The Ontario election: Why Doug Ford is the enemy of the “little guy”

While campaigning as the voice of the “little guy”, Doug Ford’s PC’s are actually joined at the hip with corporate interests that are pushing a detailed policy agenda that will make life worse for many Ford supporters.

Introduction

A previous post made the argument that the core appeal of Doug Ford populism (much like Trump populism) is a cultural resentment against the professional class as opposed to an economic populism in which working and middle class resentment is directed against the wealthy and large corporations. In other words, the “elites” that Ford rants against are professionals such as bureaucrats, academics, lawyers, journalists and teachers who Ford portrays as “looking down” on average Ontarians. The article goes on to point out that while there is considerable truth to the fact that the professional class has a limited interest and little empathy for the everyday, pocketbook concerns of average Ontarians, this isn’t exactly news and while unfortunate, there really isn’t a public policy response to this indifference.  Moreover Ford, a rich man’s son like Trump, has no interest in improving the lives of everyday Ontarians and his PC program (such as it is), is evidence of this.

The article went on to contrast  Ford populism with an economic populism in which the “elites” are large corporations whose business practices have directly resulted in an increase in part-time, low wage jobs and the loss of good quality, full-time jobs (especially in the manufacturing and resource sectors). These economic trends have hurt many Ford supporters and economic populism embraces a set of policies that would actually improve the lives of Ford voters.

That article also argued that these two kinds of populism have considerable appeal to Ontario voters without university degrees with broadly similar social values. However, when it comes to voting intentions, those not affiliated with a union (or not living in a community with a labour tradition), lean towards a Ford-style cultural populism in which the elite “villains”  are essentially “know-it-all” professional types who “think they are better than me”. In contrast, those with a union affiliation (or who live in a community with a labour tradition), lean towards an anti-corporate, economic populism most associated with the NDP.

The article further argued that Andrea Horwath’s NDP are in a good position to tap into those who hold to this anti-corporate, economic populism. Recent polls suggest that this is exactly what is happening in the Ontario election with a surge in support for Horwath’s NDP – especially in the economically hard hit regions of the Southwest and North which have seen a massive loss of well paying manufacturing and resource jobs in the past decade.

While the NDP may be pulling even with the PC’s in terms of the popular vote, as of this writing (May 25th), the most recent polls still suggest that the Ford PC’s have a very good chance of winning  a plurality of seats with at least some chance of forming a majority government. Therefore, the question of what a Doug Ford government would actually do during its time in office needs to be examined closely. Continue reading

Ford populism and the 2018 Ontario election

While there is an element of economic resentment in Ford populism, economic elites are not its targets and it is first and foremost an appeal to Ontarians who feel ignored and disrespected by what might be called Ontario’s “professional class”. However, there is also considerable support in Ontario for a very different sort of populism – an economic populism – that would actually improve the lives of working and middle class Ontarians. Andrea Horwath’s NDP are in a good position to capture that vote.

Introduction

This is the first in a series of articles on the upcoming June 7, Ontario election. The series will look at both the partisan political strategies and policy issues at play during the election.

This article takes an in-depth look at the dynamics of Ford populism and the basis of its appeal to its supporters. The basic argument is that the core appeal of Ford populism is cultural resentment against the professional class as opposed to an economic populism in which the resentment is directed against the wealthy and large corporations.

The article argues that the two kinds of populism appeal to voters without university degrees with broadly similar social values. However, when it comes to voting intentions,  those not affiliated with a union nor living in a community with a strong labour tradition, lean towards a Ford-style cultural populism. In contrast, those with a union affiliation (or living in a community with a strong labour tradition), lean towards an anti-corporate, economic populism.

The PC’s seem destined for at least a plurality of seats

All Ontario polls done since Doug Ford was elected PC leader suggest a solid, PC majority government on June 7. These polls are relatively consistent with polls done before the Ford PC leadership victory although the consistency likely masks at least some shifts in PC support at the riding level (i.e. PC support has likely gone up in working class ridings in the GTA and down in affluent, well-educated ridings in central Toronto and Ottawa).

As of this writing (May 10), CBC’s Poll Tracker (which combines and weights recent polls) gave the Ford PC’s 41.1% of the vote, the Horwath New Democrats 27.2%, and the Wynne Liberal’s 25.7%.

The Poll Tracker gives the PC’s a 90% chance of winning a majority government and a 95% chance of winning a plurality of seats.

 

Continue reading

Is a Basic Income Guarantee the Right Choice for Ontario?

Ontario has introduced basic income pilot projects in 3 Ontario communities that aim to provide a living wage for all. For those who believe in a living wage, the question is whether or not the approach being tested in the Ontario pilot projects is the best way to achieve this objective.

Introduction

In 2017, Ontario introduced pilot projects related to a Basic Income Guarantee (BIG) benefit in three Ontario communities. The Ontario pilot projects apply to both low-income individuals in the workforce and low-income individuals not in the workforce. The objective of the pilot projects is to assess whether there is a simple way of providing a living wage that would lift all Ontarians out of poverty.

Before assessing BIG in the context of both working and non-working low-income Ontarians, here is how the BIG benefit works in the three Ontario pilot programs now underway.

Four thousand low-income Ontario residents in three communities have been offered a spot in the pilot study. Non-working Ontarians receive a Basic Income payment instead of standard social assistance and those working will receive what amounts to a wage supplement. The annual payment is set at $16,989 for single individuals, or $24,027 for married couples. An additional $6,000 per year will be provided to individuals with disabilities. Recipients get to keep any child benefits, dental and pharmaceutical access, and disability supports to which they are already entitled. However, their Basic Income payment shrinks by 50 cents on each dollar of work related earnings, and by 100 cents on the dollar of CPP or EI income.

Eligible participants are those living on a low income (under $34,000 per year if you’re single or under $48,000 per year if you’re a couple). There are no asset tests involved in determining eligibility. Continue reading

The root of fake news in Canada: Facebook and other advertising-based social media

Canadian Christopher Wylie says that Cambridge Analytica targeted 50 million Facebook users without their knowledge during the U. S. presidential election campaign with Trump aligned messaging based on psychological profiles.

Introduction

This article contends that the increasing spread of “fake news” is a direct result of the rise of social media platforms such as Facebook, Twitter and Google. These companies have undermined traditional, fact-based newspapers, and have encouraged the growth of web-based, fake news sites in the following ways.

  1. They have undermined the business model of fact-based, quality journalism by garnering the lion’s share of digital advertising at a time when print-based advertising was collapsing; and
  2. By refusing to take responsibility for what is posted on their sites, they have allowed their sites to be used by fake news propagators;

The following are four examples of the harm being done by the rise of fake news driven by the growth of social media:

Example 1: Facebook estimated that 11.4 million Americans saw advertisements that had been bought by Russians in an attempt to sway the 2016 election in favor of Donald Trump. Google found similar ads on its own platforms, including YouTube and Gmail. A further 126 million Americans, Facebook disclosed, were exposed to free posts by Russia-backed Facebook groups. Approximately 1.4 million Twitter users received notifications that they might have been exposed to Russian propaganda. But this probably understates the reach of the propaganda spread on its platform. Just one of the flagged Russian accounts, using the name @Jenn_Abrams (a supposed American girl), was quoted in almost every mainstream news outlet.

A Russian troll farm known as the Internet Research Agency used Facebook’s tools to promote rallies, protests and other events across the U.S. According to Facebook, 13 of the pages created by the Internet Research Agency attempted to organize 129 events. Some 338,300 unique Facebook accounts viewed the events, the company said. Facebook said about 62,500 marked they were attending one of the events and 25,800 accounts marked they were interested. Continue reading

The unfinished business of labour law reform in Ontario: A strategy for implementing sectoral bargaining

Workers and community activists protest at Tim Hortons as some Tim’s Ontario franchisees eliminated paid breaks, fully-covered health and dental plans, and other benefits for their workers in response to an increase in the province’s minimum wage.

Introduction

This post on sectoral collective bargaining is the first of a number of posts related to the unfinished business of labour law reform in Ontario that will be published by Canada Fact Check during the run-up to the June 7, Ontario election. Future posts will focus on a range of topics related to employment standards, pensions, health and safety, and the WSIB.

While the post contains a fair amount of detail on the specifics of sectoral collective bargaining, it is first and foremost a political strategy paper. As such, if and when readers feel they’ve had enough of the fine points of the Changing Workplaces Review and Ontario’s Bill 148, they should feel free to scroll down to the “Implementing the strategy” section.

The context

On November 23, the Ontario legislature passed Bill 148, a sweeping revision of Ontario’s employment standards and labour relations legislation. While there was (and continues to be) substantial media coverage of employer opposition to the bill’s provisions to raise the minimum wage to $15/hr., there was far less coverage of other aspects of the bill, particularly the labour relations portion. In part, this is because labour relations is a somewhat more abstract concept than employment standards. Employment standards sets out a basic floor for all workers in areas such as wages, overtime, and vacation time. In contrast, Ontario’s Labour Relations Act sets out the rules by which employers and unions relate to each other including the initial certification process to form a union as well as the rules related to subsequent collective bargaining – including strikes. These rules can be highly technical and it was predictable that the debate over options to amend the Ontario Labour Relations Act would be pretty much ignored by the media.

Most of the changes in Bill 148 (albeit not the minimum wage increase) were rooted in recommendations contained in the final report of the Changing Workplaces Review, a two-year effort led by co-commissioners, Michael Mitchell and John Murray. Mitchell was a long time union-side labour lawyer while Murray represented the management side on the review.

The purpose of this post is to highlight a sub-set of labour relations options the Changing Workplaces Review labelled “broader-based bargaining”. While the Review’s discussion of these options was largely ignored by the media, behind the scenes unions, employer associations, academics, and lawyers representing both management and labour, engaged in an intense debate over the pros and cons of broader-based bargaining options with unions  (to varying degrees) endorsing the concept and employer groups unanimously opposing it.

One of the broader-based bargaining options strongly endorsed by the final report of the Review involved measures making it easier for unions to organize franchise operations. It is the author’s opinion that the Ontario Government’s refusal to include this very modest proposal in Bill 148 was a serious mistake and a completely unnecessary capitulation by the Wynne government to employer lobby groups opposing the measure. The franchise proposal is discussed in detail later in this post but the long-term implications of not implementing the Commissioners’ franchise recommendation is articulated nicely in a January 11, Star Op-ed by Ontario Steelworker head, Marty Warren. In addition to allowing for greater unionization of franchise employees as Warren suggests, the Commissioners’ franchise recommendation could have served as an effective “bridge” to a more ambitious broader-based bargaining regime.

But before addressing the specific broader-based bargaining options discussed in the Changing Workplaces interim and final reports and why such regimes are important, some context is in order.

Continue reading

Reining in Canada’s Financial Giants – Are Consumers Getting a Fair Break?

While arm’s-length regulators at both the provincial and federal levels do the heavy lifting when it comes to regulating Canada’s financial services, it is ultimately politicians such as Ontario Finance Minister Charles Sousa and Federal Finance Minister Bill Morneau, who are accountable for protecting the interests of consumers in their dealings with Canada’s banks and other  financial institutions.

Introduction

In an important piece in the July 31 issue of the New Yorker Magazine on the decline in the prosecution of white collar crime in the U.S., author Patrick Radden Keefe cites a telling 2002 incident involving ex-FBI director James Comey. Keefe relies on the description of the incident contained in the journalist Jesse Eisinger’s recently published book, “The Chickenshit Club”.

Keefe writes:

When James Comey took over as the U.S. Attorney for the Southern District of New York, in 2002, Eisinger tells us, he summoned his young prosecutors for a pep talk. For graduates of top law schools, a job as a federal prosecutor is a brass ring, and the Southern District of New York, which has jurisdiction over Wall Street, is the most selective office of them all. Addressing this ferociously competitive cohort, Comey asked, “Who here has never had an acquittal or a hung jury?” Several go-getters, proud of their unblemished records, raised their hands.

But Comey, with his trademark altar-boy probity, had a surprise for them. “You are members of what we like to call the Chickenshit Club,” he said.

What Comey was saying, of course, was that avoiding risky prosecutions aimed at reining in Wall St. might have been seen as career enhancing under the previous U.S. Attorney responsible for keeping an eye on Wall St. but with Comey as boss, such an approach was going to be a career killer.

This post is the first of a series of Canada Fact Check investigations asking the question: does Canada have a Chickenshit Club problem when it comes to the development and enforcement of financial services regulation?

The answer for impatient readers? The next 12 – 18 months will tell and Canada Fact Check will be there to tell the inside story.

Here’s what we know now.

Finance Minister Morneau’s response to CBC investigations of hyper-aggressive bank sales practices

On March 6, the CBC’s Erica Johnston broke the first of a number of CBC stories on shady sales practices in Canada’s banking industry. The CBC reports revealed a constant pattern amongst big banks and credit unions of signing consumers up for products or services without providing all the required information, particularly about fees, costs and penalties related to the products. In many cases, bank employees were signing people up for products without even notifying them.

On March 15, in response to the CBC reports, Finance Minister Morneau turned to the Financial Consumer Agency of Canada (FCAC) and announced that the Agency would be conducting a separate industry review to examine Canada’s financial institutions’ sales practices. The FCAC has the primary mandate to represent the interests of consumers on “systemic” policy matters effecting federally regulated financial institutions such as banks, trust companies, life insurance companies and property and casualty (auto, property, etc.) insurance companies.

The FCAC has indicated that it expects to publish its initial findings by the end of 2017. Furthermore, FCAC officials expect to conclude the review of bank sales practices in June, 2018 and will publish a final report soon after. Finally, FCAC may conduct additional specific investigations flowing from the industry review. For example, if a FCAC  follow-up investigation determines that a specific violation has occurred, the Commissioner may make public the nature of the violation, which financial institution committed it, and the amount of any monetary penalty levied by the FCAC on the financial institution. Continue reading

The Liberal hydro rate reduction program: sound policy or just a shell game?

The March 2 hydro rate reduction announcement by the Ontario Liberal government was widely compared to converting a 20-year personal mortgage to a 30-year mortgage. Your short-term payments may go down but in the long run you end up paying a lot more.

On March 2, the Ontario Government announced its latest package of initiatives designed to reduce hydro rates. The key initiative in the package (the re-financing of the Global Adjustment) was widely compared to converting a 20-year home mortgage to a 30-year mortgage and amounted to little more than a cheap accounting trick designed to bribe Ontarians with their own money. The re-financing initiative was the latest in a series of Liberal hydro initiatives that set aside sensible electricity policy and instead, embraced private-sector style financial engineering in order to pursue political – as opposed to policy – objectives.

The purpose of this post is to provide some context and analysis to the March 2 announcement as well as other recent Ontario government initiatives on the hydro file.

Policy Context

To achieve rate reduction, the Ontario government had three broad approaches to energy policy to choose from. It could have:

  • Dealt in a targeted way with the affordability challenges of those paying an unacceptably high proportion of their household income on home energy costs. This may very well have involved additional assistance for a good chunk of the ratepayer base but it certainly didn’t need to include an increased hydro subsidy for everyone;
  • Dealt with the “structural” inefficiencies that have contributed to spiralling system costs and therefore steadily rising hydro bills; or
  • Engaged in a range of complex financial engineering exercises that simply shift current energy costs to future generations of ratepayers and tax payers.

Clearly, a high profile measure such as the re-financing of the Global Adjustment (the key March 2 announcement) falls into the “financial engineering” category.

That said, the government has implemented several low-profile initiatives that deal directly with the real hydro affordability crises facing many Ontarians. Moreover, the government is beginning to explore some market design changes that deal with the “structural” inefficiencies that have driven up the overall costs of the system. Unfortunately, the perceived political need to dramatically reduce all Ontarians’ hydro bills in the short-term has won out. The result is that the more nuanced and targeted initiatives that address the real problems of affordability and unnecessary system costs are taking a back seat to the misguided (but splashier) financial engineering initiatives. Continue reading

Will federal tax review lay the groundwork for real tax reform in next budget?

Will a low profile review of federal tax expenditures lay the groundwork for tax fairness in the Spring federal budget?

Last Spring, federal Finance Minister Bill Morneau announced that his Liberal government would be undertaking a comprehensive review of tax “expenditures” found in the federal tax code. According to Morneau, the aims of the review are to simplify the system and make it more progressive. In the process, he hopes to find $3 billion in savings. A panel of “external experts” was appointed “to ensure that the review is informed by a range of perspectives”.

While little known to the general public, the review is of enormous importance. Every year, Ottawa spends about $110 billion on programs such as health transfers to the provinces, the Canada Pension Plan, Employment Insurance, and other line item programs that comprise the federal budget. These expenditures, as with all direct spending, are put before Parliament for examination. Through this “Estimates” process, information on the costs and impact of these programs is available to the public.

Far less visible and transparent is the roughly $100 billion the federal government forgoes annually in so-called “tax expenditures”. These exemptions, deductions, credits, rebates and surtaxes are not subjected to the same kinds of parliamentary accountability mechanisms that are applied to more direct government spending. Moreover, many of these expenditures (including all exemptions and deductions), while legally embodied in the federal tax code, have huge implications for the fiscal situation of the provinces in that they also define the tax “base” against which all personal and corporate income taxes are levied at the provincial level.

Given the sheer scale of these tax expenditures, there is a strong argument for subjecting this hidden tax spending to the same oversight and public debate as any other spending. This is especially true given just how regressive (i.e. favouring the affluent) many of these expenditures are. If the government wants to provide billions of dollars in tax breaks to the richest Canadians, it should have an obligation to justify these gifts to the vast majority of Canadians who don’t benefit from such largesse.

The last comprehensive evaluation of the federal tax system was the Carter Commission of 1966. It’s clearly time to take a top to bottom look at our tax system to see if it is the truly progressive system the public deserves. Continue reading

What should be done to make Ontario electricity rates more affordable

There is far more that the Wynne government can do to help Ontarians struggling with sky-high hydro bills. But will they do what needs to be done?

It will come as no surprise to Ontarians that according to a recent Nanos Research poll, the cost of hydro was the most important issue for 20.5 per cent of voters, eclipsing the usual suspects such as health care (15.1 per cent), jobs and the economy (9.6 per cent) and high taxes (7.3 per cent). And it will also come as no surprise that recent polls suggest that the popularity of Ontario’s Liberal Government is taking a beating because of the issue.

Undoubtedly, the government is frustrated by the electorate’s focus on the cost side of the hydro file and its relative lack of interest in what the Liberals see as a series of environmentally friendly energy policies (the closure of the coal plants, the Green Energy program, increased “clean power” imports from Quebec, etc.) that have dramatically reduced smog days and made Ontario a leader in North America in fighting climate change.

But if the Liberals are puzzled by the public’s refusal to give them much credit for their green energy initiatives, they only have to look as far their crassly political cancellations of the Oakville and Mississauga gas plants to understand why the public isn’t cutting them much slack on the hydro file. Politics is nothing if not a blood sport and if you want political credit for making tough decisions on a file, then it is probably best not to engage in a billion dollar’s worth  of political opportunism (the cost of re-locating the two gas plants) on that very same file. After all, that’s a billion dollars added to the hydro bills of the very voters that were already paying for the elimination of cheap, coal-generated power!

That said, it appears that Kathleen Wynne has gotten the message  (high hydro bills are “my mistake”) and has promised to announce new rate reduction measures over and above the already announced 8% HST rebate. Continue reading

Justin Trudeau’s big infrastructure mistake

port-mann-bridge-construction

It is a mistake to have private asset managers invest in projects funded by a new infrastructure bank expecting a return of 7-9% when the government can borrow long-term at 2%.

November 14 was a big day for the Trudeau government’s infrastructure plans.

In the afternoon, Prime Minister Trudeau attended a “summit” for foreign investors focussing on investment in areas like infrastructure, technology, natural resources, and renewable energy.

The summit was hosted by Blackrock Capital Investment Corporation, the world’s largest asset management company with $5.1 trillion dollars under management. All told, BlackRock brought two dozen of its clients to Toronto from around the world to meet with Trudeau. Blackrock clients include many of the world’s largest pension funds, sovereign wealth funds and other institutional investors.

Cabinet ministers attending the event included Finance Minister Bill Morneau, Minister of International Trade Chrystia Freeland, Minister of Natural Resources Jim Carr, Minister of Innovation Navdeep Bains, Minister of Infrastructure Amarjeet Sohi, Minister of Canadian Heritage Melanie Joly, and Minister of Health Jane Philpott.

Earlier in the day, the Liberals met with Canadian institutional investors such as the CPP Investment Board, the Caisse de dépôt , Ontario Teachers’ Pension Plan, OMERS, and Brookfield. Continue reading