Four National Women's Groups: CCLOW · CFWEC · CRIAW · NOIVMWC

C. Key Issues

1. Globalization

Currently, there is economic growth in Canada - wealth is being created, but it is not being funneled through the labour market to create jobs. We are living through the "jobless recovery".

This is an inevitable outcome of the process of globalization, which has been building for a number of years. Successive decisions by Canadian governments (including the current one) have tied us more closely to the economic decisions of other governments and of transnational corporations. The Canada/US free trade agreement, NAFTA, and the completion of GATT are among the most high profile of these decisions.

The nature of globalization is that it emphasizes technology, and reduces the number of human beings needed - that is, it reduces the number of jobs available. Women, and especially immigrant women, are particularly vulnerable, as they are concentrated in sectors of the manufacturing industry that are most vulnerable to global competition (e.g. textiles).

The mobility of capital in a world of free trade means that all countries are more vulnerable to losing investment and jobs, so they have to shape their social and economic policies to attract foreign capital.

Will this move towards worldwide free trade create prosperity in Canada and elsewhere? Early signs are not positive. Canada lost several hundred thousand jobs in the flight of capital following the Canada-US free trade agreement. Of the new jobs that free trade is touted to create, most observers predict a split: a small number of highly-skilled, well-paying jobs, and a larger group of low-skill, dead-end and often temporary jobs. Indications are that women will occupy a disproportionately high number of the lower-paying jobs.

The Green Paper assumes that Canada's economic hopes lie with aligning ourselves even more closely with the pressures of globalization. Given our experience thus far, the opposite may be true. If Canada's social and economic development is to survive the impact of globalization, we need a strengthened social security system, and a comprehensive employment development strategy.

2. The Deficit and the Debt

The Green Paper implicitly makes several assumptions about the federal deficit which we believe the data show to be false:

1. The Green Paper assumes that the deficit is due to over-spending by the government. However, a 1991 Statistics Canada study found annual deficits grew more from shortfall in revenues than from higher spending. Excluding the cost of unemployment insurance, which is intended to be self-financing over the business cycle, social program spending has not increased relative to GDP over the last 16 years. Shortfalls in revenue are due mostly to the falling share of corporate taxes relative to personal income tax, and to significant tax loopholes available principally to the wealthy and to corporations.

2. The Green Paper assumes that social expenditures are the major culprit in creating the deficit. However, research by various groups show that only a small portion of the deficit is due to spending on social programs. The most important factors in creating the deficit are high interest rates, and the failure of large corporations to pay their fair share.

3. The Green Paper assumes that social expenditures are out of control, compared to other economically strong countries. However, Canada's social expenditures grew from just under 14.5% of GOP to almost 19% between 1980 and 1990, placing Canada below the OECD average by several percentage points, ranking 15th out of 20 countries in 1990, just as it had done a decade earlier.

   We acknowledge that reducing the deficit is one of the important challenges facing the Federal Government. However, we disagree strongly that cutting social expenditures will be either an effective or a fair method of doing this. We would suggest that the government look at measures to reduce interest rates, increase tax revenues from the wealthy and corporations and reduce Canada's dependence on foreign capital.