Oxfam Canada’s 2022 Federal Budget Analysis

Oxfam Canada has prepared this budget overview to highlight the gain in this year’s federal budget and what is missing. Our analysis reveals that this year’s budget falls short of delivering a strong feminist economic recovery. In fact, the government’s gender analysis of its budget admits that men will benefit significantly more than women, with 42 per cent of spending expected to directly or indirectly benefit men and only 14 per cent to directly or indirectly benefit women.

Much work remains to address increasing inequality in Canada and globally. However, there were several significant steps forward this year, with historic investments in ending gender-based violence, implementing a federal action plan on 2SLGBTQ+ rights, supporting Indigenous communities and building a nationwide early learning and child care system.

Representation and Leadership

It is telling that Budget 2022 only mentioned gender 18 times, compared to over 200 times in 2021. This is stunning considering the disproportionate impact COVID-19 has had on women, especially Black, Indigenous and racialized women, women living with disabilities and gender diverse people. Yet, there were few measures to advance gender equality or support women’s leadership and representation in decision-making.

Oxfam Canada had hoped to see a continuation of the Taskforce on Women in the Economy as a permanent body that would provide the government with expertise and insights to living up to its promise of an intersectional feminist recovery. The budget does contemplate the creation of a new Council of Economic Advisors, which, if inclusive and diverse in its makeup, could have the potential to strengthen the government’s gender-based analysis plus and advise on the most critical policies to address immediate needs.

For years, women’s rights movements have advocated for long-term, flexible and sustainable funding. Current funding mechanisms inhibit the sector’s ability to provide decent work to its employees and meet the demand for services in the communities they serve. Budget 2022 fails to deliver, but one promising initiative is $50 million over two years towards Supporting Black Canadian Communities, which aims to empower Black-led and Black-serving community organizations. It is hoped that at least 50 per cent of that funding is made available to Black women-led and women-serving organizations.

The budget once again contained a Statement on Gender and Diversity in Canada. Still, a lot of the data was either old or not broken down by gender. Also, details provided on the initiatives highlighted were vague when explaining how exactly the measure would advance gender equality. It was promising to see that Budget 2022 allocated $172 million over five years to enhance the government’s ability to collect disaggregated data – crucial to understanding how intersecting factors shape women’s lived reality. However, the main shortcoming remains that the gender budgeting framework is not applied to its full potential in identifying specific needs of women and gender diverse people and building initiatives around it.

Overall, it is clear the government must engage more deliberately and meaningfully with the women’s rights and feminist sector better to understand the needs of women and gender diverse people and build solutions collaboratively.

Reducing Poverty for the Most Marginalized Women

Housing was a key priority of Budget 2022, allocating over $14 billion in new and advanced housing spending. This included a $1.5 billion expansion of the Rapid Housing Initiative and $562 million over two years of funding for Reaching Home, and $4 billion for a Housing Accelerator Fund.

The size of these commitments demonstrates an understanding of the severity of the housing crisis experienced by people living in Canada. However, it falls short in understanding the gendered nature of the housing crisis. Low-income women-led households experience the most significant housing need in Canada, especially Indigenous, Black and racialized women and women living with disabilities. Affordable housing remains a crucial challenge for them. Affordability needs to be tied to income, not the market, to meet low-income women's needs. Only the Rapid Housing initiative announced a gender-specific commitment, but such a commitment should apply across all housing initiatives.

Women living with disabilities had their eyes on the budget, hoping for an announcement of the promised Disability Benefit, but Budget 2022 did not deliver. It allocated $272.6 million over five years to implement an employment strategy for persons with disabilities through the Opportunities Fund. While welcome, the benefits of these investments won't be immediate, and women with disabilities need income security and employment equity now.

Racism shapes the daily lives of black, Indigenous and racialized women and determines their access to opportunities, jobs and benefits. The budget provides $85 million over four years to support the launch of the new Anti-racism Strategy and National Action Plan on Combatting Hate and $50 million over two years for the Supporting Black Canadian Communities Initiatives. Advocates had hoped to see bolder action to address the scale and severity of the problem and to ensure deep-seated transformation in institutions and policies affecting racialized women. What is needed is anti-racism legislation and a fully resourced secretariat that would roll out a National Anti-racism Action Plan.

Upholding the rights of Indigenous women

Over the next six years, the budget will invest $11 billion to support Indigenous communities. This represents roughly 19 per cent of total federal spending, although substantially less than the $18 billion in last year's budget. Much of this year's funding was targeted to housing in Indigenous communities and critical infrastructure on reserves, including water and wastewater systems. In addition, First Nations children and families will be supported with an additional $4 billion over six years to improve service delivery by implementing Jordan's Principle.

There were limited new initiatives targeted at First Nations, Metis and Inuit women. One national Indigenous women's organization told Oxfam that the budget limited references to taking a distinctions-based approach and tended to frame initiatives and funding in a pan-Indigenous manner.

Work and Pay Equity

The high inflation rate in Canada makes the cost of living even more unaffordable. Wages are not keeping up, despite increases in job vacancies. A study in Ontario found that racialized women, Indigenous women, single mothers, low-income women, immigrant women, women with disabilities and those living in rural areas experienced the highest income loss from COVID-19 shutdowns. These women are stuck in the most precarious and low-paid jobs in a labour market that continues to discriminate against them and have slid further into poverty due to the pandemic. It was a missed opportunity that the budget failed to address the systemic gendered impacts facing women concentrated in low-wage and precarious work.

Despite human rights legislation, employment equity remains a tremendous challenge in Canada, with marginalized groups experiencing systemic discrimination and racism in the labour market. This year’s budget allocates $1.9 million to complete the Employment Equity Act Review. The review should be delivered as soon as possible, and women’s rights organizations should be meaningfully consulted in the process.

More targeted actions are needed to address the racial gender wage gap, lack of access to employment insurance for marginalized women, and discrimination in the labour market. 

The budget had notable omissions for low-income communities and workers. While the budget commits to amending the Employment Insurance Act to increase access to training for workers before they become unemployed, significant changes like higher EI benefit levels and EI coverage for the self-employed were missing. 

The budget included no meaningful spending to support migrant care workers and temporary foreign workers in Canada. Most of the resources and initiatives allocated focused on regulatory measures for industries and employers who hire temporary foreign workers in Canada. There were no substantial investments in providing safer working conditions, ending exploitation, or creating concrete pathways to citizenship and status for the country's nearly 1.6 million migrant workers.

Care Work

The federal government remains committed to building a Canada-wide early learning and childcare system. The budget includes $625 million for a new federal Early Learning and Child Care Infrastructure Fund, essential for growing not-for-profit and public child care spaces across the country. Investments in dental care are also important and will benefit many Canadians, especially children. Unfortunately, support for long-term care was not mentioned, despite the attention it gained during the worst moments of the pandemic.

The budget does not go far enough to address the critical needs in the care economy. Major issues, such as labour shortages, recruitment and retention, low wages and poor working conditions, and burnout of the care workforce, have not been addressed.

The budget's Gender and Diversity Statement identifies that women, especially racialized and immigrant women, are overwhelmingly employed in care sectors in Canada. Women make up 91 per cent of nurses, 86 per cent of health services support and 86 per cent of workers in the legal, social, community and education sectors.

The child care sector is experiencing an acute shortage of qualified early childhood educators because of very low recruitment and retention rates. It will be impossible to hire the 62,200 educators required to staff the anticipated growth in spaces without raising the sector's very low levels of compensation.

Upholding 2SLGBTQ+ Rights

In recent years, queer and trans communities in Canada have seen unprecedented federal engagement and support for their movements, organizations and front-line services.

The budget continues on that path with a historic investment of $100 million over five years to implement the LGBTQ2 Action Plan – the first of its kind. Advocates want to ensure the funding is accessible to rural, Two-Spirit, trans and intersex organizations and organizations serving Black and racialized 2SLGBTQ+ communities. This announcement builds on the $15 million over three years announced in 2021 for the new LGBTQ2 Projects Fund.

Canadian organizations working in solidarity with 2SLGBTQ+ rights movements globally, including Oxfam Canada, have been calling on Canada to increase investments to support movements for people of diverse sexual orientation, gender identity and expression, and sexual characteristics (SOGIESC). The first-ever investment of $30 million over five years was announced in 2019. While the overall increase in Canada’s international assistance budget this year is positive, it is unclear whether SOGIESC funding will increase to $20 million a year, including humanitarian aid and LGBTQ+ human rights defenders.

Ending Gender-Based Violence

Over the last several years, the government has shown an unprecedented commitment to addressing violence against women and girls and gender-based violence, including in response to the COVID-19 pandemic.

This budget provides $539.3 million over five years to support the provinces and territories in preventing gender-based violence and providing services to support survivors. Unfortunately, details are sparse. There was no fixed timeline for the promised 10-year National Action Plan nor any additional funding to address the ongoing genocide against missing and murdered Indigenous women and girls.

Upholding Sexual and Reproductive Health and Rights

There were a few positive announcements in Budget 2022 on sexual and reproductive health and rights. The $25 million over two years for a national pilot Menstrual Equity Fund to ensure all Canadians in need can access menstrual products is laudable, as was the announcement of labour code amendments to support federally regulated employees who experience stillbirths or miscarriages.

Given the limited new announcements this year, it is more crucial than ever to see progress on the commitments in Budget 2021 for funding to sexual and reproductive health and rights organizations of $45 million over three years and $7.6 million over five years for implementation of a sexual health survey to address data gaps on sexual and reproductive health indicators.

Regrettably, Budget 2022 made no mention of pharmacare and its need to include comprehensive contraceptive care.

For decades, access to sexual and reproductive healthcare and services has been underfunded in Canada. The pandemic exacerbated it. Nine provinces are experiencing rising rates of sexually transmitted infections. Access to abortion in remote areas continues to be challenging. The state of sexual education lags far behind international and Canadian standards. The state of comprehensive sexuality education in Canada is inexcusable, particularly with evidence demonstrating that it plays a significant role in promoting equality and consent, decreasing violence and facilitating youth empowerment and acceptance.

Global Development

The increase in Canada’s international assistance envelope, from $7.6 billion in 2020-2021 to just over $8 billion in 2022-2023, will save lives worldwide and help advance gender equality. 

Canada boosted its international assistance funding significantly in 2020 in response to the COVID-19 crisis. It is encouraging that this increase has become the new baseline to build upon. However, the increase in foreign aid still fell short of the $9 billion that experts say is needed to adequately tackle global challenges such as COVID-19, climate change, and conflict – all of which exacerbate gender inequality. 

New investments this year focus on fighting COVID-19 and promoting global health. The ACT-Accelerator, a global partnership to give people equal and affordable access to COVID-19 health products, received a renewed investment of $732 million, representing roughly 93 per cent of Canada’s fair share for 2022.

The budget also includes an amendment to the Income Tax Act that will allow international development organizations to work in more feminist ways. Despite the FIAP’s commitment to support and empower local women’s rights groups, Canadian law currently forces organizations like Oxfam to micromanage their local civil society partners in developing countries and treat them like an extension of their agency. These changes will make it easier for international charities to provide their partners with core funding and greater autonomy.

Conflict and Crisis

The budget’s foreign policy section focuses strongly on the Ukraine crisis. It committed $500 million in lethal and non-lethal military aid to Ukraine this year. Over five years, it will invest $8 billion in Canada’s armed forces and the North Atlantic Treaty Organization (NATO) alliance. 

Despite Canada’s talk about feminism being a core principle in its international affairs, there appears to be no attempt to articulate its investments along these lines. Instead of an exclusive focus on militarization, Canada could have announced investments in conflict prevention, women’s participation in peace talks, support for women and LGBTQ+ rights defenders, or prevention and response to conflict-related sexual violence. The values and principles of a feminist foreign policy are needed now more than ever in this time of global crisis.

Budget 2022 lays out an ambitious immigration plan for the coming year, which will help meet labour needs and reunite families. However, it does not do enough for protected persons in Canada and their dependents abroad. 

The target for this category is set at 24,500. Currently, there are 43,335 people with pending applications. This means that tens of thousands of people who have been accepted as refugees will need to wait until next year to become permanent residents or reunite with family members waiting overseas. Long family separations have a particularly harsh impact on women, who generally keep the children - and have difficulty building their lives without childcare or emotional support.

Climate Change

This budget framed climate action as one of its main priorities. Most federal support for climate action comes as industry subsidies, even for the fossil fuel industry. The government’s new 2030 Emissions Reduction Plan includes $9.1 billion in federal spending to lower greenhouse gas emissions over the next eight years. The budget also creates a $15 billion Canada Growth Fund to leverage private sector investment for decarbonization and clean technology projects.

The carbon capture, utilization and storage tax credit for oil and gas companies, expected to cost $2.6 billion over the next five years, was panned by several environmental groups. Instead, these groups say this support would have been better directed towards renewable energy investments rather than expanding fossil fuel infrastructure.

There was no clear plan on how women, racialized people, migrants and other marginalized groups would benefit from the billions in climate action funding. A mere $29.6 million was earmarked for Indigenous climate leadership initiatives over the next three years.

The government’s gender analysis accompanying the budget acknowledges that “men are overrepresented in certain sectors benefitting from many of the climate and infrastructure related measures in this budget.”

On the international front, Canada has doubled its climate finance for developing countries to $5.3 billion over the next five years, with at least 80 per cent of this funding being allocated for projects that advance gender equality. No equivalent commitment appears in Budget 2022 for climate actions in Canada.

Taxes

The budget shows some progress on tax fairness. While feminist tax reform would involve a comprehensive overhaul of the tax system to curb growing inequality and generate more public revenue for equity measures, this budget represents a small step in the right direction.

The Trudeau government introduced its first-ever increase to the corporate income tax rate, from 15 per cent to 16.5 per cent, although it only applies to banks and insurance companies. The corporate income tax rate has been locked at 15 per cent for decades – an all-time low and less than half the rate of what it was in the 1980s. It should be restored to 21 per cent for all large companies.

Implementing a public registry on beneficial ownership had been promised by the federal government. It was highlighted as a priority action in the recent supply and confidence agreement between the Liberals and the NDP. In this budget, the government commits to establishing a searchable registry of the beneficial owners of companies and trusts by early 2023, a critical tool to curb tax evasion and illicit financial flows.

The accelerated timetable for implementing the registry – including penalties, data verification and validation – has been celebrated by tax and transparency experts. It could end Canada’s reputation for lax transparency rules that enable tax dodging and money laundering.

The government promised to impose a 15 per cent effective minimum personal income tax rate on the highest income earners in Canada. However, this promise did not materialize in this budget. Yet, the government promised to examine it and report back in the fall of 2022.

The finance minister also fell short of introducing a wealth tax in Canada, nor was there any mention of closing major tax loopholes, such as the preferential treatment of capital gains.