Life inside Flaherty's 'generous' Canada

Many protestors inside the Occupy Wall Street movement refer to themselves "the 99 per cent." As in, not the richest one per cent of Americans who now control 40 per cent of the wealth, and have seen their pay stubs swell 18 per cent in the last decade, while the middle class saw their pay slashed, according to economist Joseph Stiglitz. Protestors around the world have seized on this make-the-rich-pay slogan, shouting it at rallies in Toronto and Ottawa, for example. But Finance Minister Jim Flaherty says the Occupy movement has no relevance in Canada, because of the country's "progressive tax system" and "generous social system," among other aspects, result in a fairer economy for everyone. Aside from the grueling irony of watching Mr. Flaherty talk up Canada's social safety net just as his government is about to knife up federal spending in a back alley, his claims should be examined further in the wake of some damning reports. First, we learned this week that Canada doles out $5-billion in taxpayer cash to businesses to conduct research and development. The independent panel charged with studying this bonanza in taxpayer-funded business growth concluded that the tax credit system behind it is confusing and full of holes. Meanwhile, we also learned this week that the government does not consider a network of 600 environmental organizations—many of which conduct work on one of humanity's largest collective problems, climate change—to be worth the $547,000 it spends on keeping it alive. The network was cut loose, said Environment Canada, on the grounds of "responsible spending and sound management of tax dollars." Let's spell that one out: Ottawa is willing to blindly shovel $5 billion out the door to boost corporate bottom lines, but considers cutting half a million to environmental research to be sound fiscal management. Then there is Mr. Flaherty's idea of Canada's "generous social system." Perhaps he meant the system that a recent Federation of Canadian Municipalities report says hurts immigrants by not providing enough affordable housing, efficient public transit and community services. Or there's the new University of British Columbia report that says the federal and provincial governments need to spend $22 billion on social programs to reverse what is a rapidly declining standard of living. Mr. Flaherty also leaned on his long-held comment that Canada's "strongly regulated and supervised" banking system has avoided the pitfalls of the freewheeling American economy. But with the fringes of society falling more and more off the radar, and with the unemployment rate staying high and growth remaining low, a prudent banking system may be of little help in future. Instead of patting themselves on the back the Harper government could address some of the country's long-term social dilemmas by modifying their spending and cutting agenda to one less focused on boosting the prospects of the corporations controlled by Canada's wealthiest CEOs.