Crappy New Year 2014: Canada’s economy in the shitter
Yes, it’s the economy, stupid! As of January 2014, the Canadian economy continues to be shite, swirling down the toilet. The Harper Conservatives are flushing our country down the drain.
When I say “the economy”, I mean the real, boots-on-the-street, money-in-your-pocket economy, job market and standard of living, not the abstract, pie-in-the-sky “economy” that’s measured in charts and graphs that reduce the concept of economic health to little more than GDP and corporate profits.
It’s infuriating that so many in the media – even those who are usually critical of the Harper regime – have swallowed the big lie that the Canadian economy is supposedly “strong” and that the Harper con artists are allegedly “good on economic issues”. It goes to show that the constant, annoying, tax-wasting Economic Action Plan propaganda has been effective at brainwashing a large portion of the population, including those who should know better.
Economic Destruction Plan
The Harper Cons have been “focusing on the economy” all right, but their focus is extremely narrow, spending their time, energy and our money almost entirely on promoting and subsidizing the tarsands and natural gas fracking industries. It has almost gotten to the point that Stephen Harper should be called the prime minister of Enbridge instead of the prime minister of Canada. The Harper Conservatives are even using government spy agencies to serve the oil companies and to crack down on environmentalists!
This is despite the fact that the Canadian oil and gas sector has been becoming increasingly controlled by foreign corporations, and the fact that – in the grand scheme of things – it provides relatively few benefits to average Canadians, especially when balanced against its high costs to the environment, health, government finances and the overall economy.
A report released in May 2012 showed that “More than two-thirds of all oil sands production in Canada is owned by foreign entities, sending a majority of the industry’s profits out of the country…” (bolding mine). One can only assume that the problem is getting worse. Husky Energy, which recently got approval for two oil projects in Saskatchewan, is majority-owned by a Hong Kong billionaire.
Even workers directly employed by the non-renewable resource sector are facing threats to their job stability and high pay levels, as they face off against disloyal multinational corporations and increasing competition for jobs, including from low-paid temporary foreign workers brought in to replace Canadian employees. In Alberta, the provincial government is bringing in heavy-handed anti-union laws meant to keep uppity working-class people down in their place.
Then there’s the fact that provincial governments have incrementally been charging lower royalty fees to the resource extraction companies, in a contest to see who can be the biggest corporate kiss-ass. Without those royalties flowing in, the provincial governments will allow infrastructure to crumble, public services to fade away and taxes to rise for those at the lower rungs of the income scale. God forbid they increase taxes for corporations and rich individuals! Why would they bite the hands of their masters?
Increased job losses and trade deficits
Meanwhile, thousands of Canadians have been losing their jobs due to off-shoring, the temporary foreign workers program, and/or irrational, illogical “restructuring” that looks good on paper but almost always results in lower-quality products and services. It’s all about cutting costs in the short term.
Many Canadians who have been fortunate enough to keep their jobs are scared shitless that they will be next on the chopping block, and are willing to accept stagnant wages, bigger workloads, higher stress levels, fewer benefits and lower morale. It beats the alternative: unemployment.
This has happened in most sectors of the economy, including the natural resources sector and other sectors in which career counsellors and smug know-it-alls claim there are plenty of opportunities. It has even happened in sectors in which corporate mouthpieces have falsely claimed there are labour shortages.
In December 2013, about 46,000 jobs were eliminated in Canada. That’s not surprising, considering recent reports of several high-profile companies rushing to slash labour costs by the year-end. Of the lost jobs, about 39,000 of them were in the manufacturing hub province of Ontario and about 12,000 were in oil-rich Alberta.
Scratch the surface and find that the situation is even worse than first presented. According to CBC, “60,000 full-time jobs were lost, a decline only partially offset by 14,000 new part-time jobs.” It’s ridiculous that these kinds of studies consider part-time jobs to be equivalent to full-time jobs! What a crock! Another flaw in these studies is that at some point, statistics compilers strictly narrowed their official definition of “unemployed” to make the economic situation seem much better than it really is. Q: When is a jobless person not unemployed? A: When a statistician decides the person doesn’t count.
Since the days of lyin’ Brian Mulroney, Conservative and Liberal governments have been selling us on the idea that globalization and free trade are good for Canadians. The Harper Cons have been the worst, proudly signing treasonous trade deals in every corner of the planet. The result has been more imports, fewer exports, more factories shutting down, fewer good-paying jobs and less wealth flowing through the Canadian economy. According to a recent Reuters article,
Canada posted a much larger than expected trade deficit of $940 million ($879 million) in November, most likely knocking market hopes that the beleaguered export sector might be starting to recover.
The deficit — the 23rd in a row — was significantly wider than the $140 million shortfall forecast by market experts.
Statistics Canada on Tuesday also revised October’s initial surplus of $75 million to a deficit of $908 million, in part to reflect revised data on crude oil prices.
This does not bode well for the future of Canada. I’d be happy to be proven wrong.
Unjustified high executive pay
While this is going on, a Canadian Press article (on CBC.ca) says: “It may be hard to swallow, but according to an annual review by the Canadian Centre for Policy Alternatives, by 1:11 p.m. on Jan. 2, the average top paid Canadian CEO will have been earned as much as the average full-time worker’s yearly income.”. Here is a link to the full Canadian Centre for Policy Alternatives study.
There’s one falsehood in that sentence from the Canadian Press article. The average top paid Canadian CEO did not actually “earn” that money. The word earn implies that a person worked for something and deserves it. Today’s off-the-charts high executive pay levels are not based in reality or guided by the magical “invisible hand” of the market. Executive pay is set – essentially arbitrarily – by corporate board members, most of whom are executives at other companies. It’s a small world of elite insiders scratching each other’s backs. According to Hugh Mackenzie of Canadian Centre for Policy Alternatives, “There is no clear relationship between CEO compensation and any measure of corporate performance.”
Contrary to the Conservative Party and their fellow travellers, these executive parasites aren’t wealth creators, job creators or risk-takers. Workers create the wealth and executives take the credit. Most of today’s wealth-hoarding execs are job destroyers, receiving bonuses for cutting labour costs, even when the job-slashing harms the company in the long run. If the executives run the company into the ground, the workers get screwed and the execs get big severance packages before moving to other companies. There’s no risk in that.
The Canadian Press article mentions that in 2012, the highest paid executive in Canada was Hunter Harrison, the head of Canadian Pacific Railway. He was paid $49.1 million in salary, stock options and bonuses that year. You read that right: $49.1 million in one year, for one person! That is simply insane, unjustified and undeserved!
Short-sighted idiots argue that the high pay levels of the lucky few is none of our business and none of our concern, but nothing could be further from the truth. That money was sucked out of the railway company’s revenue, and sucked out of the entire Canadian economy. If that shameless prick was only paid a few million dollars instead of $49.1 million, the rest of that money could have been reinvested in the company or into the economy at large. That much money could pay the wages of an entire city! Growing levels of financial inequality, poverty and debt will lead to disaster. The cracks are showing and something has to give.
All this brings to mind the classic George Bernard Shaw quote: “The more I see of the moneyed classes, the more I understand the guillotine.”