The Budget contains no big surprises but is still a big disappointment. Despite the fact that unemployment is and will remain very high, economic stimulus measures effectively end after this year. A few very small new investments in jobs and skills will be made, but they do not amount to even the beginnings of a strategy to build a new economy. There will be a temporary extension of EI work-sharing, but about 500,000 unemployment claims filed during the Great Recession will still be exhausted. Corporate tax cuts continue, and are even modestly increased in this Budget, so the burden of deficit reduction will fall on government programs. Despite very low interest rates and one of the lowest debt levels in the advanced industrial countries, federal program spending will be slashed. Spending on international assistance is to be frozen.

While the world’s and Canada’s economic recovery is still very fragile, the Harper government has decided to focus on eliminating the deficit. Creating jobs would help balance the books at far lower cost.

Impact on Jobs and the Economy

Since October 2008, almost 500,000 permanent, paid jobs have been lost as the manufacturing and forest industry jobs crisis intensified and spread to other sectors. In the last Budget, under intense pressure, the federal government passed an economic stimulus package that, combined with ultra-low interest rates, seems to have stabilized the economy. The Budget estimates that the stimulus package has saved or created 130,000 jobs as of today.

But, a significant proportion of layoffs that occurred in the last few years are permanent, the result of bankruptcies and plant closures. Unemployment is expected by the Budget to average 8.5% this year, and 7.9% in 2011, and the real rate of unemployment — counting people who have been forced into part-time jobs or have given up looking for jobs — is already over 12%. Many unemployed workers are able to find only very low wage, insecure jobs.

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