Newfoundland’s austerity budget hits women particularly hard

Canada Politics

[Newfoundland and Labrador Finance Minister Cathy Bennett presents the 2016 provincial budget at the House of Assembly in St.John’s, Thursday, April 14, 2016. / THE CANADIAN PRESS/Paul Daly]

Women’s groups in Newfoundland and Labrador are sounding the alarm about the province’s budget, saying its cuts and tax increases will hit women hardest.

“For women in Newfoundland and Labrador, we’re hit in two very clear, distinct ways,” Jenny Wright, executive director of the St. John’s Status of Women Council, tells Yahoo Canada News.

The province already has the highest wage gap in the country: women earn 66 per cent of the average weekly wages of men, according to research from Memorial University. Women are also the highest users of provincial services, Wright says, which means that cuts and fee increases will affect them disproportionately.

“We’re essentially dealing with a double whammy,” she says.

The provincial budget was released Thursday and included several controversial measures, including a “deficit reduction levy” on all residents making at least $20,000 a year, increased income taxes, increased HST, new taxes on books, public sector layoffs and cuts to health-care and education funding.

An analysis published by CBC News, based on data from bankruptcy trustee S.R. Stack and Company, found that the 2016 budget would have a considerable cost for the average family: they’d lose $6,085 a year thanks to increased income taxes, the higher fuel tax, the eliminated baby bonus and the increase in HST, among other factors.

The effects of austerity and economic problems have been seen in other jurisdictions, Wright says, and can actually put women’s lives at risk. Domestic violence has increased in Alberta, for example, amid its own financial crisis related to oil revenues. Similar increases were seen in the United States during the recent economic downturn there.

Earlier this month, the Newfoundland and Labrador Transition House Association said that shelter numbers were up across the province and that it was important to continue to fund their services during the economic downturn. Wright says some of the budget’s provisions will make it harder for women to leave violent situations. Four provincial courts will close and the 16 cents per litre gas tax increase will make it more expensive to travel to courts in other communities.

“Women in rural communities experience double the amount of family violence, and in rural communities they’re experiencing that violence with very little or sometimes no supports at all,” Wright says. “An entire matrix of barriers have been placed around women being able to escape from domestic violence.”

The province’s new “deficit reduction levy” will also hit lower-income earners particularly hard — which is concerning given the wage gap the province’s women already experience, according to Wright.

The levy can cost anywhere from $300-$900 annually, getting higher in relation to income, for anyone who makes more than $20,000. In Newfoundland and Labrador, 15.3 per cent of families are headed by a single parent, according to StatsCan – and in Canada, 80 per cent of single parents are women. 

At about $35,000, the median income of those Newfoundland single-parent families is about $5,000 lower than the national average. The number of elderly women living in poverty is also rising, as it is across Canada.

Several other measures in the budget will reduce the available income for families. Newfoundland and Labrador families will lose their “baby bonus,” introduced under former premier Danny Williams, which gave families $1,000 during the first year of a baby’s life. 

Routine mammograms for women aged 40-49 are no longer covered under provincial health care. HST will go up by two percentage points, to 15 per cent, and the province will add a 10 per cent tax onto book purchases. 

Income tax are increased for all brackets, as are the fees for services like birth and death certificates and motor vehicle registration. Cuts to food and travel subsidies in Labrador will be particularly harmful to indigenous women, Wright says, who already experience high rates of poverty.

Few can deny that financial cuts were necessary with this budget, considering the steep drop in the oil revenues that make up 30 per cent of what the province takes in. But Wright says it could have been distributed more equitably, especially considering that women in Newfoundland and Labrador are already at an income disadvantage. 

About 70 per cent of the reduction to the province’s deficit, taking it from $2.7 billion to $1.83 billion, will come from tax and fee increases instead of spending cuts.

“We all understood that cuts needed to be made and that there would need to be an increase in revenue through taxes,” Wright says. “But a budget is not just an accounting exercise. We must make sure that the cuts do the least harm — and if possible, do no harm at all.”