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