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“The major economic problem faced
by Canadians is a very slow recovery
and weak job market, not government
deficits or rising debt. But public
spending cuts at the federal and
provincial level will make the real
problem even worse.”
-- Andrew Jackson, Chief Economist, Canadian Labour Congress
Attacks on jobs, wages and services
in a time of rising profits
Summer 2012


People who depend on public
services – which is everybody – are
seeing many of those services
weakened or wiped out entirely
The 2012 Ontario Budget will cut
$17.7 billion from public services
over the next three years
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
Public employees are facing direct attacks on
their jobs and wages
The government is cutting jobs and demanding
a wage “freeze” (really a wage cut equal to the
rate of inflation) for all provincial workers
Private sector wages are not keeping up either.
In Ontario, overall wages went up just 0.7 per
cent from Feb. 2011 to Feb. 2012. But inflation
was 2.9 per cent. In other words, real wages
(after inflation) fell by 2.2 per cent


Premier Dalton
McGuinty is making
these big problems
worse
McGuinty says more
deep cuts to public
services, wages, and
jobs are needed to
get the deficit to zero
by 2017-18



The government has
exaggerated how bad
the deficit is
In the early 1990s
there were five years
when the deficit was
worse than it is now
The deficit is
manageable
1
Ontario deficit relative to size of
economy (GDP)
0
-1
% -2
-3
-4
-5
81-82
86-87
91-92
96-97
Fiscal Year
01-02
06-07
11-12
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
Taking advice from
banker Don Drummond,
McGuinty wants cuts that
are deeper and last longer
than those of the 1990s
Drummond was happy to ignore options
for raising revenues because it helped
“keep the screws on” spending
Based on this, you might think the deficit
was caused by public spending. It wasn’t



Ontario’s deficit was caused by the
recession, which cut tax revenues to
governments everywhere
Ontario had balanced budgets for
three years before the recession
Ontario has the lowest spending per
person of any province in Canada


Ontario’s
program
spending is 11
per cent lower
than the
average of the
other
provinces
Spending
is not the
problem

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Spending cuts will hurt the economy and
reduce government revenues
The Centre for Spatial Economics, a
mainstream forecasting firm, estimates that the
2012 Budget will cost 7,000 jobs in 2012
But by 2015, Ontario will have 105,000 fewer
jobs
In 2015, the unemployment rate will be 0.9 per
cent higher as a result of the Budget

Of the
105,000 jobs
missing in
2015, 65,000
will be
public sector
jobs and
40,000 will
be private
sector jobs

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


Cuts and privatization will cut
wages and jobs for workers while
creating more profit opportunities
for investors.
They won’t help struggling
households – in the public sector or
the private sector


Consumers and governments have
been propping up corporate profits
for close to three decades – by going
into debt
Meanwhile, corporations in Canada
are sitting on $527 billion in cash
that they are not spending or
investing
Debt Ratios by Sector 1990 to 2011
160%
140%
120%
100%
80%
60%
Household debt to personal disposible income
Corporate credit market debt to equity
Total gov't gross debt to GDP
2010
2005
2000
1995
1990
40%
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
The global economy is like a
Monopoly game in which one
player has all the money and
the others are broke
It’s time to start a new game.
That can only happen by
redistributing money from
corporations and high-income
individuals to workers and governments to
get the economy rolling again

Around the world,
citizens are fighting
back, demanding
solutions that don’t
mean lower wages
and higher profits, or
fewer public services
and more private
ones
In the last two years, OPSEU has:
 promoted fair taxation at the G-20
 campaigned to reveal the link between the
McGuinty wage freeze and corporate tax cuts
 launched the satirical “People for Corporate
Tax Cuts” campaign
 Supported the Occupy movement and its
opposition to growing inequality
 sponsored the Commission on Quality Public
Services and Tax Fairness

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The 2012 provincial Budget deal that raised
taxes on those earning more than $500,000 a
year will raise around $500 million a year for
public services
More needs to be done to support jobs, wages,
and public services
In 2012, we are fighting “austerity” in our
communities and at the bargaining table
Working people did not cause Ontario’s
problems….
Photo: Jackson Chui