Toronto, Ontario – Canadian Auto Workers (CAW) union President Ken Lewenza has criticized the federal government for the lack of economic stimulus contained in the fiscal update delivered by Finance Minister Jim Flaherty this afternoon, especially the lack of specific measures to support troubled Canadian industries such as the auto industry.

“Today’s statement does not rise to the challenge of the times. It is more concerned with cutting spending to avoid the symbolism of deficit spending, than it is with keeping Canadians in their jobs and in their homes,” Lewenza said.

“Instead of cutting spending, the government should be increasing spending at times of macroeconomic weakness,” said Jim Stanford, CAW economist. “Other countries have stepped up to the plate in recent weeks with massive new spending stimulus. Sadly, Canada is not doing its bit.”

Stimulus spending will indeed push Canada’s federal budget into a deficit position, Stanford acknowledged, “but this is economically prudent at a time of economic contraction.”

“Canada’s economy needed economic stimulus, but incredibly this statement provides anti-stimulus. The new measures announced today will actually withdraw several billions of dollars of purchasing power from Canada’s economy and that’s the last thing we need right now,” said Stanford.

The proposal to sell capital assets, if necessary to avoid a deficit, is short-sighted and will cost taxpayers in the long-run. “Dumping valuable public assets at fire sale prices, just so Mr. Flaherty doesn’t face the embarrassment of tabling a deficit budget, is no way to run a country’s budget,” said Lewenza. “Once again he is putting ideology ahead of the troubling economic reality that millions of Canadians face right now.” Lewenza also called on the federal government to expand eligibility for Employment Insurance (reflecting the fact that less than half of unemployed Canadian qualify for regular EI benefits at any one time), and to waive the waiting period for EI benefits.

Lewenza expressed particular outrage over measures announced today which will undermine Canadian democratic rights – namely, the proposed abolition of public funding for political parties, and the federal government’s attack on the right to strike of federal public servants and the proposed retreat from pay equity commitments.

“Canadians have fundamental democratic rights that must be respected,” Lewenza said. “You can’t just start taking away those rights, on the grounds of a budget deficit. That is offensive and illegitimate.” Lewenza pledged his union’s full support for public sector unions in defending their labour rights and pay equity provisions.

The CAW welcomed the government’s decision to expand the capital base of the government’s own banks (such as Export Development Canada and the Business Development Bank), thereby positioning those institutions to play a greater role in coming months in facilitating loans to hard-hit manufacturers and exporters. “These public banks can play an increasingly important role, filling the void left by the retrenchment of private bank lending,” said Stanford.

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