“The major economic problem facedby Canadians is a very slow recoveryand weak job market, not governmentdeficits or rising...
Attacks on jobs, wages and services     in a time of rising profits              Summer 2012
People who depend on publicservices – which is everybody – areseeing many of those servicesweakened or wiped out entirelyT...
Public employees are facing direct attacks ontheir jobs and wagesThe government is cutting jobs and demandinga wage “freez...
Premier DaltonMcGuinty is makingthese big problemsworseMcGuinty says moredeep cuts to publicservices, wages, andjobs are n...
The government hasexaggerated how badthe deficit isIn the early 1990sthere were five yearswhen the deficit wasworse than i...
Taking advice frombanker Don Drummond,McGuinty wants cuts thatare deeper and last longerthan those of the 1990sDrummond wa...
Ontario’s deficit was caused by therecession, which cut tax revenues togovernments everywhereOntario had balanced budgets ...
Ontario’sprogramspending is 11per cent lowerthan theaverage of theotherprovincesSpendingis not theproblem
Spending cuts will hurt the economy andreduce government revenuesThe Centre for Spatial Economics, amainstream forecasting...
Of the105,000 jobsmissing in2015, 65,000will bepublic sectorjobs and40,000 willbe privatesector jobs
Cutting spending on public services hurts the  economy more than an equivalent increase in  taxes:“Raising taxes rather th...
Cuts and privatization will cutwages and jobs for workers whilecreating more profit opportunitiesfor investors.They won’t ...
Consumers and governments havebeen propping up corporate profitsfor close to three decades – by goinginto debtMeanwhile, c...
The global economy is like aMonopoly game in which oneplayer has all the money andthe others are brokeIt’s time to start a...
Around the world,citizens are fightingback, demandingsolutions that don’tmean lower wagesand higher profits, orfewer publi...
In the last two years, OPSEU has: promoted fair taxation at the G-20 campaigned to reveal the link between theMcGuinty wag...
The 2012 provincial Budget deal that raisedtaxes on those earning more than $500,000 ayear will raise around $500 million ...
Photo: Jackson Chui
Austerity in Ontario  May 2012
Austerity in Ontario  May 2012
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Austerity in Ontario May 2012

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This new OPSEU PowerPoint presentation provides basic facts about Dalton McGuinty’s “austerity” campaign to cut public services, jobs and wages. Complete with speaker’s notes, anyone can deliver it to local meetings, bargaining team caucuses, area councils, or any other group

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  • This presentation is intended to give OPSEU members some basic language to talk about what is happening to public services, jobs, and wages in Ontario. What is happening is not about the deficit. Rather, employers and the politicians who work for them are using the deficit as a means to drive down wages across the economy – in the public sector AND the private sector. This boosts profits and creates more investment opportunities as the private sector delivers more public services, but it increases inequality. It also weakens consumer spending, which slows the economy even further. Ontario needs a strategy for jobs, wages, and public services that keeps money in the pockets of working people and calls on corporations and the wealthy to pay their fair share to get our economy – and the province’s finances – back on solid ground.Supporting documents for this presentation include the OPSEU analysis to the 2012 Budget, The Shock Doctrine Comes to Ontario, available at http://www.opseu.org/notices/2012-overview-budget.htm; and the Centre for Spatial Economics report called Budget 2012 and the Public Sector’s Contribution to Ontario’s Economy, available at www.opseu.org/C4SEreport.The questions in the notes for some of the slides are meant to serve as guides to interactive conversations at member meetings.This slide can be on the screen as people are taking their seats before the presentation.
  • “Austerity” is defined as a policy of cutting public services and wages to reduce spending by governments. It may also be accompanied by contracting-out and the sale of public assets. As a policy, austerity may reduce government deficits and debts, or it may not. Harsh austerity measures stifle economic growth, which in turn causes a reduction in government revenues which may result in higher deficits and debts. Critics of austerity measures say they are more about transferring public wealth to the wealthy than improving public finances. "Austerity" was named “word of the year” for 2010 by the Merriam-Webster dictionary.
  • Most OPSEU members already know that public services are under attack. But they may not know just how large the attack is. This slide could be a good place to include sector-specific information on job reductions or spending restraint (available in the 2012 Budget).Q. What does the Budget say about your sector or workplace? How will it affect your members? How will it affect the services they provide?
  • For a breakdown of wage increases and reductions for Ontario by sector, see http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labor93g-eng.htm .Q. Are people you know talking about falling wages? Are they talking about inflation more than they used to?
  • The picture says it all….Q. Do you think Ontarians are onside with what McGuinty is saying?
  • This chart is from the 2012 Budget. Note that the government has overestimated the deficit in every year since the recession. The government has a great deal of latitude to adjust the deficit in line with political goals. Right now, when they want cuts, they want the deficit to appear higher to put pressure on public employees; if an election is called, they may want the deficit to look lower so they look like responsible managers. One easy way to fiddle with the numbers, for example, is to slow down or speed up the pace of infrastructure projects. The government has budgeted $35 billion for infrastructure over the next three years.
  • For a detailed look at the ways in which the government has exaggerated the current deficit, see The Shock Doctrine Comes to Ontario, p. 4.
  • The phrase “keep the screws on” is a direct quote from Drummond. See Cohn, Martin Regg (2012a), “Brace for a budget firestorm across Ontario”, Toronto Star, January 5 (web edition). Available at http://www.thestar.com/news/canada/article/1110700 .
  • Q. Do your neighbours think Ontario has a spending problem? Do you?
  • The government admits our spending is low -- the chart here is from the Ontario budget. Note that program spending is all government spending except for interest payments on debt.Q. If you asked your neighbours where Ontario sits in terms of public program spending per person, do you think they would know that Ontario’s is the lowest?
  • To put these numbers in perspective, Ontario officially had 574,000 unemployed workers in April 2012. Adding another 105,000 to this number won’t increase their chances of finding a job!Q. Do your neighbours think “austerity” will have a significant impact on their own job prospects, or those of their children?
  • Cutting public services has a major economic impact on the private sector. That’s partly because of “spin-off” effects when public employees who are laid off or have their wages cut don’t have money to spend. But it’s also because 36 cents of every dollar of public spending goes directly into the private sector – for example when government pays to build a new building on a college campus, or a Conservation Officer puts gas in his patrol vehicle.Q. If you asked your neighbours, do you think they know how much of public spending goes directly into the private sector?
  • Cutting spending cuts the deficit about as much as raising taxes does. But cutting spending does way more damage to the economy than raising taxes does. This is because cutting spending takes more money out of the economy, as virtually all public spending is both spent and spent in Ontario. In comparison, raising taxes actually brings money in to the economy – money that would otherwise have been saved, used to pay down debts, used to purchase imported goods and services, or spent outside of Ontario. Q. Are your neighbours willing to pay higher taxes? Do they support higher taxes on corporations and the wealthy?
  • For proof that privatization is really about boosting profits, not paying down the deficit, look no further than ServiceOntario. ServiceOntario is a very efficient public service whose central operations are run by government. The government believes ServiceOntario needs to raise money for more technology to provide more online services, and plans to call on the private sector to finance the project as a “public-private partnership.” But that makes no sense: ServiceOntario doesn’t cost money, it makes money. New technology for ServiceOntario will be paid for by service fees whether it is run by the private sector or the public sector. The two big differences? The private sector pays higher interest rates to borrow money for new technology, and private companies demand a profit margin for everything they do. If a private company takes over ServiceOntario, expect higher user fees for the public, lower wages for workers, or both.Q. How might privatization affect your workplace?
  • The $527 billion number is from the National Economic Accounts table 378-0088. It includes Canadian and foreign currency holdings and deposits of non-financial corporations. If banks are included the amount of money corporations are sitting on is much higher.Q. What do your neighbours think is happening with profits of businesses? Do they know profits and corporate balance sheets are healthy while wages are falling? Why do they think that is?
  • This chart from CUPE Chief Economist Toby Sanger shows how corporations in Canada are in the pink while citizens and governments have gone into debt to subsidize corporate profits. Note how:government debt rises when recessions begin but falls off when recessions end; corporate debt has fallen steadily for more than 20 years; andhousehold debt compared to income has been rising steadily.Toby’s 20-minute presentation on austerity is excellent and available online at http://www.youtube.com/watch?v=3y-okQUcvm8&feature=relmfu . The introduction by Ryerson University professor Bryan Evans ends at 1:54 of the video, when Toby begins speaking.
  • For more options on how to fund public services and strengthen the economy through tax fairness, see The Shock Doctrine Comes to Ontario, pp. 5-7.
  • At the G-20 in June 2010, OPSEU educated the public about the “Robin Hood Tax,” also known as the Financial Transactions Tax, a tiny tax on trades in stocks, bonds, derivatives and currencies that would raise billions to fund public services, reduce poverty, and climate change.The union mobilized members around the wage freeze and corporate tax cuts in the fall of 2010.The “People for Corporate Tax Cuts” campaign attracted 25,000 visitors to its web site and received province-wide media coverage in January-February 2011.OPSEU provided logistical support for Occupy Toronto in the fall of 2011.Led by former MP Judy Wasylycia-Leis, the Commission on Quality Public Services and Tax Fairness held hearings and town hall forums in 12 communities across Ontario in January-February 2012. The Commission heard presentations from academics, OPSEU members, and communities members. The report of the Commission is available at http://www.publicservicesfoundation.ca/content/new-publication-something-value .
  • Q. What can your sector, bargaining unit, or local do to join the battle for good jobs, quality public services, and tax fairness?Q. What can you do to increase public support for the fight against austerity in Ontario?
  • Q. What can your sector, bargaining unit, or local do to join the battle for good jobs, quality public services, and tax fairness?Q. What can you do to increase public support for the fight against austerity?
  • Austerity in Ontario May 2012

    1. 1. “The major economic problem facedby Canadians is a very slow recoveryand weak job market, not governmentdeficits or rising debt. But publicspending cuts at the federal andprovincial level will make the realproblem even worse.” -- Andrew Jackson, Chief Economist, Canadian Labour Congress
    2. 2. Attacks on jobs, wages and services in a time of rising profits Summer 2012
    3. 3. People who depend on publicservices – which is everybody – areseeing many of those servicesweakened or wiped out entirelyThe 2012 Ontario Budget will cut$17.7 billion from public servicesover the next three years
    4. 4. Public employees are facing direct attacks ontheir jobs and wagesThe government is cutting jobs and demandinga wage “freeze” (really a wage cut equal to therate of inflation) for all provincial workersPrivate sector wages are not keeping up either.In Ontario, overall wages went up just 0.7 percent from Feb. 2011 to Feb. 2012. But inflationwas 2.9 per cent. In other words, real wages(after inflation) fell by 2.2 per cent
    5. 5. Premier DaltonMcGuinty is makingthese big problemsworseMcGuinty says moredeep cuts to publicservices, wages, andjobs are needed toget the deficit to zeroby 2017-18
    6. 6. The government hasexaggerated how badthe deficit isIn the early 1990sthere were five yearswhen the deficit wasworse than it is nowThe deficit ismanageable
    7. 7. Taking advice frombanker Don Drummond,McGuinty wants cuts thatare deeper and last longerthan those of the 1990sDrummond was happy to ignore optionsfor raising revenues because it helped“keep the screws on” spendingBased on this, you might think the deficitwas caused by public spending. It wasn’t
    8. 8. Ontario’s deficit was caused by therecession, which cut tax revenues togovernments everywhereOntario had balanced budgets forthree years before the recessionOntario has the lowest spending perperson of any province in Canada
    9. 9. Ontario’sprogramspending is 11per cent lowerthan theaverage of theotherprovincesSpendingis not theproblem
    10. 10. Spending cuts will hurt the economy andreduce government revenuesThe Centre for Spatial Economics, amainstream forecasting firm, estimates that the2012 Budget will cost 7,000 jobs in 2012But by 2015, Ontario will have 105,000 fewerjobsIn 2015, the unemployment rate will be 0.9 percent higher as a result of the Budget
    11. 11. Of the105,000 jobsmissing in2015, 65,000will bepublic sectorjobs and40,000 willbe privatesector jobs
    12. 12. Cutting spending on public services hurts the economy more than an equivalent increase in taxes:“Raising taxes rather than cutting spending imposes lower costs on society in terms of reduced jobs and GDP while achieving the government’s objective of reducing the deficit.” - Centre for Spatial Economics, April 2012
    13. 13. Cuts and privatization will cutwages and jobs for workers whilecreating more profit opportunitiesfor investors.They won’t help strugglinghouseholds – in the public sector orthe private sector
    14. 14. Consumers and governments havebeen propping up corporate profitsfor close to three decades – by goinginto debtMeanwhile, corporations in Canadaare sitting on $527 billion in cashthat they are not spending orinvesting
    15. 15. The global economy is like aMonopoly game in which oneplayer has all the money andthe others are brokeIt’s time to start a new game.That can only happen byredistributing money fromcorporations and high-incomeindividuals to workers and governments toget the economy rolling again
    16. 16. Around the world,citizens are fightingback, demandingsolutions that don’tmean lower wagesand higher profits, orfewer public servicesand more privateones
    17. 17. In the last two years, OPSEU has: promoted fair taxation at the G-20 campaigned to reveal the link between theMcGuinty wage freeze and corporate tax cuts launched the satirical “People for Corporate TaxCuts” campaign Supported the Occupy movement and itsopposition to growing inequality sponsored the Commission on Quality PublicServices and Tax Fairness
    18. 18. The 2012 provincial Budget deal that raisedtaxes on those earning more than $500,000 ayear will raise around $500 million a year forpublic servicesMore needs to be done to support jobs, wages,and public servicesIn 2012, we are fighting “austerity” in ourcommunities and at the bargaining tableWorking people did not cause Ontario’sproblems….
    19. 19. Photo: Jackson Chui
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