Finance Minister Bill Morneau has taken quite a bit of heat for his tone deaf comments about the reality of precarious work, specifically saying that we should just “get used to job churn”. His policy prescription, an improved social safety net, is actually a valid part of the solution. But must we accept that the precarious will always be with us? That is, what can government actually do to address precarious work?
First of all, has the Finance Minister accurately understood the issue? There is a great deal of hubbub about precarious work, can it be reduced to simply “job churn”?
Hmm, apparently not. The average duration of a job has been remarkably stable since 1976, even for young workers. The distribution is pretty stable too, and aside from the obvious impact of recessions, there is no clear upward trend in short term jobs.
This is because for many workers, precarity doesn’t mean jumping from job to job – it means not knowing how many hours you can count on next week, it means not having any benefits, it means balancing multiple jobs along with caretaking duties and/or furthering your own education. It means working for the same employer for 5 years, but always on six month contracts. It means unpaid internships are the only kind of internship you can find, or not having any recourse when an employer unjustifiably docks your wages or takes your tips for themselves.
Of course there has been an increase in own-account self-employment (has no paid help, but may be incorporated or unincorporated), and contract workers wouldn’t show up in the data on job duration. But the trend in own-account self-employment is most pronounced for workers 25-54.
Our labour statistics don’t do a good job of measuring precarity – but some indications:
- Nearly 2 million workers are ‘own-account self-employed’, meaning they have no paid help,
- About 900K work part time because they can’t find full time work,
- Another 390K work part time to accommodate unpaid care work,
- About 1 million have a second or third job.
So, now that we have a better understanding of the problem, what tool(s) does the federal government have at its disposal to address labour market precarity for younger and older workers, now and into the future?
The federal government can try to spur economic growth. The current government is doing that through investment in infrastructure (watch out for privatization schemes here), and investment in green jobs and clean tech.
But the economy has been growing over the past 25 years, when we’ve seen growing precarity in the labour market – so that’s clearly not sufficient. I would advise the economic council to take a look at Senator Bellemare’s work on full employment, and Professor Marc Lavoie’s work on wage led growth. It might lead them in a policy direction that will benefit both growth and well-being.
For example, transfers such as the Canada Child Benefit will help to reduce poverty and inequality. Expanding the Working Income Tax Benefit would help make work pay, and make life a little easier for the working poor.
Expanding the social safety net by improving CPP will help down the road, and it absolutely reduces the stress of precarity when workers know they will have that pension when they retire.
The current design of Employment Insurance amplifies and exacerbates labour market inequalities, and ideally a social insurance system would work to dampen existing inequalities. A lower entrance requirement & minimum benefit level would go a long way to doing that.
The federal government could use Labour Market Development Agreements (LMDAs) with the provinces to provide more opportunities for training and re-training – and better supports for non-EI eligible workers who need access to basic numeracy and literacy training through Labour Market Agreements (LMAs).
High quality public services and social services are critical. I cannot overstate the need for more affordable childcare spaces in Canada, and the beneficial impact this would have on precarious workers.
But it’s not all about the federal government, since the provinces legislate employment standards for about 90% of workers in Canada.We’re hearing lots about $15 and Fairness, because that’s where the issue is for many precarious workers. Higher minimum wages, access to paid sick leave, the ability to certify a union in one step instead of two-stages (leaving workers open to retaliation and intimidation from employers), anti-scab legislation, and most importantly, proactive employment standards enforcement, like Manitoba has.
(Instead of relying on complaints from affected workers, Manitoba has a Special Investigations Unit that monitors the employers of vulnerable workers. According to their website, in 2014-2015 almost half of their investigations were the result of information received from the public and the Unit identified violations in 80 per cent of these cases.)
So what can government do to address precarious employment? A whole lot, it turns out.
Here is a link to my review of an extremely interesting new book by Guardian economics and political columnist Paul Mason.
“Paul Mason is a leading British economic journalist, currently a columnist for The Guardian. He is also a long time left political activist. His new book, Postcapitalism: A Guide to Our Future (Farrar, Strauss and Giroux. New York. 2015) is a challenging, sometimes obscure, sometimes brilliant, eminently worthwhile read, and an optimistic take that the left might, once again, be marching in tune with the forces of history.
Mason is, to say the least, highly original and idiosyncratic. His book is partly addressed to the orthodox Marxist left, endorses and builds upon the labour theory of value, takes seriously the possibility of a planned, non market economy, and pays tribute to the traditions of radical working-class socialism. At the same time, he is emphatically non Leninist, sees networked knowledge workers as the key contemporary agents of social change, and draws heavily on pro capitalist thinkers from Schumpeter, to management theorist Peter Drucker, to contemporary cheerleaders for the supposedly transformative knowledge and network based new knowledge economy.”
I was somewhat surprised to see Stephen Poloz recently urging economists to do more work identifying and disseminating research on the supposed benefits of free trade. That’s slightly beyond his job description (perhaps more fitting with his last position as head of Export Development Canada). But like economic leaders elsewhere in the world, Mr. Poloz is obviously concerned with the disintegration of popular support for neoliberal free trade deals. That disintegration will have tectonic economic and political consequences. Read more »
Posted by Nick Falvo under aboriginal peoples, Alberta, Employment Insurance, fiscal federalism, gender critique, guaranteed annual income, income, income support, Indigenous people, inequality, labour market, Old Age Security, Ontario, poverty, progressive economic strategies, Role of government, social policy, unemployment.
September 30th, 2016
Over at the web site of the Calgary Homeless Foundation, I’ve written a blog post titled “Ten things to know about Canada’s guaranteed annual income debate.”
Points raised in the blog post include the following:
-There are people and groups on both the left and right of the political spectrum who favour a Guaranteed Annual Income (also known as a “basic income”).
-One reason for support on both the left and right is that there is considerable discrepancy in terms of how generous the benefit should be. This also makes it challenging to estimate its annual cost.
-It’s not clear what the desired outcome(s) of such a scheme would be. This too may depend on which advocates/proponents you talk to.
-The implementation of a Guaranteed Annual Income would require a considerable amount of intergovernmental cooperation.
The link to the full blog post is here.
Posted by Nick Falvo under aboriginal peoples, Alberta, Conservative government, federal budget, fiscal federalism, homeless, housing, Indigenous people, poverty, Role of government, social policy.
September 8th, 2016
Over at the web site of the Calgary Homeless Foundation, I’ve written a blog post about Canada’s National Housing Strategy consultations. The link to the blog post is here.
Points raised in the blog post include the following:
-In Canada, public social spending as a percentage of our GDP is well below the OECD average.
-The amount of housing stock in Canada considered to be “social housing” is also well below the OECD average.
-The history of Canadian housing policy suggests that, when the federal government leads new construction, provinces and territories follow with funding of their own.
Prime Minister Trudeau leads a big entourage to China this week, in hopes of expanding Canada’s foothold in that huge economy. A couple of interesting media stories today set the stage for the visit: an overview of China’s evolving diplomatic and economic strategies by Andy Blatchford of Canadian Press, and a review of China’s growing emphasis on migrant labour provisions in trade deals by Jeremy Nuttall in the Tyee.
I recently compiled some data on Canada’s present highly lopsided economic relationship with China. Here are the main features of our current, unbalanced relationship: Read more »
Posted by Nick Falvo under aboriginal peoples, budgets, Canada, Conservative government, CPP, demographics, economic history, election 2015, federal budget, Federal elections 2015, fiscal federalism, Harper economics, income distribution, income support, Indigenous people, inequality, labour market, Old Age Security, older workers, pensions, population aging, poverty, retirement, Role of government, seniors, social policy.
August 29th, 2016
The blog post argues—among other things—that if the age of eligibility for Old Age Security were to move from 65 to 67, the percentage of Canadians aged 65 and 66 living in poverty would see a very substantial rise.
The post is based on a recent chapter we’ve written for How Ottawa Spends, an annual publication of Carleton University’s School of Public Policy and Administration. In the chapter, we estimate the rise in poverty with the help of Statistics Canada’s Social Policy Simulation Database and Model.
The link to the blog post can be found here.
Every 5 years the federal Finance Minister updates the “marching orders” that guide the Bank of Canada and its conduct of monetary policy. This process is the one opportunity for democratic oversight of the Bank, which otherwise is deemed to be operating “independently” of government — all the better to ensure that it has the authority to take away the punchbowl whenever the economic party gets going too energetically. Read more »
Posted by Nick Falvo under budgets, Canada, democracy, economic literacy, economic risk, federal budget, fiscal policy, progressive economic strategies, public services, regulation, Regulations, Role of government, social policy.
August 8th, 2016
Do you ever lie awake wondering what it is that Finance Canada, the Privy Council Office and Treasury Board Secretariat actually do? Well, wonder no more my friends! Over at the web site of the Calgary Homeless Foundation, I’ve written a blog post titled “Ten things to know about central agencies in Canada.”
Here’s the link to the post.
Over at the web site of the Calgary Homeless Foundation, I’ve written a blog post about the First Annual Canadian Homelessness Data Sharing Initiative. The link to the blog post is here.
Here’s another review of Jim Stanford’s Economics for Everyone, 2nd edition, this one by guest contributor and MMT aficionado Larry Kazdan.
Review of Jim Stanford’s /Economics for Everyone
by Larry Kazdan
Jim Stanford has written a superb book which deserves pages of admiration and praise – a truly impressive body of work that introduces to the public an alternative vision of progressive economics. Yet his overview is not without its tragic policy flaw; a flaw which likely renders many of his objectives unachievable. Read more »
Most of the world economy (including Canada’s) has performed sluggishly since the Global Financial Crisis of 2008-09. And many economic and fiscal projections now accept this pattern of slow growth as more-or-less inevitable, as a “new normal.” This argument is typically invoked to justify a ratcheting down of expectations regarding job prospects, incomes, and public services.
In my view it’s important for progressives to dig beneath the observed reality of prolonged stagnation, identify its causes (which I attribute largely to sustained weakness in the dynamism of private business investment), and then identify progressive, relevant responses — instead of assuming that stagnation is inevitable or even (in the eyes of some) beneficial. Read more »
Recycling is supposed to be a good thing, so when the federal Liberals quietly announced that “asset recycling” would be part of their strategy for meeting their much-ballyhooed infrastructure promises, not many eyebrows were raised. They should have been. Asset recycling is an obscure code word for selling our public goods for private profit. It’s privatization by another name.
Don’t have the taxes to pay for new buses? It’s okay, you can sell your electricity utility to pay for them instead. In fact, this is precisely what the Ontario Liberal government is doing. Already 30% of the profitable Hydro One have been sold and another 30% will be sold before 2018. A public Hydro One could more directly fight climate change, lower energy costs for the poor or work with First Nations on whose lands generation often happens. A private Hydro becomes an instrument for profit first with other goals secondary.
What the Liberals have started in Ontario will soon be rolled out across Canada. Here are the problems with these schemes.
In 1995, Canadian First Ministers signed an Agreement on Internal Trade. From the website, “Its purpose is to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services, and investment within Canada and to establish an open, efficient, and stable domestic market.”
Well, it turns out that agreement, although regularly updated and renegotiated, is no longer enough. The previous Conservative government had really, really, really wanted to update AIT to be more in line with their approach to trade in international agreements such as TPP and CETA. The pretty conservative Senate wants it badly too. And it seems the current government is happy to oblige.
The updated agreement on internal trade, which had been moving along nicely, has hit a snag. Negotiators had wanted to open up all government procurement (meaning, not allowing any preferential treatment for local contractors). Alberta has asked to be allowed to require 20% local employment in government procurement.
The other proposed feature of an updated AIT that is particularly troublesome is a switch to a negative list. (A negative list starts from the assumption that all services should be delivered privately, without restriction, and a positive list starts from the assumption that most services should be publicly provided and/or regulated. The language used in these deals is super technical and inaccessible for a reason – it’s harder to organize opposition around something that’s so abstract.)
The current AIT and all of Canada’s international trade deals operate on a positive list. Only the CETA has been negotiated on a purely negative list (I’ve been told that some elements of TPP are negative list and some are still positive list because of references to WTO rules).
Proponents are trying to argue that a negative list is ‘modern’ – but it’s just privatization and deregulation through the back door. As I told Blacklock’s Reporter, implementing a negative list to solve Canada’s internal trade barriers makes about as much sense as using a chain saw to trim your fingernails.
It seems like a good time to post my comments on behalf of the Canadian Labour Congress to the Senate committee on Banking, Trade, and Commerce.
Mr. Chair, the labour movement is keenly aware that trade is, and has always been, an important feature of the Canadian economy. We understand the interest that all governments have in fostering healthy trade between jurisdictions, inside and outside of Canada.
Unfortunately, trade agreements can unduly restrict governments’ right to regulate, give huge advantages to larger businesses, and rarely have effective protections for workers or the environment.
As such, they do not always increase trade, improve economies, or benefit Canadians.
So our question is: what problem is an updated Agreement on Internal Trade meant to solve, and is it possible that there are better policy tools available to solve those problems?
Since 1995, many of the impediments to internal trade have been addressed. Most empirical studies have found that the cost of remaining internal trade barriers are quite small, and the benefits of expanding AIT have been grossly exaggerated.
Most often, one hears about the movement of alcohol, or the movement of trained workers.
On the labour front, considerable gains have been made in recent years, for example with the Red Seal program that sets a high standard that is accepted in all provinces. We’re confident that provinces are moving in the right direction on labour mobility, and on harmonizing training as well as certifications.
Do we need to re-open an existing agreement to improve the interprovincial movement of alcohol? It seems that provinces could work together on specific issues, such as that, when they arise.
As Scott Sinclair recently told this committee, it would be a useful exercise to list and estimate the cost of specific trade barriers between provinces. Provincial governments could then cooperate to remove any costly barriers that do not serve any useful purpose, rather than sign onto a far-reaching agreement that may have serious unintended consequences.
One of the other reasons that we’re talking about changing the Agreement on Internal Trade is to make it compliant with international trade agreements such as the Trans Pacific Partnership and the CETA. The labour movement has serious concerns about those agreements, as they contain elements that are harmful to workers, the environment, and local economies.
Particularly, we want to preserve local governments’ ability to deliver high quality public services, and to use procurement policies to promote local economic development and environmental stewardship.
We know that public purchasing policies can have broad benefits, such as reducing waste and energy consumption, developing economic capacity among underserved populations, and supporting smaller suppliers and suppliers who have sustainable and ethical business practices. Expanding the AIT will make it more difficult for provincial and local governments to accomplish this.
In terms of protecting public services, the drive to switch to a negative list in the AIT is very worrisome, particularly in light of investor dispute settlement mechanisms.
A negative list means that any service governments wish to be kept out of a trade deal, such as health care or education, must be specifically named. If new services emerge, or if public consensus grows for new programs such as pharmacare, these services are automatically subject to the trade agreement. This is privatization by default. A positive list would give all governments, and their residents, the chance to decide if they want to protect new areas of public service delivery.
Even for those services that have been protected, standstill and ratchet clauses effectively lock the current level of privatization into place, and only allow increased privatization. If a hospital has outsourced meal, laundry, and cleaning services – but finds that they are getting sub-standard service for higher prices – decision makers subject themselves to an ISDS complaint & potential fine if they want to bring those services back in house – even if that is the best decision economically.
As it stands, the AIT prohibits adopting or maintaining even non-discriminatory measures that “restrict or prevent the movement of persons, goods, services, or investment across provincial boundaries.” This seriously ties the hands of elected officials at all levels of government, in an unnecessary way.
We have followed the policy prescriptions from the OECD and IMF from the 80’s and 90’s in terms of privatization of public services, trade liberalization and lowering corporate taxes, and not seen much economic benefit as a result. We would suggest to you that it is time to try something new, not rehash old policies.
Update: The Alberta government has announced their timeline for getting to $15 / hour, which includes eliminating the lower minimum wage for liquor servers.
The Alberta Federation of Labour has an excellent minimum wage campaign, called “15 is fair”. I provided some research support for a paper they produced on the positive economic impact of increasing minimum wages, which you can read in full here, but I wanted to share some of the key points.
Increasing the minimum wage doesn’t kill jobs
In recent years, several provinces including Alberta have modestly increased minimum wages. Not only has the number of workers in low-wage sectors grown, but economists say that higher minimum wages can be good for reducing poverty, increasing job stability, and providing stimulus to the economy.
Since 2011, Alberta has made five upward adjustments to minimum wage – and at no point did that make a dent in employment growth in low-wage industries such as retail trade or accommodation and food services. In fact, even after the oil shock that devastated Alberta, these two low-wage sectors remain stronger than the overall Alberta labour market.
Increasing the minimum wage does lower inequality
Fortin and Lemieux (2015) show that these increases in the minimum wage actually reduced income inequality in Canada, and that the trend for the bottom 10 per cent of income earners is closely linked to changes in the minimum wage.
This is important for two reasons. First, opponents have argued that increasing the minimum wage is misguided because not all minimum wage earners are working poor. But minimum wage earners are more likely to be working poor than higher wage earners. Secondly, there is now clear evidence that minimum wages reduce inequality – which is an advisable goal separate and apart from poverty reduction.
Minimum wage increases stimulate the economy
The Federal Reserve Bank of Chicago studied the potential impact of minimum wage increases in the United States. They found that increases in the minimum wage lead to significant increases in household spending, which has a stimulative effect on the economy.
This makes sense, if we consider the fact that many low-wage workers currently can’t make ends meet. Low-wage workers are more likely to have un-met basic needs, and so spend extra income right away. Economists call this “a higher marginal propensity to consume.” The good news is that with more income, workers can better meet their basic needs, and local businesses benefit from having customers with more money to spend.
With that in mind, we can attempt to gauge the impact of an increase in the minimum wage, assuming workers spend every extra after-tax dollar in their pocket.
|Table 1: Impact of a $1 Minimum Wage increase in Alberta|
|Wage < $11.20||Wage $11.21-12.20|
|Number of workers||70,100||88,500|
|Usual hours of work per week||25.3||25.4|
|Estimated impact on household spending|
|Average wage increase||$1.23|
|Weekly increase after CPP, EI, and Federal income tax||$3.9 million|
|Annual increase in household spending||$201 million|
Source: Labour Force Survey microdata, April 2016 and author’s calculations
Higher wages create more stable & productive jobs
We often talk about how to increase the number of ‘good jobs’ in our economy. Good jobs are ones where workers feel respected, where the job is stable, and where employers invest in workers.
Too often minimum wage jobs are not good jobs. But Canadian research shows that increasing the minimum wage reduces turnover, creating more stable jobs for workers.
The theory is that higher wages force employers to abandon low-wage, high turnover strategies, and instead encourages them to invest in their current workforce. Low-wage, high turnover strategies are actually costly, as it takes time and resources to find and train new employees. Lower turnover means more stable jobs for workers, and a more productive workforce for employers.
UBC economist David Green suggests that increasing the minimum wage is one of the few mechanisms that encourages employers to abandon an inefficient low-wage, high turnover strategy. This is the more important long term impact of increasing wages.
In the end, what was meant to be a referendum about the economic benefits of remaining in the European Union, was about everything but. There will be countless analyses of the results and of the reasons that motivated the British people to vote to leave the European Union. But in the end, I fear that very few of these analyses will even come close to addressing the true underlying forces at work. Read more »
Looking for something to take with you to the cottage, the beach or the cafe? Check out Jim Stanford’s 2nd edition of Economics for Everyone. Here’s a review by Peter G. Prontzos first published in the Vancouver Sun.
Book review: A fresh look at the dismal science of economics
Economics for Everyone:A Short Guide to the Economics of Capitalism (2nd Ed.)
By Jim Stanford
The global economy is still recovering from the “Great Financial Crash” (GFC) of 2008. Understanding the causes of the meltdown is not a simple task, and devising a more stable, prosperous, and egalitarian alternative is even more difficult. That’s why it is fortunate that Jim Stanford has re-written his groundbreaking study, Economics for Everyone.
Stanford explains how the economic collapse was the direct result of “financial products and practices that were unethical, unstable, and unsustainable”, and which were unregulated by governments. Indeed, in many cases, it was the earlier deregulation of Wall Street — which attended the rise of neo-liberal capitalism — that allowed the financial sector to make such risky moves in the first place.
The author makes the links between the GFC and the imposition of “austerity” demands by governments, whose real agenda is, “to claw back public pensions, reduce income security … drive down wages … and privatize more public assets.” (Greece is perhaps the best-known victim of these counter-productive and inhumane policies).
This market failure, along with the growing gap between the one per cent and everybody else, exemplifies one of the most important points in this discussion: that economic decisions are not necessarily based on an objective “science.” Instead, they are also political choices that societies make.
For instance, it is generally agreed that unemployment could be lowered significantly if the Bank of Canada and the government were not so determined to keep the rate of inflation to around two per cent, which is what giant corporations usually prefer.
On the other hand, many — perhaps most — Canadians would prefer economic policies which would create more jobs (as well as giving a higher return on investment such as RRSPs), even if another result was a slightly higher rate of inflation.
Stanford explains that one of the benefits of high levels of unemployment for corporations is that working people are more likely to tolerate lower wages and more stressful working conditions if they know that there are very few decent jobs available.That’s what Stanford means when he argues that there are indeed alternatives, depending on who is calling the shots. “The economy embodies conflicting interests between different groups,” he notes. Stanford himself, who holds a PhD in economics, is employed by the Unifor, Canada’s largest private sector union, with more than 305,000 members across the country. (He is also a regular panelist on CBC TV’s, The National).
The main goal of his book is to provide exactly what the title implies: a way to understand how the economy works because we are so profoundly affected by it. Fortunately, he explains, “you don’t have to be an economist to know a lot about economics.” Which is not to say that it is an easy read. It takes both time and thought to work your way through its 400 pages. It is, however, clearly written and includes many informative charts, pictures, and figures to explain its ideas and show how the various economic elements interact with each other.
A rather unique feature is the invitation to take part in an interactive dialogue with the author. The reader is invited to weigh in on a number of topics, and some contributions are posted on his website. (Check it out: www.economicsforeveryone.com).
As impressive as this book is, there are a few aspects which could be improved. For example, Stanford rightly explains that Adam Smith celebrated the “deregulation of markets … and policies to protect the profits and property rights of early capitalists.”
It would be helpful to mention that Smith also distrusted capitalists, felt that this economic system is unjust, and was appalled by the way workers were treated. In fact, Smith wrote that most people who have to sell their labour in order to make a living would be psychologically damaged “unless the government takes pains to prevent it” by mandating decent pay and working conditions.
Stanford and Smith (and Marx!) also agree on what is known as the “labour theory of value: “Productive human activity is the only force that adds value to the wealth we were given by nature.”
It follows, then, that those who work the hardest and produce the most value — sweatshop workers, perhaps, and farmers, and child care providers, for instance — should reap the largest rewards.
In contrast, Stanford writes that: “The financial industry is not, in itself, productive,” and he provides a number of examples to support his case.
He ends by urging “workers and poor people … to organize” and fight for a fair distribution of the wealth that they have created.
This book does a commendable job of explaining the workings of our economy, so if you don’t have the time or inclination to take economics courses, you can learn a lot from this volume.
On the other hand, if you are studying mainstream economic theory, this book may be especially valuable, as it provides an alternative perspective to the hegemonic values of orthodox neo-liberalism.
Peter G. Prontzos teaches Political Science at Langara College.
On June 16th the House Committee on International Trade held its 27th meeting about the Trans-Pacific Partnership. The Canadian Labour Congress, the Canadian Association of Research Libraries, Scott Sinclair, and Gus Van Harten were all in Ottawa to tell parliamentarians just how bad the Trans-Pacific Partnership would be for Canada.
We outlined the limitations on governments right to regulate in the public interest, the expensiveness and unpredictability of Investor-State dispute mechanisms, and the ways in which the deal will tie the government’s hands in trying to implement their mandate for economic growth, a green transition, managing health care costs, and indigenous rights.
There was limited time to make our case though, as presentations are limited to 5 minutes, and answers to questions were even shorter. I left the meeting feeling as if I wanted to clarify a few points:
- Being pro-trade is not the same as being pro-trade deals. Similarly, being against trade deals doesn’t mean you’re against trade. We’ve long past the point where trade deals have much to do with lowering tariffs. Instead, trade and investment deals have become a convenient back-door for multi-national corporations to lobby for legislative and regulatory changes that they could never get through a democratic process. One example is the extension of copyright duration to life + 70 years, which has some pretty significant benefits for Disney & Hollywood in general, but that the librarians (and others) have significant concerns about. Another example is opening up access to unlimited numbers of temporary work visas, with no right to require needs tests or to set limits, and no mechanism to enforce wages and working conditions for these vulnerable workers. It’s this bypassing of democratic institutions that is most worrying.
- Even the most rosy macro-economic analysis of the TPP shows limited benefits for economic growth. And these analyses were undertaken with unrealistic assumptions. They assume that the trade balance stays constant (when actually we’ve seen an increasing trade deficit after signing our trade deal with South Korea, for example), and they assume that employment stays constant. If you use a model that allows these outcomes to vary, like the Tuft’s University study did, you find smaller economic benefits overall, and that workers in all TPP nations lose out. Pointing out that there is the potential for limited micro-level benefits (say, for beef producers) does nothing to change the big picture analysis that Canadians and workers overall would lose out from the TPP.
- In general, the process for negotiating trade deals is secretive and not accessible to most Canadians. Scott Sinclair is a veteran of Canadian trade negotiations, and he says that the TPP was the most secretive ever. When you consider that large pharma, energy, and tobacco corporations and lobbyists *are* often included, and civil society organizations are not – it’s not only secret, it’s plain undemocratic.
- It is time to come back to more reasonable form of investor protection. A Canadian company has never won an ISDS case against the United States, but we have been successful under WTO processes. Investor protections which should be:
- subsidiary to national judicial processes,
- should privilege state-to-state settlements, and
- should emphasize investors’ responsibilities just as much as the protection of their assets.
To learn even more and add your voice to stop the TPP, visit stoptpp.ca
UPDATE: All numbers exclude self-employed workers. The Labour Force Survey doesn’t provide wage data for self-employed workers, and self-employed workers aren’t subject to minimum wage laws. “Proportion of workers” is more accurately “Proportion of employees”. The number of employees per province can be found in CANSIM Table 282-0012.
Minimum wages have been getting a lot of attention lately. And for good reason. Workers earning minimum wage often struggle to get enough hours, don’t have predictable schedules or advance notice of shifts, and many don’t even have access to unpaid sick days.
Alberta’s current government was elected on a plan to raise the minimum wage to $15 by 2018, and the Nova Scotia NDP recently tabled a bill that would have the minimum wage increase each January, eventually reaching $15 in 2019.
How many people even earn minimum wage? Well if you take everyone earning less than the primary minimum wage, there were 1,253,000 workers earning minimum wage or less in 2015 (many provinces have exceptions or lower wages for students or alcohol servers).
|Minimum wage (2015)||Number (000’s)||Proportion of workers|
Source: Labour Force Survey microdata 2015, Government of Canada Minimum wage database
But if we’re talking about increasing the minimum wage, workers who earn just above that get a raise too. So how many workers benefit directly from a $15 minimum wage? Well, in 2015 about 25% of all workers in Canada made $15 / hr or less. That’s more than 4 million workers. This varies significantly by province, from 18% of all employees in Alberta, to 38% of all employees in PEI.
|Number (000’s)||Proportion of workers|
Source: Labour Force Survey microdata, 2015
We also often hear that low wage workers are young workers, living with their parents, and raising the minimum wage will only hurt them – making it harder for young workers to break into the labour market. David Green, a professor at UBC, reviewed the existing literature on minimum wages and found that “Estimated [employment] effects for young adult and adult workers range from insignificant to non-existent.” He also found the Canadian evidence shows that increasing the minimum wage reduces turnover – so raising the minimum wage actually creates more stable jobs for workers too.
And while lots of young workers are employed in low wage jobs, many adults are as well. Besides, young workers deserve a fair wage for their labour too.
Finally, women are disproportionately represented in these low wage jobs – fully one-third of women earn less than $15 / hr, compared to only 22% of men.
|Employees earning less than $15 (000’s)||Low wage employees as % of all employees|
Source: Labour Force Survey microdata, 2015
It’s also important to note that many in the Fight for $15 movement have made associated improvements in employment standards part of their campaign. In Ontario, the 15 and fairness campaign addresses issues such as sick days, predictable scheduling, and contract flipping.
Fight for $15 is a concrete way to push back against growing inequality and precarious work – join the fight for decent work in your province!
The Progressive Economics Forum is pleased to announce Marjorie Griffith Cohen as the winner of the 2016 Galbraith Prize in Economics. Our selection committee included past winner Lars Osberg, Joan McFarland (St. Thomas University), Angella MacEwen (CLC), Fletcher Baragar (Manitoba) and David Pringle (PEF), and was chaired by Marc Lee (CCPA-BC). Marjorie has accepted the Prize and will deliver the Galbraith Lecture at the Canadian Economics Association meetings in Ottawa on Saturday, June 4. Thanks to our judges and to the Galbraith family.
Below is the nomination of Prof. Griffith Cohen by Iglika Ivanova, Brenda Spotton-Visano, Armine Yalnizyan, Duncan Cameron and Jim Stanford, which does a great job to summarize her extensive career.
It is our honour to nominate Marjorie Griffin Cohen for the PEF’s Galbraith Prize in Economics for her contributions to political economy in Canada. Marjorie Cohen is a professor of Political Science and Gender, Sexuality, and Women’s Studies at Simon Fraser University. She is a scholar in the feminist tradition, who writes on public policy and economics with special emphasis on issues concerning the Canadian economy, Canadian public policy, women, labour, international trade agreements and deregulation of the electricity sector. She is well known and highly regarded for her work on women’s work and income security, and more recently the implications of climate change for labour in Canada.
Professor Cohen is an activist with a strong commitment to social justice. She was a director of NewGrade Energy (Sask) and has served on several boards and commissions in British Columbia including the B.C. Industrial Inquiry Commission on the Fisheries; Board of Directors of B.C. Hydro; Board of Directors of B.C. Power Exchange. She was also instrumental in establishing the Canadian Centre for Policy Alternatives in B.C., was its first Chair, and is on its Board of Directors.
She is a scholar and an activist whose work perfectly exemplifies the PEF’s goal of supporting thorough-going, progressive democratic structural change in the policies and institutions that currently govern the economy (including macroeconomic policy; labour market institutions and regulations; policies affecting both paid and unpaid work; the regulation of international economic relationships; and environmental protection and regulation), and a desire to participate in the strengthening and promotion of these alternative policies.
She is currently involved in two research projects related to global warming and gender and a project on the gender and economic crises. Her large scale research project in Economic Security (funded by the Social Science and Humanities Research Council) brought together 22 community-based researchers, 22 researchers from universities in B.C. and many students in the study of the impact of government policies on vulnerable populations. Its most significant work is to try to establish new public policy that would meet the economic security needs of this population.
In addition to several scholarly articles and policy papers, she has authored and edited several books on women’s work and globalization.
- Free Trade and the Future of Women’s Work: Manufacturing and Service Industries (University of Toronto Press, Higher Education Division, 2013)
- Public Policy for Women (University of Toronto Press, 2009)
- Remapping Gender in the New Global Order (London & New York: Routledge 2007),
- Training the Excluded for Work: Access and Equity for Women, Immigrants, First Nations, Youth, and People with Low Income (UBC Press 2003)
- Governing Under Stress: Middle Powers and the Challenge of Globalization (Fernwood Press, 2004), with Stephen Clarkson
- Global Turbulence: Social Activists’ and State Responses to Globalization (Ashgate 2003), with Stephen McBride
- Canadian Women’s Issues: Volume II: Bold Visions (James Lorimer & Company, 1995) with Ruth Roach Pierson
- Women’s Work, Markets, and Economic Development in Nineteenth-century Ontario (University of Toronto Press, 1988)
I have a new report out today on affordable housing in Metro Vancouver. While it’s mostly of regional interest, I think the analysis and framework for housing solutions could have a much wider audience. The report looks at what’s driving the spectacular rise in housing prices in Vancouver, summarizing what we know from a wide range of sources. It looks at the how rising prices have widened the growing gap between rich and poor. And it outlines five themes for a solutions agenda.
Here’s the oped length summary of key measures, including restricting absentee ownership, major new public investments in affordable housing stock, and a more progressive property tax system.
A Solutions Agenda for Vancouver’s Housing Market
Metro Vancouver’s housing market is broken. While most of the attention has been on the soaring price of housing, there is also a crisis in the rental market, and the complete absence of any secure housing for the most needy. Together, these factors have fuelled a widening gap between rich and poor.
To address this crisis we must stop treating housing primarily as an investment rather than a place to live. Vancouver’s housing should be owned by the people of Vancouver, not absentee owners or corporations.
First, we need to take external capital out of the game. The ability of outside wealth whether Chinese, Russian, American or Albertan to come into the housing market is largely unquestioned. But when Vancouverites have to compete for housing with the world’s super-rich, locals cannot win.
In London’s even crazier real estate market, the UK government has acted to curb foreign money inflows by making its property transfer tax steeply progressive (topping out at 12% above $3 million), and adding a 3% transfer tax on purchases of second homes and rental properties.
BC’s property transfer tax could easily be amended along these lines to keep outside money at bay, and to address other ills of the real estate market like speculation. Over the longer term, though, we need to have a conversation about outright restrictions on absentee ownership.
In addition to cooling demand, we need to build public housing supply, lots of it. The development industry maximizes its profits when it can sell exclusive, luxury units to the top bidder. We need to revive the role of public enterprises to build the housing that local people need, not what investors want.
The tools for such public investment are already in place, from CMHC to BC Housing to regional/municipal housing agencies, not to mention potential partnerships with a wide array of non-profit housing providers.
We can start with an ambitious expansion of the rental housing stock, ideally with cooperative and social housing models. We need about 5,000 new units per year just to keep pace with demand. And more if want to address the housing backlog, from thousands of homeless people up to the estimated 145,000 households considered in “core housing need” (meaning they spend more than 30% of their gross income on housing).
In addition to rental, a building program should also explore innovative affordable ownership models, like community land trusts, where constraints on resale price serve to lock in affordability over the long term. Whistler also provides an excellent BC example of developing affordable ownership for local workers.
The challenge is how to fund the upfront costs of building new housing, typically about $250,000 per unit (800 square feet, mid-rise apartment). That means an annual investment of between $1.25 and $2.5 billion per year to build 5,000 to 10,000 units per year, less where land is contributed or development charges waived. That said, most of that upfront cost would get repaid over the lifetime of the building through rent.
To finance such as build out, and to make the tax system more fair, we should reform how we tax property. For example, a progressive property surtax kicking in at $1 million of assessed value would only affect the top one-third of homeowners, but would raise $1-2 billion per year.
Similarly, the windfall capital gains from housing price escalation should be subject to tax, just like income from working is or (to a lesser extent) income from selling stocks. A lifetime capital gains exemption of $500,000 could be included, with only gains above this amount taxed.
The surge in real estate prices has further increased the gap between rich and poor, with homeowners essentially winning the lottery. A portion of those winnings should be taxed to build the affordable housing we need.
It’s clear that we need a more rational management of housing in the interests of the people who live and work in the city. We have plenty of examples of success from our own history to actions taken in other jurisdictions. The real challenge is political will, and overcoming the powerful collection of vested interests in the housing market.
If you are in Ottawa or close by, and are interested in the ideas and debates that are shaping today’s economy, then we have a summer school for you.
PEF Summer School 2016: Expanding Economic Thinking
Venue: Room 1007, Faculty of Social Science Building (FSS), 120 University, University of Ottawa, Parking Map
Date: Thursday June 2, 2016
Learn in a day what you may have missed from a year of regular classes about the cutting edge economic issues that everyone is talking about.
The Progressive Economics Forum (PEF) invites you to submit an application for our one-day Summer School, which will take place the day before the Canadian Economics Association annual conference at the University of Ottawa, June 3-5. The summer school aims to help nurture a new generation of economists and researchers who will explore practical and theoretical problems from an unconventional perspective. As a participant, you will have the opportunity to expand your views with stimulating discussion about:
- Heterodox Economic Theory: alternative views on economic growth
- Is Economics Changing? lessons from the financial crisis
- Ecological Economics: informing debates about a sustainable future
- Basic Income Guarantee: a policy idea whose time has come?
Meet established and aspiring progressive economists. Speakers include:
- Mario Seccareccia(Professor, University of Ottawa)
- Brenda Spotton-Visano (Professor, York University)
- Louis-Philippe Rochon (Professor, Laurentian University)
- Mathieu Dufour (Professor, Universite de Quebec en Outaouais)
- Eric Miller(Contract Faculty, York University Faculty of Environmental Studies)
- Herb Emery(Professor, University of Calgary)
- Diane Bellemare(Senator, Parliament of Canada)
- David Macdonald (Senior Economist, Canadian Centre for Policy Alternatives)
If you are an economics student (undergraduate or graduate), a student interested in economic questions or a practicing economist in academia, the labour movement or with an NGO, this summer school is for you.
Registration is $20, covering lunch, refreshments and one drink at the evening social. Out-of-town participants are responsible for their own travel costs; however, limited travel scholarships for one-night accommodation may be available for select participants.
8:00 – 8:30 a.m. Registration
8:30 – 8:45 a.m. Introduction to the day’s events
8:45 – 10:15 a.m. Introduction to Heterodox Economics: More to Growth than f (A, L, K)
Mario Seccareccia, University of Ottawa
With secular stagnation and rising inequality being hot topics in the public conversation, there is a renewed interest in economic growth and distribution. But does the conventional approach to understanding growth restrain us from exploring the complexities of how growth and distribution are related? This introductory lecture shows that there is more than one way to bake a pie and cut it too.
10:15 – 10:35 a.m. Break
10:35 – 12:05 p.m. Basic Income Guarantee: A Policy Idea Whose Time Has Come?
Panel discussion featuring: Herb Emery (University of Calgary); Diane Bellemare (Senate of Canada); David Macdonald (Canadian Centre for Policy Alternatives)
Fundamentally, poverty is about lack of income and poverty impacts everything from hospitalization rates to food security. Perhaps sending low income families a basic income could be the answer. Then again, maybe that approach is a false promise. This panel will debate the issues.
12:05 a.m. – 1:15 p.m. Lunch
1:15 – 2:45 p.m. Ecological Economics for Sustainable Well-Being
Eric Miller (York University, Faculty of Environmental Studies)
Ecological economics integrates considerations of efficiency, equity, and biophysical scale in ways that identify paths to achieving a sustainable future. This session introduces approaches and techniques developed in this field to help illuminate and resolve pressing environment-economy tensions.
2:45 – 3:05 p.m. Break
3:05 – 4:45 p.m. Is Economics Changing? Lessons from the Financial Crisis.
Panel discussion featuring: Brenda Spotton-Visano (York); Louis-Philippe Rochon (Laurentian); Mathieu Dufour (Universite du Quebec en Outaouais)
Many observers said the 2008 financial crisis exposed the weaknesses of the dominant economic orthodoxy, further pressing the need for a new economic thinking. But eight years after the crisis, has the teaching and practice of economics really changed? This panel will weigh in on this question.
4:45 – 5:15 p.m. Group Evaluation, Feedback of Day’s Events
5:30 – 8 p.m. Social at the Royal Oak (161 Laurier Ave E)
Posted by Nick Falvo under Alberta, budgets, carbon pricing, child benefits, climate change, corporate income tax, debt, demographics, energy, environment, federal budget, health care, homeless, housing, HST, income support, income tax, inflation, population aging, poverty, public services, seniors, social policy, taxation.
May 3rd, 2016
Over at the web site of the Calgary Homeless Foundation, I have a blog post titled: “Ten things to know about the 2016-17 Alberta budget.”
The link to the post is here.
The 2016 Student Essay Contest deadline has been extended to Monday, May 9.
2016 PEF ESSAY CONTEST RULES
Deadline: 9 May, 2016
All entrants receive a complimentary 1-year membership in the Progressive Economics Forum.
– Open to all Canadian students, studying in Canada and abroad, as well as international students presently studying in Canada. All entrants receive a complimentary 1-year membership in the Progressive Economics Forum.
– The definition of student encompasses full time as well as part time students.
– Students eligible for the 2016 competition must have been/be enrolled in a post-secondary educational institution at some point during the period of May 2015 – May 2016.
LEVELS OF COMPETITION
There are two levels of competition
– One for undergraduates
– One for graduates*
*Note: Those who have previously completed an undergraduate degree or graduate degree, and are returning to do a second undergraduate degree will only be considered for the graduate student competition. The same holds for student who spend part of the academic year in a graduate program.
CONTENT OF THE ESSAY
– Entries may be on any subject related to political economy, economic theory or an economic policy issue, which best reflects a critical approach to the functioning, efficiency, social and environmental consequences of unconstrained markets.
Eligible entries will be:
– sent by email at the latest on May 02, 2016, to:
– the only submission by the author(s) (i.e., one submission per person)
– between 20-40 pages in length, and typed in 12-point font, double spaced
– referenced to academic standards (including any data)
– written in either English or French
– original, single-authored essays that do not infringe upon the rights of any third parties
– accepted on re-submission once
– accompanied by a signed scanned file of the completed PEF Essay Contest Submission Form.
Entrants consent to having the Progressive Economics Forum publish essays from winners and those receiving honourable mention. Each applicant will submit a valid email and postal address for correspondence.
A panel of judges selected and approved by the Progressive Economisc Forum will judge entries.
Entries will be judged according to the following criteria: substance and originality, writing style, composition, and organization.
The Progressive Economics Forum reserves the right not to award a prize or any prizes where submissions do not meet contest standards or criteria.
The winning essays will be announced at the Annual General Meeting of the PEF.
A cash prize of $1,000 will be awarded the winner of the graduate competition; and $500 will be awarded to the winner of the undergraduate competition.
The winning essays will be published on the PEF website.
Judges’ decisions are final.
2016 Concours de textes étudiants
Date limit : le 9 mai 2016
Ouvert à tous les étudiants canadiens
Qui peut participer ?
-Ouvert à tous les étudiants canadiens, qui étudient au Canada ou à l’étranger, ainsi qu’aux étudiants étrangers étudiant au Canada. Tous les participants deviennent gratuitement membres du Progressive Economics Forum pour un an.
-Le terme « étudiant» couvre les étudiants à temps plein et les étudiants à temps partiel.
-Pour être éligible à l’édition 2016 du concours, un étudiant doit avoir été ou être inscrit dans une institution post-secondaire à un moment donné pendant la période allant de mai 2015 à mai 2016.
Niveaux de compétition
Il y a deux niveaux de compétition :
-Un pour les étudiants prégradués
-Un pour les étudiants gradués*
*NB: Ceux qui ont déjà complété un programme prégradué ou un programme gradué et qui retournent faire un deuxi à ¨me programme prégradué ne peuvent participer qu concours qu’au niveau gradué. C’est la même chose pour tout étudiant ayant passé une partie de l’année dans un programme gradué.
Contenu du texte
-Les textes peuvent porter sur tout sujet relié à l’économie politique, la théorie économique ou une problématique en lien avec des politiques économiques, qui reflète une approche critique sur le fonctionnement, l’efficience, et les conséquences sociales et environnementales des marchés libéralisés.
Pour être accepté, un texte doit :
– être envoyé par courriel, au plus tard le 2 mai 2016, à l’adresse suivante: email@example.com
– être le seul texte envoyé par le(s) auteur(s) (un texte par personne).
– avoir entre 20 et 40 pages, tapé dans une police de taille 12 points, à interligne double.
– avoir des références écrites selon les standards académiques (incluant les données)
– être écrit en anglais ou en français
– être un texte original, avec un seul auteur, qui n’enfreint pas les droits d’auteurs d’une tierce partie.
– n’avoir été soumis au maximum qu’une fois auparavant (donc un texte peut être soumis un maximum de deux fois)
– être accompagné par une fiche d’inscription pour le concours de textes du PEF complétée, signée et numérisée.
Les participants acceptent que le Progressive Economics Forum publie les textes des gagnants et de tout autre participant recevant une mention d’honneur.
Tout participant devra soumettre une adresse courriel qui fonctionne, ainsi qu’une adresse postale pour fins de correspondance.
-Un panel de juges choisis et approuvés par le Progressive Economics Forum va juger les textes soumis.
-Les textes seront évalués selon les critères suivants: substance, originalité, style, l’organisation et la cohérence de l’ensemble.
-Le Progressive Economics Forum se réserve le droit de ne pas décerner un prix, ou quelque prix que ce soit, si aucun texte ne remplit les critères ou n’atteint les standards.
-Les gagnants seront annoncés à l’assemblée générale annuelle du PEF.
-Un prix de $1,000 sera attribué au gagnant du concours pour les étudiants gradués et $500 sera attribué au gagnant du concours pour les étudiants prégradués.
-Les textes gagnants seront publiés sur le site internet du PEF.
-Les décisions des juges sont sans appel.
Every year, women around the world celebrate (angrily) the day their average full-time full-year earnings have caught up to men’s average full-time full-year earnings from the year before.
This year in the United States that day fell on April 12th. In Germany it was March 19th. In Switzerland it was February 24th.
In Ontario? Equal Pay Day** comes on April 19th.
This will be the third year that the Ontario provincial government officially recognizes Equal Pay Day, but this year there is cause to be hopeful that change is in the works. Not only has the Ontario provincial government been examining this issue, but the federal government has convened a special committee on pay equity.
To help us better understand gender pay gap dynamics in Ontario, Dr. Kendra Coulter at Brock University conducted a survey of retail workers, an already low wage and feminized sector. Sheetal Rawal, a lawyer and pay equity expert, contributed analysis and context, and I helped out with some numbers. Our whole report can be found on Dr. Coulter’s website, revolutionizingretail.org.
What we found will sound familiar to many who have worked on pay equity issues over the years. Managers are more likely to be men, lower wage occupations within retail are more likely to be women. Men are more likely to be employed full time, whether they are managers or cashiers. Even within retail locations, managers have gendered ideas about skills, expecting women to be better with customers or to be good at cleaning tasks, and expecting men to do more physical labour.
Equal Pay Day is calculated based on the difference in full-time earnings between men and women, but it turns out it is not just about wage equity, but also about “hours equity”.
The women who responded to Dr. Coulter’s survey wanted more hours, but were consistently frustrated with growing precarious work trends in their workplaces. They told us that unpredictable scheduling is the norm rather than the exception, and it is common for employers to hire more casual workers instead of giving current workers more hours. This persistent hours deficit combined with unpredictability takes a toll on workers, especially if they have unpaid work responsibilities as well.
As our report notes, “Workers are often expected to have full-time availability without any of the benefits (financial and otherwise) that come with being employed fulltime.”
Our report makes several recommendations about how the Employment Standards Act can address the gender gap in hours, including:
- advance notice for work schedules,
- minimum hours guarantees,
- requiring that part-time, contract, and temporary workers be paid the same wage as full-time workers doing the same tasks, and
- paid sick leave.
Provincial consultations on the gender pay gap ended on February 29th, 2016, and a report is expected from the steering committee in May 2016. Then we’ll need to mobilize to make sure the evidence gathered results in concrete changes for women in Ontario, and across Canada. Otherwise, we’ll be waiting another 228 years for the wage gap to close on its own.
Ain’t nobody got time for that.
**Your own personal Equal Pay Day may vary significantly, based on a variety of factors. The Labour Force Survey gives us some insight into the pay gap for new Canadians and Aboriginal workers living off reserve. The CCPA in Ontario have calculated that women who are landed immigrants earn $21,000 less per year than non-immigrant men (39% pay gap), and Aboriginal women earn $31,000 less per year than non-Aboriginal men (57% pay gap). We desperately need better data on the pay gap for racialized workers and workers living with disabilities.
The fine folks at the Institute for Research on Public Policy have undertaken an important and eclectic review of Canadian trade policy. They have marshaled 30 contributions from researchers addressing all aspects of Canada’s recent trade performance, and how we can improve it. The contributions will eventually be published in a single volume, Redesigning Canadian Trade Policies for New Global Realities, edited by Stephen Tapp, Ari Van Assche and Robert Wolfe (part of the IRPP’s “The Art of the State” series). But in the meantime individual chapters are being electronically released on their own. One recent and especially informative contribution was Koen De Backer and Sebastien Mirodout’s review of global supply chains and how Canada is being sidestepped (on both the supply and the demand sides) by that important change in trade patterns.
The IRPP invited me to contribute to the project, and I chose to develop an empirical examination of Canada’s disappointing international trade performance since the turn of the century — highlighting the seeming contradiction between those lousy results, and the government’s simultaneous ambitious effort to sign as many free trade and investment agreements as possible. If these deals are the key to trade success, why is it that the more of them we implement, the worse our trade becomes? Perhaps the deals are doing more harm than good.Â And perhaps there are other factors holding back our exports, rather than “lack of free access to foreign markets.”
Here is the link to my full chapter on the IRPP site. And below I post a summary of my findings (which I also presented this week, via videoconference from Sydney, to the Senate Standing Committee on International Trade). Read more »
Over at the web site of the Calgary Homeless Foundation, I’ve written a blog post titled “Using Data to End Homelessness in Calgary.”
Anti-democratic investor rights deals are in the news again, thanks partly to a Communications Workers of America & Trade Justice Network event that brought Nobel prize winning economist Joseph Stiglitz to Canada. Professor Stiglitz pronounced the Trans-Pacific Partnership the “worst trade deal ever”, adding that provisions allowing multi-nationals to sue governments are particularly toxic.
Professor Gus van Harten pointed out that enacting the CETA and the TPP would dramatically increase the number of corporations that are allowed to sue Canadian governments. Canada is already the most sued nation under various investor state dispute settlement mechanisms. Under NAFTA, Canada has settled 4 investor claims for a cost of $150 million, lost 3 cases for a cost of about $48 million, and 7 cases are still ongoing as of 2015. The problem with corporations suing governments is not only the cost, but the regulatory chill.
And Pia Eberhardt told us that the changes to CETA’s investor state dispute settlement mechanism didn’t fix the basic problems, calling it the zombie ISDS. She said that Canada’s experience with NAFTA was a big part of the reason Europeans were so mobilized against including similar mechanisms in their own deals.
The Broadbent Summit also hosted a panel on “The Free Trade Charade”, where Michael Geist, Ianik Marcil, Pia Eberhardt, and I explained why there was very little benefit to joining the TPP, but lots of risks.
The other reason that trade deals are in the news is because the House of Commons Standing Committee on International Trade wants to hear your views on the TPP. You are encouraged to send them a 1,500 word brief on how the TPP will impact you and your community atÂ firstname.lastname@example.org no later than April 30, 2016.
P.S. If you missed the Making Sense of the TPP event held at the University of Ottawa on April 1, the video is is available at: https://www.policyalternatives.ca/newsroom/updates/what%E2%80%99s-big-deal-understanding-trans-pacific-partnership.
It includes the keynote address by Nobel-prize winning economist Joseph Stiglitz.
The morning panel included:
- Gus Van Harten, Associate Professor – Osgoode Hall Law School – Who has benefited financially from special privileges in the TPP for foreign investors in ISDS?
- Meghan Sali, Digital Rights Specialist, Open Media – IP, copyright and Canada’s digital future
- Scott Sinclair, Senior Researcher, Canadian Centre for Policy Alternatives Trade and Investment Project – Democratic deficit: the TPP’s questionable legitimacy
The afternoon panel included:
- Professor Ron Labonte, Canada Research Chair Globalization and Health Equity and Ashley Schram The TPP and health. Few gains, some losses and many risks
- Jeronim Capaldo, Research Fellow Global Development and the Environment, Tufts University “Unemployment, Inequality and other Risks in the TPP”
- Steven Shrybman, Goldblatt Partners “Does the TPP really advance labour rights?”
- Pia Eberhardt, Researcher and Campaigner, Corporate Europe Observatory “Why are Europeans concerned about TPP’s little brother, the CETA?”
This event was hosted by the Trade Justice Network, CWA/SCA Canada, and the University of Ottawa’s School of Epidemiology, Public Health and Preventive Medicine, and The School of International Development Studies.
One interesting topic for a Canadian living in Australia is the manner in which fiscal and social responsibilities are divided between the levels of government. Both countries are big, regionally diverse, and resource-rich (with all the pluses and minuses that entails). As in Canada, Australian states are largely responsible for the big-ticket social programs: including health care, hospitals, and education. The federal (or Commonwealth) level retains some direct social funding responsibilities, however. For example, the Commonwealth government provides direct operating grants for schools (including, unfortunately, to the private schools that serve about one-third of Australian primary and secondary students). The federal government also pays directly for Australia’s progressive pharmaceutical benefits scheme (which provides low-cost prescription drugs).
The revenue side of the equation, however, is much more centralized than in Canada. Read more »
The 2016 Budget announces some much needed improvements to Employment Insurance, and leaves room for more changes in the near future. The changes announced in the budget are largely positive, but many details are still missing, and some stinkers from Harper are left unchanged.
The Good …
Significantly, the government will reduce the 910 hours threshold for new entrants/re-entrants as of July 2016. All workers within a region will have the same entrance requirements between 420 hours and 700 hours, depending on the local unemployment rate. This change will be implemented 6 months earlier than promised in their election platform, and will be a meaningful change for young workers, recent graduates, and new Canadians. (Grade: A+)
Another significant announcement is $106 million over two years for front line staff. In their election platform, the Liberals had committed to reducing EI wait times, but had not allocated any funding for that purpose. This budget provides a one year increase of $19 million to help Service Canada meet increased demand for processing. It also provides $73 million over two years for increased staffing at EI Call Centres, and $14 million over two years to promote compliance with program rules. Mostly good, but in my experience, face-to-face discussions with well-trained staff near the beginning of claims are the best way to promote compliance with program rules. (Grade: A-)
The budget will extend the duration of EI regular benefits by 5 weeks, up to a maximum of 50 weeks of benefits, for claimants whose primary residence is in one of the 12 EI regions with the sharpest increase in unemployment. The extension will be available for a year starting in July 2016, and will apply retroactively to all eligible claimants as of January 4, 2015. The government will also offer an additional 20 weeks of EI regular benefits to long-tenured workers who reside in those same 12 EI regions, up to a max of 70 weeks of benefits. This too will be available for a year, and applied retroactively.
While this benefit extension will be significant for many workers, many others will fall through the cracks. Those who worked in affected regions but returned home to look for work will not qualify, and younger workers are unlikely to qualify for the 20 week extension offered to long tenured workers. Long -tenured workers must have paid into the EI program for the past seven out of ten years, and over the past five years must have received 35 weeks or less of EI benefits. About 20 – 25% of EI recipients fall into the long-tenured category. (Grade: B)
In a positive step, the maximum duration of work-sharing agreements will be extended from 38 weeks to 76 weeks. I encourage the government to work with employer and worker groups to increase awareness of this program, as it can be very effective but take up is low. (Grade: A+)
The government will extend the current version of the working while on claim pilot until August 2018. This pilot allows workers to keep 50% of their earnings from employment, up to a maximum of 90% of their weekly insurable earnings. All workers will also have the option to fall under an earlier pilot. Under the alternate working while on claim pilot, workers may keep all of the first $75 earned and have earnings above that amount deducted dollar for dollar from their EI benefits. This alternative pilot may work better for low wage workers with opportunities for part-time work. (Grade: A-)
As promised in their election platform, the two-week waiting period for EI benefits will be reduced to one week, starting January 1, 2017. This change does not add to total benefits, it simply starts the claim period one week earlier. I think this money could be better spent elsewhere in EI, but it was an election platform promise. (Grade: A)
The Mixed Bag …
Budget 2016 promises to reverse job search requirements by claimant category introduced by the Conservative government in 2012, but maintains the three claimant categories: frequent claimants, occasional claimants, and long tenured workers. Since one of the requirements to be “long tenured” is seven years of EI contributions, this automatically excludes younger workers. (Grade: D)
Other elements of Harper’s cuts to EI are not addressed in this budget, such as changes to the appeals process or changes to the number of EI regions in PEI, Yukon, Nunavut, and the Northwest Territories. This is certainly not what workers expected when we called on the federal government to undo the Conservative EI changes that were punitive to workers. (Grade: D)
Despite some expansion of benefits, this budget predicts a $1.7B accumulated surplus in the EI Account by December 2016. If you’re looking for stimulus, money in workers’ pockets is the most effective route, and there was enough money in the EI Account to make that happen. It’s disappointing that opportunity was wasted. (Grade: D)
The budget also forecasts a seven year break even rate at 1.61 per $100 of insurable earnings. This premium level does not take into consideration the promised expansion of benefits for compassionate care leave, or parental leave. Since the new premium rate is set to take effect on January 1st, 2017, it’s hard to know what that means. Will they figure out the details of the new programs before then, and then announce a new rate? Will they let the EI Account go further into deficit in 2017 and then raise rates later on if required? Unknown.
The takeaway? So much better than Harper, but still lots of work to do. And I expect that Atlantic Canadian MPs are going to be hearing an earful over Easter.