Civic Elections-New Politics for a New Deal for Municipalities
George Hewison Political Economy Newsletter XVIII October, 2014
It’s municipal election season for many Canadians. Yet in most municipalities, the voter turnout will be less than an underwhelming 50 per cent. These elections do not arouse the same passions as a Scottish (or Quebec) independence referendum. Waste management and potholes may not be as sexy as the fate of nationhood, but the consequences for decision-making can be just as serious. Both sets of ballots are ultimately concerned with individuals and communities, large and small, delegating bits of their sovereignty in return for a perceived greater good.
In the Scottish vote, almost 90% of citizens, whatever their choice, felt empowered. During Canadian municipal elections, electors increasingly feel their vote just doesn’t mean enough in terms of changing their lives.
The reality is nothing could be further from the truth. The reality is that much can and must be done locally and it starts by refusing to accept a thesis that nothing meaningful is possible. In fact, there is growing evidence, to the contrary, that changing disastrous directions in our increasingly global community must start at the grass roots (consider today’s news about “Occupy Hong Kong”).
Change starts by acknowledging that there is a gigantic contradiction between provincial, national and global strategies that increasingly determine the quality of our lives within local municipalities (on the one hand) and a deepening crisis for our local municipal governments (on the other).
Much has changed in the intervening 147 years since the British North America Act brought Canada into existence. From that time long ago time when constitutional powers were first divided up between the federal and provincial governments, Canada has gone from a largely rural population living in unorganized territory to a largely urban population in towns and cities mandated by municipal acts of various provincial governments.
Thus, the local municipality is the lowest tier of governance and subject to a most oppressive weight of policies set at senior levels of government. Senior governments hold all of the real levers of power. For example, the main taxation source of revenue to service the increasing needs of the population rests with senior levels of government, but those senior governments have increasingly downloaded heavy costs onto hard-pressed municipalities. The senior levels of governments have left municipalities with only a few tools in their tool chest, along with very limited revenue possibilities except for one of the most regressive forms of taxation, the tax on the home.
Further, the Lac-mégantique tragedy, and increasing floods, wild fires and other disasters arising from climate change informs Canadians as to how federal and global policies can have disastrous consequences for the local community. Meanwhile, myopic provincial resource policies and regulatory oversight frustrate municipal leaders trying to do what they can with their limited powers.
“What About the Gravy Train?”
Something else has changed radically since Confederation. If fortunes were made by speculators with the Canadian Pacific Railway (including the “Pacific Scandal” involving our first Prime Minister in the 1870s), it pales before the wealth accumulation and concentration of wealth in 21st Century Canada. The current wealth accumulation must surely be worthy of the attention of local municipal leaders trying to decide which crisis to tackle first. There is, however, a huge, mind-numbing ideological bug standing in the way of a critical examination of the real state of our fiscal and economic health.
Most local, provincial and federal leaders (and most of the rest of us) are still bitten by the “austerity” virus. That bug would have us believe that, without serious fiscal belt tightening, we will leave our children and grandchildren with mountains of debt. In other words: “we are living beyond our means”; “our work force is pampered”; and “we have to put a stop to the runaway gravy train”.
Related to this, for the past four decades, we’ve been indoctrinated, compliments to the Chicago School of Economics (Milton Friedman), and the Fraser Institute in Canada, by yet other gigantic myths. They are the myths of de-regulation, privatization and… that low corporate taxes will result in economic prosperity that trickles down to the least of us, including local municipalities. The meltdown of 2007/08 should have been the theoretical Waterloo for such mythology. But powerful economic and social forces lie behind this increasingly failed fiscal sleight-of-hand.
Canada is not going broke and IF there is a gravy train, we are looking in the wrong direction.
Canada does not have a fiscal problem. The real 21st Century scandal, that would make Sir John A. blush with envy, is that Canada has a distribution-of-wealth problem. Organizing, creating and distributing the collective wealth created by Canadians, in a responsible way, should be the function of government, and the most effective ways to ensure equitable distribution is, in the first place, PROGRESSIVE TAXATION!
Simple, so what’s the problem?
Today, the most powerful lobby in Canada, the Canadian Conference of Chief Executives (CCCE), brings together 150 Canadian CEOs, that according to their web-site boasts that they “represent all sectors of the Canadian economy. The companies they lead collectively administer $6 trillion in assets, have annual revenues in excess of $850 billion, and are responsible for the vast majority of Canada’s exports, investment, research and development, and training.”
This sounds like a formula for an “invisible” hand behind government, much like the tempters of Sir John A. in the 1870s, or the “Family Compact” and the “Chateau Clique” before them, that we studied in history books. We needn’t go into how cash in election campaigns plays such a big role in framing election outcomes, or the highly concentrated media in Canada (part of the CCCE by the way). We do need to examine how the “austerity bug” affects tax policy and the looming debt crisis though.
According to the economist, David Macdonald, of the Canadian Centre for Policy Alternatives: “Corporate Canada has reached a milestone in 2014. For the first time ever, it is now hoarding more cash than the national debt. What that means is that in one fell swoop, Canada’s corporations could pay off our entire national debt with just the cash sitting in their bank accounts, never mind their other assets.”
How and why did this happen? Forty years ago, we were told that lower tax rates for corporations would attract investment, economic growth and jobs. That spin has continued. So the federal corporate tax rates were dropped from an already abysmally low 22.1% in 2006 to 15%. The Province of Ontario dropped its corporate rate from 15% (already disastrously low from the Harris years) a couple of budgets ago to just over 9%. Billions of dollars have been lost to the public purse. Now both senior levels of government are fixated on balanced budgets involving massive cuts to services to people and local governments and irresponsible resource development that rapidly undermine the quality of life of Canadians. Deeper cuts are contemplated.
The spin has been that tax cuts were designed to stimulate investment. The reality is that investment goes where a buck can be made and the tax rate gifts to the 150 CEOs’ corporate balance sheets are not being re-invested to create jobs, and not “trickling down”, but are sitting in bank accounts to the tune of $690 billion in Canada and offshore, awaiting sketchy investment opportunities. That’s the real gravy train. Now our federal government is negotiating a blizzard of “trade” agreements that have little to do with trade, but everything to do with the free flow of capital investment opportunities at a global gaming table and more gravy to the players. More privatization and attacks on unions and assaults on the desperate poor mean still more gravy.
No intelligent person opposes more fair trade in commodities within an increasing globalized division of labour. The objection must be in handing more economic and legal weapons to corporate oligarchs that frustrate the sovereignty of our country and our citizens and their governments. Reading the CCCE’s web-site, they are lauding the opportunities presented by the so-called “trade” deals, but municipalities, provinces, and small local businesses need to be alarmed about local procurement policies (among other parts of these deals increasingly negotiated in secret).
What does all this mean?
Clearly, being an elected municipal leader is not what it once was. Not only must local leaders demonstrate leadership to their constituents on fiscal stewardship, urban planning, potholes and waste management, but must use their perspectives to help citizens connect these issues as they relate to a much bigger picture. Sustainable urban planning must be accompanied by adequate resources and transparency and citizen involvement. This means politics must be practiced in a new way. This means going beyond fielding constituent complaints over building code violations and bylaws for pet owners to helping constituents to help themselves in challenging worn out mantras shouted at the provincial, federal, and, yes, even the global level. Leaders who accept and perpetuate the austerity myth, or lack strategic vision and end up running interference for failed policies at the federal and provincial levels of government contribute to the feeling of helplessness by local citizens.
A local struggle around a mega quarry in the tiny Ontario municipality of Trent Lakes is instructive because it has generated a debate in that community about how the municipality should move forward. There is a community-wide discussion not just on a mega quarry but also issues that militate towards core questions for the future of local government and our democracy: can the lowest tier of governance in Canada play any useful role in defending the interests of the people and their communities?
Trent Lakes, as part of the “Land Between” a unique ecosystem that bridges the St. Lawrence Lowlands and the Canadian Shield, sustains unique species of plants and animals found nowhere else. The Land Between has also supported human habitation for more than ten thousand years.
This special area and its current inhabitants now face a great challenge, and stark choices, because the area is also the northern-most boundary of the sedimentary limestone prized for its designer landscaping stone (and in aggregate form-for construction and highways). Backed by provincial government policy, developers, eager for the fast buck, are rushing to the area as if stricken by Gold Rush fever.
The Provincial Government, supposedly stewards of the environment (as well as for economic stewardship), seem to have made choices either by action or inaction to favour irresponsible growth at the expense of the environment. It seems strong provincial legislation and regulation has been overrun by the current wave of limestone quarry applications.
In face of its parent Province of Ontario, the Council of Trent Lake has either thrown in the towel or gone along with the Gold Rush mentality. The latest granddaddy of mega quarries (three times larger than all of the previous quarries combined) was signed off on with the minimum of effort and fight, while defensively chanting the oft heard phrase that “provincial policy dictated to us and we had no choice.” Their changed official municipal plan and rezoning bylaw touched off a firestorm of protest in an otherwise relatively sleepy community. That sleeping giant is now awakening, as the citizens of Trent Lakes demand choices and leaders, who will help them in the search for meaningful choice. The struggle is not just an urban planning issue but the essence of democracy at its most basic.
If nothing can be done to challenge the mantra that nothing can be done, local government really has little role but to turn in the keys. Obviously, this is NOT an option, but it means that the job of the local politician must change to helping provide real leadership. And it’s up to the rest of us to help engage as many as possible in the search for meaningful solutions. In the Township of Trent Lakes, during the quarry struggle, many experts in many fields, with many divergent views, found one another among the local citizens. The resulting brew has been a rich discourse and exchange of ideas to help move the democratic process forward in the search for solutions.
The idea of more advisory citizen committees with more lively debate on important issues affecting the community cannot but move in the positive direction of more engagement. Yes, it is baby steps in the grand political scheme of things. But it sure beats watching politicians trying for that ultimate 30 second sound bite, regurgitating rehearsed talking points, testing focus groups and watching poll numbers and turning off the electorate of Canada.
George Hewison is a lifelong union organizer and former officer of his union, the United Fishermen and Allied Workers Union, on Canada’s west coast. He embraces political and social activism in the interests of social justice and fundamental social change.
Hewison believes in the power of the people, who, if given the proper tools, can change the world. One of those tools is a deepening understanding of how our society is put together. He has been the recipient of many important lessons, both positive and negative, from veterans of Labour’s struggles stretching back decades. He has spent most of his adult life sharing those lessons with others.
For a number of years, he has also embraced a study of the political economy of capitalism, including its current iteration, and conducts discussion groups with interested folks who share his desire to understand and explain the complexities of the social, economic and political world around us.
He continues a tradition of combining working class activism with the power of song and continues to tour and perform extensively.
He may be reached at email@example.com .
 Credit Suisse Global Wealth Databook, 2013 has the most exhaustive studies dating back to 2000 of the world’s $230 + trillion US dollars in assets.
 The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.
 Taxation based on the ability to pay.
 Letters to various Premiers, the Prime Minister and federal and provincial finance ministers by the CCCE tends to confirm a most symbiotic relationship between politician and oligarch.
 http://rabble.ca/blogs/bloggers/behind-numbers/2014/08/truth-about -corporate-taxes-single-chart
 The 31 year FIPA agreement just signed with China, gives the Chinese state and state-owned companies the right to sue the government if Canadians impede their profit opportunities under the pact. The Germans are already balking at the Canada-EU Agreement over concern that Canadian-based corporations might sue Germany for the same reason. The issue for people in every country and municipality is the loss of sovereignty.