Tag Archives: economic democracy

Work is a fundamental human right

A just society should provide everyone with access to a job yet nearly 2 million Canadians can’t find work.

Officially 6.9 per cent of the Canadian workforce is unemployed. But this number rises to 10.3 per cent when those who’ve given up searching for work are included. Counting “discouraged workers”, about 1.8 million Canadians can’t find a job.

Looked at from a different perspective, StatsCan announced last week that there were six job-seekers for every job available in September. Counting “discouraged workers” that number increases 50 percent.

Incredibly, some consider Canada’s unemployment rate a success. In his October throne speech Stephen Harper misleadingly declared that “Canada now has the best job creation record in the G-7 — one million net new jobs since the depths of the recession.”

This isn’t simply self-promotional rhetoric. Policy moves suggest the government is little concerned by the large number of Canadians out of work. Over the past two years they’ve curtailed Employment Insurance benefits, increased the age at which people can receive Old Age Assistance and slashed public-sector employment.

While the government would never say as much publicly, some among the corporate-funded think tanks argue that having over 1 in 10 Canadian workers out of a job is actually too few. “Canada’s unemployment rate dangerously low” was the title of an April Financial Post article by Philip Cross, Research Coordinator for the Macdonald-Laurier Institute.

Hostility to anything approaching full employment reflects the growth of neoconservative policies. Over the last three decades the idea that everyone should have access to a job has largely disappeared from political discourse. But it used to be fairly common.

In the 1963 election Liberal leader Lester Pearson ran on a “Sixty days of decision” platform that included a pledge of full employment and during his time as Prime Minister Canada’s official unemployment rate dropped below 3%. Similarly, the UN’s International Covenant on Economic, Social and Cultural Rights, which was adopted in 1966 and signed by Canada in 1976, called for the right to employment. It recognizes that “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”

Instead of focusing on peoples’ right to employment, policymakers today emphasize property rights. In effect, this has meant extending patents, easing safety/environmental regulations on corporations and enabling investors to move to low-wage jurisdictions.

While these policies certainly benefit some, few of us gain our income from owning property. The vast majority of Canadians are wageworkers, their dependents or retired wageworkers. And without a job it’s difficult to get by.

But a job is not only about paying the bills. What one does is generally an important part of a person’s identity and most people want to feel like they are contributing to society. Persistent unemployment can be psychologically damaging for individuals.

It’s also socially damaging. Mass unemployment is a waste of peoples’ energy and ingenuity. Imagine what the 1.8 million Canadians out of work could accomplish if they were mobilized to develop green energy sources or to expand mass transit and childcare services.

But how do we mobilize all this latent human energy. One socially useful way to stimulate employment would be to have the government significantly expand its role in mass transit and childcare. Another would be to push Corporate Canada, which is sitting on over $575 billion in cash, to invest in renewable energy.

It’s time to rekindle the idea that all adults have the right to a job. There are 1.8 million Canadians waiting to better contribute to their society.

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The rich profit while other Canadians suffer from Dutch disease

A clear diagnosis of the Oil Sands fever variant of Dutch Disease may be just what the doctor ordered to rally Canadian workers in the fight against global warming.

A rapid increase in natural resource investment and revenue usually drives up a nation’s currency. This generally makes other industries less competitive and can greatly weaken a country’s manufacturing base.

Widely known as “Dutch Disease” (named after a period of rapid expansion of the natural gas industry in the Netherlands), this well established economic paradox has become a taboo subject in this country. Canada’s highly class-conscious elite is worried that manufacturing workers might make common cause with environmental groups and even some business sectors to challenge the carbon/profit bomb known as the tar sands.

A recent Pembina Institute/Equiterre report titled “Booms, Busts and Bitumen” argues that Canada’s economy is facing “Oil Sands fever”. The study points out that the Bank of Canada believes one-third of the Canadian manufacturing sector’s decline has been caused by a more expensive dollar, which rose alongside the price of oil from $.61 US in 2002 to $1.10 US in 2007 (and has hovered near par since). The study concludes that 40% to 75% of the currency increase has been caused by rising commodity prices, principally oil.

The higher price has led to a boom in production and export. Between 2002 and 2012 energy grew from less than 13% of total Canadian exports to over 25%. And if plans to double tar sands production over the next decade are realized, this dependence will increase.

A February Canadian Centre for Policy Alternatives study gives a sense of the jobs impact of Oil Sands fever. The Bitumen Cliff notes: “The forestry sector lost close to 30,000 positions. And the manufacturing industry, of course, haemorrhaged nearly a half-million positions. For every new job created in the petroleum sector during the past decade, 30 have been lost in manufac­turing. Across all of the export-oriented goods industries… net employment declined by almost 520,000 jobs in the past decade.”

While the precise job toll is debatable, the rapid growth in tar sands exports has undoubtedly hurt manufacturers.

Despite the obvious link between tar sands expansion, a higher dollar and a decline in manufacturing, corporate sycophants denounce any politician or established organization that draws attention to the relationship.

Federal Leader of the Opposition Tom Mulcair was aggressively attacked for raising the issue as was former Ontario Premier Dalton McGuinty. In response to the Pembina/Equiterre report Financial Post editor Terence Corcoran called the mainstream Pembina Institute “off-kilter … fomenter of oil sands phobia … keen on triggering a nation-splitting debate over the oil sands.” For his part, Sun Media’s Lorne Gunter wrote: “Left-wing environmentalists should just come clean: they hate the oil industry, they hate profits and love big government.”

Both Corcoran and Gunter cited a recent Canadian Manufacturers and Exporters (CME) study lauding the tar sands. It notes: “In recent years, much of the discussion linking the oil sands with manufacturing has included so-called ‘Dutch disease,’ with any supposed relationship being characterized as inherently negative. While the effect of the rising dollar has impacted the competitiveness of the Canadian manufacturing sector, especially exports, the underlying problem was poor labour productivity, lack of diversity among customers, and lower rates of overall capital investment. While increased investment in the oil sands may have strengthened the Canadian dollar, it is by no means the root cause of the challenges faced by Canadian manufacturing. Rather than having a negative impact on Canadian industry, the oil sands are providing a customer base for manufacturers.”

While most sane people would argue it makes little sense for the lobbying arm of Canada’s export-oriented manufacturers to dismiss oil-fuelled currency increases that have added 5, 10, or 30 percent to their costs, the CME is a highly ideological institution. When environmental or labour regulations add a few percentage points to their costs it goes berserk. For instance, before Parliament ratified the Kyoto Protocol in 2002 the CME claimed that reducing greenhouse gas emissions 6% from 1990 levels by 2012 would cost the country 450,000 manufacturing jobs. (Perhaps CME researchers should check to see if they didn’t mistake a minus sign for a plus symbol since the trashing of Canada’s Kyoto commitments through tar sands expansion has contributed to significant job losses in manufacturing.)

The CME tends to represent the voice of its biggest members, many of whom have plants in other countries. They can shift operations to lower-cost jurisdictions or use the threat of moving jobs to force wage and benefit cuts.

But that’s only part of the explanation for the CME’s pro tar sands position. That organization is in fact a mouthpiece for capitalists who are more widely invested than ever before and thus less wedded to particular firms. Without too much difficulty they can move their capital from lower margin to higher profit industries. It’s all about chasing profits and damn the negative consequences for workers.

In recent years the tar sands have been a major source of profit making. The Parkland Institute estimates that oil sands operators realized pre-tax profits of $260 billion between 1986 and 2010 (the public owners of these resources received less than 10 per cent of that sum). Over the past decade Canadian resource companies’ profit margins have nearly doubled the service, manufacturing and “nonfinancial” sectors of the economy. According to a late 2011 calculation, the market capitalization of the 405 oil and gas companies listed companies on the Toronto Stock Exchange topped $379 billion.

The boom in tar sands profits and stock prices clearly benefits leading Canadian capitalists. A recent Canadian Business magazine profile of the “100 richest Canadians” explains: “Collectively, the individuals on the Rich 100 are worth $230 billion, more than the total gross domestic product of many countries in the world, including New Zealand, Ireland and Portugal. And this year has been one of their best ever. Their combined net worth surged by more than 15% … While the actual economies of Canada and the U.S. aren’t faring particularly well, so long as the U.S. Federal Reserve maintains its stimulus program, stock markets will tick higher.”

The “100 richest Canadians” – and the rest of the 0.01% of top shareholders who control most corporations – dominate corporate lobbying associations such as the CME and they also have significant influence with many think tanks, university departments and news outlets. Like their wealthy patrons, these institutions tend to back whatever generates the most profit (that’s the point of capitalism after all). As a result, there’s little interest in discussing the deleterious job impacts of Oil Sands fever.

But environmentalists and union activists should be making common cause by explaining how tar sands profits that go to the rich and powerful cost Canadian workers hundreds of thousands of jobs. Expansion of the tar sands and the resulting bouts of Oil Sands fever may be good for capitalists but it will further weaken the job market and do great harm to Canadian workers.

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Canadian foreign policy is to promote corporate greed

Should the primary purpose of Canadian foreign policy be the promotion of corporate interests?

Canada’s business class certainly seems to think so. And with little political or ideological opposition to this naked self-interest, Harper’s Conservatives seem only too happy to put the full weight of government behind the promotion of private profits.

Recently, the Conservatives announced that “economic diplomacy” will be “the driving force behind the Government of Canada’s activities through its international diplomatic network.” According to their Global Markets Action Plan (GMAP), “All diplomatic assets of the Government of Canada will be marshalled on behalf of the private sector to increase success in doing business abroad.”

The release of GMAP is a crass confirmation of the Conservatives’ pro-corporate foreign policy. In recent years the Conservatives’ have spent tens of millions of dollars to lobby US and European officials on behalf of tar sands interests; expanded arms sales to Middle East monarchies and other leading human rights abusers; strengthened the ties between aid policy and a Canadian mining industry responsible for innumerable abuses.

While some commentators have suggested that GMAP is a “modern” response to China’s international policy, it actually represents a return to a time many consider the high point of unfettered capitalism. Often in the late 1800s wealthy individuals not employed by Ottawa conducted Canadian diplomacy. The owner of the Toronto Globe, George Brown, for instance, negotiated a draft treaty with the U.S. in 1874, while Sandford Fleming, the surveyor of the Canadian Pacific Railway, represented Canada at the 1887 Colonial Conference in London.

From its inception the Canadian foreign service reflected a bias towards economic concerns. There were trade commissioners, for instance, long before ambassadors. By 1907 there were 12 Canadian trade commissions staffed by “commercial agents” located in Sydney, Capetown, Mexico City, Yokohama and numerous European and U.S. cities.

Despite this historic precedent, in the 21st century it should be controversial for a government to openly state that economic considerations drive international policy. Yet criticism of GMAP has been fairly muted, which may reflect how many progressives feel overwhelmed by the Conservatives right-wing aggressiveness in every policy area.

Or perhaps there’s a more fundamental explanation. The mainstream political/media establishment basically agrees with the idea that corporate interests should dominate foreign policy.

In response to GMAP, Postmedia ran a debate between John Manley, head of the Canadian Council of Chief Executives and a member of the advisory panel that helped draw up the Conservatives’ plan, and former foreign minister and leading proponent of the Responsibility to Protect doctrine, Lloyd Axworthy. While Manley lauded the Conservatives’ move, Axworthy criticized it as “bad trade policy. The best way to enlarge your trade prospects and to develop a willingness for agreements and to improve economic exchange is to have a number of contacts to show other countries that you are a willing and co-operative player on matters of security, on matters of human rights, and on matters of development.”

Axworthy did not express principled criticism of the Conservatives’ move; he simply said that “trade prospects” — a euphemism for corporate interests — are best advanced through a multifaceted foreign-policy. Widely lauded by the liberal intelligentsia, Axworthy reflects the critical end of the dominant discussion, which largely takes its cues from the corporate class. And Canada’s business class is more internationally focused than any other G8 country.

Heavily dependent on “free trade” Canadian companies are also major global investors. The world’s largest privately owned security company, GardaWorld, has 45,000 employees operating across the globe while another Montréal-based company, SNC Lavalin, has engineering projects in 100 countries. Corporate Canada’s most powerful sector is also a global force. The big five banks, which all rank among the top 65 in the world, now do a majority of their business outside of this country. Scotiabank, for example, operates in 45 countries.

The mining sector provides the best example of Canadian capital’s international prominence. Three quarters of the world’s mining companies are based in Canada or listed on Canadian stock exchanges. Present in almost every country, Canadian corporations operate thousands of mineral projects abroad.

With $711.6 billion in foreign direct investments last year, Canadian companies push for (and benefit from) Ottawa’s diplomatic, aid and military support. As their international footprint has grown, they’ve put ever more pressure on the government to serve their interests. There is simply no countervailing force calling on the government to advance international climate negotiations, arms control measures or to place constraints on mining companies.

There’s also limited ideological opposition to neoliberalism. Few in Canada promote any alternative to capitalism. Until unions, social groups and activists put forward an alternative economic and social vision it’s hard to imagine that Canadian foreign policy will do much more than promote private corporate interests.

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