WHY TRADE IS THE LEAST IF I HAD $100 BILLION... THE PROS AND CONS OF OUR CONCERNS WITH A CANADA’S SECRET TAX OF A BASIC INCOME /30 TRUMP PRESIDENCY /10 RICHES /18

CANADIAN CENTRE FOR POLICY ALTERNATIVES JAN/FEB 2017 $6.95 Contributors Heather Menzies Armine Yalnizyan Jeremy Appel is a magazine and book is a senior economist Vol. 23, No. 5 is a Toronto-based journalist writer and adjunct professor with the CCPA and weekly ISSN 1198-497X whose work has appeared on at Carleton University. Her commentator on CBC’s Canada Post Publication 40009942 TVO.org, in the Toronto Sun, tenth book, Reclaiming the Metro Morning radio show CCPA Monitor is published six times the Monitor and numerous Commons for the Common and The Exchange on CBC a year by the Canadian Centre for campus publications. He Good, was published in 2015 News. She is vice-president Policy Alternatives. has a master’s degree in and won the Ottawa Book of the Canadian Association The opinions expressed in the CCPA American studies from Award. In 2013, she was for Business Economics and Monitor are those of the authors Western University in awarded the Order of Canada serves on the boards of and do not necessarily reflect London, Ontario. for her “contributions to the Canadian Institutes for the views of the CCPA. public discourse.” Health Research’s Institute of Vitalyi Bulychev Population and Public Health, Please send feedback to Hadrian Mertins-Kirkwood is an independent filmmaker and the Public Interest [email protected]. is a researcher at the living in Montreal. Advocacy Centre. Editor: Stuart Trew Canadian Centre for Policy Senior Designer: Tim Scarth Alisha Davidson Alternatives, where he Claire Young Layout: Susan Purtell is an illustrator and maker focuses on federal and is Professor Emerita at the Editorial Board: Peter Bleyer, currently living in Toronto. provincial climate change Peter A. Allard School of Law Kerri-Anne Finn, Seth Klein, Kate McInturff, Erika Shaker, Emily Turk Karen Foster policy in Canada. He is also at the University of British is an assistant professor an ongoing contributor to the Columbia, where she taught CCPA National Office: of sociology and social CCPA’s Trade and Investment for many years. Her area 500-251 Bank St., Ottawa, Research Project and the of specialization is tax law ON K2P 1X3 anthropology at Dalhousie tel: 613-563-1341 University, whose research Alternative Federal Budget. and policy and she is the author of several books and fax: 613-233-1458 and writing spans the Kate McInturff [email protected] numerous articles, including sociology of work, political is a senior researcher at the HELP US SHED LIGHT ON THE www.policyalternatives.ca “Women, Tax and Social economy and historical CCPA and the director of the Twitter: @ccpa Programs: The Gendered sociology. centre’s initiative on gender facebook.com/policyalternatives Impact of Funding Social equality and public policy, ISSUES THAT MATTER TO YOU. 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ON THE COVER Rediscovering redistribution /18 What would you do with $100 billion dollars? Canada is spending too much money on tax breaks for the rich when a more progressive tax system — one aimed at reducing inequality and redistributing wealth — is within our reach.

BEHIND THE NUMBERS IN THE NEWS The Canada Infrastructure Bank: Canadians at Standing Rock: A public handout to privateers Lessons from the epicenter of North America’s David Macdonald 4 anti-pipeline movement Ontario still has the room to be Jeremy Appel 16 an activist government FEATURES Sheila Block 5 Seeing the Underground Railroad Why raising the basic amount through a borderlands lens in Manitoba fails the poor Allison Smith 35 Molly McCracken 6 How committed is Canada to screening B.C. seniors need more housing support international arms sales? Sarah Sheridan 7 Asad Ismi 41 The Nova Scotia government is ignoring child poverty data ARTS Christine Saulnier and Lesley Frank 8 Heather Menzies assesses progressive and left responses to the current TRUMPED environmental and democratic crises 43 The CCPA’s Scott Sinclair and Kate McInturff Vitalyi Bulychev reviews reflect on the U.S. election and its implications The Chaplin Machine by Owen Hatherley 47 for Canada 10 PERSPECTIVES Participatory budgets in action: Paul Shaker on Hamilton’s experiment in democracy 48

Note from the editor 2 | Letters 3 | New from the CCPA 14 | Index 9 | The good news page 34 Note from the editor Stuart Trew Rediscovering redistribution

T FEELS A bit counterintuitive, after where I think taxes come in, and why care user fees in half—by only tax- a tumultuous 2016, to be talking they could play a greater role in our ing 50% of the capital gains earned about the mundane matter of tax political dialogue in 2017, Canada’s from selling stock or real estate. reform. This is normally a time of sesquicentennial anniversary. While everyone would benefit from deeper reflection on the year that The now one-year-old Liberal gov- enhanced long-term care services in was and the trends and challenges ernment remains popular despite an Canada, 87% of the benefit of this Ito come. Obviously, the signs are not embarrassing cash-for-access scan- preferential treatment of capital very good: a sexist, race-baiting bully dal, pressure from opposition parties gains goes to Canada’s richest 1% of elected president of the United States related to electoral reform, and ques- tax filers, according to a new report (see Kate McInturff on page 12); Brex- tions about Canada’s military export by CCPA economist David Macdon- it and the revival of neo-fascist pop- controls (see Asad Ismi on page 41). To ald (see page 18). He calculates that ulism in Europe; a Game of Thrones- some extent Trudeau will profit, at Canada’s five most regressive such scale power struggle still intensifying home and internationally, from the tax expenditures (or loopholes) cost in the Middle East; war hawks wel- “at least we’re not them” effect—not the government more than $10 bil- coming the coming of a second Cold Austria on refugees and immigration, lion in 2011, provided 83% of their War with Russia (and a first with Chi- not Trump on trade (see Scott Sinclair benefit to top income earners, and na); the promulgation of social-me- on page 11). However, this explanation paid a maximum of $11,700 per per- dia-based fake news sources with does not give enough credit to the Lib- son—10 times the maximum pay- sketchy state and private backing; erals for tapping into popular doubts ment to Canada’s poorest from all the continued impunity enjoyed by about the stale consensus that prom- other federal social transfer pro- U.S. police officers who have killed ised trickle-down prosperity but that grams. As Claire Young writes (page unarmed black Americans; the hot- looks more like this in reality: globali- 22), Canada could be but does not tax test summer on record for the third zation of capital + minimum social inheritance. Marc Lee wonders (page year in a row…. safety nets = outrageous concentra- 28) why B.C. does not charge a prop- And these are only some of the tion of wealth in a few hands. erty surtax on homes over $1.25 mil- higher-profile events influencing The Trudeau government’s first lion, which could pull in $1.7 billion in the western zeitgeist in 2017. Citing two major economic acts were to public revenues a year. persistent slow growth, the collapse raise taxes on the 1%, cut them for There is no guarantee the Liberal of mega-regional trade deals like the middle class (albeit mostly the government’s infrastructure plans, the TPP and TTIP, and the econom- upper end of that class) and sig- when they are eventually announced ic resilience of autocratic regimes in nificantly increase child benefits, this year, will put the Canadian econ- Russia, China and elsewhere, main- with a maximum payment of $6,400 omy on a more sound footing. To the stream news commentary at the end per child per year for families mak- extent these projects are financed of 2016 featured startlingly frequent ing less than $30,000 a year. As an- and built as public-private partner- elegies to liberal democracy. Outgo- ti-poverty groups said all year, these ships (see Macdonald again on page ing U.S. vice-president Joe Biden even were good first steps. But much more 4), the main beneficiaries will be do- visited Ottawa in December to prom- could be done to ensure that socie- mestic and international investors ise “we are going to get through this ty’s wealth is shared more equitably. (whose higher expected capital re- period,” as long as Canada steps up. Unfortunately, with the Trudeau gov- turns receive special tax treatment “The world’s going to spend a lot ernment now turning to bricks-and- and cost the public more money). At of time looking to you, prime minis- mortar infrastructure spending— the same time, tax reform on its own ter, as we see more and more chal- the new, rather predictable IMF con- will not be enough to save the liber- lenges to the liberal international or- sensus for stimulating private sector al-democratic order (if that’s your ul- der since the end of World War II— growth—we risk losing sight of the timate goal). But it could play a much you and Angela Merkel,” Biden said, more interesting, legitimately pro- bigger role in rebalancing Canada’s repeating similar counsel from Oba- gressive ways tax dollars could be re- national wealth and re-energizing a ma to Trudeau in the spring. These directed to meet social needs in a way sluggish economy—by shifting the people, let’s remember, are from the that reduces inequality and creates burden back where it belongs, on same Democratic clique that also saw far more jobs than building bridges those with the means to pay. With- Bernie Sanders’s calls for free educa- (see Armine Yalnizyan on page 30). out this modicum of social solidari- tion and socialized health care as rad- The money is there already. For ty, it will be much harder to keep the ical threats to the liberal order. But example, Canada spends $3.8 billion circling wolves at bay. The world is putting that aside for now, here’s annually—enough to cut long-term watching. M 2 Also proud to be left items, paying more for misogynist men who see worse service, without prostitutes as easy targets. am with Anne Miles any politician making the This is where sex trade 100% (“Proud to be I slightest effort to protect workers need the freedom left,” Letters, September/ the consumer. And yet we to make the choices that October 2016). I am sick have to shy away from may keep them safer. and tired of letting the being identified as “lefties” neoliberal Kool-Aid poison It’s time to decriminalize because we dare to speak the minds of the young. the sex trade, license out. Leers Politics, the media, our brothels and enact laws universities and health care Nikos Christodoulou, that limit the trade to systems, and almost all Ottawa, Ont. certain parts of town. aspects of life, have been Nothing has ever stopped bought out these days by the sex trade. Nothing ever Nuance needed on corporations and the rich, will. We need to put more the right to die More on the and corporate interests Nordic model resources into protecting count myself as a big fan trample all rights we used the women and men whose agree with Rosemary of the work of the CCPA to take for granted just a early abuse sets them up I Dzus (“Nordic Model and the always informative few decades ago — rights I for sexual exploitation. Works,” Letters, November- articles in the Monitor. that we earned by We need to offer peer December 2016) about who Having been away most sacrificing so many lives in counseling, educational gets into the sex trade and of September, I didn’t two devastating wars. opportunities, health what the (mostly) women pick up the July/August care, job-skill training and I grew up and went to need in order to get out. I edition until a couple of transitional housing. school in Greece during don’t agree with her views days ago. In an initially idle a brutal dictatorship on the Nordic model. Women on the street use read of Kelley Tish Baker’s sponsored by the CIA and drugs to make standing review of Gary Bauslaugh’s In my years leading writing the U.S. administration. on the corner half-dressed book, The Right to Die: The groups for sex trade I went to the National in Canadian winters more Courageous Canadians workers, I had the privilege Technical University of bearable. Or they are Who Gave Us the Right to of listening to these Athens where, in 1973, I already addicted to drugs a Dignified Death, I was (mostly) women. That’s saw my fellow students and need to sell sex to pay stunned to see Robert what we all need to do killed by tanks and guns for them. We need to set up Latimer featured along unless we want to continue supplied by those who supervised consumption with Sue Rodriguez and Dr. the same old patriarchal advocated human rights sites that greatly reduce Donald Low. The latter two approach, telling women in the open but did not overdose risk and often Canadians fought publicly what’s good for them. The hesitate to undermine steer users to safer for the right to choose women I knew felt the anyone and any country lifestyles. The women I their own death; Latimer Nordic model endangered that dared to want to knew who wanted to stay chose to end the life of them because they had to carve their own path. in the profession worked in his daughter Tracy, who get into cars very quickly South America is still the role of dominatrix. This lived with cerebral palsy, without the freedom to suffering because U.S. should tell us something gassing her in his truck. I check the guy out and, with interests dictated the about power in sexual am troubled that the book’s luck, weed out the “bad support of brutal regimes transactions. reviewer did not make this dates.” It also cut down on at the expense of countless critical distinction about the income they needed for Dorothy Field, human lives so their who chose death in each themselves and their kids. Victoria, B.C. corporations could be case, and that the editors “protected” at the expense We don’t need to of the Monitor let it go of the rights of the native stigmatize men who by without comment. As inhabitants of those places. purchase sex. They may long as people like Robert have a disability or Latimer are considered It is sickening to see in condition that makes Canadian heroes, then everyday life that the it difficult to find a sex people with disabilities average Joe or Jane has partner; they may have are at risk of having to fight the bank, or the a spouse whose physical others “compassionately” credit card company, or the or emotional situation terminate their lives. insurance company, or the Send us your feedback rules out sex; they may be phone service provider, and thoughts on the news, Maria Squance, painfully shy; they may or the airline that treats politics (at all levels) and Victoria B.C. like variety. They may, of them like disposable the Monitor to: monitor@ course, be creeps — violent, policyalternatives.ca 3 ies to seek and receive infrastructure funding. As announced in Morneau’s fall eco- nomic update, the total amount in the new bank would be $35 billion: $15 bil- lion will come from the federal govern- Behind the ment and $20 billion from private lend- ers. While the government is treating this all as direct funding, the bank ex- pects the money it will be loaning cit- ies to be paid back eventually. numbers Right off the bat, this is awfully cheap given how low federal inter- est rates are, and the fact that feder- DAVID MACDONALD | CANADA al funding for infrastructure is at all- time lows compared to other levels of government. More worrying, though, New infrastructure is that the $20 billion in private sec- tor money is just a fancy way of say- bank will cost us ing these infrastructure loans will be structured as P3s. The government, in other words, is creating a privatiza- ne of the federal government’s jects. Such a bank could also simpli- tion bank. main justifications for creat- fy the process of accessing bond mar- The fiscal update speaks mislead- Oing a new Canada Infrastruc- kets, which would get projects off the ingly about “bringing in private cap- ture Bank was to reduce costs and in- ground sooner. ital to the table to multiply the level crease access to loans for Canadian But this is not what the federal gov- of investment.” In fact, whether the cities. Unfortunately, the bank’s lend- ernment has done. Actually, the pro- feds sell bonds or use P3s for infra- ing structure will actually cost cities posed federal infrastructure bank will structure, the money comes from the an extra $6.2 billion on the $20 billion likely make it more complicated — as same place: large institutional inves- promised for infrastructure. well as expensive — for Canadian cit- tors like pension plans. The difference Why? Because roughly a third of the is in how much money private inves- benefit from the new money will be wasted on higher interest payments to private investors. Projected cost breakdown Interest rates differ for different lev- of proposed infrastructure bank ($ billions) els of government. Cities pay about 2.2% on a five-year bond right now. Base costs Competetive neutrality Risk premium Financing costs Ancillary costs The rate is lower for the provinces; for example, B.C. is presently paying 1.5% for its five-year bonds. The federal gov- ernment pays the least interest of all at a rate of 0.7%. Infrastructure bank (P3) The private sector, on the other hand, expects dramatically higher re- turns on infrastructure investments. For example, the head of the Caisse de dépôt pension plan, Michael Sabia $6.2 billion (who sits on Finance Minister Bill Mor- neau’s economic advisory council), ex- pects a 7% to 9% interest rate on the public-private partnerships (P3s) he backs. Traditional financing Given the right mandate, an infra- structure bank could lower the bor- rowing cost for cities from 2.2% to 0.7% (the federal rate), saving local governments a lot of money on loans for needed upgrades and new pro- $0 $5 $10 $15 $20 $25 4 tors will take home at the end of the SHEILA BLOCK | ONTARIO day. Pension plans are among the larg- est purchasers of federal bonds (pay- No more “deficit made ing 0.7% interest) and also of P3s (paying 7% to 9% interest). Obvious- me do it” in Ontario? ly, if they had a choice, pension plans would want to put more money into private or partially privatized infra- n his fall economic update, Ontar- But with no “the deficit made me structure. The Canada Infrastructure io Finance Minister Charles Sou- do it” excuse in 2017, what should we Bank obliges them. Isa stuck to his commitment to bal- be looking for in program spending, Why is this a big deal? For one thing, ance the province’s budget next year. which has been squeezed over the it will cost us (the public) a lot of mon- The government has relied heavily on last number of years? In other words, ey. Ontario has a fair amount of experi- three austerity measures in the name what could a post-austerity Ontario ence with P3s, much of it painfully de- of deficit reduction: budget look like? tailed in a 2014 report by the province’s To get back to the real per capita 1. It slapped a long-term freeze on auditor general. The report found that spending levels of 2011-12, the gov- public-sector-worker compensation. on the $26 billion worth in recent P3 ernment will have to increase spend- In fact, some workers haven’t seen a projects, the province will pay, over ing by 5%, or an additional $6.3 bil- raise in six years. the long term, $8 billion more than it lion, in 2018-19 (see graph). That would needs to, mostly due to higher inter- 2. It cut back on program spending, mean reversing the commitment in est costs. which hasn’t kept up with inflation last year’s budget to keep growth in If the federal experience with P3s and population growth. health care spending at a 1.8% aver- looks anything like what happened in age between 2014-15 and 2018-19, and 3. It sold off public assets, including Ontario (and there’s not much reason to keep education spending increas- Ontario Hydro. it shouldn’t), we should expect the in- es at 1.2%. The $140-million increase frastructure bank’s $20-billion loan The province is still committed to cap- in hospital budgets announced in the program to be unreasonably expen- ital spending to deal with pressing in- fall update is an increase of just over sive in the end. We can show this by frastructure renewal issues. These one-quarter of 1%. adapting the Ontario P3 analysis to important investments increase em- The government is squeezing these project a cost breakdown for the pro- ployment in the short term and im- services below inflation and popula- posed federal infrastructure bank (see prove the productive capacity of the tion growth at a time when the de- chart). economy in the longer term. With the mands on the health care system In the projections both traditional passage of Bill 6 (the 2015 Infrastruc- are growing and the education fund- financing and the P3 portion of the in- ture for Jobs and Prosperity Act), and ing formula continues to fail Ontario’s frastructure bank start with the same commitments to community bene- school system. $20 billion, as laid out in the fiscal up- fits agreements, these dollars can be Now that the deficit dragon has al- date. The P3 approach will have high- spent even more effectively. most been slayed, there is pressure er projected ancillary fees and risk premiums, but it primarily results in dramatically higher financing costs Ontario spending on public services has fallen behind of $5.4 billion compared to $400 mil- 138,015 lion using the traditional government Actual spending ($millions) 134,356 financing model. Spending needed to keep up with In the aggregate, taking the P3 inflation and population growth ($millions) 130,807 131,700 route on the $20 billion of private cap- ital in the infrastructure bank will re- 127,602 127,700 sult in an additional projected cost of 125,219 125,300 $6.2 billion for cities. In other words, 121,491 122,400 roughly a third of the government’s in- frastructure money will be wasted on 118,225 higher interest costs over the life of 115,792 the (privatized) projects it is funding.

DAVID MACDONALD IS A SENIOR ECONOMIST AT THE CANADIAN CENTRE FOR POLICY ALTER- NATIVES AND THE CO-ORDINATOR OF THE AL- TERNATIVE FEDERAL BUDGET. FOLLOW HIM ON TWITTER @DAVIDMACCDN. 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

5 from the right to maintain austerity MOLLY MCCRACKEN | MANITOBA in order to tackle the province’s debt. But, as I argued in my CCPA report, No Crisis on the Horizon: Ontario Debt, Tax changes will not 1990–2015, there is no need to pan- ic. The best way to reduce the debt- reduce poverty to-GDP ratio — the one indicator that matters — is to keep the economy on a strong footing. he Manitoba government is in- put much more money on the tables Increasing the money flowing into creasing the basic personal ex- of high-income earners than those the government’s coffers is another Temption (BPE) — the floor at with the lowest incomes in the prov- way to maintain public services and which we start paying provincial tax- ince, as we can see in the chart. keep Ontario finances moving in the es — under the auspices of reducing To help our office with this research, right direction. The province needs poverty. It won’t work. In fact, it’s easy CCPA economist David Macdonald di- to take a strong stance in its negotia- to see why the changes are counter- vided all families in Manitoba into de- tions with the federal government to productive. ciles (10 units) by income level. Those secure increased health transfers and The Progressive Conservatives in the lowest decile (families earning funding for other public services. promised during the last election to between nothing and $14,718 annually The time has also come to face the bring Manitoba’s BPE, currently $9,134 before taxes) will save on average $17 a elephant in the room: after a two-dec- (the 4th lowest among Canada’s 10 year once Manitoba’s BPE is raised to ades tax cut frenzy, Ontario has got a provinces), “towards the national av- the national average. Those in the sec- revenue problem. Those tax cuts were erage within our first term.” Raising it ond lowest decile (earning between politically appealing back when eco- would provide a miniscule amount of $14,719 and $21,953 per year) will save nomic growth was in the 4–5% range tax relief to low-income earners, but $68 a year, and so forth. (the late-1990s and early-2000s). deprive the government of revenue Those at the highest income de- But those days are behind us — slow that might otherwise go toward pov- ciles stand to benefit the most from growth is Ontario’s reality. erty reduction programs. an increase in the BPE. The top 5% of In a 2015 report for the CCPA, Kaylie Manitoba Finance estimates that families will save on average $553 a Tiessen outlined options Ontario has increasing the BPE by $1,000, as or- year in taxes. The next highest 5% will for increasing revenues to pay for the dered in the 2016 provincial budget, save $517, and those in the 9th decile services we need. They included: will cost the government $78 million will save $454. annually in lost tax revenue. Bringing Increasing the BPE clearly puts Reversing the 2.5 percentage point ͸ the BPE up to the national average of much more money in the pockets of reduction in the corporate income tax $11,066, as promised, will be doubly Manitoba’s wealthy and does little for that took place in 2009. That could expensive: $150 million will be wiped low- to moderate-income earners. In- raise over $2 billion in revenues, and from future budgets, with no plans to creasing the BPE is therefore a blunt it would still leave Ontario with lower find that money elsewhere. instrument that least affects low-in- corporate income tax rates than com- The change is supposed to “put come Manitobans. parable jurisdictions. more money on the kitchen table,” ac- Why is this the case? Manitobans ͸ Taking up the room in the HST va- cording to the government. But it will pay a tax rate of 10.8% on the first cated by the Harper government’s cut $31,000 of earned income, 12.75% on to the GST. Increasing sales taxes and the next $36,000 and 17.4% on income the sales tax credit (to offset regressiv- Decile Pre-tax income Avg. tax savings/family over $67,000. Increasing the BPE ity) would do some very heavy lifting. 1 <14,718 $17 means middle- and higher-income families are eligible for more tax cred- Looking at closing more tax loop- ͸ 2 14,719–21,953 $68 its, which reduces tax payable and rev- holes (Ontario made a start in last 3 21,954–29,974 $158 enue earned by the province. year’s budget), which would increase The Manitoba government is also revenues, fairness and simplicity in the 4 29,975–40,611 $199 planning to index these income tax tax system all at the same time. 5 40,612–51,835 $255 brackets to inflation (estimated for It’s time for the Wynne government to 6 51,836–66,598 $304 our purposes at 2%). Like with the take advantage of existing room in key 7 66,599–84,855 $369 higher basic amount, raising the tax tax revenue streams — and to truly de- 8 84,856–106,856 $413 brackets by inflation saves nothing for liver on her promise to be an activist those earning below $31,000 a year. government. 9 106,857–142,824 $454 But it will cost Manitoba $12.8 million

SHEILA BLOCK IS A SENIOR ECONOMIST AT THE 9.5 142,825–180,658 $517 in forgone tax revenue in 2016-17. CANADIAN CENTRE FOR POLICY ALTERNATIVES’ 10 180,659+ $553 The 2016 budget started by indexing ONTARIO OFFICE. FOLLOW HER ON TWITTER @ the BPE to inflation, which means the SHEILA_M_BLOCK. All $277 basic amount will go up from $9,134 6 to approximately $9,292 starting in SARAH SHERIDAN | BRITISH COLUMBIA 2017. The 2,770 low-income Manito- bans taken off the tax roll by this in- crease will save only $16 per year, not Affordable housing even enough for a box of diapers. This change will cost Manitoba $11.6 mil- crisis hitting seniors lion in forgone tax revenue in 2016-17. The new government did not in- crease the minimum wage in 2016. t may be hard to believe, but Statis- already a steep cost for low-income Had it done so, even modestly to ac- tics Canada data show 52% of sen- renters, once evicted these tenants count for inflation, the change would Iior renters (65+) in Metro Vancouver will join the growing masses searching have put $400 “on the table” for this spend 30% or more of their monthly in- for a safe and affordable place to live. same group — 20 times the benefit of come on rent, and 21% spend half or Low-income seniors evicted from af- a higher BPE for low-income earners. more. How are low-income seniors ex- fordable rental apartments have few Make Poverty History Manitoba pected to survive? options. Even if you qualify for social (MPHM), a broad-based coalition that A recent Vancity Credit Union report, housing the waitlists are long. In Met- works closely with marginalized Man- Rent Race: The Growing Unaffordability ro Vancouver there aren’t many op- itobans, recommends increasing the of Rent in Metro Vancouver, calculates tions beyond living on the street. And minimum wage to $15.53 an hour to the average monthly market rent in in the city, single-room-occupancy bring minimum-wage workers above Metro Vancouver to be $1,144, which is hotels, originally built as temporary the poverty line. Based on research considerably higher than the $765-per- housing, are now permanent homes and consultation in the CCPA report month maximum ($825 for a couple) of- for many seniors. In addition, city shel- The View from Here 2015, the coalition fered by the province’s Shelter Aid for ters have become a sort of placehold- is also calling on the province to make Elderly Renters (SAFER) program. er for people while they are on wait its new poverty reduction plan compre- Considering how little market rental lists for subsidized housing. hensive by acknowledging how child stock is available to low-income peo- B.C. has also seen an end to provin- care and child welfare, income, edu- ple, it is alarming that subsidies are not cial investment in independent social cation, employment and housing are keeping up with the real costs of hous- housing coupled with a shift to de- interrelated. MPHM and Hunger Free ing in our region. It’s also not surprising pendency on supportive housing. In Manitoba are calling on the province to see more and more low-income sen- the latter model, the provincial gov- to increase the basic needs and food iors forced into precarious living con- ernment partners with a non-profit en- budget for those on social assistance ditions and homelessness every year. tity that hires staff to monitor the front and make this money portable for those In 2016, Vancouver’s annual home- desk, acts as security for the building, moving off assistance to paid work. less count found 204 people (18% of and sets and enforces its own rules, On tax policy alone, if the goal is tru- the homeless population) over the age such as requiring guests to sign in ly reducing poverty, there are much bet- of 55. Startlingly, homelessness among when they come to visit residents. ter tax options available. CCPA Mani- seniors in Metro Vancouver has in- Wait lists are incredibly long for sup- toba analysis by Errol Black and Shau- creased since 2008. The Metro Vancou- portive housing; it is clearly not the na MacKinnon found that adding a ver Homeless Count, which takes place right solution to Metro Vancouver’s ur- fourth bracket of 18.4% on taxable in- every three years, showed that the in- gent housing crisis. Additionally, limit- come above $94,000 and a fifth brack- crease in homeless seniors grew from ing the construction of new buildings et of 19.4% on income above $128,800 1% to 3% in 2011 and to 4% in 2014. to supportive housing assumes that would generate $50 million that could The housing crisis affects seniors residents require this type of support go to anti-poverty programs. throughout Metro Vancouver. The City when what many seniors really want To maintain public services and re- of Burnaby has been criticized recent- is the choice to live independently in duce poverty the province should scrap ly over its rezoning of the Metrotown an affordable home. plans to increase the BPE and introduce area, which is seeing many three-level Aging is challenging enough with- these new brackets instead. To do so walkup rental buildings being demol- out having to worry about housing would require changing Manitoba’s re- ished to make way for high-rise condo- security. If we want our senior popu- strictive balanced budget legislation, minium towers. This rezoning has dis- lation to age with dignity we must of- which is being opened up for review placed hundreds of people, including fer better support, including by fully this legislative session. There is enough low-income seniors, and it continues. investing in subsidized independent wealth in Manitoba and Canada so that The practice, called demovictions social housing. no one should have to live in poverty. (evicting people for the purpose of VANCOUVER HEALTH RESEARCHER SARAH SHER- MOLLY MCCRACKEN IS DIRECTOR OF THE CA- demolition), is forcing people out of IDAN HAS WORKED IN THE DOWNTOWN EAST- NADIAN CENTRE FOR POLICY ALTERNATIVES’ their homes, even pushing them out of SIDE FOR SIX YEARS AS A SUPPORT WORKER IN MANITOBA OFFICE AND A STEERING COMMIT- Burnaby, where one-bedroom apart- HOMELESS SHELTERS, DROP-IN CENTRES AND AS AN OUTREACH WORKER. SHE IS A MEMBER OF TEE MEMBER OF MAKE POVERTY HISTORY MAN- ments in three-level walkups rent for ITOBA. THE ALLIANCE AGAINST DISPLACEMENT AND AN about $800 per month. While this is EDITOR AT THE VOLCANO NEWSPAPER. 7 LESLEY FRANK AND families with young children and CHRISTINE SAULNIER | NOVA SCOTIA lone-parent families. The poverty for children under six years old was 27% (it was 22.5% for all children). Among Investment needed now lone-parent families, 50.4% lived be- low the AT-LIM (affecting 24,230 chil- to end child poverty dren), while 11.2% of children living in two-parent families (13, 230 children) lived in poverty. Children in families wenty-five years ago, Canada the minimum delivery of home heat- that depend on welfare are particu- adopted the United Nations ing oil, or afford child care fees (even larly vulnerable to poverty. Total wel- TConvention on the Rights of when they are subsidized). After hous- fare incomes in Nova Scotia have re- the Child. Among those rights are ing costs, there is often little money mained virtually flat since 1989 and that all children must have a place to left for food. are far below the poverty line. learn and play, and access to nutrition- Child poverty rates in Nova Scotia The response of the Nova Scotia al food and a safe home. Twenty-sev- have fluctuated since the 1989 House government to the report was that en years ago, the House of Commons of Commons resolution. But, like for the “numbers are out of date and unanimously adopted a resolution to Canada as a whole, the objective of misleading” because the data is from end child poverty by the year 2000. But ending poverty was never achieved. 2014. The minister for community ser- today, poverty rates are higher than According to the most recent data, vices also claims that much progress they were in 1989. The basic rights of 22.5% of Nova Scotia children — one has been made since then. But the a second generation of children there- in five — lived in poverty in 2014 (in only significant policy change in the fore continue to be violated. families with incomes below the af- past two years, which may actually Child poverty and family poverty ter-tax low income measure), which lift some families up out of poverty, is cannot be separated. Statistics on was 24.3% higher than 1989 levels. the federal government’s new Canada the first are based on the percentage These and other findings are re- Child Benefit (CCB). of children that live in families with corded in a child poverty report card Child poverty in Nova Scotia would income below a particular threshold. issued annually by the CCPA and be 32.5% if not for federal transfers, so But poverty is not just a measure of Campaign 2000. For the first time in there are hopes the CCB will have a income: it is a social condition that 2016, the report card included data for similar effect. Still, by the federal gov- manifests in a multitude of ways in smaller geographic areas in the prov- ernment’s own numbers, only a quar- daily family life. Daily struggles to stay ince. Child poverty rates range from a ter of those children currently living in afloat lead to social exclusion, high low 5% in Hammonds Plains (about 10 poverty will be lifted above the poverty levels of stress, and negative health km northwest of Dartmouth) to 75.6% line by the program (which is also not outcomes for both parents and chil- in Eskasoni on Cape Breton Island. indexed to inflation until 2020). dren. Six communities have child poverty We hope we do see significant pro- Parents struggle to make lunches rates over 30%: five are in Cape Bre- gress in reducing child poverty in the for their children, pay for school sup- ton (Glace Bay, New Waterford, North years ahead, even if the provincial gov- plies and fees, support their extracur- Sydney, Sydney Mines, and Eskasoni) ernment can claim little of the credit. ricular activities and sports, and, at and the other in Yarmouth (41.8%). Unfortunately, the signs are not good this time of year, buy winter coats and This year’s report card also shows for Nova Scotia. The 2016 Hunger- boots. It is difficult for many parents to that poverty rates vary depending on Count report from Food Banks Cana- keep vehicles in working order, pay for family type, and are higher among da showed the province experienced the highest increase (+20.9%) in num- bers of people served over the past Child poverty rate, Nova Scotia year, and that 30.4% of users were children. 26% We don’t need to wait for the next 23% poverty report card to know that much more federal and provincial in- 18% vestment in families and children is needed now.

LESLEY FRANK IS ASSOCIATE PROFESSOR OF SOCIOLOGY AT ACADIA UNIVERSITY, A CCPA RE- SEARCH ASSOCIATE AND THE AUTHOR OF THE NOVA SCOTIA CHILD AND FAMILY POVERTY RE- PORT CARD. CHRISTINE SAULNIER IS THE NOVA SCOTIA DIRECTOR FOR THE CCPA. 1989 2000 2014

8 as to examine mandatory voting and online voting.” 12,000 Half Number of Canadians Number of participants 6 involved in further town in the ERRE’s online Number of months the hall discussions organized consultation who agreed special committee on by political parties, which (53.5%) Canada’s electoral Index electoral reform (ERRE) ranged in participation system should favour Canada’s last unfair spent consulting this year from seven to 253 people. the following outcome: election, maybe on reforming how we vote “no single political party Compiled by for federal governments, 67% holds the majority of seats the Monitor including a three-week Percentage of expert in Parliament, thereby cross-Canada tour hitting witnesses who thought increasing the likelihood 39.5% 17 municipalities in all a referendum on that political parties will Share of the popular vote provinces and territories. electoral reform would work together to pass won by the Liberal Party in be undesirable or legislation.” the October 2015 federal 196 unnecessary, according to election. Number of expert Fair Vote Canada. 5% witnesses the committee Top end of the Gallagher 55.6% heard over 57 meetings. 13 Index, named after Irish Share of seats in the Number of previous political scientist Michael House of Commons won 88% federal and provincial Gallagher (and cited in the by the Liberal Party (184) in Percentage of these commissions since ERRE report as useful), that election. witnesses who expressed a 1977 that have under which value an preference for proportional recommended moving electoral system is said to 2015 representation, according to a more proportionally be highly proportionate to The “last federal election to Fair Vote Canada. representative voting voting intentions. conducted under the system. This is in addition first-past-the-post voting 22,247 to provincial and local 12% system,” according to Number of Canadians experimentation with the Estimated Gallagher Index Governor General David who took part in a single transferable vote value of the 2015 federal Johnston in his Speech multiple-choice online (STV) and other alternative election result, according from the Throne that consultation between voting methods since to Byron Webber Becker of year, repeating a Liberal August 19 and October 1921, when an earlier the University of Waterloo. election promise to 7, 2016. The government parliamentary committee introduce legislation received a further 567 found FPTP was not Zero enacting electoral reform written submissions and appropriate where more Number of political points within 18 months of more than 1,000 pieces than two parties contested scored by Maryam Monsef, forming a government. of correspondence from for election. minister for democratic organizations, academics institutions, when she 4 and citizens. 18 ridiculed the Gallagher Number of OECD nations Registered political parties Index and the work of that use FPTP, sometimes 71.5% in Canada as of December the electoral reform called a “winner takes all” Percentage of Canadians 2016. committee in the House of system (Canada, Mexico, who took part in the Commons on December 1. United Kingdom and the ERRE’s online consultation 5 United States). who strongly agreed Number of registered May 2017 (59.1%) or agreed (12.4%) parties who elected MPs Self-imposed deadline 5 with the statement, to the House of Commons for the government to Number of months into “Canada’s electoral system in the 2015 federal election introduce legislation the new Liberal mandate should ensure that the (Liberal, Conservative, to reform the election that a committee was number of seats held by a NDP, Green and Bloc process, a deadline Liberal struck “to identify and party in Parliament reflects Québécois). MP Mark Holland told the conduct a study of viable the proportion of votes Hill Times in December the alternate voting systems it received across the government is planning to to replace the first-past- country.” meet. the-post system, as well

SOURCES Elections Canada; Fair Vote Canada; “Strengthening Democracy in Canada: Principles, Process and Public Engagement for Electoral Reform,” report of the all-party special committee on electoral reform; “Going deeper into Canada’s 2015 federal election results,” CBC, October 21, 2015; “Electoral Reform: Gallagher Index,” CPAC, December 1, 2016; “‘A dating website designed by Fidel Castro’: Opposition blasts Liberal electoral reform survey,” CBC, December 6, 2016; Vox Pop Labs; MyDemocracy.ca; “Feds aim to get electoral reform bill tabled by May, despite ‘incredibly cynical’ response to committee report,” Hill Times, December 12, 2016. 9 ILLUSTRATION BY REMIE GEOFFROI TRUMPED

MORE CCPA PERSPECTIVES ON THE U.S. ELECTION: WWW.BEHINDTHENUMBERS.CA / WWW.POLICYNOTE.CA Scott Sinclair an all-out attack on agricultural supply management, further inroads on data privacy and new demands to lock in A trade gamble Canada can’t win U.S. “energy security.” Canadian corporate voices are al- Trade should be the least of our concerns with a Trump presidency. ready lining up to back a NAFTA rene- But NAFTA renegotiation could soon put the Trudeau government’s gotiation that many see as an oppor- tunity for further gains for their sector, commitment to inclusive prosperity to the test. or to “bring the deal into the 21st cen- tury,” using their favourite but highly deceptive catchphrase. The Trudeau government — which telegraphed its ike many of you, we were caught off Promised corporate tax cuts and openness to renegotiation immediate- L guard by the Trump victory. We are breaks for the wealthy will worsen al- ly after Trump’s win — will no doubt be now faced with a right-wing, plutocrat- ready high levels of inequality and in- primarily focused on maintaining mar- ic U.S. government championing a na- evitably lead to cuts in public servic- ket access and protecting the invest- tionalism laced with racial and ethnic es, which are disproportionately re- ment interests of the now more global- overtones. lied upon by the poor, low-waged work- ly oriented Canadian corporate sector. Trump’s ugly style of campaign- ers, minorities and the middle classes. Progressive Canadians, in close ing — especially the scapegoating Many of Trump’s nominees for cabinet concert with their U.S. and Mexican of immigrants and minorities — is posts are billionaires (see next page); allies, need to quickly contest this re- already tainting Canadian politics. their approval by Congress will con- newed NAFTA push and put forward Hopefully these tactics will not find centrate power directly in the hands an alternative agenda for inclusive fertile ground here, but they must be of the rich in a manner not seen since prosperity. They could start by drawing condemned unequivocally. the late-19th century. public attention to the most destruc- Yet, despite all the post-election The renewed influence of Wall Street tive elements of NAFTA, such as its in- hand-wringing among Canadian eco- coupled with deregulation could lay vestor–state dispute settlement pro- nomic elites about Trump’s protection- the groundwork for a future financial cess — the one TransCanada is using ist views, an upheaval in Canada-U.S. crisis, which poses a far greater threat to sue the U.S. government for US$15 trade relations is probably the least of to the health of the Canadian and glob- billion for abandoning the Keystone our worries. al economies than perennial bilateral XL pipeline. If President-elect Trump actually trade irritants such as softwood lum- But frankly, it is hard to envisage follows through on his pledges of a ber or beef exports. There will of course meaningful ISDS reforms after Exx- US$1-trillion infrastructure program, be increased bilateral trade frictions, on Mobil CEO Rex Tillerson — a big deep tax cuts, and sweeping environ- as there also would have been if Hillary booster of corporate rights in trade mental and financial deregulation, it Clinton had won. But there are, as yet, deals — is appointed Secretary of might even temporarily boost the U.S. no convincing reasons to anticipate a State. Likewise, with the impending economy and Canada-U.S. trade flows. major trade disruption. Keystone approval, NAFTA’s energy But any “Trump boom” would be short- One silver lining to the otherwise provisions, which lock in the U.S. share lived, and set the stage for severe eco- devastating Trump victory is the col- of Canadian exports, take on a more logical and financial problems in the lapse of the TPP. Whatever Trump’s log- ominous tone. near future. ic for opposing it, the demise of this Canada should be prepared to walk The Trump administration is likely imbalanced treaty, with its expand- away from the NAFTA negotiating ta- to pull the U.S. out of the Paris Agree- ed investor–state dispute settlement ble, even if that means Trump makes ment, lift Obama’s limited curbs on (ISDS) mechanism, supercharged in- good on his threat to pull out of the coal-fired plants and hamstring the tellectual property rights, and tooth- agreement. While such a step would Environmental Protection Agency. less labour and environmental protec- be disruptive for trade and the North These steps will all contribute to a tions, is most welcome. But just like American economy, it would not be backsliding on climate change. There zombies, it’s hard to keep slain trade disastrous. The two countries could will be negative impacts on Canada, deals buried for long. conceivably revert to the Canada–U.S. where climate change skeptics and A major policy plank of the Trump FTA, which would maintain duty-free the energy industry have already been administration is to renegotiate NAF- access but without NAFTA’s ISDS bag- emboldened by Trump’s win. TA. Given Republican control of Con- gage. In any case, much of Canada’s While Trump’s rhetoric against gress, this would probably mean in- access to the U.S. is locked in by WTO the Trans-Pacific Partnership (TPP) tensified TPP-plus demands directly rules, with average U.S. tariff levels and NAFTA helped get him elected, targeting Mexico and Canada: more bound at just 3.5%. his core economic policies will hurt restrictive, U.S.-friendly intellectual Those hoping for genuine reform blue-collar workers even more than property protections sought by Big and an alternative model of North the trade deals he’s been attacking. Pharma, Silicon Valley and Hollywood, American regional integration should 11 already be looking beyond Trump’s being driven to leaders like Trump by tal protection — something that might tenure. Just as grassroots resistance “the fact that globalization doesn’t inspire those who rightly feel that in- needs to be renewed, the organizing seem to be working for the middle tensified NAFTA-era integration has and visioning for a post-Trump era class, for ordinary people.” You would left them further behind economical- should begin now. think he’d be open to a positive, ly and with less control over their lives Prime Minister Trudeau told the post-NAFTA agenda for North Amer- and futures. Guardian U.K. newspaper at the end ica that is based on shared prosperi- of 2016 that he worried people were ty, economic fairness and environmen-

Kate McInturff Who’s afraid of Hillary Clinton?

ere is something I will never under- in power, but also placed the blame for in which Trump supporters sported H stand. Why are (some) men so afraid that fear on the woman herself. T-shirts bearing the slogan “Kill the of (some) women having (some) pow- If only Clinton were nicer. If only she B**ch.” In a country where one in three er? Men make up the majority of elect- weren’t so, I don’t know, bossy. Smart. female homicide victims are killed by ed officials in Canada (74% of MPs), in Experienced. I mean, it’s ok to be ex- their spouse. the U.S. (80% of Congress) and around perienced, but, you know, don’t brag Thanks goodness things are so the world for that matter. They make about it. much more civilized up here in Can- up the majority of CEOs of major cor- Nasty woman. ada. porations. They hold the majority of All of this occurs in the context of Oh wait. decision-making positions in the me- a campaign in which the other (male) Just last month, Alberta MLA San- dia. candidate is on record joking about as- dra Jansen offered examples of some When Hillary Clinton earned the saulting women. In a country where, of the abuse she is regularly subjected nomination of her party, the fact of her according the Centers for Disease to as a woman holding power in public, ascendance to this position was so in- Control, one in five women will be sex- including “traitorous bitch.” conceivable that newspapers across ually assaulted in their lifetime. This While Trump bragged about grab- the United States ran photos of…wait occurs in the context of a campaign bing women “by the p***y,” MP Mi- for it…her husband. When Clinton first chelle Rempel reported “my ass be- announced her bid for the presidency, ing occasionally grabbed as a way to Time magazine’s cover featured a giant shock me into submission.” high-heeled foot crushing a tiny little While Trump weathered a storm of be-suited man. Poor little guy. assault allegations, female politicians Clearly, one more woman in office made public some of the threats of was going to tip the balance of power sexual assault they receive on a reg- between men and women complete- ular basis, like the tweet former MP ly. Her agenda was almost certainly to Megan Leslie received after she post- CRUSH THE MEN. ed HER CHRISTMAS CARD: “Nice to This goes some way toward explain- know you know how to spread your ing why Hillary Clinton’s campaign legs. What else can you do?” was beset by cries of “she needs to be Here’s what I’m scared of. A world more likeable” and “she just isn’t relat- where a man can brag about assault- able” — as if she were posting a profile ing women and be elected president. on OKCupid, not running for president A world where a woman brags about of the United States. her impact on public policy and is sub- Much has been written about the jected to violent harassment. A world mobilization of fear in the recent U.S. where simply pointing that fact out will presidential election. But the fear of invite more of the same. women in power was mostly masked Nasty indeed. as an ostensibly legitimate discussion of Clinton’s personal appeal to voters. This performed the neat trick of not The author at CCPA’s only legitimating the fear of a woman national office in Ottawa. 12 nti-establishment voters in SECRETARY OF STATE the United States who chose ATrump on November 8 got a Rex Tillerson rude awakening from the incoming president’s nominees for top- Tillerson is the CEO and chairman level jobs in the new Republican of oil multinational Exxon Mobil, administration. If these people are not considered part of the power one of the top 10 most valuable and elite, the concept has no meaning. profitable corporations in the world, Trump’s choices also foreshadow where he’s worked for 41 years. He is another round of corporate paid about US$30 million every year deregulation in the financial, and is worth an estimated US$150 education and energy sectors, and in consumer protection generally. million. -Hadrian Mertins-Kirkwood

COMMERCE SECRETARY TREASURY SECRETARY Wilbur Ross Steven Mnuchin Ross is the chair of private equity firm Mnuchin is a former Goldman Sachs WL Ross & Co. The investor is known banker and hedge fund manager. He for buying struggling companies joined Trump’s campaign as chief and “restructuring” them — usually fundraiser in May 2016 and raised by breaking unions and laying off more than US$169 million, for which workers, a practice for which he is the treasury position is widely viewed known affectionately as the “King of as compensation. Mnuchin is worth Bankruptcy” by admirers and a “vulture” US$40 million himself. by critics. Ross has an estimated net worth of US$2.9 billion.

EDUCATION SECRETARY ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION Betsy DeVos AGENCY (EPA) DeVos is a billionaire religious activist Scott Pruitt who has campaigned for decades for the privatization of the public Pruitt is the climate-denying education system. Her family, which Oklahoma attorney general who includes the co-founder of the Amway has twice sued the EPA over its pyramid scheme, is valued at US$5.2 environmental regulations. He has billion. strong ties to the energy industry he is now tasked with regulating.

13 reductions as the best “Traditional banks are matters for affordability means to address the turning them down for is a clear takeaway from downturn, while 30 states credit requests, they’re this research as federal, adopted varying degrees making it hard for provincial and territorial of expanded public them to cash cheques governments work toward spending,” he writes. or secure something a national framework for “Surveying the results of as basic as overdraft early learning and child New from these divergent responses protection — services care.” to the economic recession that are readily extended Friendly is also a co-author, the CCPA in the United States, to higher-income bank with Lynell Anderson and we see that states that clients,” says Joe Fantauzzi, Morna Ballantyne, of an adopted an expansionary a master’s candidate in Alternative Federal Budget fiscal policy were able to public policy at Ryerson technical working paper, pull themselves out of University who analyzed The futility of released by the CCPA in recession sooner, while the survey results for austerity early December, on the experiencing less of the the CCPA. “Low-income need for universal child he instinct of negative economic impacts bank customers face a care in Canada. Despite governments across the of the recession.” double standard in the T some initiatives in a political spectrum when traditional banking world. Rather than restoring number of provinces, child faced with economic That’s why the majority growth, austerity at care across Canada remains contraction has been to cut of survey respondents this time will have unaffordable, unavailable public spending as a means said they turned to high the perverse effect of and inconsistent in quality, to reduce deficits and interest shadow banking prolonging economic the report finds. restore growth. As CCPA– operators.” stagnation in the province, Saskatchewan Director In Child Care for Us increasing unemployment, Simon Enoch writes in a All, Friendly, Anderson exacerbating deficits new SaskNotes report, The and Ballantyne argue and hindering economic Child care fees Futility of Austerity, this that federal leadership, recovery. grow faster than instinct is shared by the inflation together with provincial/ provincial government of territorial collaboration in Brad Wall, which recently ince 2014, the CCPA working toward a long-term Payday or no way announced large spending S has provided an annual vision of a universal, high cuts in health ($63.9 for low-income snapshot of median quality, comprehensive million), education ($8.7 Ontarians parental child care early childhood education million) and social services fees — for infant, toddler and care (ECEC) system, ntario is home to more ($9.2 million). This is in and preschool care — in is demonstrably the best than 800 payday addition to funding and O Canada’s major cities. This way to ensure real early storefronts offering short- program cuts announced in year’s report, A Growing learning and child care term loans — more than the 2016 provincial budget Concern, finds that average options for families. half of the country’s entire that saw reductions to fees for child care spaces stock of such businesses. seniors’ and children’s drug have risen 8% in the past Many of these outlets plans, lower funding for two years, three times charge customers up No public gain to the Aboriginal court worker faster than inflation over to 500% in annualized selling Toronto program, the elimination of this period, and that wait interest. A new paper from Hydro funds for urban parks and lists for spaces are common CCPA–Ontario, Predatory clawbacks to some social across the country. Toronto council proposal Lending, analyzes findings assistance programs. to partially sell a long- from an ACORN Canada “Child care fees vary A held public asset could But the instinct to survey of its members to predictably across the turn the private sector’s cut during economic understand why many country based on provincial gain into consumers’ pain, downturns is actually the low-income people turn policy,” explains co- argues CCPA–Ontario worst possible course to alternative financial author Martha Friendly, economist Sheila Block of action, Enoch argues, services such as high- executive director of the in a new study. Selling looking to the recent U.S. interest payday loans. The Chidcare Resource and Off Toronto Hydro finds experience for evidence. majority of the survey’s Research Unit. “They are that if the City of Toronto 268 respondents said it’s lowest in provinces that “Since the start of the goes through with the because they are denied set the fees and higher Great Recession, 20 U.S. plan it will only end up adequate credit services in the cities that are states adopted varying ceding the control it has from traditional banks. market driven. That policy degrees of public spending over electricity prices, 14 hydro service reliability structure of their gardens between Edmonton and sands emissions cap, which and environmental to the floor coverings, Burnaby, British Columbia. allows a 40% increase stewardship over green chair arms and spaces If constructed, the project in bitumen production energy innovation in the for memorials, physical is expected to increase over 2015 levels. The face of catastrophic climate environments shape and oil tanker traffic off approval of Line 3 and the change. Block warns that reflect how care and life Vancouver’s coast from five likely construction of the Toronto residents could in nursing homes are to 34 shipments per month. TransCanada Keystone XL end up paying the price understood. They construct pipeline under the Trump “By approving the Kinder in the long term through limits and possibilities for administration will confer Morgan pipeline, Prime higher hydro rates, and residents, staff, families an 11% to 13% surplus Minister Justin Trudeau has the city would be left to and volunteers. Armstrong of pipeline capacity disappointed a generation clean up the mess while and Braedly hope readers over the National Energy and betrayed the rights and reckoning with a lost will use the information Board’s latest production title of Indigenous people,” opportunity to use a public in this book, which is forecasts under the Alberta said Shannon Daub, utility to lead the way on downloadable for free government’s oil sands associate director of the energy conservation. from the CCPA website, emissions cap — even CCPA–BC and co-director to contribute to these without Trans Mountain. of the Corporate Mapping environments. Project. “The decision puts New book on the fossil fuel industry’s long-term care interests ahead of the solutions CCPA–BC questions public’s and those of First approval of Kinder Nations.” new book by social Morgan pipeline A policy experts Pat David Hughes, a CCPA Armstrong and Susan t the end of November, research associate and Braedley, Physical A the federal government earth scientist, noted Environments for Long- gave a final green light to that existing pipeline and For more reports, Term Care, explores two controversial energy rail capacity is sufficient commentary and promising practices for projects, including Kinder to allow for planned infographics from the residential care and Morgan’s Trans Mountain production growth in CCPA’s national and nursing homes. From expansion plan to twin an Western Canadian crude provincial offices, visit their location and the existing pipeline running oil under Alberta’s oil www.policyalternatives.ca.

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VISIT WWW.POLICYALTERNATIVES.CA/GIVE TO DONATE APRIL 2017 15 The protest camp at Standing Rock JEREMY APPEL in early December. A reprieve for Standing DARK SEVIER (FLICKR CREATIVE COMMONS) Rock, a warning for Canada

hile many Canadians proval to drill under the Missouri River, the Kinder Morgan Trans Mountain “checked in” on Facebook forcing it to find another route, but the pipeline expansion, which will pump Wto Standing Rock Reserva- decision is subject to appeal and can Alberta tarsands oil to the coastal tion near Cannonball, North Dakota, be reversed by the incoming Trump ad- town of Burnaby, B.C., for shipping to to express solidarity with the Great ministration. Asia, and Enbridge’s Line 3 from Alber- Sioux’s protest against the Dakota Ac- “We’ve been able to greatly rattle ta to Wisconsin, means the Standing cess Pipeline, some of their compatri- the inevitability narrative that big oil Rock Sioux will soon have the opportu- ots went down to join the anti-pipe- continues to weave into the minds of nity to reciprocate in Western Canada. line struggle in what has become its the public,” Clayton Thomas-Muller, “Justin Trudeau needs to under- epicentre. the Stop-it-at-the-Source campaigner stand that we’ve faced tougher foes The battle pits the Sioux band, who with the global climate organization than him and we have removed them have set up a protest camp, and its 350.org, told the Monitor from Stand- from power,” Thomas-Muller, a mem- supporters against a militarized Mor- ing Rock in the wake of the U.S. army’s ber of the Mathias Colomb Cree Na- ton County sheriff’s department and announcement. tion, said. “His administration will bend the National Guard. The latter have In response to the potentially histor- to the will of the Indigenous rights and used mass arrests and force in an ef- ic decision, Standing Rock Sioux Tribal climate justice social movements. I fort to crush the movement fighting Chairman Dave Archambault II issued guarantee it.” Texas-based Energy Transfer Partners’ a statement expressing special grati- If it gets built, the Trans Mountain planned $3.8-billion, 1,900-km pipe- tude to “all of the other tribal nations expansion will increase an existing line that snakes across four states and jurisdictions who stood in solidar- pipeline’s capacity to 890,000 barrels from western North Dakota to Illinois, ity with us,” promising to return the fa- from 300,000, casting doubt over the threatening Indigenous heritage sites vour “if and when your people are in government’s climate change commit- and the drinking water below. need.” ments and vows to improve relations On December 4, the U.S. Army Corps Meanwhile, Prime Minister Justin with First Nations. of Engineers denied the company ap- Trudeau’s late-November approval of 16 “Even though it’s down in the Unit- chological tactics meant to demoral- ens of other protestors who were ar- ed States, our struggle as First Nations ize the demonstrators. “It’s the most rested after a police barricade was set is the same everywhere,” said Snook- peaceful place you’ll ever be in your on fire. As of November 3, they were ie Catholique of the Dene Nation. The life...but the Morton Country sheriffs back home in Prince George, B.C., but former CBC journalist and Northwest issued a press release saying that we will have to return to North Dakota un- Territories language commissioner had guns and pipe bombs and that less the charges are dropped. had just returned from her second there were shots fired,” a claim Settee U.S. Green Party leader Jill Stein and trip to Standing Rock in mid-Novem- emphatically denied. Democracy Now host Amy Goodman ber when she spoke to the Monitor. Protestors faced both state troopers were also arrested for protesting the “We’re all fighting to protect Mother and private DAPL security, Catholique DAPL on separate occasions. The ri- Earth and for a better, cleaner envi- told me, and it was often difficult to oting charges against Goodman were ronment, so that my grandchildren will distinguish one from another. She said dropped, while the criminal trespass have the experience I had as a child.” “a few bullets were fired” at a demon- and criminal mischief charges against Thomas-Muller said stewardship of stration she attended on her initial trip Stein had yet to be resolved when the the environment is an essential com- over the Labour Day weekend, which Monitor went to print. ponent of the Indigenous rights move- she suspects came from both the po- The Sioux had gone to court in Sep- ment. “Our livelihoods, our cosmology lice and security. tember to block the pipeline’s con- and our worldview are fundamentally Catholique vouched for the peace- struction, represented by the environ- tied to the relationship that we have ful nature of the protests, but said the mental law firm Earthjustice. Their re- with the sacredness of place,” he said. tension emerged as the standoff wore quest was rejected on October 11, “Environmentalism is, for us, a human on. On her first trip, the Lakota Sioux although the D.C. Circuit Court of Ap- rights issue.” were in charge. “They were the ones peals acknowledged that their ruling who were really putting it out there “is not the final word.” evin Settee, president of the Uni- that this was a peaceful protest. We Outgoing U.S. president Barack Oba- Kversity of Winnipeg Student Asso- do not want to lose any lives. We do ma had been mildly critical of the pro- ciation and a member of Fisher River not want to get into any kind of con- ject, saying it ought to be built along a Cree Nation, also made the trip down flict that is going to linger after every- different route, “to accommodate sa- to Standing Rock with two comrades body leaves.” cred lands of Native Americans.” Sen- in late August. He said part of the rea- She continued, “This time around, ator and recent Democratic presiden- son he went was to send a message to the Red Warrior camp tried to take tial candidate Bernie Sanders had writ- people back home “not to let the Unit- control. They were the ones who were ten an open letter to the president the ed States border divide them and stop really being aggressive and that was week before, calling on Obama to re- them from going south [to support not the original goal.” ject the project, as he had done with social movements].” (Thomas-Muller Catholique attributed the move- the Keystone XL pipeline. concurred, calling it a “false border.”) ment’s prominence, particularly com- But the surprise election of Settee said he sought to learn or- pared with other anti-pipeline strug- race-baiting climate change denier ganization tactics from the demon- gles, to social media. “It’s at the fore- Donald Trump, who now wants to pro- strators that he could apply to environ- front of media now, but it wasn’t when ceed with Keystone XL and is able to re- mentalist and Indigenous movements I was there in September. Our airwaves verse the decision to reroute the DAPL, back home. “Why is what they’re doing were being scrambled.” When demon- underscores the anti-pipeline move- so powerful?” he pondered. strators “got online for their livefeeds ment’s urgency, said Settee. “The gov- Settee and his allies were some of from camp, then it really took off.” ernment is going to be pushing these the first people from Winnipeg to make pipelines through as fast as possible.” it down to the protest. When crossing n late October, two University of Trump until recently owned be- the border, at around 2 a.m., they told INorthern British Columbia (UNBC) tween $15,000 and $50,000 in stock the guards they were going to a pow- medical students, Nicole Schafenack- with Energy Transfer Partners and be- wow, fearing that if they told them er and Katriona Auerbach, were arrest- tween $100,000 and $250,000 in Phil- they were going to Standing Rock they ed at the demonstration, according to lips 66, which owns a quarter of the would get turned away. the CBC, which prompted UNBC Pres- DAPL. A spokesperson for the new “Some people said they dealt with ident Daniel Weeks to issue a state- U.S. president told the media in early border guards who were support- ment defending their right “to take a December that Trump had sold his en- ive, giving them thumbs up,” he said, position, to exercise their rights to free tire stake in the former company, but noting that he doesn’t know anyone speech, to peacefully assemble, and to he would not comment on the latter. who was turned back, but many were develop and foster informed opinions “The more people that we have searched extensively. across a wide range of subject areas.” that organized, that are trained, that At Standing Rock, Settee said he wit- The students were charged with are on the frontlines,” Settee said, “the nessed police intimidation — erecting conspiracy to endanger by fire or ex- better chance we have for a sustainable cement barricades and checkpoints, plosion, engaging in a riot and main- future.” M for example — but also the use of psy- taining a public nuisance, as were doz- 17 DAVID MACDONALD The federal government spends more than $100 billion a year on tax loopholes. A shocking amount of that money goes to Canada’s wealthy one-per-centers. ANY OF Canada’s fed- The 2016 federal budget included as relatively progressive, since at eral tax expenditures (or several measures focused on limit- least half of their benefits go to the loopholes, as they’re often ing or closing regressive tax expendi- lower half of income earners. The Mcalled) are designed to en- tures including tax-free savings ac- remaining 59 loopholes are quite re- courage certain types of behaviour, counts (TFSAs) and family income gressive in that they provide more such as sending your children to arts splitting. Concerns about equity than half of their benefits to the top school or making a charitable dona- played a key role in this decision, half of the income spectrum. tion. They can also relieve the burden since the benefits of both tax policies Put together, the average bene- of some routine costs, as in the case went mostly to high-income earners. fit from tax expenditures is $15,000 of Canada’s tax deductions for union Ending or restricting these and oth- for the richest Canadians, but only dues and post-secondary education. er costly tax expenditures would sim- $130 for the poorest. Yes, low-income Other tax expenditures, such as Can- plify the tax system and expand gov- earners receive transfers as well, in- ada’s mineral exploration deduction ernment revenues. cluding child benefits, but these and the capital gains allowance, are My November 2016 report, Out of only amount to an average $1,100 a more targeted to wealthy investors. the Shadows, attempts to fill a data year — dramatically less than what While it may be tempting to think gap with respect to Canada’s tax sys- the richest get from loopholes. of one set of tax loopholes as progres- tem and to contribute to the federal In total, personal income tax loop- sive and the other regressive, based government’s current review of tax holes cost the federal government on the types of activities they target, expenditures. We knew these tax $103 billion in 2011, which is rough- this is not a helpful way to judge the loopholes were expensive, but not ly as much as all income taxes col- fairness of a tax or tax system. We who was benefiting the most. We sus- lected that year ($121 billion). It is also must instead look at which income pected most loopholes would be rela- not much less than what the federal groups benefit the most from a given tively regressive (i.e., they do not ben- government spends annually to pay tax expenditure. If high-income earn- efit low-income earners or the middle for the Canada Pension Plan, employ- ers are the big winners, the tax ex- class much), but the situation was ac- ment insurance, the GST credit, the penditure is regressive and contrib- tually much worse than we thought. universal child care benefit, the Can- uting to inequality; if low-income After crunching some numbers, I ada child tax benefit and the national earners take most of the benefit it is found that only five of Canada’s 64 child benefit supplement combined relatively progressive. tax expenditures could be described ($113 billion).

Working Income Tax BeneŒit $1,080

Non-taxation of Guaranteed Income Supplement and Allowance BeneŒits $115

Refundable Medical Expense Supplement $135

Non-Taxation of Social Assistance BeneŒits $160 LEAST REGRESSIVE LEAST CANADIAN TAX EXPENDITURES TAX CANADIAN Disabili‘y Tax Credit $675

COST TO 1 2 3 4 5 6 7 8 9 10 GOVERNMENT $0–$4 $4–$12 $12–$17 $17–$22 $22–$30 $30–$38 $38–$48 $48–$61 $61–$84 $84+ (Millions) BENEFIT BY INCOME DECILE 19 In other words, if the federal gov- WITB in 2011 was $944, and most of The second most regressive tax ex- ernment got rid of all tax expendi- the benefit is paid to earners in the penditure is the employee stock op- tures it would roughly double the middle of the income spectrum (peo- tion deduction, which costs the gov- amount of income tax collect- ple making $12,000 to $17,000 a year). ernment $740 million a year. About ed — money that could be redistrib- The most regressive tax expend- 99% of that money is disbursed to in- uted to those who need it most by en- iture, which comes with a cost to come earners in the top decile, and hancing existing social transfers or government of $975 million annual- 100% of that goes to the richest 1% creating new ones. ly, is pension income splitting. This of Canadians. In essence, there is no Recognizing this scenario is un- tax measure allows a couple to shift benefit from this tax expenditure to likely (RRSPs, which count as a tax up to half the pension income of the anyone making less than $215,000 a expenditure, are for better or worse higher-earning spouse to the lower year. a foundation of Canada’s private re- earner at tax time. The lower-earn- tirement savings regime), my report ing spouse would still pay tax on the recommends targeting annual feder- amount transferred but at a lower RECOMMENDATIONS al savings of 5% ($5.2 billion a year) by marginal rate. This transfer effect is The government could begin to close closing, capping or phasing-out Can- why the distribution is negative in this massive and opaque hole in our ada’s most regressive tax loopholes. deciles three through seven: lower tax system by taking the following For the record, the following charts earners will pay higher taxes as pen- measures: show Canada’s top-five most and sion income is transferred, but pre- 1. Include the income distribution of least regressive tax expenditures sumably net family taxes will be low- tax expenditures in government re- and their costs broken down by in- er. porting; come decile. Benefits from pension income The most progressive federal tax splitting are concentrated at the 2. Include the cost of tax expendi- expenditure is the working income very top, with 83% of the value of tures in the federal budget and fis- tax benefit (WITB), since 95% of its the expenditure going to the rich- cal updates; value is paid to the bottom half of est decile. In contrast with the oth- 3. Incorporate income inequality in Canadians. The WITB costs just er most regressive tax expenditures the federal government’s current over $1 billion a year, making it the there is a maximum benefit here of review of tax expenditures; and, as most expensive tax expenditure in $11,675 when $128,800 of pension in- mentioned above, this group. Canadians receive more come is transferred from a higher from the program as their income in- earner to a spouse with no income. 4. Target a 5% reduction ($5.2 billion) creases to a limit of $10,700 per year, While capped, this maximum benefit in annual tax expenditures by clos- at which point the benefit decreases is 10 times more generous than any ing regressive loopholes. M and eventually phases out. The maxi- of the five most progressive tax ex- mum value one could make from the penditures.

Divident Gross-Up and Tax Credit $4,145$4,145

Patial Inclusion of Capital Gains $3,800

Foreign Tax Credit for Individuals $740

Employee Stock Option Deduction $740 MOST REGRESSIVE MOST CANADIAN TAX EXPENDITURES TAX CANADIAN Pension Income Spli€ting $975 NEGATIVE VALUES COST TO 1 2 3 4 5 6 7 8 9 10 GOVERNMENT $0–$4 $4–$12 $12–$17 $17–$22 $22–$30 $30–$38 $38–$48 $48–$61 $61–$84 $84+ (Millions) BENEFIT BY INCOME DECILE 20 CLAIRE YOUNG Redistribution and inequality HOW REFORMS TO TAX POLICY COULD HELP CLOSE THE WEALTH GAP IN CANADA

2014 REPORT from the donald. His comments were more type of economic inequality in Can- CCPA called Outrageous than a rhetorical device: people do ada, and that a few possible changes Fortune documented the in- want change. Another report in to that system would have an imme- Acreasing wealth gap in Can- 2014, this one from the Broadbent In- diate positive effect. Some of these ada. Using data from Statistics Can- stitute and based on the same data, changes would affect or eliminate ada, CCPA economist David Macdon- surveyed Canadians on their views tax breaks that may appear, at first, ald demonstrated that for every new about the country’s wealth gap. It to be broadly beneficial for a very dollar of real wealth generated in the found that “the desire for a more eq- limited group of taxpayers. But if we country since 1999, 66 cents has gone uitable distribution of wealth holds are honest about who really benefits to the wealthiest 20% of families. As regardless of demographics or past most from these measures, and their a result, in 2012 Canada’s wealthi- political preferences, including those costs, I think people will agree they est 86 families had a combined net who voted for the Conservative par- are overdue for reform. worth of $178 billion, roughly the ty in 2011.” same amount of wealth held by the Clearly there is an appetite among e tend to think of taxes and the country’s poorest 11.4 million people. voters to do something about eco- Wtax system as being primarily “[M]any gasp at the fact that Can- nomic inequality. But do what? I ar- geared toward revenue generation. ada’s richest 20% of families take al- gue that Canada’s tax system con- That is, taxes are collected from indi- most 50% of all income,” wrote Mac- tributes to and exacerbates this viduals and corporations then spent 21 on government programs. In fact, our to two-thirds and finally to half in ey to invest in a home. The compar- tax system is meant to serve many dif- the year 2000.) ison with income tax is useful again ferent purposes, including redistrib- To see how this is preferential here. Tax-free profit on property is uting income and wealth in an effort treatment, consider that there is no not usually due to any particular ef- to reduce inequalities between rich way to avoid paying taxes on 100% of fort on the part of the taxpayer, es- and poor. For example, progressive your income. In other words, when pecially in metropolitan areas such marginal income tax rates — rates wealth creates wealth it is taxed as Vancouver and Toronto, whereas that go up at intervals depending on more generously than most people’s a person’s labour is fully included in how much you earn — are used to main source of income, their labour. their taxable income. ensure there is a more equitable dis- Each year, the federal government Consider also that the higher the tribution of disposable income than publishes an account of tax expendi- profits are from home sales and the there would be if everyone, regard- tures that details the value of tax rev- hotter the market, the more unlike- less of pay, were taxed at the same enues foregone because of tax breaks ly it is that lower-income earners will rate. on things like capital gains. It is a lot be able to buy in and one day realize But when it comes to wealth re- of money. In 2016, the cost to govern- the same gains. While many home- distribution (the distribution of fi- ment of taxing only 50% of capital owners like the capital gains exemp- nancial, property and other assets) gains is estimated to be over $6.3 bil- tion on principal residence sales, it is the tax system fails completely and lion. Contrast that amount with the worth discussing a cap on the tax ex- indeed exacerbates the wealth gap. modest $210 million in taxes not col- penditure. For example, would it not The main reason is that Canada has lected on social assistance payments. be reasonable to tax windfall profits an extremely low overall tax rate on While some capital gains are tax- (above $500,000) on more expensive capital (wealth). Until this issue is able, if only in part, many others are homes? This would serve a dual pur- redressed, the gap between the rich not taxed at all. A well-known exam- pose of cooling over-hot real estate and poor in Canada will continue to ple is the tax exemption for gains markets while letting low- and mid- grow. made selling a principal residence dle-income homeowners keep the tax An international comparison (your home). The policy of not tax- benefit. demonstrates this point. OECD sta- ing home sale profits is clearly meant tistics show that Canada lags far be- to encourage home ownership. It is nother significant exemption hind both the United States and the a popular exemption that can be ex- Afrom taxation relates to gains United Kingdom with respect to the tremely valuable to people of varying arising from the transfer of capital overall rate of taxation on capital. For incomes, especially when the real es- property to a spouse. This tax loop- example, Canada is one of only seven tate market is hot. It is therefore diffi- hole allows one spouse (a person who of the OECD’s 34 member countries cult to imagine any government will- is married or who is in a common-law that does not have some form of es- ing to end this tax break. relationship lasting at least a year) tate or gift tax, the most commonly But taken together with the other to defer taxes on the transfer of cap- used tool for taxing capital. exemptions for capital gains, there is ital property to the other during Combined with Canada’s non-tax- a problem here in the form of a large their lifetime and, importantly, also ation of capital gains arising from and substantially inequitable tax ad- on death. Taxes must eventually be the disposition of property (bonds, vantage going to those with the mon- paid when the spouse who receives shares, real estate and other valua- the property disposes of it or dies, but bles), the absence of an estate or gift overall the policy encourages people tax results in huge pools of wealth to keep wealth in the family, as a dis- being passed on, tax-free, from gen- position to anyone else would trigger eration to generation. This oversight an immediate tax liability. is not just expensive for the govern- The issue of preferential tax treat- ment, but it tends to widen the gap ment of spouses is complex: the idea between rich and poor in Canada. Canada has an that one should be able to move prop- extremely low erty within a relationship without ubject to certain exceptions, having to pay tax has its obvious at- S which I’ll address in a moment, if overall tax rate on tractions and rationale. But it is im- a taxpayer makes money disposing of capital (wealth). portant to note the class dimensions a capital property, that profit (the dif- of this feature of the Canadian tax ference between what it cost when Until this issue is system. you acquired the property and what redressed, the gap Many people believe it is to their you eventually sold it for) is consid- advantage to be taxed as a couple, ered a capital gain, only half of which between the rich and and that they will pay less tax than is taxable under Canadian tax rules. poor in Canada will they would if taxed as two individ- (In the past, three-quarters of the uals. That assumption is correct in capital gain was taxed, decreasing continue to grow. some cases, mostly affecting those 22 FIVE MOST COSTLY TAX EXPENDITURES

80% Credit for the basic personal amount $29.0 bil Net registered pension plan expenditure $16.1 bil Net RRSP expenditure $10.0 bil Non-taxation of capital gains on principal residences $4.7 bil 60% Dividend gross-up and tax credit $4.1 bil

40%

20%

1 2 3 4 5 6 7 8 9 10 $0–$4K $4K–$12K $12K–$17K $17K–$22K $22K–$30K $30K–$38K $38K–$48K $48K–$61K $61K–$84K $84K+ TOTAL INCOME DECILES

in middle to upper income brackets, removing the tax exemption for in- emption — will cost the federal gov- and mainly due to the intra-spousal tra-spousal transfers of capital prop- ernment an estimated $1.5 billion in tax-free transfer of capital. But cou- erty is a good place place to start. 2016. The tax exemption covers prof- ples with low incomes and little or no its from disposing of shares in a wealth cannot benefit from this tax ome dispositions of capital prop- small business corporation or certain break. Furthermore, these couples of- Serty take place on a completely farming and fishing property. ten pay more tax when taxed as a tax-free basis. One of the most ex- While the capital gains exemption couple than they would when taxed pensive tax loopholes in this cate- is meant to encourage entrepreneur- as individuals. gory — the lifetime capital gains ex- ship, it is but one of several big bo- One reason for this is because in- nuses linked to activities that already dividuals can lose the GST tax cred- benefit from significant income tax– it and, if they have children, some related breaks. Those who earn busi- portion of the Canada Child Bene- ness income enjoy many more tax fit when they are taxed as a spous- breaks than those who receive em- al unit. Those tax breaks come with ployment income, and several tax an income ceiling, based on aggre- breaks are already designed specifi- gated spousal incomes, above which cally to reduce the tax paid by farm- one can lose the benefit. This issue While many ers and fishers. was illustrated starkly when lesbians If we focus on the fairness of Can- and gay men were included as spous- homeowners like ada’s tax regime, and how effectively es for tax purposes. The result was a the capital gains it helps redistribute national wealth tax windfall for the government be- from top earners to those making cause couples with low incomes were exemption on lower incomes, we cannot forget tax now paying more tax than when they principal residence shelters such as registered retirement were taxed as individuals. savings plans (RRSPs), registered ed- If we are serious about redistribut- sales, it is worth ucation savings plans (RESPs) and ing wealth in Canada and removing discussing a cap on tax-free savings accounts (TFSAs). the current tax penalty for couples Taxes are deferred on RRSPs until with low incomes and little wealth, the tax expenditure. they are removed from the plan in 23 retirement, while capital gains in RESPs and CEO SALARIES TFSAs escape taxation entirely. There are tax policy reasons for encouraging AT RECORD HIGHS people to contribute to these plans. For exam- ple, a well-financed RESP can make paying for a child’s post-secondary education easy. But we Over the past 10 years, CEO salaries must ask ourselves who is taking advantage of these tax shelters and, more importantly, who have weathered economic storms, has no access to them because of their low in- but the trend is up, up, up! In 2015, come and lack of wealth. Contributing to RRSPs, TFSAs and RESPs total average compensation for Can- is dependent on having the discretionary in- ada’s 100 highest-paid CEOs hit a his- come available. Studies show, for example, that men contribute more than women to these sav- toric high of $9.5 million — 193 times ings vehicles, and those with high incomes save more than the average industrial more than those with low incomes. The Parlia- mentary Budget Officer has reported on how, wage in Canada. over time, foregone government revenues from TFSAs will represent a staggering pool of un- As per recent tradition, CCPA researcher Hugh Mac- taxable accumulated wealth — a process that in kenzie has calculated the precise moment in the New itself perpetuates inequality in Canada while Year when the average top-100 CEO will have taken impoverishing efforts at redistribution. home what the average worker will earn all year. Last As mentioned already, Canada is further limited in this respect by being one of the few year, that moment was 12:18 p.m. on January 4, the countries that does not levy an estate tax, suc- first official working day of the year. In other words, cession duties (tax on inheritances) or gift tax. by that point last January, Canada’s top-100 CEOs had The federal government ceded this field of tax- already pocketed $48,636, the average income in 2014. ation to the provinces in 1971, but eventually they dropped out, too. In 1993, the Ontario Fair Based on CEO pay data for 2015, reported in 2016, Tax Commission called on the federal govern- and the Statistics Canada average industrial wage for ment to introduce an estate tax, as exists in so 2015 ($49,510), the average top-100 CEO in Canada sur- many of Canada’s OECD contemporaries, but there have been no serious moves in that di- passed the average Canadian’s earnings this year at rection since then. 11:47 a.m. on January 3, the first working day. s long as Canadian tax breaks for capital This staggering discrepancy has become a high-pro- Agains remain as they are, the wealth gap file proxy for income inequality in Canada and other will continue to grow. While our income tax sys- countries. In his latest report, Canada’s CEO Pay Sun- tem is relatively progressive in the way it helps shine List, Mackenzie notes that in 1995 the average redistribute the national income, we need to get serious about the redistribution of wealth in pay of the best-paid 50 CEOs was $2,666,006, rising to Canada. Our record is woeful compared to oth- $14,341,897 in 2015 — an increase of 438% in 20 years. er countries. It is time to start removing some of our tax exemptions on capital property, and Sky-high CEO compensation does not necessarily to consider the use of an estate and gift tax re- reflect corporate performance, does not track GDP gime as part of any effort to redress econom- growth, and may even be destabilizing for the econo- ic inequality. M my at large. Mackenzie makes several recommenda- tions for bringing CEO pay under control, including a stronger role for shareholders in setting compensa- tion levels, higher taxation on top incomes, and elim- inating tax preferences for capital gains that encour- age bonuses paid in stock options and shares. -The Monitor

24 HADRIAN MERTINS-KIRKWOOD How closing tax loopholes could pay for a green economy

AX LOOPHOLES in Can- retraining to the 150,000 people em- This “plan” is hardly the most re- ada cost the federal govern- ployed in that sector might cost as alistic or efficient approach to emis- ment $103 billion per year in much as $15 billion (at $100,000 per sions reductions, and closing every Tforegone revenue, with most person), or $1 billion per year in our single tax loophole is neither benefi- of the benefits going to the wealth- scenario, but we could easily afford cial nor feasible (e.g., it would mean iest Canadians. What could you do it. ending tax-deferred registered pen- with that much money? If we really wanted to make an sion plans end eliminating the pro- For starters, you could eliminate impact we could totally electrify the gressive working income tax ben- post-secondary tuition fees. Then transportation system. The feder- efit). But it’s an illustration of just you could create a universal child al government could replace the 24 how ambitious we could be on cli- care program. And then a national million cars, buses and heavy trucks mate change with a significant in- pharmacare program. Heck, there’s on the road with new electric mod- jection of federal cash into Canada’s money left over. Let’s massively ex- els (at, say, an average cost of $30,000 low carbon transition. pand anti-poverty programs for chil- per vehicle) for $720 billion, or $48 bil- Ignoring many obvious logisti- dren, seniors and First Nations while lion per year for 15 years. It’s an out- cal hurdles, the measures outlined we’re at it. landish idea (not least because public above would reduce Canada’s GHG With $103 billion in new revenues, transit is a much better investment), emissions by well over 60% in just 15 the entire platform laid out in the Al- but we could still afford it. Electri- years, easily exceeding our 2030 tar- ternative Federal Budget could easi- fying the vehicle fleet would reduce get and putting us on a clear path to ly be implemented with money left GHG emissions by 23% and create our new 2050 target, while simulta- over. countless jobs in auto manufactur- neously creating hundreds of thou- So let’s ask a different hypothetical ing and supporting industries. sands of good jobs. question: if the federal government We still haven’t addressed build- And that’s without any form of had an extra $103 billion per year to ings, heavy industry, agriculture or carbon pricing, which would by it- invest in Canada’s fight against cli- waste, which are collectively respon- self drive emissions reductions and mate change, what could it be used sible for the remaining 40% of Can- enable new funding for climate ini- for? How far could we reduce the ada’s emissions. There are no quick tiatives. Coupling a strong national country’s greenhouse gas (GHG) fixes, so let’s allocate $35 billion per carbon price with a fraction of $103 emissions in, say, the next 15 years? year to a massive national retro- billion per year in new green invest- By my back-of-the-envelope calcu- fitting and innovation program to ments would be more than Canada lations, replacing all of Canada’s con- improve energy efficiency across needs to drastically reduce emissions ventional power plants (coal, natural the country. Besides reducing ener- in a very short time and ensure an gas, oil, etc.) with the equivalent gen- gy use, that investment would cre- equitable, inclusive and economical- erating capacity in solar and wind ate hundreds of thousands of well- ly productive outcome for everyone projects (at a 25/75 split) would cost paid jobs spread across every region in Canada. around $90 billion and reduce green- of the country. For Canada to get there, we first house gas (GHG) emissions by 11% rel- As the cherry on top, Canada could need to make the political choice to ative to current levels. Let’s double uphold its Paris Agreement commit- end business as usual and invest in a the sticker price to account for in- ment to provide meaningful climate greener future. Closing some of the creased electricity demand in the fu- financing to developing countries. billions of dollars in tax loopholes ture. Spread out over 15 years, that’s Collectively, developed countries going to the wealthy and investing just $12 billion per year in renewable have promised US$100 billion per the proceeds in climate initiatives is energy investment. year by 2020. If Canada generously a sensible place to start. M Completely phasing out the oil provided 5% of the total that would and gas sector would reduce Cana- be another $7 billion per year, which dian GHG emissions by 26%. Offering brings us up to $103 billion per year generous compensation and skills in reconstituted tax loopholes. 25 ROBIN SHABAN Takeovers and taxation THERE ARE WAYS TO TEMPER THE EFFECT OF MERGERS AND ACQUISITIONS ON INEQUALITY

F WE are interested in addressing removes a competitor from the mar- competition and generate few effi- the trend of growing wealth ine- ket. With less competitive pressure, ciencies. This finding is particularly quality in Canada, we should be the merged business can charge a shocking given stringent M&A laws Ipaying more attention to domestic higher price (or provide a lower qual- in the U.S. that do not permit a Cana- merger and acquisition (M&A) activ- ity product for the same price). With dian-style efficiencies defence. ity. These transactions are a unique less competition the merged business mechanism for generating wealth can make more money at the expense n my view, it is likely the profitabil- inequality and therefore one more of people with no choice but to pur- Iity of any given merger or acquisi- good reason why we should close chase the product at a higher price. tion is influenced by multiple factors, tax loopholes that primarily benefit Canadian regulators of merger ac- and to varying degrees. Regardless, the wealthy. tivity would likely tell you M&As are the two main mechanisms for gener- To provide some context, 2015 saw profitable solely because they gener- ating profit through M&As are culpa- $374.1 billion worth of M&As take ate efficiencies. In the interest of con- ble of generating inequality. place involving Canadian compa- sumer welfare, our government has If an M&A is profitable the share- nies, which made it the most active a regulatory system that is meant holders gain from that profit. To year for M&As in the last seven. Of to prevent M&As that are profita- own shares in a company requires this amount, about $102.9 billion (just ble because they reduce competi- surplus wealth (e.g., surplus income under a third) involved transactions tion. M&As over a specific size (val- not used for housing, food, education, between Canadian firms. To put it ue) require the approval of the Com- etc.). Shareholders therefore tend to another way, in 2015 Canadian busi- petition Bureau, and this tends to be be among Canada’s highest income ness owners who sold their business granted if the deal is not likely to sig- earners, but generally include those to another owner collectively earned nificantly lessen or prevent compe- who are wealthy enough to have revenue equal to about 5% of nomi- tition. In the words of a former di- savings. Profitable M&As therefore nal GDP. rector at the Competition Bureau, make the rich richer. How do mergers and acquisitions “the very fact that so few mergers More specifically, shareholders of generate inequality? I believe the are contested by antitrust author- the firm that is acquired (the “tar- best way to answer this question is ities [on the grounds of being an- get”) receive most, if not all, of the to discuss why M&As are profitable. ti-competitive] illustrates the prev- gains from an M&A. The number of On a theoretical level, there are two alence of cost savings in motivating target shareholders is generally small- main reasons for this. transactions.” er than the number of shareholders Firstly, the new merged business In fact, unlike most countries, Can- in the acquiring firm, so the wealth may be more efficient having com- ada makes special exemptions for generated by M&As is concentrated in bined the resources of two previous- mergers that generate efficiencies. the hands of a relatively small group ly existing companies, allowing it to According to the Competition Act, if of people. Executives at the merging make and sell products at a lower a merger will likely hurt consumers companies may also receive bonuses cost. In general, efficiencies include by reducing competition the merger upon completing a transaction. The any innovation, arrangement or en- will still be approved if the efficien- profit of the merged firm is then great- hancement directly resulting from cies surpass and offset any potential er than the sum of the profits of the a transaction that improves produc- harm. This exemption is called the “ef- two firms pre-transaction because it tivity and profitability. Creating ef- ficiencies defence.” has reduced its operating costs. ficiencies can be a good thing, theo- However, a fascinating working pa- M&As also create losers. In the retically, if they make the best use of per released by the U.S. Federal Re- case where a transaction reduces precious resources to create a higher serve in October provides a differ- competition shareholders profit by quality of life for citizens. ent perspective. It suggests that M&A extracting wealth from consumers Secondly, and less favourably, the regulation is, on the whole, ineffec- through higher prices (or by offering new business coming out of an M&A tive. In general, merged firms earn a lower quality product at the same may be profitable because the merger profit primarily through reduced price). Realizing efficiencies can also 26 AGGREGATE ASSET CONCENTRATION AND INCOME INEQUALITY, 

Correlation Coe icient=0.91

45% 2.4

40% Asset Concentration 2.2 Top 60 irms as a percent of the corporate universe 35% 2.0

30% 1.8

Personal Income Inequali y 25% Inveted Pareto-Lorenz Coe icient 1.6

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Chart taken from the CCPA report, Ascent of Giants: NAFTA, Corporate Power and the Growing Income Gap, by Jordan Brennan (February 2015). harm workers: laying off “redundant” marginal rates for this kind of in- of wealth through M&As — is in the staff post-transaction is very likely come significantly lower, but there interests of the overall health of so- the most common type of efficiency. are a multitude of tax expenditure ciety. Some efficiencies (e.g., layoffs) From a utilitarian perspective, soci- programs (i.e., tax loopholes) that re- create pressures on individuals, fam- ety is better off because, in theory, duce the effective tax rate on income ily life and Canada’s social safety net. labour will be redirected to a more from stocks and other investments. The links between poverty and high- useful purpose, i.e., fired workers will Some of the worst tax breaks re- er risks of illness — with the costs move on to other jobs where they are late to M&A profits: pension income this creates for health systems — are wanted. But this is no solace to work- splitting, the dividend gross-up, the well documented. ers facing shrinking average wages stock option deduction, and credit The architects of the Competition from new jobs created, as reported by for partial inclusion of capital gains. Act were very aware that in order for Statistics Canada this summer. A recent report from the CCPA, Out laws regulating business conduct to Even if M&A profits come from gen- of the Shadows, finds that in 2011 the be effective they require complemen- uine improvements in the merged government spent about $9.7 billion tary economic policy in other realms. business or its products/services we to pay for these four tax expenditures The intersection of Canada’s domestic should be concerned that people are alone, which benefit almost exclusive- M&A regulations and taxation policy adequately compensated for any ly Canada’s highest income earners. is an example of the need for policy hardship they endure. Likewise, while Admittedly, it would be difficult to synchronization, as alluded to in the it may be reasonable for investors to get an accurate estimate of the value 1969 interim report on competition expect a greater return on riskier in- of forgone taxes directly attributable policy. But clearly more work needs vestments, surely there are ways to to M&A activity. However, the CCPA to be done drawing the connections ensure the gains enjoyed by the rela- report clearly illustrates that our cur- between today’s expanding wealth in- tively wealthy are equitably distribut- rent taxation system is not compatible equality and existing Canadian policy. ed to those who lost out from the deal. with the goal of preventing the growth Do we need to reconsider Canada’s “ef- A progressive taxation policy could of wealth inequality due to M&A activ- ficiencies defence,” for example? be a reliable way to correct for the ity. No matter how you slice it, M&As The federal government committed wealth inequality generated from transfer wealth to the wealthiest indi- in its 2016 budget to reviewing Can- M&As. Unfortunately, Canada’s cur- viduals in our society, often at the cost ada’s tax system, including current rent tax system is not up to the task. of those with fewer means. tax loopholes, some of which relate Taxation of personal income My intention here is not to de- to business takeovers. This review earned from corporate profits is far monize all mergers and acquisitions, is a valuable opportunity to make a lower than it is for employment in- simply to point out a progressive re- measurable impact on preventing the come (as discussed elsewhere in this distributive tax system — to com- growth of inequality, including that issue of the Monitor). Not only are pensate for the upward movement generated through M&As. M 27 MARC LEE The case for a progressive property tax

N 1993, Glen Clark, then B.C. fi- the province, or about 2.5% of the effective form of taxation because nance minister, tabled a contro- total housing stock. Unfortunately, people cannot move their property to versial budget featuring a wide the property tax proposal triggered another jurisdiction to avoid the tax. Irange of tax changes. A one-point a political firestorm and was pulled Property tax rates in Metro Vancou- increase in the provincial sales tax off the table due to concerns about ver are already low when compared was the largest measure, tempered the potential harm to seniors living to other Canadian cities. by the introduction of a refundable on fixed incomes — the “property rich Making the property tax progres- sales tax credit. Most of the budget but cash poor” — who would not be sive would be a step toward the pro- measures increased taxes on the able to afford higher property taxes. gressive taxation of wealth (includ- wealthy and corporations. Up went In hindsight, the 1993 budget may ing financial assets), as recommend- the top marginal income tax rates well have been the most progres- ed by French economist Thomas for the top 8% of British Columbi- sive tax shift in B.C. history. Stung Piketty in Capital in the 21st Centu- ans, as did the general corporate in- by criticism of new taxes in gener- ry. Progressive property taxes have come tax rate. al, and the property tax in particu- precedents in Europe, including Den- Among the measures tabled was lar, the 1994 budget (tabled by a new mark, Finland and Germany. a progressive increase in provincial finance minister, Elizabeth Cull) in- What would a progressive ap- property taxes (officially called the stead promised a three-year tax proach to property taxes look like in “school tax,” but already de-coupled freeze. The NDP government would B.C.? Current practice is that proper- from actual education expenditures). never again attempt major reforms ty taxes are determined by the prod- On top of regular property tax, the to the tax system before losing pow- uct of assessed housing value multi- budget proposed a surtax with in- er to the B.C. Liberals in 2001. plied by a “mill rate” determined an- come-tax-like brackets of 0.5% on nually by municipal governments homes valued over $500,000, rising ore than two decades later, it is based on their expenditure needs. to 1% on homes over $700,000, and Mtime to revisit the idea of pro- But the property tax rate itself is a 1.5% on value over $900,000. gressive property taxation in light of flat percentage, unlike the income The budget reckoned this progres- house price inflation that has fuelled tax, with its multiple brackets. sive property surtax would only ap- a growing gap between homeowners The proposed surtax thresholds ply to about 25,000–30,000 “high-val- and renters. Economists consider from the 1993 budget are from a dif- ued single residential dwellings” in property taxes to be an efficient and ferent era. A modernized version proposed by Simon Fraser Univer- sity economist Jonathan Rhys Kes- ANNUAL PROPERTY SURTAX BASED selman calls for a property surtax of ON KESSELMAN’S PROPOSAL 0.5% on home values between $1 mil- lion and $1.5 million, 1% on home val- HOME VALUE KESSELMAN SURTAX ues between $1.5 million and $2 mil- lion, 1.5% on values between $2 mil- $500,000 $0 lion and $3 million, and 2% on homes worth more than $3 million. Kes- $1 million $0 selman’s proposal would allow home- owners to credit their previous year’s $1.25 million $1,250 B.C. income tax against the surtax, thus aiming it squarely at non-res- $1.75 million $5,000 ident owners and vacant properties. This framework, however, could be $2 million $7,500 more broadly aimed at taxing wind- $5 million $62,500 fall gains from housing price esca- lation; these are more like lottery 28 winnings than the proceeds of hard Like the GST credit, than $1.31 million. The recent surge in work. A progressive property tax on Canada Child Benefit Vancouver real estate prices pushed all properties, regardless of whether many new households over one or the owner resides in B.C. or not, would or old age security, both thresholds. For seniors, there is raise substantial revenues — about the new program an additional HOG amount, making $1.7 billion per year — in support of the total grant $845. an ambitious affordable/social hous- could be designed A fairer approach would be to elim- ing construction plan, while tackling to provide greater inate homeowner grants in favour growing wealth inequality. of an income-tested credit/transfer Kesselman’s proposal is just one of benefit to low- program. Like the GST credit, Cana- many possible examples of a progres- income households da Child Benefit or old age security, sive property tax regime. The thresh- the new program could be designed to old for the surtax need not start at $1 and then phase out provide greater benefit to low-income million of assessed value, and there gradually as income households and then phase out grad- is no reason why brackets could not ually as income rises. Unlike the cur- continue to increase above $3 million. rises. rent HOG, renters would be includ- Implementation of this approach ed in this system, as they pay prop- could occur through the provincial erty taxes indirectly through their portion of the property tax. Alterna- rent. (Sadly, the 1993 B.C. budget also tively, it could be implemented at a killed the “renters’ tax reduction,” an regional or municipal level, if given income tax credit for renters that legal authorization by the province. individuals are not taking unfair ad- used to complement the HOG.) For example, only half of the proper- vantage of the deferral program. B.C. already has multiple brackets ty taxes collected by the City of Van- Another means of ensuring fairness for the property transfer tax, but couver are for its own purposes, while would be to reform the current home- these only apply when a house is 38% goes to the B.C. government, an- owner grant (HOG), which goes to all sold, and it’s an unpredictable reve- other 9% to Translink and 2% to Met- qualifying homeowners regardless of nue source. Progressive property tax- ro Vancouver’s regional government. their income. The homeowner grant is ation would bring benefits every year costly to the provincial treasury: $814 by making the property tax system hat of the legitimate concerns million in 2014-15, representing about more fair to renters, reducing wealth W about fixed-income seniors liv- half of total provincial property tax inequality and improving the overall ing in homes purchased long ago? revenues from homes. The grant cur- equity of the tax system. B.C. already allows seniors to defer rently provides a $570 reduction in Finally, a progressive property tax paying the surtax until the proper- provincial property taxes for proper- system would raise substantial reve- ty is sold, so continuing this policy ties under $1.2 million in market val- nues in support of a much-needed af- would be sensible, perhaps with some ue, and is then phased out and elimi- fordable housing building spree over income test to ensure very wealthy nated for properties assessed at more the coming decades. M

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If you’d like to learn more, our Development Officer Katie Loftus would be happy to assist you with your gift planning. Katie can be reached at 613-563-1341 ext. 31829 or at [email protected]. ARMINE YALNIZYAN Redistribution through a basic income ARE WE BETTER OFF WHEN WE HAVE MORE INCOME, OR NEED LESS OF IT?

S THE Ontario and Quebec of life and making incomes and mar- tial. This was the approach taken by governments design their kets matter less. the Swiss in their June 2016 referen- versions of a basic income pi- That’s the learning from decades dum on a proposal to offer a universal Alot program, Canadians find of evolution of the welfare state, yet stipend worth about C$35,000 annu- themselves engaged in a policy ques- it is basic income — a centuries-old ally, costing about 30% of GDP. Vot- tion we haven’t grappled with in al- idea — which has galloped ahead on ers rejected the idea, with 77% voting most half a century: how should the the policy agenda in the past year. no. More likely, Canada’s approach welfare state evolve? Perhaps it’s not that surprising, as it will be narrower, focused on reduc- At the heart of the basic income de- is a familiar idea arriving in a particu- ing public expenditures or reducing bate is a discussion about what’s re- lar policy context. poverty — or possibly both. quired for everyone to have a basical- A poverty reduction focus could in- ly decent life. Implicitly, it embraces or the past 20 years or more, gov- clude the working poor or it could be a conversation about the importance Fernments put a priority on tax restricted to social assistance recipi- of markets in that pursuit. cuts as a way to put money in your ents, as is the case with a current pi- A market-based approach stresses pocket. A basic income does the lot project involving 250 people in the the importance of more money, which same thing using an income trans- Dutch city of Utrecht. One group in buys more freedom and choice in the fer instead. Like tax cuts, transfers that pilot will receive standard wel- market. A health-based approach of- can be broad-based or targeted; they fare benefits, while another will re- fers more public services that are not can provide large or small amounts. ceive more — about C$17,000 per year. contingent on income, which buys But like tax cuts, more money in your A third group can receive up to an more freedom from the market. pocket doesn’t change the status quo additional $2,000 if they volunteer. Governments improve lives by pro- in the market. Your cash, received as A fourth will receive the bonus but viding both income transfers and an individual, doesn’t create another lose it if they don’t volunteer. public services. A basic income may unit of affordable housing or create We could, alternatively, design a pi- improve lives by increasing income. one new child care space. lot project that prioritizes goals such But governments can also reduce the Just as the calculation of a living as increasing efficiencies and elimi- need for spending on certain goods wage depends on the range of public nating bureaucracy, thereby replac- and services by providing access to services available in a particular com- ing other forms of income support them regardless of income. munity, the amount of money need- with a single tax-based cash trans- For example, care provided by pub- ed to beat poverty or unleash poten- fer. Or we could use the exercise to licly insured doctors and hospitals tial depends on what governments do reduce costs, as Finland’s pilot pro- and taxpayer-funded public schools other than put money in your pocket. ject is expected to do. Current pro- dramatically reduce poverty and in- You need less cash if you’re not paying posals target 2,000 unemployed peo- equality. They address consumption as much out of pocket for child care, ple, providing 560 euros a month inequality, not income inequality. Nei- prescriptions, post-secondary educa- (about C$9,800 annually) whether ther puts a penny in your pocket, but tion, public transit and dental care. they work or not. both directly improve your individu- Basic needs are publicly subsidized to The critical questions regarding al health, opportunity and mobility. greater or lesser extents in each com- the design and cost of a basic in- Essentially, public services de- munity. Whether more cash or more come policy are not just how much commodify the basics, which helps support is more effective depends on for whom, but also what else is in those struggling with low income the objective being pursued. the mix? Welfare recipients in Cana- the most by far. The advantage of What’s the problem for which ba- da don’t get much cash, but most also improved public services is that they sic income is the solution? Basic in- receive some level of access to drugs, also make things cheaper for every- come is often portrayed as the rem- dental and vision care, housing bene- one (through scale and by eliminat- edy to a future where robots eat our fits and other limited support. ing for-profit exigencies and tax obli- jobs, or a way to liberate people from Of course, for virtually every in- gations), while improving the quality wage labour and unleash their poten- come class, the single biggest house- 30 hold budget outlay is housing. With- out rent control most of a basic in- come cheque would go in one pocket and out the other to pay the landlord, a complex redistribution scheme in- volving large amounts of taxpayer dollars being transferred to people least likely to need financial support.

ow much money could we be talk- H ing about? Across Canada, a uni- versal basic income of $10,000 a year would cost $350 billion (17.5% of GDP) minus any reduction or elimination of existing income transfers. A more modest and targeted goal of raising everyone’s income above the pover- ty line would cost an estimated $30 billion per year over and above ex- isting programs. Paying for this ba- sic income program would require taxpayers to chip in the equivalent of about four percentage points more in sales taxes across Canada. The ma- jority of Canadians would pay but see no benefit, as they are not poor. Even if a consensus developed around this kind of policy fix, how long would it hold? Contrast this with another possi- bility: the CCPA Alternative Federal Budget shows that for half the annu- al cost of a poverty-eliminating basic income ($15 billion) we could perma- nently expand the stock of affordable housing, child care and public tran- sit, as well as almost eliminate user costs for pharmacare, dental care and post-secondary schooling. After a decade, we would have greater ac- cess to more high quality, affordable ILLUSTRATIONS BY ALISHA DAVIDSON necessities of life — not just for the poor, but for everyone. er of it all — slowth (long-term slow That does not rule out progress Spend a little more and you could or no growth, the result of popula- and a better quality of life, but the offer free access to community and tion aging, technology and global in- new prosperity may be less a result recreation centre programming, ex- stability) — mean that while the sta- of higher income for the individu- panded mental health services, uni- tus quo is not an option, change will al than a higher social wage for all, versal access to low-cost internet and be difficult. through broader access and great- more legal aid. The net result: more As the largest cohort of retirees er quality of public services that en- participation, more mobility, more in history move into position, their hance our individual health and op- potential, more healthy people, more fixed or falling incomes add pres- portunity, and build a society’s health justice. Add to that list less political sure to keep the cost of living down. and resilience. It’s also a far easier sell friction and disenfranchisement, and Their anxiety is shared by workers in an era of slow growth. more solidarity. who can barely make ends meet. In The basic income exercise has fired Solidarity will be a key considera- this environment, the next genera- imaginations across the globe. We tion as the economy evolves. The ac- tion of workers in both the public should use this moment to experi- celerating automation of work; the and private sectors may find it diffi- ment with designs that can tell us if growing precariousness of jobs for cult to see wage gains despite poten- we’re better off when we have more newcomers and youth; and the moth- tially widespread labour shortages. income, or need less of it. M 31 KAREN FOSTER Basic income and seasonal work

SMALL BUT substantial around. Accordingly, the solution work. There are many reasons, but proportion of all jobs in Can- for many seasonal workers is to col- three stand out. ada are seasonal. By defini- lect employment insurance (EI) in the First, a basic income lacks the mor- Ation, the proportion fluctu- winter. al baggage of EI or social assistance. ates with the seasons, but the lat- The last published attempt to It’s a moral project, certainly, because est Statistics Canada data (CAN- measure the connection between EI it rests on the belief that everyone SIM, 2016) tell us that the number of and seasonal employment is likely deserves to live with dignity and se- workers in seasonal jobs can range outdated (from 2003), but it points to curity. But in the model of basic in- from a low of 214,000 in mid-winter to a strong correlation: 61% of all season- come I endorse, a person does not a high of 766,000 in summer. This rep- al jobs reported in the national sur- have to prove his or her moral worthi- resents roughly 2–5% of all workers vey of labour and income dynamics ness by declaring and demonstrating in the country. In the Atlantic prov- were followed by a period of collect- a willingness to work. Seasonal work- inces the incidence is much higher, ing EI benefits. It is prudent to ask ers would not be shamed for selling with about one in 10 workers in sea- whether or not the EI system should their labour to the industries we sonal jobs. serve this function, and governments benefit from — the fisheries, forest- Thus, although it’s marginal, so- have indeed asked that question be- ry, tourism, agriculture, outdoor rec- called “seasonality” in employment is fore. In 2012, the federal government reation — or pressured in the off-sea- a reality for hundreds of thousands answered it with some EI reforms son to seek a job that isn’t there. of Canadians. It’s also a constant con- meant to coerce seasonal workers to If we stick with a system that pun- cern for policy-makers, and for em- find other jobs in the off-season -in ishes and treats with suspicion work- ployers — especially those in rural ar- stead of relying on EI benefits. ers in these industries we will contin- eas — who have difficulty recruiting The swift reaction from season- ue to see labour shortages and disap- people with job offers that only cov- al workers, employers and indus- pearing small communities. I can only er part of the year. tries, and the mainly rural commu- conclude that we have stuck with this In many industries, like seafood nities that rely on them, along with system so far because we are afraid of processing and agriculture, the ap- the CANSIM statistics that show no what happens when people don’t have parent reluctance of Canadian work- long-term reduction in claims after to sell their labour to live. However, ers to take seasonal jobs has led em- 2012, suggest that seasonal workers all of the pilot tests of basic income ployers to seek migrant workers are not simply opting out of work in have shown that it is precisely this at- through the temporary foreign work- the off-season. Seasonal fluctuations tachment to work as a meaningful er program. Canadian workers who in employment, in other words, are and moral activity that ensures that do take seasonal jobs are left with the not a problem of individual motiva- most (if not all) people would contin- problem of how to make a living year- tion; they are a structural feature ue to work for a paycheque. round. In all but a few exceptional in- of our economy. Thus, they require Second, a basic income dispenses stances — e.g., the crude stereotype structural support — as even the fre- with the increasingly naïve idea that of the wealthy fisherman — one sea- est of free markets always do, in prac- we can employ everybody all the time. son’s income cannot stretch over a tice if not in theory. Since Confederation we have been whole year. working harder and smarter, and In most communities it is also dif- s a sociologist who studies work, throwing money into new technolo- ficult (if not impossible) to match Aunemployment, productivity gies, in pursuit of increased produc- a seasonal job with a job in a differ- and, most recently, rural economies, tivity. The flipside of increased pro- ent industry for the rest of the year. I have come to believe that a basic ductivity is less work for people. We As the aggregate numbers show us, income is the most promising solu- can either scramble to invent more there is an abundance of jobs in the tion to cyclical and structural un- jobs by inventing more needs for our- summer, but in winter it’s reduced employment, and especially the sea- selves or we can treat ourselves to a by two-thirds. There simply aren’t sonal employment that sustains the society where we all work a little less enough winter seasonal jobs to go Atlantic provinces where I live and and have more time for our commu- 32 nities, families and creative pursuits is to make sure other people are be- Overall, a basic income promises to (or, god forbid it, time to do nothing). ing honest about their job search- help us come to terms with our econ- In communities with seasonal in- es. It could replace much of our cur- omy and job market as they actual- dustries, a basic income opens up the rent patchwork of regular govern- ly exist — not as they exist in the im- possibility for people to work all sum- ment transfers, each with their own aginations of orthodox and neoliber- mer for pay and then take the winters piles of paperwork, in a single pay- al economists, seasonal fluctuations to read, do house repairs, go on vaca- ment. There could still be top-ups for and all. M tions, raise children, play a sport, make people with disabilities and parents THESE TWO ARTICLES ON THE IDEA OF A BASIC INCOME art, write stories, plan events — all of of young children, and EI would have ARE EXCERPTED FROM THE CCPA COLLECTION, BASIC INCOME: RETHINKING SOCIAL POLICY, EDITED BY ALEX the stuff that makes life worth living. to remain for people who lose their HIMELFARB, CHAIR OF THE CCPA-ONTARIO’S ADVISO- Third, a basic income could do all jobs. But EI as a Band-Aid solution for RY BOARD, AND TRISH HENNESSY, DIRECTOR OF CCPA- ON, AND RELEASED IN OCTOBER (WWW.POLICYALTER- this without a gigantic bureaucratic the wounds left by seasonal indus- NATIVES.CA). structure full of people whose job it tries could disappear entirely.

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Send mail to 500-251 Bank St, Ottawa, ON K2P 1X3. FURTHER For more information, contact Jennie at 1-613-563-134133 ext. 305 or [email protected]. SAM PIZZIGATI Should we assign tax collectors to the super rich?

E DON’T know exact- That’s just what they’re doing in HMRC special tax monitors assigned ly how much Donald Britain right now, in a special tax com- to the wealthy has already recov- Trump paid in taxes last pliance project that U.K. tax officials ered another £416 million from these Wyear. (He hasn’t released launched in 2009. Her Majesty’s Rev- same super rich. British tax officials his 2015 federal income tax return enue and Customs (HMRC), the Brit- have also identified — and are going yet and most likely never will.) But ish counterpart to America’s IRS, has after — another £1.9 billion the super let’s keep in mind that we don’t ac- identified 6,500 U.K. taxpayers worth rich should have paid in taxes over re- tually know how much any individ- over £20 million — the equivalent of cent years but haven’t. ual American billionaire paid in tax- about US$25 million — and matched In other words, the dust could set- es last year, with just one exception: each of these “high net worth individ- tle with the British super rich pay- in October, investor Warren Buffett uals” with an HMRC “customer rela- ing 35% more of their income in tax- released his own basic tax info as a tionship manager.” es than they initially expected to pay. protest of sorts against the soon-to- These personal tax collectors oper- In the United States, collecting 35% be U.S. president. ate as half tax cop and half concierge. more in taxes from the nation’s rich- We do, on the other hand, have a Wearing the concierge cap, the cus- est would, in 2013, have brought in an sense of just how much our billion- tomer relationship managers try to impressive US$8.5 billion in new rev- aires as a group are shelling out at be as helpful as possible to wealthy enue from just 400 taxpayers. tax time. taxpayers. They’ll readily answer, for Only one other nation (the Nether- Give credit for that to statisticians instance, any question a wealthy tax- lands) now has a system in place that at the Internal Revenue Service (IRS). payer may have about a legally ques- mirrors what British tax officials are Over recent years, they’ve been pub- tionable tax-related move the taxpay- doing, and this Dutch effort has only lishing annual reports on America’s er might be thinking of making. As just begun. America’s IRS does, to be 400 highest-income tax returns. The tax cops, customer relationship man- sure, have a unit that concentrates on most recent of these reports (in 2013) agers are constantly looking over the taxpayers of high net worth. But the reveals our top 400 averaged an amaz- shoulders of the individual wealthy United States hasn’t yet given these ing US$265 million in income — and taxpayers they’re monitoring, watch- high-end taxpayers anything near paid, on average, just under 23% of ing out for fraud and any attempt to the level of across-the-board scruti- that in federal income tax. Some of fudge income and tax-due figures. ny that Britain’s HMRC has. the top 400 billionaires fared far bet- HMRC has wisely built into this Could that situation change? Our ter than that average. Forty-three intense monitoring effort a series of top tax officials should take a look at of them paid less than 15% of their safeguards to prevent what good-gov- the new report on the U.K. approach reported incomes in federal tax. On ernment analysts in the United States released in early November by Brit- paper, remember, rich couples in 2015 call “regulatory capture,” the situa- ain’s National Audit Office. The re- faced a 39.6% tax rate on ordinary in- tions that develop when regulators port offers powerful evidence that come over US$464,850. get too close to the regulated and placing the tax affairs of all a nation’s What explains the gap between start ignoring the public interest. ultra-rich taxpayers under the micro- that 39.6% and the much lower actu- Among these safeguards: HMRC reg- scope can yield significant benefits. al tax rate on rich people’s incomes? ularly rotates the customer relation- How significant? U.K. auditors have In a word, loopholes. The rich play ship managers assigned to each su- calculated the British tax authori- all sorts of games — some just a little per wealthy taxpayer. And individu- ties gain £29 for every £1 they spend shady, some a lot — to get their effec- al relationship managers don’t get to on staffers who do their agency’s mi- tive tax rate down as low as possible. make the final call on whether to pur- croscoping. That sounds like a great If the new president wanted to undo sue tax fraud investigations or not. deal, for both the national treasury this “rigged” tax status quo and nar- What sort of impact is this new Brit- and average taxpayers. row the gap between what the law ish crackdown on wealthy taxpayers Just by coincidence, we do have an says rich elites should pay in taxes having? In 2015, the U.K.’s 6,500 rich- expert deal-maker about to take up and what they do pay, he could start est taxpayers voluntarily declared tax occupancy in the White House. Will by assigning America’s super rich liabilities of £4.3 billion, about US$5.3 he try cutting a tax deal like Britain’s? their own personal tax collectors. billion. The compliance work of the He would if he asked his voters. M 34 to the San Francisco Public that incoming U.S. Pres- leave them behind. The Library and Golden Gate ident Donald Trump will bees’ fellow workers across Park per request from the withdraw from the deal. the Pacific may benefit from previous owner of the land. Forty-seven of the world’s Sonoma County, Califor- U.S. Forest Service fisheries most climate-vulnerable nia’s ban, along with five scientists are building a nations, including Bangla- other counties, of GMO crop biodiversity map, called desh, Ethiopia and Costa cultivation, which creates The good the Aquatic Environmental Rica, also pledged to reach a 13,734-square-mile DNA Atlas, which will soon 100% renewable energy (35,571 square kilometres) news page identify thousands of “as rapidly as possible.” GMO-free zone, the largest aquatic species in every The Paris Agreement in America. The Congrega- river and stream in the officially came into force on tion of Benedictine Sisters Compiled by western United States. Pro- November 4, putting some of Boerne, a McDonald’s Elaine Hughes ject leader Dan Isaak says pressure on signatory coun- shareholder, wants the the map could eventually tries to wean themselves fast-food chain to pro- Respecting waters help with conservation and off fossil fuels, reduce hibit the use of medically and watersheds land management funding carbon emissions and lower important antibiotics in its decisions, and identify global temperature to “well global poultry supply chain, n late December, a month stream inhabitants — from below” two degrees Celsius believing that overuse I after the U.S. Bureau of insects to salmon to above preindustrial levels. of the drugs is leading to Ocean Energy Management river otters to invasive Japan ratified the pact on resistant varieties of dan- put a five-year stop to species — by analyzing November 8, and Australia gerous suberbugs (70% of offshore oil and gas water samples containing became the 140th country all U.S. medically important leasing in the Chukchi DNA. / EcoWatch / Associat- to do so on November 10. antibiotics are consumed by and Beaufort seas, the ed Press / Futurism The once fossil-friendly Mo- livestock). The congregation Obama administration rocco (in 2013 it was 90% first asked McDonalds permanently banned reliant on energy imports) shareholders to stop the drilling in U.S.-owned arctic Climate (class) action is even making strides on practice at last year’s waters. Canada agreed at climate. Having altered annual meeting (20% voted the same time to prohibit Federal District Court its constitution in 2011 to in favour) and will ask again arctic offshore drilling A in Eugene, Oregon include a commitment to this spring. / New Zealand for five years. The U.S. recently decided to allow a sustainable development Herald / Sustainable Pulse / move follows a decision “groundbreaking” climate and to stop subsidizing Reuters by regulators in March, case to proceed. The legal fossil fuels, the country based on strong public challenge, brought by 21 plans to generate 40% of pressure, to block offshore young plaintiffs aged 9 its energy from renewables Peace and progress drilling along much of the to 20 against President by 2040. / Reuters / Atlantic coast for five years. Obama and numerous EcoWatch / Huffington Post n November 24, the In its stead, at the end of federal agencies, alleges / Associated Press / CNN O Colombian government the year the Block Island the pursuit of fossil-fu- signed a final peace accord Wind Project, off the coast el-based energy policies with FARC rebels after a ref- of Rhode Island, started violates the group’s Our food, our health erendum in October failed generating offshore wind constitutional rights to life, to secure popular support power for the first time in liberty and property, and esidents evacuated for an end to a half-century U.S. history. The San Fran- to public trust resources. R after the New Zealand of civil war. President Juan cisco Board of Supervisors It is one of many related earthquake of November 14 Manuel Santos wants the has likewise prohibited the legal actions brought by were asked to bring only a deal in place as quickly city “from entering into or youth in several states and suitcase or two on the ship as possible, to maintain a extending leases for the countries, all supported by to safety. But Commander fragile bilateral ceasefire, extraction of fossil fuel Our Children’s Trust, which Simon Rooke of HMNZS while opposition leader from city-owned land.” The is seeking science-based Canterbury reported that and former president Alva- legislation responds to an action by governments along with 192 people ro Uribe, himself accused expiring Chevron lease to to stabilize the climate and 2.3 tonnes of baggage of war crimes committed 800 acres of land in Kern system. Internationally, came “one cat, 14 dogs and by right-wing paramilitary County. The city plans to nearly 200 countries have about 30,000 bees.” The groups he helped establish convert the property to reaffirmed their commit- pollinators, housed tem- to fight FARC, is urging a solar array that could ment to the 2015 Paris porarily in a small wooden street protests. / Associated generate more than the climate agreement as a box, belonged to a Kaikoura Press / Christian Science US$320,000 currently paid show of strength amid fears man who couldn’t bear to Monitor / Reuters 35 Feature

Allison Margot Smith Gateway to Freedom International Emancipation Memorial to the Underground Railroad in Detroit’s Hart Plaza. and the Canada-U.S. border JASON PARIS (WIKIMEDIA COMMONS) Canada’s simplified national story obscures our understanding of the Underground Railroad

ITH CANADA’S 150TH anniversary we can anticipate that the presenta- American narratives] come unrave- upon us, we can expect many tion of our history will become more led. They are ambiguous and often replays of the traditional and nuanced and self-reflexive. unstable realms where boundaries Woften self-congratulatory mo- As a contribution to this active his- are also crossroads, peripheries are ments of our nation’s history. Invari- tory project my research has tried also central places, homelands are ably, this will include segments about to reconceive the lauded narrative also passing-through places, and the African-Canadian history and in par- of the Underground Railroad using endpoints of empire are also forks in ticular Canada’s place at the north- a borderlands approach. Very basi- the road.” These historians add that ern terminus of the Underground cally, as this essay attempts to show, the “central insight [of borderlands] Railroad. the telling of black history and the history pivoted not only on a succes- The telling of this part of our his- history of the Underground Railroad sion of state-centred polities but also tory, especially outside the academic changes when we consider it with- on other turning points anchored in setting, has until recently tended to in the historiography of the Cana- vast stretches of America where the overlook the negative aspects of the da-U.S. border region. But the value visions of empires and nations of- black experience in Canada. And yet, of a borderlands approach goes much ten foundered and the future was as the field of public history grows further than this. far from certain.” at Canadian universities, and profes- According to Pekka Hämäläinen My own experiences writing about sional public historians fill positions and Samuel Truett, borderlands his- and producing films on black history at national museums and archives, tories: “are the places [where Master in Canada reflect the observations of 36 Hämäläinen and Truett regarding the instability and am- people taking control of their own situations, whether biguousness of borderlands narratives. While I set out to this agency was purposefully hidden from white view address a part of Canadian history, I had difficulty keep- (as often happened in the U.S. South) or on open display ing the narratives strictly Canadian. in locations like the Canada-U.S. borderlands. The black community that I was studying in south- While scholars agree that the study of black history in western Ontario (called Canada West in the mid-19th cen- Canada has been neglected, there remains a debate today tury) was of American origin. Its members maintained concerning the intentionality of this neglect. Smardz Frost business associates and wrote to family in the U.S. after admits a “perhaps unconscious bias of some later writ- coming to Canada. One of my main research subjects, ers” after the early 20th century writing of Fred Landon Mary Ann Shadd, came to Canada in 1851 but slipped reg- and Justice William Renwick Riddell. Another historian of ularly back and forth across the border to see her brother blacks in Canada, Afua Cooper, sees a self-conscious buri- in Buffalo and meet her newspaper associates in Detroit. al of black history. She writes (in 2006) that: She returned to the U.S. for good during the American Canadian history, insofar as its black history Civil War, leaving some of her letters behind in Canada. is concerned, is a drama punctuated with Karolyn Smardz Frost, a historian of black history in disappearing acts. The erasure of black people Canada, explains: and their history in the examples of the Priceville Borderlands studies...examine communities of Cemetery [in Ontario] and Africville [in Halifax, interest in liminal districts where overlapping Nova Scotia] is consistent with the general economic, environmental...and other factors mean behaviour of the official chroniclers of the country’s that people living on opposite sides of a boundary... past. Black history is treated as a marginal subject. often have more in common.... Despite differing In truth, it has been bulldozed and ploughed over, political affiliations, governance, and legal systems, slavery in particular. people in such districts share cultural, familial, It is evident from Smardz Frost’s extensive bibliography, business, and other ties distinct from those of their in her 2009 edited collection of Landon’s writing, Ontar- respective countrymen residing elsewhere. io’s African-Canadian Heritage, that the number of pub- The borderlands approach first emerged in the 1920s with lished works on black history in Canada decreased after the work of Herbert Eugene Bolton, who examined Amer- the 1920s then recovered somewhat in the 1960s and 1970s, ican history in the context of the clash of Indigenous, and even more significantly in the 1980s, 1990s and 2000s. Spanish and British empires. The concept of social his- Today, Canadian history taught at the undergraduate lev- tory, which arose in the 1960s, stimulated a resurgence of el in Canada covers numerous features of black history. borderlands ideas. But it was not until the 1990s that the For example, R. Douglas Francis’s 2010 textbook, Jour- borderlands approach blossomed as a comparative, trans- neys: A History of Canada, describes how: national methodology that could be applied to geograph- Under the governor’s direction, the Assembly ic border regions around the world and, as Hämäläinen [of Upper Canada] adopted a bill in 1793 that and Truett write, to imaginary conceptual borderlands. abolished slavery but freed not one single The approach works well in adjacent nations with com- slave.... [S]laves already in Upper Canada had to plex historical interactions like those that took place at remain slaves.... [C]hildren born after the act’s the Canada-U.S. border, where racially mixed populations passage would become free at the age of 25.... [N] congregated from the 18th century onwards. Writing in o additional slaves could be brought to Upper 2011, American historian Nora Faires uses the borderlands Canada. After 1793, slavery steadily declined in the approach, in combination with a study of iconography, colony. to make several observations of statuary commemorat- ing the Underground Railroad, in particular at the his- While acknowledging the presence of Canadian slaves torical crossing point between Detroit and Windsor (see and the limitations of Lieutenant-Governor Simcoe’s Act image) — what Hämäläinen and Truett would call a “pass- to Limit Slavery, the text omits that, at that time, many ing-through” place. black slaves chose to flee Canada to the United States. Faires points out that earlier British iconography tend- Francis’s textbook also ignores the evolution of the le- ed to depict white rescuers holding up weakened and gal framework on both sides of the border that protected cowering black slaves. In contrast, the Windsor-Detroit black fugitives from extradition to Canada or to the U.S., statuary comprises only black figures displaying their perpetuating — intentionally or not — the false idea of own agency. In the early 20th century, we frequently read Canada as the preferred destination for fugitive slaves. of the benevolent masters taking care of slaves who could Perhaps the more significant result of this kind of omis- not care for themselves. By mid-century, writes Ameri- sion is that Canadians of all ages are often surprised to can historian Sharon A. Roger Hepburn, it was more com- discover that the colonies that later became Canada ever mon to see the black community portrayed as the “pow- had slavery. Under a borderlands approach, the slavery erless victims of white oppression.” and societal complexities facing the black communities More recent scholarship has altered this thinking once in both countries through the 18th and 19th centuries be- again, demonstrating regular 19th-century cases of black come far more apparent. 37 Historian Gregory Wigmore uses learly the Canadian national his- Windsor and Detroit, Faires describes the borderlands approach to show Ctorical narrative misses out from the Detroit River as a “Jordan Riv- the direct impact on slavery in the a strictly national focus. But what er,” with freedom on one side, wash- Detroit River region around the time of the American narrative? National ing away the “stain of racism.” She of the U.S. Northwest Ordinance of histories in the U.S. have traditional- points out the irony that the memo- 1787 and the gradual limiting of slav- ly centred on the idea of freedom — of rial, while funded by public and cor- ery in Upper Canada starting in 1793. America being a country toward porate funds in the U.S., seems to run Wigmore writes, “[t]he laws of both which people worldwide have come counter to American ideals of being territories inadvertently established to be free. Now, as in the past, “free- a nation of freedom, and openly re- free spaces where fugitives from the dom is central to Americans’ sense of veals the “ambivalence many African opposite side could find sanctuary, a themselves as individuals and as a na- Americans have towards the history development that destabilized and tion,” writes American historian Eric of their nation.” ultimately destroyed slavery in the Foner in the second volume of his Give In contrast to the traditional ap- borderland.” Viewed from a strictly Me Liberty! An American History. probation of American, or even Ca- national perspective on history, the Here, again, the borderlands ap- nadian, national greatness, the bor- destruction of slavery in this small proach to black 19th-century histo- derlands approach reveals that the but unique region is not as readily ry unsettles that narrative. Ameri- Underground Railroad celebration apparent. can history becomes also about the belongs to neither country. In the Another aspect of black history movement of thousands of Afri- 19th century, the black history of the that is enhanced by a borderlands can Americans — both free and for- people and activities of this border- approach concerns the individuals, merly enslaved — across the border lands region came to be celebrated on institutions, functions and commu- and out of the country. It is, in oth- Emancipation Day. Blacks from both nity practices that supported fugi- er words, about finding freedom else- sides of the border came together an- tive and free blacks. As Smardz Frost where. Black Americans were drawn nually to celebrate this most impor- explains, “[t]he Detroit River was at to the border by the relative attrac- tant of days and the significant role the same time...a border between tiveness of the legal protections of- that this borderlands region played slavery and freedom and a conduit fered by Britain and Upper Cana- in the lead-up to eventual abolition for travel between the United States da/Canada West, especially after the of American slavery. and what is now Canada.” She de- passage by U.S. Congress of the 1850 Clearly, not all borderland histo- scribes two organizations, one in Fugitive Slave Act. ry is so jubilant. As Wigmore writes, Amherstburg, Canada and the other In her discussion of the two-part the failures of “lax enforcement and on the American side, which offered Underground Railroad memorial in loopholes in antislavery laws,” along services to blacks on both sides of with a lack of awareness of these the border: the Amherstburg Baptist changing laws by many enslaved Association “linked churches on both people, meant that slaveowners were sides of the Detroit River in fellow- regularly able to cross through the ship, antislavery, education, benev- borderlands accompanied by their olence, and political activism”; the In general the slaves and unimpeded by the author- Detroit Vigilant Committee “com- ities. But in general the Canada-U.S. bined…religious and antislavery ac- Canada-U.S. border region operated as a distinct tivities with direct political action border region “nation” where people on one side of on behalf of both African Americans the river had more in common with living in Detroit and those who had operated as a their close neighbours on the other sought relief from slavery and ra- distinct “nation” side than with countrymen in fara- cial discrimination in…British North way national capitals. Even after the America.” where people on borderline was established in 1796, Smardz Frost also describes the one side of the writes Wigmore, “[l]ike many local Coloured American Baptist Church, inhabitants, the regional labor mar- later renamed the Second Baptist river had more in ket defied the new, artificial bound- Church, which was located in Detroit common with their ary between the United States and and operated as a refuge for fugitives British Canada.” travelling to Canada. Under a nation- close neighbours Even proximity to the river with- al approach to historical study, these on the other in the state or province gave enslaved organizations might appear as ordi- blacks a greater likelihood of freedom nary churches or advocacy groups. side than with than those further afield. According A borderlands approach reveals how countrymen in to Wigmore, “enslaved people in the the clients served by these groups Detroit borderland acquired their were, in many cases, residents of the faraway national freedom long before those held else- nation across the border. capitals. where in Upper Canada and Michi- 38 gan — jurisdictions where slavery persisted until the mid- John P. Thomson, Rough View of Sandwich (Windsor, Ontario), 1833, 1830s.” Proximity to the border also enabled African Amer- GELATIN-SILVER PRINT, 1943, TORONTO PUBLIC LIBRARY. icans living in Detroit during the American Civil War to help recruit African Canadians into the First Michigan Colored Infantry Regiment on the Union side, later called the 102nd U.S. Colored Troops. Residence within this bor- The subject of segregation, therefore, became widely dis- derland pseudo-nation therefore enhanced the potential cussed across and within both populations. Some, includ- that events in either country would significantly impact ing many in the black community, argued in favour of seg- on the lives of black Canadians or Americans. regation for themselves and their children, while others The balance of power within the borderland itself, how- believed the best path to success lay in integration with ever, was not evenly spread across the river. In 1805, the the white community. Michigan Territory was created from a portion of the Northwest Territory, and the Michigan territorial court p until 1865, the more critical borderland for African established in Detroit. This new U.S. court, being imbed- U Americans fell along the Mason-Dixon line separating ded within the borderlands region, had more influence so-called slave States from free States. However, changing on policy, and thus borderlands activity, on both sides laws in the late-18th and 19th centuries in Canada and the of the border than the court in the more distant coloni- U.S., in particular after the passing of the 1850 Fugitive al capital of York (now Toronto). Slave Act, also increased the relative importance of the At the same time, increased legal rigour contributed Canada-U.S. border. This was a zone within which impor- to a hardening of the borderline, which made it easier to tant parts of black history were made possible, but that find more freedom on one side than the other. In Wig- are also obscured by the traditional national narrative. more’s words, “[t]he success with which slaves exploited Wigmore helps us summarize the significance of the the emergent Canadian-American boundary offers an- borderlands approach for improving how black history other perspective on borderlands, one in which harden- is understood and taught in Canada: ing borders and growing state sovereignty actually in- On the surface, the cross-border migrations of a creased freedom for some local inhabitants.” few hundred slaves in the early North American American historian Kenneth Kusmer identifies “three West seem peripheral to such national narratives. seminal forces influencing the black experience” in the When viewed from a transnational borderlands Upper Canada borderland region: external forces (de- perspective, however, such actions take on a much fined as white influences),internal forces (influences of broader significance. American and Canadian the black community on itself), and structural forces, or slavery did not simply fade away in the Great Lakes “things associated with the geographical location of the borderland. Rather, the enslaved used the new black community and the wider society in which it was border to transform themselves into free people, located — the size and proportion of the black communi- and in the process helped define the significance ty and influence of white culture and community.” the British and American nation-states attached to On the one hand, these forces operating within the bor- that border. derland offered the relatively large black community liv- ing there with opportunities to form societal cohesive- As Canada reassesses and restages its history for the 150th ness — a community in which blacks could work, earn anniversary celebrations, it should seize the historical an income, raise families, practice religion, and social- tools available in the borderlands approach to reimagine ize. On the other hand, proximity to white communities those narratives, like the Underground Railroad, that far could awaken unfounded but extant fears leading to con- too often ignore the lived experiences of African Canadi- flict, or the potential for conflict, between racial groups. ans and African Americans at the border and beyond. M 39 Saudi Arabia

Asad Ismi The Yemeni city of Sa’ada has been heavily Does Canada really want hit by Saudi airstrikes, as shown in this image from August 2015. to control its military exports? PHILIPPE KROPF / UNITED NATIONS OCHA

HE TRUDEAU GOVERNMENT has sig- side, and would be used in future, as Canadian military exports, then nificantly undermined its stat- they were in Bahrain in 2011, to quell which country would not be?” ed commitment to human rights domestic protest against the regime The U.S.-backed Saudi royal fami- Tby going ahead with a $15-bil- or its allies. ly suppresses virtually any dissent, lion sale of light armoured vehicles “We are concerned that this is the criticism, democratic aspirations and (LAVs — combat transports that can largest arms deal in the history of civil rights. Saudi women are among be armed with lethal high-calibre Canada and the military equipment the least free in the world; in 2013, weapons) to Saudi Arabia. is going to a country which is a hu- King Abdullah granted women the The Saudi regime’s vicious re- man rights pariah, holding among right to run and vote in municipal pression of its own population is the very worst such records, accord- elections, but they are still not per- well documented by human rights ing to every organization that tracks mitted to drive, and make up a very groups, and a two-year bombing this issue,” says Cesar Jaramillo, ex- small fraction of the national work- campaign against Houthi rebels in ecutive director of Project Plough- force. Beheadings or long jail terms, neighbouring Yemen has claimed shares, a Waterloo, Ontario–based extensive flogging, the cutting off of as many as 10,000 lives, more than NGO focused on preventing war and hands and torture are common sen- half of them civilians by United Na- building peace. tences for political crimes. tions accounts. Depending on when “If Saudi Arabia, with such a dire Saudi Arabia’s actions have also they arrive, the Canadian-made LAVs human rights record, both internal- destabilized the region, for exam- could enter the battle on the Saudi ly and externally, is eligible to receive ple, by invading Bahrain in 2011 and 40 then Yemen in March 2015. The lat- maiming, injuring and repressing of the planet. “The controls are a facade ter conflict has destroyed a country innocent civilians abroad,” says Peg- which protect the official mythology that was already one of the poorest in gy Mason, president of the Rideau In- that Canada is a promoter of peace the world. Saudi bombing has target- stitute in Ottawa. and human rights. That is their real ed Yemen’s markets, houses, schools, Jaramillo agrees. He points out function. The narrative that Cana- factories, hospitals and health clin- there “are very strong ethical ques- da has these so-called rules fits into ics (all war crimes), injuring 35,000 tions to be asked about linking the the grand myth that this country is and starving the country’s 7.6 mil- economic well-being of Canada to a force for peace in the world.” lion people through the imposition the suppression of human rights in Sanders emphasizes that when of a blockade, according to the UN’s other countries.” If jobs are the key we are speaking about the impact Office for the Co-ordination of Hu- consideration, he asks, “then what’s of Canada’s arms sales on peace and manitarian Affairs. to stop Canada from selling weapons human rights, the U.S. is the unmen- The Saudi regime is also a financi- to ISIS or to the Mexican drug car- tioned “elephant in the room.” The er of international terrorism, includ- tels? Sadly whenever commercial in- U.S. government “is constantly at ing the so-called Islamic State of Iraq terests are pitted against the protec- war,” he says. Canada’s exports to and the Levant (ISIL), as revealed in a tion of human rights, the former of- the U.S. consist of essential compo- recent leak of Hillary Clinton’s emails ten win.” nents for about 40 major U.S. weap- from when she was U.S. Secretary of Richard Sanders, co-ordinator of ons systems used in Iraq and Afghan- State. “We need to use our diplomat- the Ottawa-based Coalition to Op- istan. These included helicopters, ic and more traditional intelligence pose the Arms Trade (COAT), says if warplanes and gunships, but also assets to bring pressure on the gov- the Canadian government were real- electronics for radar and communi- ernments of Qatar and Saudi Ara- ly interested in creating jobs it would cations, and targeting and guidance bia, which are providing clandestine be investing in more labour intensive systems that do not go through any financial and logistic support to Isis sectors such as health and education, export screening at all. and other radical groups in the re- “which also have added social bene- “Washington is also the godfather gion,” said a memo dated August 17, fits that weapons exports obviously of Saudi Arabia and many other 2014. A 2009 email sent under Clin- don’t provide.” In contrast, the mili- countries that violate human rights,” ton’s name, also leaked by Wikileaks, tary industry “creates relatively few says Sanders. “The mainstream peace says “Saudi Arabia remains a critical jobs as it is so capital intensive,” he movement seems to want to shy financial support base for al-Qaeda, says. “It is one of the least efficient away from this central issue.” the Taliban, LeT [Lashkar-e-Taiba in ways to create jobs.” Jaramillo agrees this “historic loop- Pakistan].” In Canada, military exports are re- hole” is a major issue. “This is the big- Yet, in April 2016, Foreign Affairs viewed to ensure there is no reasona- gest chunk of exports annually and Minister Stéphane Dion referred to ble risk of the buyer government us- they get almost blanket approval the Saudi warfare state as Canada’s ing Canadian weapons against civil- from Ottawa. Of course, the U.S. has “strategic partner in an increasing- ians or otherwise to violate human direct or indirect involvement in any ly volatile region, particularly in the rights. According to a report in the number of conflicts around the world armed conflict against the so-called Globe and Mail in November, Minis- and is the biggest arms exporter glob- Islamic State” (emphasis added). The ter Dion blocked a shipment of mili- ally.” Jaramillo opposes such excep- Liberal government is therefore de- tary goods to Thailand last year be- tional treatment for any nation and termined to stand by a Conserva- cause the military junta running the wants Canada to treat all its trad- tive-brokered sale of LAVs — from country since 2014 has silenced the ing partners in a similarly transpar- one ally to another. “We will not press, imprisoned political oppo- ent manner. For him, all military ex- weaken the credibility of the signa- nents and prevented public protests. ports should be dealt with on a case- ture of the Government of Canada,” The Globe has persistently highlight- by-case basis. said the same government press re- ed the contradictions of a Canadian The Canadian government has lease. policy that blocks some arms sales failed to respond adequately to a Ottawa also justifies the LAV sale but allows them to countries with a number of Ploughshares’ concerns by highlighting the economic bene- human rights record as poor as Sau- about the Saudi arms deal and “may fits, such as the 3,000 jobs it claims di Arabia’s. be wilfully blind” to the reasonable will be sustained at General Dynam- Sanders, who has been studying risk that the monarchy might use ics Land Systems’ Canadian plants. Canadian arms exports for 30 years, the LAVs against civilians, says Jar- However, most Canadians asked says Canada’s export controls actual- amillo. “At the end of the day, what about the issue want the government ly “have no teeth whatsoever.” Cana- matters are the actual arms deliver- to cancel the sale (an Angus Reid poll da has guidelines but no firm rules, ies that are going to threaten civil- in February 2016 found only 19% sup- which explains why the government ians’ lives, enable human rights vio- port for the deal). “It is a pernicious is able to sell billions of dollars worth lations, cause human suffering, em- argument to assert that Canadi- of military technology to the United bolden dictators and sustain oppres- an jobs must depend on the killing, States, the most warring country on sive regimes.” M 41 “This powerful collection of essays lays bare what the TPP is really all about: enhancing corporate power. Under the guise of a trade deal, the treaty hands corpo- rations an assortment of tools for striking down domestic laws that protect citizens and the environment. Easy to read and authoritative, this ‘citizen’s guide’ deftly expos- es how the TPP would negatively affect our lives—increas- ing inequality and hampering efforts to deal with global emergencies like climate change.”

Linda McQuaig, author and journalist

A NEW BOOK EDITED BY

SCOTT SINCLAIR is a senior research fellow with the STUART TREW is the editor of the CCPA Monitor, a Canadian Centre for Policy Alternatives, where he directs bimonthly publication of the Canadian Centre for Policy the centre’s Trade and Investment Research Project. He Alternatives. Prior to joining the centre, he worked for was formerly a senior trade policy advisor with the gov- eight years as a trade researcher and campaigner with ernment of British Columbia. the Council of Canadians.

AVAILABLE NOW

42 WWW.LORIMER.CA Books A review essay by Heather Menzies For those who love this planet, challenges and responses

COUPLE OF CENTURIES ago (not long, the New Feudalism (Watershed Sen- helpful responses to the seemingly in Earth time), a host of public tinel Books, October 2016), locates a ineluctable status quo based on what interest regulations that had citizen lawsuit to restore the original people are doing in the here and now. Akept the fledgling English cap- public interest mandate of the Bank italist economy operating within of Canada within the larger context acing the Anthropocene speaks the carrying capacity of the social of conglomeration and acceleration F from the fecund, fairly recent con- and natural environment were re- in that sector. With adroit interpre- vergence of the social justice and pealed — largely due to the lobbying tive skill, she links recent bank-relat- environmental movements. By ex- power of the emergent capitalists. ed developments to a blizzard of “free tending a socialist perspective into The social movement that arose to trade” deals that weaken public inter- an ecosocialist one, Angus makes it protest and resist the devastation est regulation in a host of areas, like easier to see that what has been done this unregulated transformation un- education and public infrastructure, to human communities has also been leashed, Luddism (or the Luddites), but which also seek to prevent demo- done to nature as a living communi- came be so demonized that at least cratic governments from expanding ty, with similar destabilizing effects. one edition of Webster’s Dictionary public governance of finance. He lays out the breakdown in nature’s defined it as “a misguided attempt to The third book reviewed here, A carrying capacity in much the same stop progress.” World to Win: Contemporary Social way that sociologists have described This historical note nicely reviews Movements and Counter-Hegemo- how deepening poverty and polariz- what people in today’s social move- ny (ARP Books, June 2016), edited by ing inequality have destroyed the so- ments are up against — including William Carroll and Kanchan Sark- cial carrying capacity of many cities at the level of naming reality, di- er, personalizes the financial and cli- and even regions. recting public policy and shaping mate crises as being part of the an Historically, the carbon and ni- public perception. It also reminds ongoing colonization and integra- trogen cycles helped the earth ab- us that what we’re “for” is not uto- tion of people into the fast, compet- sorb fluctuations in global tempera- pia, but a renewal of a vision of hu- itive, individualist consumer socie- tures. But these restorative systems mans living in right relations with ty that global market capitalism has are breaking down under the com- each other and the planet, a vision produced. This important antholo- bined assaults of human-caused car- that has served countless societies gy then lays out a range of hopeful, bon emissions, particulate pollution, for millennia without bringing the ocean acidification, excessive nitro- Earth to the point of crisis it is fac- gen and phosphorous runoff, fresh ing today. water depletion, deforestation and Three recent books approach the rogue effects of plastic wrapping the current crisis — financial, envi- and various nanomaterials. ronmental, democratic — from the The term The term Anthropocene, Angus ex- same public interest perspective. Not Anthropocene plains, was coined some decades ago all are optimistic. In Facing the An- to mark the point where human sys- thropocene: Fossil Capitalism and the was coined some tems started to overwhelm earth’s Crisis of the Earth System (Monthly decades ago to self-regulating systems, ending the Review Press, July 2016), Ian Angus relatively peaceful Holocene era and suggests corporate conglomeration, mark the point bringing the world to the tipping militarization and the acceleration where human point of Earth-systems collapse. The associated with “fossil capitalism” all key system on the human side, he ar- but guarantee we will be engulfed be- systems started to gues, has been fossil capitalism, the fore we can adequately address the overwhelm earth’s first phase of which was coal-based, climate change challenge. followed by oil. Today, there is more Joyce Nelson’s new book on big fi- self-regulating money in oil and gas than in any oth- nance, Beyond Banksters: Resisting systems. er industry. 43 As one thread in a well-woven tapestry of analysis, An- talism lies in its ability to turn almost any activity and gus points out the close link between fossil fuel and the any social institution into an investment opportunity. military and also big government. Winston Churchill, for- This financialization of everyday life is pushing corpo- mer British prime minister, was the first global leader to rate capitalism into whole new frontiers, bringing its col- see the strategic importance of oil, especially cheap oil onizing effects with it. from the Middle East, and the advantage of controlling As with the other acceleration-boosting developments, it at the source. this expansion of finance began shortly after the Second Not only are the world’s armies (with the U.S. military World War with the direction to governments from the at the top) the largest users of petroleum in the world, Bank for International Settlements to borrow privately at cheap fuel has also made possible the great acceleration market interest rates rather than publicly from national of the market-capital economy following the Second banks. Still, the paradigm-shifting changes only occurred World War. Carbon fuelled the transportation systems under the neoliberal deregulation drive of the 1990s. that allow more transactions to be turned over faster The repeal of the U.S. Glass-Steagall Act during the over farther reaches of the globe, and the whole system Clinton administration collapsed the barrier between depends on this. For capitalism, as an “ism” or ideology, commercial and investment banks, opening the way to is all about making as much money as fast as possible. the high-risk realm of derivatives trading. At the same Hence the crisis. time, the World Trade Organization (WTO) revised its fi- Corporate conglomerization, with the concentration nancial services rules to force all signatory states to dis- of power it makes possible, adds another dimension to mantle their versions of Glass-Steagall, unleashing a tor- the situation, as it both concentrates and rigidifies vested rent of collateralized debt obligations (CDOs) around the interest in maintaining the status quo. From a post-war world. surge of mergers and acquisitions, notably in the petro- When the overextended mortgage and loans bubble chemical business and those enabled by government de- collapsed in 2007-08 it caused the instant impoverish- fence contracts during the war and the Marshall Plan af- ment of millions of people around the world and, inci- ter it, conglomerates spread through the corporate sec- dentally, the further enrichment of a few who, rich in fi- tor, engulfing the media, communications and financial nancial intelligence, had sold these lucrative investments industries, while maintaining close links to the state. and left the relatively less informed and less wealthy holding the bag. (A 2016 Oxfam report revealed that 62 elson has been tracking the interconnections between billionaires now own as much wealth as half the world’s N money, information and government for decades, as population. At the same time, between 2010 and 2015, well as the key personalities and institutions (including some $500 billion shifted from the lower end of the in- think-tanks and foundations) involved. Her newest book, come scale to the highest, with the wealth of the poor- Beyond Banksters, examines the effects of speed-of-light est dropping by 41%.) Ten million Americans alone suf- financial investment and information systems now driv- fered home foreclosures. ing the global economy. Anything slowing or impeding The rise of public-private partnerships and flat-out pri- this “high frequency” movement of money from one part vatization of public infrastructure has also been part of of the world to the next, or from one investment “instru- this agenda, greatly extending the scope of corporate ment” into to another, is, as Nelson points out, targeted moneymaking and reducing the scope of public interest for elimination in “next generation” trade deals. regulation. These are important developments in their Public interest regulation and some types of demo- own right, with the troubling questions they raise — like cratic governance are anathema to “free” finance because how corporate interests seem to acquire these assets at competitive advantage is increasingly concentrated in a fraction of what it cost taxpayers to build them, or this immaterial factor, not just in cheap energy, labour why, for example, the Ontario government would sell or other material resources. The success of global capi- off shares in Hydro One when the utility generates hun- dreds of millions of dollars in profit a year for the prov- ince and its people. Equally disquieting is the loss of pub- lic knowledge about and involvement in managing these institutions. Still, the more troubling aspect arising from Nelson’s Public interest regulation and analysis is how the expansion and acceleration of finan- cialization has concentrated corporate power and intelli- some types of democratic gence, and shapes public perception of what’s normal. It governance are anathema makes the shift from public interest governance to cor- porate management across a widening range of public in- to “free” finance because stitutions and infrastructure systems seem like the nor- competitive advantage is mal thing to do, the new reality. And this in turn helps to neutralize public concern over the moves to permanent- increasingly concentrated in ly disable public interest governance through contempo- this immaterial factor rary “free trade” agreements. 44 One of the book’s strengths is the calls the capitalist “life world” that is depth of knowledge and insight The rise of continuously reproducing this sta- that Nelson marshals to describe public-private tus quo with us as its contributing the Trans-Pacific Partnership (TPP), agents. Canada–EU Comprehensive Eco- partnerships nomic and Trade Agreement (CETA) and flat-out arroll and Sarker are determinedly and the lesser-known Trade in Ser- C hopeful in A World to Win, even as vices Agreement (TISA). While low- privatization they acknowledge, as Carroll does in ering trade barriers are part of these of public an introductory chapter, that we are deals, their larger impact will likely habituated inhabitants of this indi- be to tie the hands of government infrastructure vidualized, commercialized short-at- by, for example, preventing a rein- has also been tention-span world that we are try- statement of the Glass Steagall Act, ing to change. permanently legalizing trade in fi- part of this Carroll draws on great thinkers nancially risky (even suspect) prod- agenda, greatly and theories, and uses words like ucts, and challenging the legitimacy “hegemony” and “colonization” (plus of public banks along with the pub- extending the counter-hegemony and decoloniza- lic interest mandate of Crown corpo- scope of corporate tion) to name the challenge facing rations. would-be change-makers in the so- Foreign financial services com- moneymaking cial and environment movements. panies will gain new rights in both and reducing the He gently warns against short-term, CETA and the (possibly defunct) TPP feel-good, pragmatic reforms while to sue governments for taking meas- scope of public acknowledging that the cultural ures that get in the way of their ex- interest regulation. politics of personal, grounded, local pansion plans. In 2015, a record 70 and pragmatic action that makes a such investor–state dispute settle- difference in the here and now is an ment (ISDS) cases were filed under essential first step in claiming agen- a number of global investment pro- cy and building capacity to take on tection treaties. As of January 2015, together with key Wall Street firms the larger, longer-term changes that there had been 37 known ISDS claims in the Domestic Security Alliance are needed. against Canada under NAFTA, with Council to conduct surveillance on The book is an excellent study $172 million in settled awards and the protesters in Zuccotti Park, with guide to the many threads of alter- some $2.6 billion in pending claims. the FBI labelling participants a “ter- native building that are currently at Though this right to sue does not ex- rorist threat.” More recently, Canadi- work. David McNally’s chapter, “Neo- ist in TISA, Nelson quotes a Global an security legislation, including Bill liberalism and its Discontents,” com- Justice Now report that describes C-51, designates certain transporta- bines salient statistics on today’s eco- that international deal as “a mas- tion routes, including energy pipe- nomic divide — e.g., 44% of Ontarians sive, super-privatization deal cover- lines, “critical infrastructure,” giving living between Toronto and Hamil- ing everything from finance to edu- legal heft to Natural Resources Minis- ton are “precariously” employed in cation.” ter Jim Carr’s menacing recent state- temporary or contract jobs — with re- Such is the power of naming re- ments about using the defence and ports from the protest zones of elabo- ality and managing public percep- police forces to make sure “people rate self-governing social infrastruc- tion — the result of canny connec- will be kept safe” from opponents to ture, such as the medical stations, tions among key people, think-tanks the Kinder Morgan and Energy East food centres and child care set up in and receptive governments — that pipeline projects. Cairo’s Tahrir Square during Egypt’s regulation is now a dirty word. For The scene is being set, in Canada as 2011 uprising. many, government has come to im- elsewhere, for a future in which citi- Laurie Adkin’s chapter on polit- ply “interference,” not the guiding zens raising public awareness about ical ecology and counter-hegemo- force of public interest priorities. what Angus describes as an overex- ny takes the analysis to the more Worse, the information inequalities tended global production, consump- systemic level that Carroll argues and polarization that have accom- tion, transportation, information and is essential for sustaining genu- panied the deepening inequalities of investment system are labelled not ine change. Her definition of polit- our time are creating additional bar- just Luddites but “threats to secu- ical ecology is helpful, introducing riers to asserting the public interest rity.” The We who would resist this a “way of thinking” about the world in the public’s own voice. are therefore in a struggle to think that highlights the “mutually consti- According to an exposé quoted by for ourselves, to articulate and sus- tutive relationship between human Nelson, during Occupy Wall Street tain action toward an alternative to societies and nature.” This thinking the FBI, Department of Homeland the catastrophic status quo, and to offers a bridge for solidarity-build- Security and New York police came do this from within what Habermas ing between people of settler descent 45 and Indigenous people on their journey to reclaim their tentional learning in other areas that allow for responsi- traditions, their naming of reality and with it their con- ble vertical organization. In other words, rotational lead- nection to the land. It’s not only a way of living the new ership and other practices can be employed that devel- scientific understanding that “everything is connected,” op solidarity among different interests, and allow them but of acknowledging the consequences of actions on to build. The alternative, he says, is wishful idealism and habitat and inhabitants, of having agency within that “the tyranny of structurelessness.” web of interconnected life. As such, it restores the legit- imacy of democratic self-governance in all aspects of his ability to scale-up and sustain actions over the long public life, including economics, as was the case before T term is essential to the challenges contemporary social/ the rise of market capitalism. political/environmental movements face today. The task Many chapters demonstrate the feminist mantra that is no less than reasserting the primacy of the public inter- “the personal is political,” often in combination with les- est and the commons where so many governments and sons from the LGBTQ, disability and student politics of mainstream political parties have abandoned it. more recent decades. As Warren Magnusson writes, “we Nelson mentions some of the initiatives to “remunici- need to foreground the political if we are to make sense palize” water systems, as the evidence now makes it clear of the world in which we live.” This means refusing the that privatization has yielded increased costs, not effi- neoliberal position that favours “markets” over politics ciencies, leaving ideology exposed as the real driving as society’s key public decision-maker, with its hidden force behind the policy. She also showcases the lawsuit assumption that “markets” aren’t political. launched in 2011 by an elderly William Krehm, co-found- The chapter on fossil fuel divestment, by James Rowe, er of the Committee on Monetary and Economic Reform Jessica Dempsey and Peter Gibbs, illustrates the new hy- (COMER), to require the Bank of Canada to resume its brid expression of personal politics, as this movement constitutional duties under the Bank of Canada Act to seeks to erode the oil industry’s “social licence” to oper- make interest-free loans to the federal, plus provincial ate, and undermine public consent (and complacency) and possibly even municipal governments for such things for the status quo by daring to name reality as its mem- as public infrastructure projects and health care. Few Ca- bers see it. I think of 350.org co-founder Bill McKibben’s nadians today seem aware that public financing (not pri- clear moral statement, “If it is wrong to wreck the climate, vate bank loans) built the Trans-Canada Highway and St. then it is wrong to profit from that wreckage.” Moreover, Lawrence Seaway, and funded social programs like old- the authors argue that the divestment movement is also age pensions and post-secondary education. a “threshold” to the deeper issues and agenda, such as Subjects like banking and the public debt tend to be seeing climate change as a justice issue, as Naomi Klein black-box items to most people, and it’s probably in the argued in This Changes Everything, and, related to this, interests of a controlling few to keep it that way. But it’s re-democratizing capital investment so that it can be important that civil society take on these larger issues, once again accountable to the sustainability needs of because the social landscape in which we live has been the social and natural environments. so financialized. The COMER lawsuit would have a bet- The theme of capacity building — everything from re- ter chance of success if it were taken up by a broad co- claiming agency and the power of naming, to scaling- alition of social movement players. up co-operative, collaborative organization and infor- The information on political ecology in A World to Win mation-sharing networks — runs throughout the book, and ecosocialism in Facing the Anthropocene provide making it particularly timely after the recent U.S. elec- helpful theoretical guidance to the larger agenda of re- tion. One chapter, on direct action, explores the effica- vitalizing public interest governance. With their empha- cy of “solidarity networks” to support otherwise isolated sis on self-governance, direct democracy and accounta- temporary workers against exploitative bosses. Self-or- ble interrelationships, these books also seem to draw on ganized participative initiatives like the Seattle Solidar- long-standing legacies associated both with self-govern- ity Network (SeaSol), the Ontario Coalition Against Pov- ing commons and Aboriginal traditions regulating, for erty and union “flying squads” serve as “real-life training” example, the buffalo hunt on the Prairies and the har- in thinking strategically and working with others. Be- vesting of red cedar bark and wapato roots on the Pacif- sides building individual self-confidence, these groups ic Northwest. cultivate “collective capacities” as well. Unfortunately, Angus didn’t have space to go beyond Michael Bueckert’s chapter, “Solidarity with Whom?,” a few broad generalizations about what “we must” do takes up the tough question of scaling-up and weaving in his book. Perhaps in a follow-up he might unpack initial issue-action into a larger and longer-term program the unique intellectual and even spiritual gift that an of change. Instead of the either/or of horizontal local or- ecological perspective has to offer, vested as it is inside ganizing versus vertical larger-scale objectives, Bueckert the web of lived and living interrelationships of shared suggests a disciplined dialectic. He endorses the “pre-fig- habitats. An Earth-based vision can help reverse the re- urative” practices of local, direct action out of which new mote-control perspective of contemporary globaliza- forms of subjectivity emerge. tion and its foundational information and financial sys- But he suggests that some generalization can occur and tems — as though the view from an orbiting satellite is the skills of personal agency can be enhanced through in- all that matters. M 46 Books Reviewed by Vitalyi Bulychev Soviet culture in the age of mass production

The aim of the book (which seems survey of films by Chaplin, Buster oblivious to Russia’s subtle and not Keaton and Harold Lloyd. “Chap- so subtle national tendencies and/ lin’s films,” he writes, “often seem less or hang-ups) is to draw parallels be- mechanically striking than those of tween the American and Soviet la- his immediate contemporaries, al- bour forces, worker management though it is only Chaplin who actu- and slapstick comedy. It is an eru- ally convincingly mimes a machine, dite account of a relationship be- taking the machine as a measure of tween three exports of American- human interaction.” It is surprising ism — Chaplin, Fordism and Tay- that Hatherley does not also go into lorism — and their role in the com- a discussion of the cinematic appa- plex, perplexing world of the Soviet ratus/film technology of the time, avant-garde of the 1920s. which was Chaplin’s instrument of THE CHAPLIN MACHINE: SLAPSTICK, For Hatherley, the figure of Charlie expression. FORDISM AND THE COMMUNIST Chaplin transcends slapstick come- Hatherley’s published output thus AVANT-GARDE dy, Hollywood, and America altogeth- far has been mainly in the arena of OWEN HATHERLEY er. The actor is the embodiment of a architecture criticism. The strongest world in utter transition, and every section of The Chaplin Machine, ti- Pluto Press, May 2016, $33 gesture, every movement that he tled “No Rococo Palace for Buster Ke- committed to celluloid is an expres- aton,” is a survey of Soviet appropria- HE WEST IN general and the United sion of the wider, far-reaching uni- tion of the skyscraper. Here Hather- States in particular figure prom- versal transformation “from archi- ley operates in familiar territory, and inently as one of Russia’s most tecture, to avant-garde, to comedy to the writing shifts perceptibly in re- Tconsistent and widespread na- radical politics, the swirling world en- flection. However, what differenti- tional obsessions, where a collective compassed in one man.” ates this book from his Landscapes psyche always seems to produce de- The Chaplin Machine is replete in Communism: A History Through tractors and, to a lesser extent, propo- with quotations from source mate- Buildings (Penguin), Militant Mod- nents, praising or decrying its exist- rial by writers, thinkers and practi- ernism (Zero Books) or A Guide to ence. This is crystallized perhaps most tioners like Alexander Rodchenko, New Ruins of Great Britain (Verso) famously in Dostoevsky’s writings; his Dziga Vertov, Walter Benjamin, Vik- are the numerous autobiographical novels are rife with characters rumi- tor Shklovsky and others. Hatherley scraps in those predecessors that nating on aspects of western life and uses this wide variety of published help cement Hatherley’s perspec- how it compares with life in Russia. writings to support his idea of Chap- tive, while making the narrative all No doubt Dostoevsky was in part re- lin as a proponent of a new era, a ves- the more compelling. acting to Marquis de Custine’s deplor- sel that contains all the complexities In contrast, The Chaplin Machine is ably quasi-racist, appropriately icon- of a new mechanized industrialism. an argument without narrative, and oclastic, hyper critical travel memoir “The reception of Chaplin by the So- the author, mediating through a hur- Russie en 1839, which was banned for viet and Weimar avant-garde from ricane of sources, does the book a dis- 150 years in Russia, but parts of which the early 1920s onwards hinges pre- service: this is an academic’s work. Pe- sadly seem to resonate even today. cisely on a dialectic of the universal dantic as it may be, Hatherley’s latest While national insecurities are not and the machinic,” he argues. What will interest anyone embarking on re- unique to the Russian experience, it emerges is a picture of an unlikely latable research, and it will be of true must be said that in the case of Rus- world of cultural crosspollination interest to a reader used to academia sia they do take a profound space in contrary to the stereotypical depic- with a penchant for delectable anec- the social paradigm and often man- tion of the USSR as an “other,” an al- dotes, especially ones concerning the ifest into morbid fascination. While ien, hostile, isolationist state. unlikelihood of American-style Sovi- not addressing this phenomenon di- The role of the three major Amer- et musicals, the popularity of Henry rectly, and certainly never aiming to ican comedians of the era permeat- Ford’s autobiography, and the Polit- do so in the first place, it is uncanny ed the pop culture zeitgeist across buro’s commissioning of the Gener- how Owen Hatherley’s The Chaplin physical borders, ideological con- al Electric Company to aid in the con- Machine still manages to evoke the victions and economic systems. The struction of a dam in the Donbas re- extent of its persistence. Chaplin Machine offers a detailed gion of Soviet Ukraine. M 47 Perspectives Paul Shaker Engaging communities with participatory planning

T WAS 8:30 a.m. on a Tuesday morn- Effective participatory planning outs and working with neighbour- ing in late June. Kids and parents needs to connect citizens, city staff hood associations. One particularly trickled into the playground. There and political leaders in a shared effective method was an online tool Iwas a buzz outside Dr. Edgar Davey process that is understood by all that allowed residents and business Elementary School in central Hamil- three groups. Establishing a process owners to pinpoint locations on an ton, Ontario. School was almost done whereby political leaders can chan- interactive map. and the excitement was palpable. nel public knowledge into actionable The third step in the PlanLocal pro- The end of another school year projects for city staff is a vital tool for cess is to analyze and translate the ide- wasn’t the only event happening that building vibrant local communities. as identified into a voting shortlist day. The students also had visitors. The first step in the PlanLocal pro- that is easy to understand, reflects Mingling amongst the parents and cess is choosing a targeted, concrete the priorities of the public and has HELP US SHED LIGHT ON THE kids were representatives of PlanLo- theme as a focus. Attempting to ad- been reviewed by city staff to ensure cal Ward 2 Safe Streets. The local city dress too many policy issues at once all projects are actionable. In the final councillor had initiated the PlanLo- can narrow citizen participation to a step, residents vote on this shortlist of ISSUES THAT MATTER TO YOU. cal process to enlist residents to help smaller, hyper-engaged group. Resi- ideas generated from the community. identify and prioritize where $1 mil- dents and business owners have Using a variety of methods, the lion in infrastructure funds should busy lives and multiple priorities, so PlanLocal process reaches out to (we’ve got some bright ideas) be spent for local safe street projects. it’s important for the process to be as every home and business in the ward Neighbourhoods in Hamilton, a straightforward, clear and relevant during this phase. The process lever- city undergoing a dynamic post-in- as possible. ages existing civic institutions, such dustrial revitalization, have been en- For the 2016 PlanLocal campaign in as libraries, recreation centres and gaging in a variety of new approach- Hamilton’s Ward 2, Councillor Jason schools, like Dr. Davey, to reach a wid- MAKE A DONATION Tax receipts are issued for contributions of $15 or more. es to participatory government. Over Farr chose the theme of safe streets. er range of constituents. In the end the last six or so years, citizens have As Farr argued, “Without question, the it produces a concrete list of actiona- I would like to make a monthly contribution of: I would like to make a one-time donation of: taken a direct role in allocating over safety of our neighbourhood streets is ble, publicly supported projects that OR $10 million in their communities. the foundation of a vibrant, prosper- can be submitted into the municipal $25 $15 $10 Other ____ $300 $100 $75 Other ____ PlanLocal was developed with the ous community and I hear this rein- budget and implemented as soon as help of Civicplan. The program en- forced by constituents all the time.” a year after that. PAYMENT TYPE: gages residents directly to determine The second step involves asking Hamilton’s Ward 2 PlanLocal expe- I would like to receive my the issues most significant to their the community to identify problem rience demonstrates that through a I’ve enclosed a cheque (made payable to CCPA, or void cheque for monthly donation) subscription to The Monitor: neighbourhoods. It offers an oppor- locations in their neighbourhoods thoughtful and inclusive process, civ- VISA MASTERCARD tunity for residents and local busi- and to propose solutions to improve ic leaders and the public can work to- I’d like to make my contribution by: By e-mail nesses to guide the urban planning the safety of their streets. This may gether to address challenges effective- Mailed to my address process through citizen-supported seem basic, but it is the reverse of ly. It relies on the knowledge and expe- CREDIT CARD NUMBER: decision-making, based on the be- what typically happens at city hall, rience of the community, elected rep- No Monitor, thanks lief that no one knows a community where solutions are identified by resentatives and city staff to inform EXPIRY DATE: SIGNATURE: better than the people who live there. professionals before public input is concrete actions and policy change. PlanLocal allows local leaders to sought. Also, street safety is typical- Perhaps best of all, citizens see the capture this knowledge to help shape ly seen as a traffic issue and there- results of their engagement on the CONTACT INFORMATION responsive public policy. This respon- fore looked at from the perspective of ground, in their neighbourhoods, on siveness means more than a one-way the driver. Residents have a different a daily basis, reinforcing the posi- Name Return this form to: survey of residents’ thoughts about understanding of what street safety tive role local government can play 500-251 BANK ST. an issue. Rather, it allows for a dia- means and therefore identify a vari- in their lives. M Addresss OTTAWA, ON K2P 1X3 logue on how to best address civic ety of other problems and solutions. PAUL SHAKER IS A PRINCIPAL WITH CIVICPLAN, WHICH challenges, resulting in a better mu- Outreach is done through a variety PROVIDES INNOVATIVE LAND USE PLANNING, COMMU- City Province Postal Code NITY ENGAGEMENT AND RESEARCH SERVICES TO THE Or donate online at: tual understanding of municipal pro- of strategies, including public events, PUBLIC, NON-PROFIT, AND PRIVATE SECTORS. WWW.POLICYALTERNATIVES.CA cesses and community issues alike. online outreach, local media, mail- Telephone (Required) Email 48 Yes, I prefer to receive my tax receipt Please do not trade my name with other and updates by email. organizations. REGISTERED CHARITY #124146473 RR0001 HELP US SHED LIGHT ON THE ISSUES THAT MATTER TO YOU. (we’ve got some bright ideas)

MAKE A DONATION Tax receipts are issued for contributions of $15 or more.

I would like to make a monthly contribution of: I would like to make a one-time donation of: $25 $15 $10 Other ____ OR $300 $100 $75 Other ____

PAYMENT TYPE: I would like to receive my I’ve enclosed a cheque (made payable to CCPA, or void cheque for monthly donation) subscription to The Monitor: VISA MASTERCARD I’d like to make my contribution by: By e-mail CREDIT CARD NUMBER: Mailed to my address No Monitor, thanks EXPIRY DATE: SIGNATURE:

CONTACT INFORMATION

Name Return this form to: 500-251 BANK ST. Addresss OTTAWA, ON K2P 1X3

City Province Postal Code Or donate online at: WWW.POLICYALTERNATIVES.CA Telephone (Required) Email

Yes, I prefer to receive my tax receipt Please do not trade my name with other and updates by email. organizations. REGISTERED CHARITY #124146473 RR0001