Category Archives: Ontario Feature Posts

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 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

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

What’s really behind Ontario’s rising electricity prices

hydro-lines

Ontario’s high hydro prices reflect a breakdown in the Ontario Government’s electricity planning process resulting in contradictory policies that add to costs.

On September 12, the Ontario Government announced in its Throne Speech that it was rebating the provincial portion of the Harmonized Sales Tax (HST) to residential and small business electricity users. The initiative is expected to cost $1 billion/yr. and is funded out of the provincial tax base. On September 15, Bill 13, the Ontario Rebate for Electricity Consumers Act, was tabled to implement the initative.

What the initiative means is that as of January 1, 2017, the Province will reduce residential and small business electricity bills by an amount equivalent to the 8% provincial portion of the HST.

 

Why the HST rebate benefits the affluent more than average hydro users

What is often overlooked is that the HST rebate provides a benefit proportionate to electricity spending meaning that the more you spend on electricity, the bigger your rebate. And, of course, the bigger your residence, the more you are likely to spend on electricity.

On September 27, Ontario’s Financial Accountability Officer (FAO) issued a report showing that the burden of home energy costs, as measured by share of income spent on home energy, falls more heavily on lower income Ontario households in spite of their lower overall energy spending. In 2014, the lowest-income 20% spent on average 5.9% of their pre-tax income on home energy, while the highest-income 20% spent only 1.7%.

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

The fight for a $15 per hour minimum wage in Ontario

photo $15 macondlad's

On April 4, 2016, New York Governor Andrew Cuomo signed a law which will significantly increase the minimum wage in New York  from the current rate of $9, to $15. The remarkable New York $15/hr. minimum wage victory contains many lessons for Canadian minimum wage activists.

 

On April 15, thousands of fast-food workers in more than 200 U.S. cities, and thousands more workers in other countries, including Canada, participated in a global show of force in support of a $15-per-hour minimum wage and mandatory paid sick days.

In the U. S., the $15 minimum wage campaign has made remarkable legislative gains in the past two years. In 2015, policymakers in 14 cities, counties and states approved $15 minimum wage laws including impressive legislative breakthroughs at the state level in New York and California.

In contrast with the recent U.S. experience, actual legislative victories in Canada on the minimum wage file have been extremely modest. Alberta’s general minimum wage increased to $11.20 from $10.20 per hour on October 1, 2015 and Premier Rachel Notley’s NDP government campaigned on a pledge to hike Alberta’s minimum wage to $15 per hour by 2018. The Notley campaign plank and the campaign promise by the federal NDP to re-instate a federal minimum wage and increase it to $15 per hour by 2019 are certainly encouraging as is Ontario NDP leader Andrea Horwath’s recent support for a $15/hr. minimum wage in Ontario. 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

Bay Street and the Hydro One Sale

Of the many options available to the Ontario government to finance its $130 billion infrastructure plan, selling 60% of Hydro One is pretty much the worst.

Of the many options available to the Ontario government to finance its $130 billion infrastructure plan, selling 60% of Hydro One is pretty much the worst.

It is becoming increasingly clear that the Ontario government is making a serious mistake in its plan to sell off a majority interest in Hydro One. According to a report from Ontario’s new Financial Accountability Officer, the province will be in even worse financial shape after the planned sale of 60 per cent of Hydro One than it is now.

Even former TD Bank CEO Ed Clark, the driving force behind the sale, readily admits that there will be significant forgone revenue from the sale of Hydro One down the road. But he, like Ontario Premier Kathleen Wynne, dismisses this on the grounds that the  partial sale of Hydro One is needed to help pay for Ontario’s plan to spend $130.5 billion over 10 years on transit, bridges, highways and other infrastructure.

Unfortunately, while it is undoubtedly true that the planned investments in Ontario infrastructure are badly needed, it is also true that of the various options available to the province to pay for its ten-year, $130.5 billion infrastructure investment, selling 60% of Hydro One is pretty much the worst option.

So why is the Ontario government selling off one if its most valuable assets in what seems like a clear cut case of “short-term gain for long-term pain”?

The sell-off of Hydro One is yet another chapter in the ongoing saga of an Ontario government mesmerized by private sector promises that a healthy dose of private sector, market “discipline” will somehow translate into the public good.

The names are familiar: eHealth, Ornge, the Mississauga and Oakville private gas plants, and public-private hospitals and transit – to name just a few.

The problem? Each and everyone turned out to be a train wreck of truly monumental proportions.

And now Hydro One. Continue reading