Insecurity and the Economy

Our community is experiencing severe housing and food insecurity. The increasing numbers of people living in tents and depending on food banks indicates that action by the government is essential and urgent.

Homeless in the Ball Park

 

The 2023 CBC Massey Lectures, The Age of Insecurity, feature filmmaker and writer Astra Taylor who explains how society runs on insecurity and how we can change it. The lectures are also available as a book, The Age of Insecurity: Coming Together as Things Fall Apart, from House of Anansi Press.

Taylor takes a deep dive into the history of capitalism and explores how, paradoxically, the ways that we’ve been encouraged to achieve security — purchasing health and wellness products, buying life insurance, acquiring property — actually work against us.

She also looks forward at the ways we might be able to achieve true security, using collective action. 

But today, we also live in an era of manufactured insecurity, imposed on us from above. Consumer society, Taylor argues, capitalizes on the very insecurities it produces, making us all insecure by design.

How we understand and respond to insecurity is one of the most urgent questions of our moment — nothing less than the future security of our species hangs in the balance. (Taylor, 2023)

Agnieszka K. Wielgosz serves as a vocal sustainability/ regenerative wellness advocate. She is the woman behind CEI Collective, serving the creative needs of wellness professionals, regenerative & green living brands to grow and make a dynamic impact.

When we consider the phenomenal speed at which the USA ramped up industrial production during the Second World War, or the efficiency with which developed nations are able to respond to natural disasters, we see that notions of “money” and “the economy” quickly fall by the wayside.

If only we allocated the same amount of resources and effort into the health of our global community!

It’s a well established fact that modern societies with advanced levels of technology could easily provide all the resources required for their citizens to live in ample comfort and safety, without having to resort to money, credit, bartering or worst of all, debt.

With shared responsibility and co-owned resources, humanity would quickly overcome the artificial boundaries that currently separate us, leaving us free to pursue a better way of living whilst caring for our shared environment. (Wielgosz, 2020)

A report by Lars Osberg tracks Canadian income inequality through 75 years of growth and recessions and speculates about the post-COVID-19 future. 

Although the Keynesian consensus on the importance of full employment to balanced growth and social stability enabled growing real wages and stable inequality, it was replaced, after a surge in inflation in the 1970s, by Neo-Liberal policies that emphasized budget balance and low inflation. But slowing growth and the concentration of income gains at the top produced widening income gaps, increasing discontent and political instability—even before COVID-19 hit. In the post-COVID-19 era, the Green New Deal emphasizes social and environmental sustainability, and is reflective of the economic policy changes that likely lie ahead. This report has contrasted the balanced growth and stable inequality of the Keynesian consensus era, 1946–1980, with the unbalanced growth and increasing top-end income shares of the Neo-Liberal years that followed. It has also contrasted the policy choice facing both past regimes—how to share the gains from growth—with the possibility that a post-COVID-19 world will be dominated by a more depressing choice: how to allocate the costs of contraction. As always, future policy choices will be conditioned on prior experiences. The era of Keynesian consensus decision-making saw full employment and the sharing of the gains from economic growth as central issues because that generation had experienced the costs of social instability. And although they could not solve the problem of inflation, they left a social insurance system and a history of stable inequality to their Neo-Liberal successors, which muffled initial discontent with the high unemployment, stagnant middle-class wages and increasing inequality of Neo-Liberalism. Neo-Liberalism solved the inflation problem but could not produce a fair distribution of the gains from economic growth—and that matters. When social insurance protections are dismantled and top-end incomes grow faster than middle-class incomes, inequality and insecurity increase over time. So the legacy of Neo-Liberalism includes the populist political reaction of those who were left behind in the Neo-Liberal decades and those who were, and will be the casualties of the COVID-19 years. The legacy of Neo-Liberalism also includes a global climate crisis. Those failures of Neo-Liberalism will condition Canada’s responses to the challenges of the post-COVID-19 world. (Osberg, 2021)

Prior to the Keynesian consensus era, 1946–1980, Crown Corporations, including Wartime Housing Limited built thousands of homes in Canada.

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

Wartime Housing in Halifax

 

The abstract from the Masters Dissertation of Jill Wade (1984) entitled Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada’s first national housing corporation asks the question of why did the federal government not reconstitute WHL as a permanent, low-rental housing agency.

Between 1941 and 1947, a federal crown corporation called Wartime Housing Limited (WHL) successfully built and managed thousands of rental units for war workers and veterans. At the same time, an Advisory Committee on Reconstruction study (the Curtis report) described the enormous need for low and moderate income shelter throughout Canada and recommended a national, comprehensive, and planned housing program emphasizing low-rental housing. Instead, in 1944 - 1945, the federal government initiated a post-war program promoting home ownership and private enterprise; it neglected long-range planning and low income housing. Thus, an interesting question arises. Why did the federal government not reconstitute WHL as a permanent, low-rental housing agency (Wade, n.d.)

The evidence of stagnant middle-class wages and increasing inequality is seen in the growing numbers of homeless people and the increasing importance of food banks and soup kitchens in our community.

Feed Nova Scotia essential for food security

The role of the government to protect the health of Canadians was essential during the Covid 19 emergency. Government Action, similar to wartime programs, to guarantee the right of Canadians to adequate housing and access to healthy food is urgently required now.

References

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

 

Osberg, L. (2021, March 2). From Keynesian Consensus to Neo-Liberalism to the Green New Deal. | Canadian Centre for Policy Alternatives. Retrieved November 21, 2023, from https://policyalternatives.ca/publications/reports/75-years-of-income-inequality-canada 

Taylor, A. (2023, June 16). The Age of Insecurity. 2023 CBC Massey Lectures. Retrieved November 21, 2023, from https://www.cbc.ca/radiointeractives/ideas/2023-cbc-massey-lectures-astra-taylor/lecture-1-curas-gift 

Wade, J. (n.d.). Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada's first national housing corporation. Open Collections. Retrieved November 21, 2023, from https://open.library.ubc.ca/soa/cIRcle/collections/ubctheses/831/items/1.0096317 

Wielgosz, A. K. (2020, October 20). A New World is Possible: An Introduction to Resource-Based Economies. Agnieszka K. Wielgosz. Retrieved November 21, 2023, from https://agnes-wielgosz.medium.com/a-new-world-is-possible-an-introduction-to-resource-based-economies-5def63e87e2a 

Housing Crisis Recent History

The evidence of the housing crisis in Nova Scotia is as close as our neighborhood park. This crisis has been building for many years. This article reviews some analysis and proposals from a few years ago. 

Ball Park Housing Crisis

Michal Rozworski writing in Policynote, in 2019, locates the roots of our housing crisis in austerity, debt and extreme speculation.

In 1993, the last federal budget tabled by Brian Mulroney’s Progressive Conservative government ended all new federal funding for social housing construction outside of First Nations reserves. The feds were out of the business of creating new social housing, as they put it. This was a marked change from previous decades when the federal government helped finance about 20,000 units of social housing per year—from direct public housing in the 1960s and into the ‘70s to non-profit and co-op housing in the 1980s. In most provinces outside BC and Quebec, provincial governments did not pick up the slack following the 1993 announcement.

Post War Housing

 

With the sudden imposition of social housing austerity, the Canada Mortgage and Housing Corporation (CMHC) shifted from homebuilder to mortgage insurer. The move away from direct and indirect public provision only further solidified long-standing economic and cultural pressures toward home ownership. And with this move the federal government only accelerated the transformation of housing from human necessity into investment good, to be supplied almost exclusively by the private sector. (Rozworski, 2019)

Joel Roberts reporting for the Breach, in 2021, suggests that fixing Canada’s housing crisis will require bold socialist politics. He suggests that politicians have finally taken note of the crisis. But they aren’t offering real change.

Canada’s housing crisis demands bold transformation, and a good place to start would be dramatically increasing federal spending on social housing whose rent is geared to income. That would provide immediate relief for the hundreds of thousands on waiting lists. 

Furthermore, we desperately need a large-scale community-based land acquisition strategy based on sustainable living, not returns for investors. The strategy should empower community-based land trusts to create permanently affordable, energy-efficient, community-oriented rental housing en masse. If the federal government can find $150 billion to buy government-insured mortgages during the pandemic, it should have no trouble financing this transformation of rental housing.  

Beyond a major revitalization of the social and community housing sector, we also need robust inclusionary zoning targets for private-sector housing, stronger rental protections for tenants, and emergency funding for shelters and transitional housing operations. 

But what politicians are hesitant to tell you is that the housing crisis goes beyond housing. If we are to address the affordability crisis in rental markets, house prices will likely fall. More bold housing policies are thus unlikely to find much favour among homeowners who increasingly rely on rising prices to secure their retirement or to access further bank credit. As the Parliamentary Secretary on Housing put it in a recent interview: “We know that Canadians rely on homeownership to secure their place in the economy.” (Roberts, 2021)

Roberts Recommendations

Increasing federal spending on social housing

Zoning targets for private-sector housing

Stronger rental protections

Emergency funding for shelters

Alex Cooke of Global News , in 2021, asked how did Nova Scotia get to the point where there are hundreds of people at night with no place to go?

The answer to that question is multi-faceted, says Jeff Karabanow, and the issue has been decades in the making.

Karabanow, a professor of social work at Dalhousie University, said advocates have been arguing for decades for municipal and provincial governments to create more affordable housing.

Now, people are paying the price for the “inactivity and inaction” around affordable housing.

“We’ve been very, very concerned for a long time that there is going to be an explosion on the streets if we couldn’t wrap our heads around some form of rapid-styled affordability housing that has supports embedded in it, that has to be taken by the province as the lead,” he said.

Add that to the stagnation of wages, the skyrocketing cost of living, and housing increasingly being seen as an investment opportunity rather than a social good, and we’ve created a “perfect storm” for the crisis we’re seeing today, he said — a crisis that shouldn’t exist in a rich country like Canada.

“We live in such a rich and fairly safe environment … especially Nova Scotia, where the numbers aren’t huge yet, we can really be providing everybody who needs, wants, some form of safe, stable housing. We could be providing that pretty easily,” he said.

“I think it’s become, for me, just a sense of inequity and injustice.” (Cooke, 2021)

Karabanow’s “Perfect Storm”:

Stagnation of wages

Skyrocketing cost of living

Housing as investment rather than social good

Perfect Storm around housing

The analysis of the housing crisis in these articles from 2019 and 2021 have identified the need for investment by government in affordable rental housing to rectify the inequity and injustice that continues to increase the number of homeless people in Nova Scotia.

References

Cooke, A. (2021, December 1). Nova Scotia's housing crisis: How the emergency has reached a boiling point - Halifax | Globalnews.ca. Global News. Retrieved September 5, 2023, from https://globalnews.ca/news/8413242/halifax-nova-scotia-housing-crisis-day-1-global-series/ 

Roberts, J. (2021, September 17). Fixing Canada's housing crisis will require bold socialist politics ⋆ The Breach. The Breach. Retrieved September 5, 2023, from https://breachmedia.ca/fixing-canadas-housing-crisis-will-require-bold-socialist-politics/ 

Rozworski, M. (2019, June 14). The roots of our housing crisis: Austerity, debt and extreme speculation. Policy Note. Retrieved September 5, 2023, from https://www.policynote.ca/the-roots-of-our-housing-crisis-austerity-debt-and-extreme-speculation/ 

Progressive Minimum Wage

 The building back of our economy after Covid 19 brings many economic questions including whether Nova Scotia’s minimum hourly wage is now “too high” or “too low”?

Economic challenges after Covid

 

Lars Osberg, McCulloch professor of economics, Dalhousie University, and research associate, Canadian Centre for Policy Alternatives-NS, comments that a big question has always been: Is there a cost, like higher unemployment, to having a higher minimum wage?

 

For the past year, unemployment numbers around the world have been dominated by the impacts of COVID-19, so the most reliable comparisons are from pre-pandemic times. In 2019, unemployment in Maine averaged 2.7 per cent and in California 4.2 per cent.  Newfoundland and Labrador and New Brunswick have had higher unemployment than Nova Scotia for the last decade. Across Canadian provinces and OECD nations, there is no clear indication in the data of systematically higher unemployment rates in places with higher minimum wages. For many years, economists have cautioned, on theoretical grounds, that if the minimum wage were to be raised too high, employers would lay off labour when it becomes too expensive — and economists do remain convinced that a very high minimum wage (e.g., $35 or $40 an hour?) would surely cost a lot of jobs. But a conceptual possibility is not a practical reality, and careful analysis of the data on actual minimum wage changes has produced a consensus recognition in economics that over the range of minimum wages actually observed, there has not been much, if any, net job loss when minimum wages increased.1

Joseph E. Stiglitz writes that progressive capitalism is based on a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed.

 

Part of this new social contract is an expanded public option for many programs now provided by private entities or not at all… This new social contract will enable most Americans to once again have a middle-class life. As an economist, I am always asked: Can we afford to provide this middle-class life for most, let alone all, Americans? Somehow, we did when we were a much poorer country in the years after World War II. In our politics, in our labor-market participation, and in our health we are already paying the price for our failures. The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest. It is as fatally flawed as the notion after the fall of the Iron Curtain that we were seeing “the end of history” and that we would all soon be liberal democracies with capitalist economies.2

A higher minimum wage reduces income inequality by pulling up the earned income of the least well-off.

 

References

 

1	(2021, March 30). LARS OSBERG: Nova Scotia minimum wage has plenty of room to .... Retrieved April 6, 2021, from https://www.thechronicleherald.ca/opinion/local-perspectives/lars-osberg-nova-scotia-minimum-wage-has-plenty-of-room-to-grow-570194/
2	(2019, April 19). Opinion | Progressive Capitalism Is Not an Oxymoron - The .... Retrieved June 17, 2020, from https://www.nytimes.com/2019/04/19/opinion/sunday/progressive-capitalism.html

Taxes to Meet Future Challenges

 

The Broadbent Institute Tax Index report suggests it's time to take stock of who's not paying their fair share.

Some revenue sources

 

From tax dodging and loopholes, to historically declining tax rates for the most wealthy, Canada is missing out on over $40 billion in revenue every year.

 References

Canadian Centre for Policy Alternative. (2018). Alternative Federal Budget 2018. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2018/02/Alternative_Federal_Budget2018.pdf 

Canadians for Tax Fairness. (2019). Canadian corporate cash in top 12 tax havens increases by 10% to all-time high in 2018. Retrieved from https://www.taxfairness.ca/en/press_release/2019-04/canadian-corporate-cash-top-12-tax-havens-increases-10-all-time-high-2018 

CBC News. (2000). A primer on capital gains taxes in Canada. Retrieved from  https://www.cbc.ca/news/business/a-primer-on-capital-gains-taxes-in-canada-1.231145 

Department of FInance Canada. (1981). Budget Papers. Retrieved from https://www.budget.gc.ca/pdfarch/1981-pap-eng.pdf 

Forrest, M. (2019). Federal NDP's proposed 'super-wealth tax' could raise $70B over 10 years, budget watchdog finds. Retireved from https://nationalpost.com/news/politics/election-2019/federal-ndps-proposed-super-wealth-tax-could-raise-70b-over-10-years-budget-watchdog-finds 

Government of Canada. (2018). Capital Gains – 2018. Retrieved from https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains-2016.html  

Government of Canada. (2019). Canadian income tax rates for individuals - current and previous years. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html 

Government of Canada. (2019). Corporation Tax Rates. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html   

Government of Canada. (2019). Tax Gap: A brief overview. Retrieved from https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/corporate-reports-information/tax-gap-overview.html 

Kassam, A. (2018). Canada's richest 87 families have same wealth as 12 million people, report says. Retrieved from https://www.theguardian.com/world/2018/jul/31/canada-richest-families-same-wealth-12-million-people-report 

Macdonald. D. (2016) Out of the Shadows Shining a light on Canada’s unequal distribution of federal tax expenditures. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2016/11/Out_of_the_Shadows.pdf 

Macdonald, D. (2019). Mint Condition CEO pay in Canada. Retrieved from https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2019/01/Mint%20condition.pdf 

Murphy, B., Veall, M. & Wolfson, M. (2015). Top-End Progressivity and Federal Tax Preferences in Canada: Canadian Tax Journal. 63.3, 661-88 

Oved, C. M, Heaps, A. A, Toby. & Yow, M. (2017). Canada’s Corporations Pay Less Than You Think. The Toronto Star. Retrieved from http://projects.thestar.com/canadas-corporations-pay-less-tax-than-you-think  

Oved, C. M & Cribb. R. (2019). Legal tax dodges cost Canada $25B, PBO study says. Retrieved from https://www.thestar.com/news/investigations/2019/06/20/legal-tax-dodges-cost-canada-25b-pbo-study-says.html 

Stuckey, B & Yong, A. (2011). A Prime of Federal Corporate Tax Rates. Retrieved from  https://lop.parl.ca/staticfiles/PublicWebsite/Home/ResearchPublications/InBriefs/PDF/2011-44-e.pdf 1

Toby Sanger, executive director of Canadians for Tax Fairness, writes “Despite all the leaks and claims of action to crack down on tax havens, corporate Canada’s use and abuse of tax havens continues to grow.”

 

Canadian corporate cash in the top 12 tax havens increased by 10% to all-time high in 2018.

 

“Despite all the leaks and claims of action to crack down on tax havens, corporate Canada’s use and abuse of tax havens continues to grow”, said Toby Sanger, executive director of Canadians for Tax Fairness. “Government clearly hasn’t fixed its multi-billion-dollar problem of tax haven use. By channeling funds to low-tax jurisdictions, corporations and wealthy investors continue to enjoy all the benefits of living in Canada without fully contributing to the very services and programs they use. We clearly need both tougher enforcement and tougher laws.” No Canadians have yet been charged with tax evasion related to the Panama Papers or Paradise Papers leaks, unlike in other countries. Canadians for Tax Fairness estimates that Canada loses at least $8 billion annually from the use and abuse of international tax havens and profit shifting. The main beneficiaries are mega-corporations that can exploit international tax laws to their advantage while ordinary Canadians—and small and medium-sized businesses—lose out.2

Maura Forrest reported in the National Post that Canada’s budget watchdog has found the NDP’s proposed wealth tax, a centrepiece of the party’s election platform, could raise nearly $70 billion over the next 10 years.

 

The “super-wealth tax,” as the NDP is calling it, is similar to an idea promoted by U.S. Democratic presidential candidate Elizabeth Warren, and is part of the NDP’s campaign focus on tax fairness and inequality. The party wants to apply a one per cent tax to fortunes worth more than $20 million. Unlike a tax on income, a wealth tax would apply to all assets, including real estate, with the aim of reducing economic inequality. The NDP says the tax would apply only to the wealthiest one-tenth of one per cent of Canadian households.The parliamentary budget officer (PBO) released a cost estimate of the proposal, part of its mandate to cost out election platforms. According to the analysis, the measure could raise $5.6 billion in the 2020-21 fiscal year, rising to nearly $9.5 billion in 2028-29.3

The battle against economic inequality, and the climate emergency will require greater government revenue going forward.

 

References

1	(n.d.). Broadbent Institute Tax Index - Broadbent Institute. Retrieved April 3, 2021, from https://www.broadbentinstitute.ca/tax-index
2	(2019, April 24). Canadian corporate cash in top 12 tax havens increases by 10% to .... Retrieved April 3, 2021, from https://www.taxfairness.ca/en/press_release/2019-12/canadian-corporate-cash-top-12-tax-havens-increases-10-all-time-high-2018
3	(2019, September 10). Federal NDP's proposed 'super-wealth tax' could raise $70B over 10 .... Retrieved April 3, 2021, from https://nationalpost.com/news/politics/election-2019/federal-ndps-proposed-super-wealth-tax-could-raise-70b-over-10-years-budget-watchdog-finds