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The Progressive Economics Forum

Mulcair on the Economy

Leader of the Opposition Tom Mulcair gave a fine speech on the Budget Bill on October 24 which can be found in its entirety in Hansard.

I have posted some extracts of interest to progressive economists below. They echo many of the arguments made on this blog

“What is more, the Conservatives are creating an economy where salaries will be much lower. There is less pressure with regard to all working conditions because of a series of measures that are being implemented. It is not by chance that, for the first time in Canada’s history, the middle class has seen a clear drop in income, and this occurred in tandem with the signing of NAFTA.


    Over the past 25 years, the middle class has seen its real net income drop. This is the first time this has happened. In other words, the richest 20% of Canadians are experiencing a rise in income while the other 80% of Canadians—it has been measured and proven—are experiencing a drop in income. These are the results of the neo-conservative policies of the current government and its Liberal predecessors, who aggressively pursued the same goals for 25 years.

This is putting downward pressure on incomes and on employment conditions. As though that were not enough, these agreements are creating a race to the bottom: temporary foreign workers who used to come and work in a few sectors, such as produce farms, will now be in several employment categories. The government trumpets the fact that we can pay them a lot less than Canadians. People are working hard in mines and many other sectors and what is the result? One simply has to go visit the steelworkers in Prince George, British Columbia, to see what kind of pressure they are under. It is hard work. They work hard their entire lives. They fought hard for fair wages only to be told that the Conservatives are going to force them to work two years longer before they can retire. Then, as though these workers did not have enough pressure on them, the Conservatives want to bring in workers from other countries and pay them lower wages, and this adds even more downward pressure. That is the Canada the Conservatives dream of, where workers are subjected to working conditions from the early 1900s. That is their vision.

The NDP wants to build a fair Canada. We hear appalling speeches, like the one we heard earlier, suggesting that our dream is heresy. A country as rich as Canada is capable of paying for decent working conditions, and that is part of what an NDP government will bring.

 Do not forget that Bill C-38, the Conservatives’ budget bill in the spring, repealed the Fair Wages and Hours of Labour Act. That is their vision.

    They are not attacking one particular group or sector. Their goal is to drive down wages for all Canadians, a total lack of an economic plan. The government is not just failing workers but businesses that create jobs too. Canada faces a perfect storm of economic challenges. We have 500,000 lost manufacturing jobs, a $50 billion trade deficit, household debt at an all-time high, the worst American downturn since the Great Depression, and we are still in the middle of a eurozone crisis.

When we talk to Conservatives about the interest that we have in using our experience, our expertise and our capability to help in Europe, we get the usual talking points of “You want us to write a big cheque to Europe”. What imbecility. As if the idea of using our experience and our expertise to help avoid a crisis that will invariably negatively affect us is something wrong.

    Yet those are the talking points that come out of the PMO because they make stuff up. That is all they have. They have nothing else. They make up pages in the budget and they make up plans for the NDP that have never existed, other than the ones that were the same ones they had. They make stuff up all day long because they cannot defend what they are actually doing. That is what we are talking about now, what is actually in here, what they are actually doing and the negative effect it is having on Canadian workers across the country.

    What an irony Bill C-45 is. The jobs and growth act does not contain a plan to generate either. Budget 2012 kills more jobs than it creates. It contains no strategy for the 1.4 million out-of-work Canadians. The so-called centrepiece of the economic plan is the small business tax credit, which members can applaud because the NDP supports a tax credit. It was part of our 2011 platform. This one does not go far enough. It is worth a maximum of $1,000 and it lasts just one year. At best, it may be enough to help companies hire one full-time employee. It will not even make a dent in our lagging job numbers.

    The truth is that the government continues its failed policy of lavish corporate tax cuts, even as companies ship jobs overseas. For example, one company demanded a 50% pay cut and shut its doors after receiving $5 million from the Conservatives. It was called Electro-Motive Diesel in London. I got to visit the workers on the picket line in the middle of the winter. It was an extraordinary experience because just a few months earlier a beaming Prime Minister had been out there with a $5 million cheque, because this was evidence of the success of his plan for jobs in Canada.

 As soon as that election campaign was over, there was a little meeting. The bosses sat down and said, “We have a deal for you. You accept a 50% pay cut or we move your jobs south of the border”. The company closed, the jobs have been moved, it kept the $5 million and there are no longer any jobs in Canada. That is the Conservative plan.

    Thirty years ago a young worker could work his or her way up a company ladder. Now workers have many different jobs in a lifetime. The incentive to invest in workers is being lost. A large workforce is no longer a sign of pride. A couple of generations ago, someone who was running a big company would be very proud and take great pride in stating the numbers in his workforce. Now the great pride is saying how many of those jobs were shipped to another country. That is the change. We have to get back to a feeling in Canada that it is a social responsibility to be proud to be creating good-paying jobs

Why do we keep doing what the Conservatives do, investing in companies like Electro-Motive Diesel that do not invest in our workforce? This is the type of short-sightedness that we see all over Bill C-45.

  For example, under the changes to the scientific research and experimental development tax credit, the program would be cut. The $500 million a year that it costs would be eliminated, but it would also reduce government support for business research and development at a time when businesses need to increase innovation to compete.

    To put it another way, if we cannot get the Conservatives to do the right thing because it is the right thing, let us try to get them to do the right thing because it is actually good for the economy. The only way to increase wealth in our society is to increase knowledge, and this is the dumbing down of Canadian business. That is the Conservative legacy. It is going to hit manufacturing particularly hard at a time when they need a little oxygen to keep going.

    We need tailored incentives that better serve businesses and our economy as a whole. There are a couple of good examples that can be looked at in Canada where long-term vision and incentive by the government has produced a great result.

    For example, take a look at the TV and film industry in Toronto. There used to be a time when it was only New York and Hollywood. Now, Toronto is in there competing with them every step of the way, but it required a partnership between government, business and labour. Those tax incentives were there for decades and they worked their way through the system and are producing the great result of bringing in billions of dollars a year and lots of high-quality jobs. However, it required government involvement every step of the way. The Conservatives simply do not believe in that.

    We should be building the next success story now. Instead, we are getting less for workers, less for Canadians and less for our economy. That is what the Conservatives are about, less for everyone.

That is the path that the Conservatives are paving for us.

Enjoy and share:


Comment from Paul Tulloch
Time: November 13, 2012, 9:28 am

Sadly the Tories are also embarking on that economic pathway that we have witnessed many times from the Neo- cons through the last 30 years. That is, they build up the facade that nothing can be done. Where the public is lead to believe that the tories have done their job, and it is the US and other international economy that prevents us from moving forward.

I think the other point that is left out of this is how Harper has intervened many times with Government resources to expand the tar sands. That is about the only somewhat successful initiative they have embarked on- that is, if you view that as successful. Creating a whirlwind of frenzy over the tar sands, in a torrid pace of development that ends up cranking our dollar into a space that non-creatively destroys everything else that relies on export markets for survival.

ATTENTION PLEASE- ATTENTION: The world NEEDs a Canadian economy that results in such innovation like our history has produced, the auto sector, hi-tech like, Nortel, ATI, RIM, COREL, (we many need better management as well) but the key point is the development and market enabling of technologies. We have been one of the leaders in the world in these high value adding spaces.

Why is it we all now think it is okay to accept the tories mantra, that resource extraction is what our economy needs to focus on. Have you watched an Economic Action plan ad lately. Have you read am economic policy document lately on sector development, (other than resource extraction)?

The world needs the minds, bodies and knowledge of the Canadian workforce, we can rebuild the economy on a platform of innovation and high value adding capacity.

Harper last week hammered away at the public, that we need all these free trade deals with other countries. At what cost to our economic sovereignty is my first response. But aside from that, he kept on this downer over the American economy.

Any other nation in the world would love to have the market access that we enjoy to the largest and wealthiest economy in the world. We are a small open economy – and what economic strategy did Harper focus on? Tar sand development that raises the dollar and destroys our environmental nuance to the rest of the world.

There is so much more that a government can do to develop the economy. It can and should be fostering the environment for such high value adding infrastructure development and R&D seeding.

Human resource strategies, education, technology cultural develop, small and medium business innovation, large business innovation, targeted investment, etc. There is a pethora of requirements for such an economy and the feds have not only abandoned much of that infrastructure, they are now cutting it back.

The tories are out of control, they have now slipped up on managing the housing bubble, as it was only a matter of time, without having a stable rebuild of the economy before the consumer debt acceleration through the recession came to a point where the bill collectors come calling. And that is now happening.

We have been living in this facade that somehow we can destroy the non-commodity related aspects of our economy and get away with it.

History will read exactly this in 20 years form now- Harper went all in on the tar sands, and lost the Canadian economy. A once vibrant, increasingly knowledge based manufacturing and high value adding economy, made it through the financial storm on the back of consumer credit and a mild amount of stimulus, but Harper gambled with the tar sands and economy failed.

Comment from Nik Barry-Shaw
Time: November 26, 2012, 5:03 pm

The speech starts out alright, but what are the solutions? Progressive competitiveness, knowledge economy boosterism, nostalgia for a land that never was, a time of kindly capitalists and tripartite concertation:

“Over the past 25 years, the middle class has seen its real net income drop. This is the first time this has happened. [I guess the Great Depression never happened …] Thirty years ago a young worker could work his or her way up a company ladder. Now workers have many different jobs in a lifetime. The incentive to invest in workers is being lost. A large workforce is no longer a sign of pride. A couple of generations ago, someone who was running a big company would be very proud and take great pride in stating the numbers in his workforce. Now the great pride is saying how many of those jobs were shipped to another country. That is the change. We have to get back to a feeling in Canada that it is a social responsibility to be proud to be creating good-paying jobs.”

This is what is killing / has killed social democracy in Canada. Appealing to the bosses’ sense of the greater good while revelling in the warm glow of the good ol’ days? You’re basically admitting you have no program other than neoliberalism with a human face. No thanks.

Comment from Keith Newman
Time: November 28, 2012, 9:45 am

I completely agree with you that it is the proposed solutions that matter and not the rhetoric. Mark Carney’s call for higher dividends to offset low investment comes to mind.

With respect to the NDP of the last 10 years or so, under Jack Layton and now Thomas Mulcair, it is certainly far less radical than even the Trudeau Liberals of 30-40 years ago. Of course this has largely been done in the hope of getting elected – so the traditional issues re electoralism emerge. How does a non-right party get elected but avoid turning into a Tony Blair-type Labour Party? Good practical question that is difficult to answer and needs to be fought out on the ground.

In any case, with respect to Mulcair’s words in the linked piece of Hansard and specific proposals, he did say the NDP would re-establish OAS benefits at age 65, a very good thing indeed especially for low income earners. This is a very nasty action taken by the Conservatives that is totally unnecessary for the solvency reasons they cite.

He also strongly infers the NDP will reverse cuts to food inspection and environmental rules, etc. I definitely believe him on the environment since he was tossed out of the Quebec cabinet due to his refusal to back down on environmental rules when builders wanted to destroy a park. I have read since that his dismissal from office was a major demand of the construction industry and clearly a victory for this industry – yes the same one being investigated for wide-spread corruption as we write. From this I infer that Mulcair is not personally corrupt and has gumption – two postives which are difficult to ascertain in the usual course of events.

Comment from Nik Barry-Shaw
Time: November 29, 2012, 9:38 pm

“How does a non-right party get elected but avoid turning into a Tony Blair-type Labour Party?”

Hmm, try asking Syriza in Greece. We’re trying to do it in Quebec with Quebec solidaire, but the pressures are definitely there. More generally, the NDP has given up trying to change the mainstream through popular organization, to put forward an entirely different ideology, and is content with working within the narrow bounds set by the mainstream. Which is to say the bounds set by the business elite. Mulcair is the fruit of that process. His rise to the leadership says more about the lack of integrity and vision of the NDP than it does about him.

Comment from Keith Newman
Time: November 30, 2012, 8:12 pm

Re Nik,
“…the NDP has given up trying to change the mainstream through popular organization, to put forward an entirely different ideology,…”
Well, that train left the station a long, long time ago. More recently, under Jack Layton, continued under Thomas Mulcair, the NDP has become very focused on getting elected and has abandoned even moderately radical objectives. It is an eternal issue. It demonstrates a different, electoralist vision, not a lack of vision.
I too support Québec soldaire as a voter and donor, but let’s face it, it received only 6% of the vote. Yet the rightist CAQ got 27% and the centre-right and corruption-tainted Liberals got an amazing 31%. 31 percent despite all the scandals swirling around them! I find it hard to imagine Quebec solidaire getting elected in its current form. By the way I do really like their Pharma-Québec proposal.
For election results see,_2012#Party_standings.

Comment from Nik Barry-Shaw
Time: December 5, 2012, 8:55 am

Kevin: Not to make too crass an analogy between Quebec and Greece, but Syriza got only 3-5% of the vote from 2004 to 2009. Which is to say, there are plenty of things I would change about Quebec solidaire and how it functions, but I remain hopeful that it is doing something right.

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