Workers bear burden of provincial ‘restraint’


Toronto Star: Published on November 19, 2010

A $35,000-a-year caregiver in a nursing home doesn’t usually get much news coverage.

She feeds our parents and grandparents. She helps them use the bathroom. She tries to enrich their final years. Sometimes she holds their hands as they die.

None of this makes the news. It’s behind the scenes, where most working people spend their days.

But these days, if an arbitrator says a caregiver’s wages should keep up with inflation, suddenly she’s on the front page.

Under Dalton McGuinty’s wage-freeze plan, our caregiver is supposed to take a two-year pay cut equal to the rate of inflation. At the normal rate, that adds up to 4 per cent, or about $1,400 a year. (This year, the cut is even bigger because of HST inflation.)

The premier says he “just can’t believe” a lab technologist who is trained to diagnose 45 types of cancer doesn’t want to take a pay cut.

Maybe he needs to look through the microscope and see what his wage “freeze” is really all about.

McGuinty says cuts in real wages will protect services, save jobs and pay down the deficit. Sounds good — too bad it’s not true.

The fact is, none of the money workers lose will go to any of these things. All of it is going somewhere else.

When fully phased in, the savings from the wage freeze could reach $1.8 billion a year.

Where is it really going?

It’s going to fund the premier’s $2.4 billion-a-year cut to the corporate income tax rate.

Every single dollar workers lose through the wage freeze will go to the profits of companies like the Royal Bank of Canada, Rogers and Imperial Oil. That’s what my members can’t stand.

The premier says Ontario needs corporate tax cuts. He says they will create jobs.

This mantra from the Mike Harris days has only one purpose: to conceal a massive transfer of wealth from the pockets of working people to the bonuses of CEOs.

The facts about corporate tax cuts don’t fit Dalton’s version.

In its 2010 Competitive Alternatives study, KPMG said Canada’s “total tax index” was the second-lowest among 10 competitor countries. Toronto had lower taxes for business than all U.S. and European cities studied.

Between Parliament Hill and Queen’s Park, we’ve had 10 years of corporate income tax cuts in Ontario. In theory, this should have boosted investment. In fact, the rate of investment has actually gone down.

In its 2010 budget, the federal government ranked cuts to corporate income taxes as the worst way to stimulate job creation.

Federal economists said every dollar spent on these no-strings-attached corporate income tax cuts creates just 30 cents’ worth of economic activity.

In contrast, “measures to help low-income people and the unemployed” boost the economy by $1.70 — more than five times as much. Spending on infrastructure and public services ranked nearly as high.

The best path to a strong Ontario is to put money into the pockets of working people. It is to put money into child care and transit and post-secondary education. It is to feed and house people who can’t find work.

It is not to impose a wage freeze.

Arbitrators make the decisions they do because they know governments make choices.

We are not in an “era of fiscal restraint,” as the premier claims.

Instead, we are in an era of restraint for working people and lavish gifts for corporations.

In 2009, the Big Six banks paid out $8 billion in bonuses and $14 billion in profits.

Can you blame a cleaner in a hospital for being angry when his family is being told to tighten their belts while bankers party?

The problem in Ontario today is not that some arbitrators are ignoring Dalton McGuinty’s wage freeze. The problem is that the wage freeze itself is arbitrary, unfair and a step backward for local economies.

As working people, my members are always ready to talk about ways to protect public services and save jobs. But our families can’t afford to donate their wages to fund corporate profits.

In solidarity,

Warren (Smokey) Thomas, President

View all Presidents' Messages: 2009 to Current

Recent messages