Broadbent Institute makes income inequality its first focus

The new social democratic think-tank named after former NDP leader Ed Broadbent wants to spark a national policy debate by building on the central theme of last year's Occupy Movement.

In a preface to The Broadbent Institute's first full policy report, "Towards a More Equal Canada," Broadbent calls growing inequality "the defining political issue of our time," saying Canada is "moving in the wrong direction."

The report's release today is accompanied by a YouTube video narrated by Broadbent himself, in which a "Play-Doh Ed" armed with a marker and whiteboard sketches out the causes and impact of growing disparities in Canadian incomes.

The narrative boils down a range of statistics and research reports to document Canada's shrinking middle class. Most of the income gains of the past three decades, the report argues, were realized by only wealthy Canadians.

In the video, Broadbent emphasizes that these changes resulted from "political choices."

Democracy, the paper argues, is based on the idea that citizens have not only rights but obligations to each other. This includes public services outside of the free market system.

The paper suggests that social and economic rights be added to the Charter of Rights and Freedoms alongside Canadians' political and civil rights, in order to fulful its "security of the person" provision.

Canada's "one per cent"

As a starting point for the discussion, the report argues that Canada has returned almost to the way it was during the Great Depression, when the top one per cent controlled 18 per cent of all the income.

For every dollar increase in national earnings over the last 20 years, it says, more than 30 cents have gone to the top one per cent while the remaining 70 cents have been shared across the other 99 per cent of Canadians.

The report discusses the consequences of income inequality for Canada's tax system and social programs. It also argues that Canada's increase in income inequality has been much greater than the average of other advanced industrial countries.

The final section of the report is prescriptive, outlining several ways to combat growing income equality:

• Good jobs: changes to economic policies to promote the growth of middle-class jobs, including trade and foreign investment policies that protect labour rights and environmental standards and strong investments in child care, public education and skills training.
• Income supports: changes to the government programs targeted at low-income Canadians and those in short-term need, such as employment insurance, Old Age Security, the Canada Pension Plan, provincial welfare systems and other income supports and tax benefits targeted at low-income families with children and the working poor.
• Expanding public services: the report argues that for the majority of Canadians public services are a good deal; The value of education, health care, child care and other public services annually exceeds the taxes paid by middle-class and low-income Canadians. At the same time, some reforms are needed, it acknowledges.
• Fair taxes: changes to Canada's tax system are necessary, it argues, pointing out Canada's taxes as a share of national income (31 per cent) are below the average of the world's industrialized countries (34 per cent), squeezing funding for public services. The report is critical of the government's tax-cutting agenda, arguing instead that taxes are "the hinge that links citizens to one another and the common good." Loopholes, including the "boutique" tax cuts found in recent federal budgets and several rounds of corporate tax cuts have failed to improve the lot of ordinary Canadians, it argues.

A poll released by the Broadbent Institute last spring suggested the majority of Canadians are willing to pay more in taxes to protect Canada's social programs.

These prescriptions aside, the institute says its goal is not to set out a detailed policy agenda, but to encourage Canadians to reflect on the available options to achieve the goal of shrinking the income gap.

Over the coming weeks, the think-tank says academics and politicians "of every partisan stripe" will be responding to the initial paper.