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Manitoba Liberals Launch “Strong Recovery” Anti-Austerity Coalition

TREATY 1 TERRITORY, WINNIPEG, MB - Manitoba Liberals are launching an online campaign to build a "Strong Recovery Coalition," calling on the Federal Government to provide better financing to provinces, municipalities and Indigenous governments, in exchange for a guarantee from participants that they will swear off austerity and privatization during the crisis.

The goal is to have the Government of Canada create a "Strong Recovery Fund" to ensure that cash-strapped provincial, municipal and Indigenous governments can continue to invest in health care, education and infrastructure to sustain and rebuild the economy during the pandemic.

The proposed "Strong Recovery Fund" is a "one-two" public investment guarantee:

  • Having the Federal Government create a "Strong Recovery" Emergency Finance program with enhanced transfers and lower borrowing costs

  • Making access to the program contingent on provinces committing to a moratorium on cuts, austerity, and privatizations during the crisis.

"One of the biggest threats to the Canadian economy and our recovery is if provincial, municipal and Indigenous governments can't pay their bills and have to lay off thousands of workers, or liquidate public assets," said Lamont. "A Strong Recovery Fund, backed by the Federal Government and Bank of Canada, will save billions in interest costs. Avoiding cuts and austerity will ensure stability and the strongest possible recovery."

Lamont said the first part of the Strong Recovery Fund could be modelled on a proposal signed by all the Premiers earlier this year, when they called on the Federal Government and Bank of Canada to allow provinces to borrow at federal interest rates.

The "anti-austerity" condition is essential to a national recovery, in order to align the actions and investments of Canadian governments at all levels, and to preserve essential local services that are essential to business and the economy.

While the Pallister PCs have been clamouring for increased health transfers, they have frozen health actual spending between 2016 and 2019 - even as transfers increased. They cut funding to infrastructure and municipalities, and $85-million in Federal COVID back-to-school funding is unaccounted for. The Manitoba PCs are not alone. The Parliamentary Budget Office also found that while federal funds for infrastructure to provinces has increased, provincial spending remained stagnant.

Since the Global Financial Crisis of 2008, all the evidence is that countries that chose stimulus fared better than countries that chose austerity. Just as stimulus can have a positive "multiplier," so can cuts. In the EU periphery after 2008, 1€ in cuts led to a 1.70€ loss in GDP.

In 2016, the International Monetary Fund wrote that austerity caused more harm than good. On July 24, The Globe and Mail published an editorial "Austerity wasn't the right path before the pandemic, and it can't be the road chosen after it."

"We will only have a strong recovery if the federal government has an ironclad, legal, enforceable guarantee that federal funds will be used for their intended purpose," said Lamont. "There are plenty of financial predators looking forward to looting the public sector for assets. We have an obligation to protect our public institutions from those predators and their political enablers. It's bad enough that provincial governments have delayed and diverted federal funds before the crisis. During a crisis, it is completely unacceptable."

While the project has been initiated by the Manitoba Liberal Party, Lamont said that it was important for groups across the province, the country and the political spectrum to be a part of the Strong Recovery Coalition.

"Our message to Manitobans, Canadians and the Federal Government is that everyone needs to be a part of a Strong Recovery: nurses, farmers, teachers, construction workers, Hydro engineers, early childhood educators, students, seniors, artists - you name it. This is about building a strong recovery for all of Canada, where no one gets left behind," said Lamont.

The website is also available in French.

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