At the 2012 CUPE division conventions, National President Paul Moist and Sr. Economist Toby Sanger hosted a series of economic literacy breakfasts to talk with CUPE members about less often discussed economic issues, and why they matter to Canadian workers.
Their presentation helps starts a new discussion on the economy - one where we talk less about what’s in the interests of banks and corporations, and more about what’s best for Canadian workers, their families, and their communities.
CUPE members need to change the channel of the economy.
2. The economy matters...
and the economy is you!
Close to two-thirds of Canada's economy driven by consumer spending,
1/4 by public spending and only 1/8 by business investment
Consumer spending &
investment in housing
Public spending & investment
Business investment
Net exports
Average share of Canada's GDP for past ten years 2002-2011. Statistics Canada Cansim Table 380-0002
3. What is the economy...
what is GDP?
GDP Spending = GDP Income =
+ Consumption + Wages, salaries & other income
+ Investment + Corporate Profits
+ Government Spending + Taxes
+ Exports – Imports + Depreciation
4. Bigger share to profits,
smaller share to wages
CANADA: WHERE THE MONEY GOES
Depreciation
Taxes
Corporate Profits
Wages, salaries and other income
Source: Provincial and Territorial Economic Accounts, Statscan Cat # 13-018X
5. Inequality growing:
Top 1% take larger share
TOP 1% SHARE OF TOTAL INCOME IN CANADA
Over $100 billion
Source: The World Top Incomes Database, http://g-mond.parisschoolofeconomics.eu/topincomes/
6. Corporate CEOs rake it in
INCOME IN 2011
+$5,000,000
Retention Bonus
Calin Rovinescu,
CEO Air Canada Canada Average
Annual Wage Canada Minimum Wage
full year earnings full year earnings
$3,999,027
$37,630 $18,500
Sources: Canada's CEO Elite 100 , Hugh Mackenzie CCPA January 2012; Employment, Earnings and Hours,
Statistics Canada cat# 72-002; HRSDC Minimum Wage database.
8. Wage increases falling
below inflation again
AVERAGE ANNUAL WAGE INCREASE AND INFLATION
CANADA NEGOTIATED WAGE SETTLEMENTS BY SECTOR
Sources: Statistics Canada, Consumer Price Index; HRSDC Annual Wage Settlement Data.
9. “Social Wage” equal to $17,000
a year - 60% of average income
ANNUAL VALUE OF SOCIAL WAGE – PUBLIC SERVICES--PER PERSON
Total value of public services
per person: $16,952
Source: Hugh Mackenzie and Richard Shillington, Canada’s Quiet Bargain, CCPA
2007
10. Public spending share
of economy at recent 30-year low
TOTAL PUBLIC SPENDING AS SHARE OF ECONOMY CANADA
Public spending by all levels of government
Source: Statistics Canada, Provincial and Territorial Economic Accounts Data Tables
11. Tax system becoming more regressive:
top 1% pay lowest total rate of tax
TOTAL TAX RATE AS A SHARE OF INCOME BY INCOME GROUP
CANADA 1990 -2005
Source: Marc Lee, Eroding Tax Fairness, CCPA 2007. All federal, provincial and municipal income, payroll, sales,
property and other taxes
12. Fair taxes could eliminate federal
deficit without damaging cuts
FEDERAL GOVERNMENT REVENUE
PROGRESSIVE REVENUE OPTIONS $ Billions
Fair taxes for corporations
-Restore federal corporate tax rate to 21% $10.5
-Financial activities tax on bank profits and compensation $5.0
Progressive tax on high incomes
-Tax incomes over $250,000 at 35% $3.5
Broaden tax base and close ineffective and
regressive tax loopholes
- Eliminate and restrict regressive and ineffective
federal tax loopholes and subsidies $10.0+
Total of above measures (billions annually) $29.0
13. What we need
More investment in public services
• They benefit everybody, reduce inequality and grow the
economy
Fair and progressive taxes
• To reduce inequality and pay for public services
• Corporate and high income tax cuts haven’t worked
Higher wages for workers
• Economic growth depends on household spending, workers
wages and public spending.
14. The economy matters!
It should serve peoples’, not just corporate
interests.
Inequality has increased as a result of government
policies, cutbacks and regressive taxes
Equality matters – for the economy, too.
We are the 99%
More public services, fair taxes and higher wages for
workers are good for the economy
16. Thank you!
For more information:
cupe.ca/economics
Canadian Centre for Policy Alternatives:
policyalternatives.ca
Progressive Economics Blog:
progressive-economics.ca/relentless