic and focused investments must be made in key sectors of the economy that foster innovation, promote sustainability and create good jobs. This includes the public sector, manufacturing sector and green energy sector. But support for companies in Ontario must come with strings attached. Just a few years ago, your government sunk millions of taxpayer dollars into the new Kellogg’s plant in Belleville. Then in December Kellogg’s announced the closure of their larger plant in London – this raises the question: why didn’t government support come with commitments to keep existing jobs in Ontario? Open-ended corporate subsidies do not make sense.
Ontario’s aging infrastructure is also badly in need of repair, upkeep and expansion. The funding for infrastructure in last year’s budget was a welcome first step. Our recommendation is that a fund be established that is dedicated to publicly financed and operated infrastructure projects. Ontarians will not tolerate another gas plant scandal, in which billions of dollars of taxpayer money was lost because of the failure of public-private partnerships. History has shown that public operation and maintenance is the efficient, cost-effective choice.
Government investments can go even further to spur Ontario’s economy if local procurement policies are adopted. Unfortunately, trade negotiations with the European Union have produced an agreement-in-principle that threatens provincial and municipal governments’ ability to use public money to support local and sustainable economic development. Even the transit and energy sectors, which experts thought would be excluded from the deal, have been included. All efforts must be made to oppose restrictions on local procurement in the CETA before it is too late.
Together, strategic support for innovative, sustainable and productive sectors of the economy; investment in infrastructure; and local procurement policies will spur the economic recovery Ontarians have been waiting for.
Making Every Job a Good Job
To ensure that all Ontarians share in that recovery, your government must also take measures to make every job a good job.
Unfortunately, the growth of low-wage and precarious work are pushing our province in the wrong direction. The number of people working for minimum wage has doubled in the last 10 years to reach over half a million people, and 33 percent of workers in Ontario now have precarious jobs without benefits or job security.
But across the board, people in Ontario believe that a job should lift working people out of poverty. A strong yearlong Camping to Raise the Minimum Wage has carried a clear message to your government that the minimum wage should be raised 10 percent above the poverty line to $14 an hour and be indexed to the cost of living. The Minimum Wage Advisory Panel will be releasing their report soon. By taking immediate action to establish a fair wage floor your government has an opportunity to make historic gains for working people in this province.
The growing reliance on migrant workers in the Ontario economy also demands stronger protections to ensure these workers are no longer forced to cope with excessive recruitment fees, sub-standard housing, unsafe working conditions or unpaid wages. The proposal in Bill 146 to extend the Employment Protection for Foreign Nationals Act to all migrant workers would provide some protection, but its effectiveness would be limited because it relies on employee complaints rather than proactive enforcement. To ensure adequate protections for migrant workers a comprehensive public registry and licensing system of all employers and recruiters must be established, similar to what is in place in Manitoba.
We all know that good jobs are at the heart of healthy communities and economies, but the Conservatives are still putting forward a cynical economic strategy that would drive down wages. For decades, union security arrangements have brought a high degree of stability to labour relations in Ontario by ensuring that all workers who benefit from collective agreements contribute to the costs of maintaining that agreement through their union dues.
The Conservatives have made dismantling these arrangements by importing anti-worker laws from the United States one of their top priorities. Despite their claims, stripping workers of their collective rights will never create jobs. When Tim Hudak tells Ontarians that good wages are a barrier to good business, he is really telling families that they deserve to live on less while corporations scour the globe for the greatest profits.
The provincial government must maintain a strong position against these proposals to avoid a “race to the bottom” that would force workers to compete with each other for lower wages and fewer benefits.
This commitment to workers’ rights should also be expanded by ensuring all workers in Ontario are free to organize collectively in a union without fear of employer reprisal or intimidation. Reforms to protect organizing rights, including successor rights in the contract sector, are included in Bill 129, which is currently before the House and must be passed as soon as possible.
Eliminating Poverty and Expanding Opportunity for All
This year’s budget must also take steps towards eliminating poverty and expanding opportunities for all Ontarians. Austerity has resulted in massive real dollar cuts and an erosion of the quality of public services available in this province. Your government must reinvest in social assistance, education, healthcare, childcare and other public services to ensure that every person in Ontario receives the care and opportunities they deserve.
In particular, the retirement crisis in this province must be addressed. Over half of Ontarians do not have workplace pensions and 86,000 seniors are living below the poverty line. To ensure retirement security for all Ontarians, Pooled Registered Retirement Pension Plans (PRPPs) must be rejected – we do not need another expensive, high fee arrangement. Instead, Canada Pension Plan (CPP) reform must remain a top priority and if no progress is made, labour must be consulted on the best way to move forward with an Ontario Pension Plan.
The fairness we must strive to achieve in our society and economy also applies to how Ontarians contribute financially to the overall well-being of the province. Years of tax cuts have disproportionately benefitted the wealthiest citizens and corporations, while the promised economic benefits and jobs for the rest of Ontarians have not materialized. Replacing reckless tax cuts with progressive revenue generation is long overdue.
We recommend that your government restore the corporate tax rate to 14 percent and increase income tax rates for those earning over $250,000 by 2 percent, which would generate up to $3.2 billion for funding public services and programs.
For too long, workers in Ontario have been bearing the burden of an economic recession they did not create. Now the Conservatives are putting forward a plan to strip those same workers’ of their collective rights, while disguising it as a “jobs plan.” By rejecting this low-wage agenda and calling on corporations to become fair tax partners, the provincial government has a real opportunity to stimulate the economy and deliver the recovery that Ontarians have been waiting for. Your government must stick to the Premier’s own words that a departure from austerity is the only way forward.
People across the province are calling for big ideas and bold action. The growth of low-wage jobs must be met with swift action to raise the minimum wage and protect vulnerable workers, while the public services Ontarians rely on must be reinvigorated and strengthened. It is time for a budget that invests in people, communities and jobs, to spur economic growth and expand opportunities for everyone.
We urge your government to do what’s right for the economy, and to deliver what’s fair for the people of Ontario.
President, Ontario Federation of Labour