Week in Review April 17, 2015

Week in Review April 17, 2015

  • Fight for $15 gains momentum
  • What about $70K minimum?
  • Inflation rising
  • Economic growth declining
  • Federal cuts killing jobs, services and safety
  • No P3 penalties for corporate crime
  • Hydro Gone?
  • Whack-a-union bill back in Senate.

  • Fight for $15! The fight for a $15 minimum wage gained a lot of momentum with protests in over 200 cities on 15 April across Canada and the United States, making it reportedly the largest protest by low wage workers in US history. Angella MacEwan does some mythbusting about who low paid workers are, while UBC economist David Green explains why it makes good economic sense to increase the minimum wage to $15. Rank and file has assembled a reader on the Fight for 15. But $15/ hour is no longer enough for a make ends meet in a big city like Toronto, where Kaylie Theissen of CCPA-Ontario calculates the living wage to now be $18.52/ hour.
  • What about $70K minimum? The 30-year old CEO of a Seattle-based credit card payment company has gone further by announcing he will increase the salary of all his employees to at least $70,000 and reduced his salary to the same amount, saying the market rate for CEOs, earning hundreds of times what their employees earn, is ridiculous. Analysis has found that happiness and emotional well-being rises with income, but only until about US$75,000 annually and then it plateaus.
  • Inflation rising. Canada’s Consumer Price Index (CPI) increased by 1.2 per cent in the 12 months to March despite lower gas prices, slightly higher than February’s 1.0 per cent increase. Excluding gasoline, the CPI increase was 2.2 per cent while the “core” inflation measure increased to 2.4 per cent, its highest since late-2008. The highest price increases were for food, with prices up by an average of 3.8 per cent since last March. The inflation rate increased in all provinces except Alberta and Prince Edward Island. In Alberta inflation declined by 0.1 per cent because of a big drop in natural gas prices from a year before and in Prince Edward Island, the CPI declined by 0.8 per cent because of the province’s much heavier reliance on fuel oil. The CPI increase was highest in Ontario at 1.6 per cent, followed by Quebec with 1.5 per cent, and Saskatchewan at 1.4 per cent.
  • Growth declining. Forecasts for Canada’s economic growth were downgraded by the Bank of Canada, the International Monetary Fund and by the private sector economists the federal government relies on for its budget projections. They now expect Canada’s economicgrowth to average just 2 per cent this year, down from the 2.6 per cent the federal government had forecasted last fall. As both the federal and Ontario governments get ready to table their budgets, one of those economists, David Madani of Capital Economics said Canadian governments should focus on creating jobs and growing the economy: “now is not the time the sort of foolish fiscal austerity that backfired so badly in the euro zone.”
  • Federal cuts killing jobs, services and safety. Federal government budget cuts resulted in another 241 layoffs at CBC/ Radio-Canada, reducing programming and bringing the total job loss to 1,400 over the past year, including many CUPE members. Federal government cuts have also slashed funding for all safety and security programs through Transport Canada, including for aviation safety, rail, motor vehicle and marine safety. Federal government cuts that closed a coast guard base in Vancouver came under the spotlight following an oil spill in its harbor.
  • No P3 penalties for corporate crime. The Harper government’s get tough on crime policy apparently doesn’t apply to well-connected big companies bidding on public-private partnership (P3) contracts. Federal Infrastructure Minister Denis Lebel announced it will give the multi-billion dollar P3 contract to rebuild Montreal’s Champlain Bridge to a consortium including SNC Lavalin. This comes shortly after the RCMP charged the company with fraud and corruption and more than two years after their former CEO was also charged with fraud in connection with another P3: the multibillion McGill University Health Centre Hospital, a project that received received the gold award for financing from the Canadian Council for Public Private Partnerships. The World Bank has banned the Canadian-based SNC-Lavalin from its contracts for ten years because of its extensive record of bribery and corruption around the world—but that hasn’t been any barrier to it winning P3 contracts in Canada. Independent analysis by SCFP estimated that rebuilding the bridge as a P3 will cost double what it would if it were publicly financed and the costs for the project have already increased to $2.4 billion from initial estimates of $1.5 billion.
  • Hydro Gone? The Liberal government in Ontario announced it plans to sell off 60 per cent of Hydro One, the province’s public electric transmission and distribution utility, in a scheme developed by former TD Bank CEO Ed Clark. It will be the largest privatization in Canadian history. Some of the proceeds will be used to reduce Ontario’s debt with the rest used to fund infrastructure investments. With this partial privatization, the province will also lose about $500 million a year in revenue and only save $250 million in interest payments for a net annual loss of $230 million. The government’s business plan makes as much sense as the Gnomes Theory of Profit, from the “South Park” TV show.  Ontario Hydro was formed as a public company over a century ago with a vision to provide clean affordable power for Ontarians, who had previously been gouged by private companies. Premier Wynne admitted she couldn’t guarantee electricity rates wouldn’t rise following this privatization.
  • Whack-a-union bill back in Senate. The Harper government has sent its anti-union Bill C-377 back to the Senate for approval. The bill would require all labour organizations to comply with highly onerous paperwork and disclosure requirements far beyond those required by any other organization or person, including MPs and Senators—or face fines of $1,000 or day. If passed, it is certain be challenged and likely overturned by the Supreme Court, but that will also involve costly legal fees.

 

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