Category Archives: Federal Politics

Trump and Ford: The new politics of resentment in Canada and the United States

Both Donald Trump and Doug Ford practice the politics of resentment to mobilize their base. However, while there are many similarities between the politics of the two men, there are also some important differences.

Introduction

To understand Donald Trump’s victory one has to understand resentment in white America. While visible minority Americans voted overwhelmingly for the Democrats, the fact is that whites still make up an overwhelming number of U. S. voters (Pew Research has whites at 74 percent of all voters in 2016 , and second, it has whites without a college degree, Trump’s key constituency, at 44 percent of all voters). This means that American politics is still defined primarily by white voters divided by attitudes towards race, religious values, class and suburban vs. urban lifestyles.

With regard to racial attitudes, when white American anxieties are directed towards racial intolerance by the rhetoric of Trump and the Republican Party more generally, they obviously cost Republicans visible minority votes. But they cost the Republicans white votes as well, alienating urban, university-educated voters who value diversity – even as they mobilize some racially resentful  whites.

The fact that American politics is defined by the politics of white resentment is widely understood and commented upon (often in discussions of the rise of “populism”) and is the conventional explanation of Trump’s surprise victory. But what is less appreciated is that the same working class voters that can be mobilized to vote Republican by anti-immigrant and racist rhetoric, can also be mobilized by economic resentment to vote for left-wing Democrats. And while economic resentment has been used by the Republican Party to stoke hostility to taxes by connecting taxes to programs like welfare and food stamps (programs perceived by many voters as “something for nothing” programs), economic resentment has also been used by left-leaning Democrats and unions to mobilize support for higher minimum wages, better pensions, tougher job protection measures, and improved access to health care.

In other words, while it is true that Trump’s anti-immigrant and racist rhetoric helped him win the white working class votes in the Midwest that gave him the necessary electoral votes to win the presidency, the resentment of those very same voters has historically been – and can be again – mobilized against Wall St. and corporate America by left-leaning Democrats for progressive ends. The fact that Trump won Michigan by taking many of the same overwhelmingly white counties that socialist Bernie Sanders won in beating Hilary Clinton in the Michigan Democratic primary, makes this point clearly.

The politics of resentment in Canada 

Much the same dynamic around the politics of resentment plays out in Canada. However, there are some differences.

On the Canadian side of the border, the politics of racial resentment is in some ways more complicated in that all three major parties seek to attract non-white voters. Canada has no equivalent to a Republican Party that has pretty much written off visible minorities. While the Doug  Ford conservative government in Ontario (along with federal Conservative leader, Andrew Scheer) may be picking a tactical fight with the Trudeau Liberal Government over  “illegal border crossers” in order to mobilize its base, the heart of Ford Nation is still primarily in ethnic Greater Toronto – and much of it is non-white. Even Andrew Scheer’s Federal Conservative Party has to tread carefully on the immigration/refugee issue as they need to win at least some seats in heavily immigrant suburban ridings in greater Vancouver and Toronto to form a government.

As such, the Ford Government has to be cautious in tapping into anti-immigrant/anti-refugee resentment if it wants to keep the visibility minority voters who supported it in the June, 2018 Ontario election. Having figured out how to win with next to no visible minority support, Donald Trump and the Republican Party do not have to exercise such caution.

While for political reasons, the Ford government can’t put racial resentment at the heart of its political strategy the way Trump can, there are two other sources of  resentment Ford can tap into to without alienating heavily ethnic Ford Nation in the GTA. These sources of resentment also have support amongst the Ontario PC’s white, rural base.

First, Ford Nation is extremely hostile to anything that smacks of “handouts” for those who are not perceived as working hard for any sort of government benefit they may be receiving. That is why the Ford government moved quickly to cut a planned 3 per cent welfare increase in half and scrapped a proposed basic income pilot program. The Ford base in rural Ontario shares this hostility to paying taxes for what many in the traditional PC base view as “something for nothing” social programs.

Secondly, much of GTA based Ford Nation – like the Ford government’s rural, white support – tends towards social conservatism. It’s the social conservatism that is shared by the two very different constituencies that explains the prominence the Ford government is giving to repealing the former Liberal government’s  sex-ed curriculum changes first implemented in 2014.    

However, just as it is true that Trump’s anti-immigrant and racist rhetoric helped win him white, working class voters in the Midwest who have historically been supportive of an economic populism (again socialist Bernie Sanders won pretty much the same counties in the Michigan democratic primary as Trump did in the general election), so it is true that the resentment of much of Ford Nation could be guided towards an anti-corporate, economic populism rooted in high wage jobs, good pensions and expanded medicare (pharmacare, etc.). The Ontario New Democratic Party made a strong showing in the GTA in the 2018 election running on just such a program and could easily win a majority of seats in Peel and Durham regions and Scarborough in the next Ontario provincial election. These suburban Toronto communities form the very heart of Ford Nation.

Conclusion

North American politics is now dominated by the politics of resentment. However, whether that resentment results in victories for the right or the left, depends upon whether right wing parties are effective in guiding working class resentment towards an anti-immigrant, anti-tax stance or whether left-of-centre parties can guide the resentment of that same working class voting block towards an anti-corporate, economic populism rooted in high-wage jobs, good pensions and access to high quality health care.

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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

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

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

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

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

What the New CPP Agreement Means for You

pensions CPP

The agreement  reached in Vancouver to enhance the CPP last week was historic in nature. Still,  some people will benefit far more than others. Many Ontario workers, for example,  would have been better off with the provincial pension plan that was abandoned by the Ontario Government within days of the signing of the CPP accord.

There is no question that Canada’s finance ministers reached an historic agreement in Vancouver on June 20. There is also no question that the changes in CPP design that the ministers agreed upon represent an eventual increase in CPP benefits for all workers when compared to the current CPP design.

That said, two additional questions need to be asked when assessing the agreement:

1)      To what extent are the workers most in need of a boost in their retirement savings getting the increase in benefits they need to truly retire in dignity and security. In other words, are the CPP changes agreed upon in Vancouver targeted towards those most in need ; and

2)      Are Ontario workers – who comprise almost 40% of the Canadian labour force – better off under the new CPP regime than they would have been under the Ontario Retirement Pension Plan (ORPP) that was scheduled to be fully implemented in 2019 – the first year of a 7-year phase-in of the agreed upon CPP changes that won’t be completed until 2025? This is relevant given that with the signing of the CPP accord, the Ontario Government moved within days to kill its ORPP initiative.

Background to the Vancouver agreement

Before answering these two questions, it is important to provide some context to the discussions that took place in Vancouver on June 20th.

The task for the finance ministers meeting in Vancouver was to see if there was a formula for reform that had a chance of getting 7 provinces containing two-thirds of Canada’s population (the amending formula for the CPP) to buy into. This was always going to be a challenge given that B.C., Saskatchewan and Quebec had been clear in the previous federal-provincial meeting in December, 2015 that they had little appetite for any sort of CPP/QPP enhancement and Manitoba’s brand new Conservative government was almost certain to join this “sceptic” group. Continue reading

Climate change policies hit corporate push back

Prime Minister Justin Trudeau Addresses Paris Climate Change Conference

Prime Minister Justin Trudeau Addresses Paris Climate Change Conference. Despite Trudeau’s high profile Paris claim that “Canada is back”, almost all the heavy lifting on the climate change file is being done at the provincial level.

Prime Minister Trudeau received considerable media attention earlier this week in his appearances at the UN Climate Change Conference in Paris.

But beyond the photo-ops starring our telegenic PM, the question still remains as to what exactly Canada is bringing to the table in Paris?

The context

The purpose of the Paris UN conference is to somehow reach an agreement covering the post-2020 period that would require participating countries to set carbon-reduction targets that, while not legally binding on individual countries, will be considered “moral” obligations.

What then is Canada proposing to contribute to the fight against global warming?

On the international front, Trudeau has already announced that Canada will contribute $2.65 billion over five years to help developing countries reduce their reliance on fossil fuels, doubling Canada’s current contribution. And in Paris he also reaffirmed a campaign pledge to invest $300 million in research and development on clean technology.

But the far trickier issue is how to reach the domestic emissions targets already established here at home.

Trudeau has committed to reducing Canada’s carbon emissions by 30 per cent from 2005 levels by 2030. That’s the same target set by the Conservatives, the difference being that the Liberals regard it as “a floor, not a ceiling.” Most importantly, within 90 days of Paris he plans to host a meeting with the premiers to firm up the specific carbon-pricing policies and investments that will be required to make good on that pledge. Continue reading

Is Canada finally getting a national pharmacare program?

Pharmacare health minister Jane philpott Trudeua

Health Minister Jane Philpott has been tasked by Prime Minister Trudeau with finding solutions to Canada’s prescription drug affordability problem.

Momentum has been building for a national pharmacare program since a June meeting of provincial health ministers.

Canada’s new Health Minister, Jane Philpott, says she plans to be in touch with her provincial counterparts to begin the preliminary work of establishing a new health accord which, according to some health experts, could include at least the broad outlines of a national pharmacare program. The 2004 Health Accord expired March 31st, 2014 after the Harper government refused to renegotiate it.

So what can Canadians expect from their new federal government when it comes to making prescription drugs more affordable?

In contrast to other policy areas, the Liberal election platform planks on pharmacare were strikingly vague.  According to the platform:

“We will improve access to necessary prescription medications. We will join provincial and territorial governments to negotiate better prices for prescription medications and to buy them in bulk – reducing the cost governments pay to purchase drugs.”

Not too many clues here as to where the new Trudeau government might end up on pharmacare. That said, Ontario’s Liberal government  has been a strong provincial advocate for an aggressive approach to drug coverage and was extremely critical of the Harper government’s hands-off approach to the issue. Given the close ties between the two Liberal governments, most observers expect the new federal government to be active in future national pharmacare talks.

That next health ministers meeting is expected to take place on January 21-22, 2016 in Vancouver and federal health Minster Philpott has said she will be attending. Continue reading

Trudeau, Wynne Pension Visions on Very Different Paths

15-10-28 trudeau wynne cpp hug

Despite the big hug and a short-term promise by Trudeau to help implement Ontario’s new pension plan, a look beneath the surface reveals serious obstacles to reconciling Wynne’s and Trudeau’s pension visions.

Prime Minister Elect  Justin Trudeau has promised to do what Stephen Harper pointedly refused to do – help Premier Kathleen Wynne implement Ontario’s new pension plan.

But reconciling Trudeau’s long-term vision of enhancing the Canada Pension Plan (CPP) with Wynne’s “ready-to-go” Ontario Retirement Pension Plan (ORPP), could prove tricky.

Trudeau to help on short-term implementation issues

The Conservative government refused to change federal regulations to help establish and collect contributions for the Ontario Retirement Pension Plan (ORPP), which is due to start collecting premiums in January, 2017.

In fact, the pension issue had become a significant point of conflict between the federal Conservative government and the Ontario Liberal government. During the recent campaign, Mr. Harper went so far as to say that he was “delighted” that his decision not to help Ms. Wynne “is making it more difficult for the Ontario government to proceed.”

But what a difference an election makes! The two Liberal leaders had a brief meeting at Queen’s Park on Tuesday and there appeared to be a complete meeting of the minds on the pension issue – at least in the short term.

According to a statement issued after the meeting, the new federal Liberal government will “direct the Canada Revenue Agency and the Departments of Finance and National Revenue to work with Ontario officials on the registration and administration of the [ORPP].”

Registration refers to the fact that unless a pension plan is registered under the terms of the federal Income Tax Act, employee and employer contributions are not tax deductible. Once registered, pension contributions and investment earnings are tax-exempt until benefits are paid to a retiree.

Administration primarily refers to piggy-backing ORPP premium deductions on the existing CPP payroll contribution infrastructure. Ontario had issued a request for proposal for a third party to help administer the plan because of the outgoing Conservative government’s refusal to co-operate. Now it won’t need that third-party partner, which means the ORPP should be less expensive to operate. Continue reading