CUPE NATIONAL
MAY 2012
Changing the Channel on the Economy
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
Net exportsBusiness investment
Public spending & investment
Average share of Canada's GDP for past ten years 2002-2011. Statistics Canada Cansim Table 380-0002
What is the economy... what is GDP?
GDP Spending =+ Consumption
+ Investment
+ Government Spending
+ Exports – Imports
GDP Income =+ Wages, salaries & other income
+ Corporate Profits
+ Taxes
+ Depreciation
Bigger share to profits, smaller share to wagesCANADA: WHERE THE MONEY GOES
Depreciation
Taxes
Corporate Profits
Wages, salaries and other income
Source: Provincial and Territorial Economic Accounts, Statscan Cat # 13-018X
Inequality growing: Top 1% take larger shareTOP 1% SHARE OF TOTAL INCOME IN CANADA
Source: The World Top Incomes Database, http://g-mond.parisschoolofeconomics.eu/topincomes/
Over $100 billion
Corporate CEOs rake it in
Sources: Canada's CEO Elite 100 , Hugh Mackenzie CCPA January 2012; Employment, Earnings and Hours, Statistics Canada cat# 72-002; HRSDC Minimum Wage database.
INCOME IN 2011
Calin Rovinescu, CEO Air Canada Canada Average
Annual Wagefull year earnings
Canada Minimum Wagefull year earnings
+$5,000,000
$37,630 $18,500
$3,999,027
Retention Bonus
Public pensions gold-plated? NOT!ANNUAL PENSION
Average CUPE Member
Don Stewart, ex-CEO Sun-Life
Wage increases falling below inflation againAVERAGE ANNUAL WAGE INCREASE AND INFLATIONCANADA NEGOTIATED WAGE SETTLEMENTS BY SECTOR
Sources: Statistics Canada, Consumer Price Index; HRSDC Annual Wage Settlement Data.
“Social Wage” equal to $17,000 a year - 60% of average income
ANNUAL VALUE OF SOCIAL WAGE – PUBLIC SERVICES--PER PERSON
Source: Hugh Mackenzie and Richard Shillington, Canada’s Quiet Bargain, CCPA 2007
Total value of public services per person: $16,952
Public spending share of economy at recent 30-year lowTOTAL PUBLIC SPENDING AS SHARE OF ECONOMY CANADA
Public spending by all levels of government
Source: Statistics Canada, Provincial and Territorial Economic Accounts Data Tables
Tax system becoming more regressive:top 1% pay lowest total rate of taxTOTAL TAX RATE AS A SHARE OF INCOME BY INCOME GROUP CANADA 1990 -2005
Source: Marc Lee, Eroding Tax Fairness, CCPA 2007. All federal, provincial and municipal income, payroll, sales, property and other taxes
Fair taxes could eliminate federal deficit without damaging cuts
FEDERAL GOVERNMENT PROGRESSIVE REVENUE OPTIONS
REVENUE$ Billions
Fair taxes for corporations-Restore federal corporate tax rate to 21%-Financial activities tax on bank profits and compensation
$10.5$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
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.
What we need
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
The economy matters!
It’s time to take back our economy
Thank you!
For more information:cupe.ca/economics
Canadian Centre for Policy Alternatives:policyalternatives.ca
Progressive Economics Blog:progressive-economics.ca/relentless
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