NUPGE urges federal government to establish Fairness Test for upcoming budget

4 February 2013

The Right Hon. Stephen Harper, PC, MP

Prime Minister of Canada

Office of the Prime Minister
80 Wellington Street
Ottawa, ON

K1A 0A2

Dear Prime Minister Harper,

I am writing again to urge your government to develop a Fairness Test to assess the impact of key tax and spending policies in future federal budgets on income inequality.

Many recent studies have concluded that income inequality has been growing dramatically in Canada. The poorest Canadians and middle-class families have been falling behind while the wealthiest are taking more of the income gains from economic growth than ever before.

A recent study by the Canadian Centre for Policy Alternatives concluded that in the past decade a third of all income growth went to the richest one percent of Canadians.  Another recent report by the Conference Board of Canada concluded that income inequality has been rising at a faster rate in Canada than in the US since the mid-1990s. Among 32 OECD nations, Canada has fallen from 14^th most equal to 22^nd.

The research shows that large and growing income inequality weakens economic growth and stability, diminishes the quality of life of all Canadians, causes social divisions and undermines democracy. High income inequality also raises a profound moral question about fairness and social justice.

I urge your government to ensure that the top priority of future federal budgets is to reduce income inequality. This is especially important. If the wrong fiscal policies are chosen, income inequality will grow even larger, causing more damage to people’s lives, our economy and society, and the federal government’s finances.

Your government should establish a Fairness Test to assess the distributional impact of key tax and spending policies in budgets and determine whether they will reduce income inequality or make the problem worse.

This test would embed the principle of fairness into public policy choices and ensure the most vulnerable families are not hit the hardest by these choices. Such a test could be developed and applied by the Department of Finance and published in the budget as part of the fiscal planning framework.

The vast majority of Canadians recognize that the gap between the richest and the poorest is growing. They are concerned about the adverse effect this has on their quality of life, the social fabric of their communities and the identity of their country.

However, they also know that growing income inequality is not inevitable. They understand the federal budget is a lot more than just an exercise in numbers. It is an opportunity to make public policy choices about the kind of country we want to build – a country that has a more equitable and sustainable economy and society.

Establishing a Fairness Test for federal budgets would be a transparent and verifiable way for your government to show its commitment to the critical goal of reducing income inequality.

I urge you to take this proposal of a Fairness Test seriously and I look forward to your response.

Sincerely,

James Clancy

National President

c.c. NUPGE National Executive Board

Hon. Jim Flaherty, Minister of Finance

Hon. Thomas Mulcair, Leader of the New Democratic Party of Canada

Hon. Bob Rae, Interim Leader of the Liberal Party of Canada

Elizabeth May, Leader of the Green Party of Canada