Confused about universality? So are NDP leadership candidates

There was some pretty confused stuff on universality and means-testing during last night’s NDP leadership debate. Here are some thoughts that might help clear things up.

First, Singh’s attack of Caron on means-testing early in the debate was a bit bizarre seeing as both of them have major new means-tested transfers among their policy planks. Caron did a good job in fighting back and hit back at Singh’s move to fold near-universal OAS into a more aggressively targeted benefit. Not a very enlightening exchange.

Not to be outdone, Angus’s attack on Singh at the end of the debate was even more confused. This time, Singh did a good job of defending himself and made a clear argument on the differences between means-tested cash transfers versus universal social programs.

On OAS in particular, Singh is right: not everyone receives it because claw-backs start at $75,000 in income and the benefit is gone for those making roughly $120,000. But Caron is right in that a vast majority of income earners ($120,000 in income lines up with the top 5% of overall tax filers) will get some benefit from the program so it is de facto universal. This makes OAS very different from things like GIS for seniors or WITB for low-wage workers, which phase out much quicker and are targeted at low income folks.

The problem of middle income seniors falling behind is an important one and tied up in so much else about the economy (the decline of unions and pensions; the housing bubble where some have won the lottery and others have not; and so on). The NDP does have to think about what combination of new social programs (pharmacare in particular because it disproportionately helps seniors), expanded public pensions and income transfers will do most to improve people’s lives, and also be a foundation to build on politically—in terms of policy staying power and building winning electoral coalitions. (more…)

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Budgeting for the oil bust in Saskatchewan and Alberta

The resource price bust is already a few years old but it’s still hitting parts of Canada hard. Two guests talk about the impact of the downturn on fiscal policy in the Canadian prairies and what this augers for the bigger question of a transformation of the economy away from fossil fuels. First I speak with Charles Smith, associate professor of political science at the University of Saskatchewan. He is the co-author, with Andrew Stevens, of a great analysis of the Saskatchewan budget, titled “Building the “Saskatchewan Advantage” : Saskatchewan’s 2017 Austerity Budget” over at the Socialist Project Bullet. Next, I speak with Ian Hussey, research manager at the Parkland Institute, a social democratic thinktank in Alberta. He contrasts the Alberta NDP’s more stimulative approach to public finance; however, there remain many questions about the scale of the shift and the need for real climate action.

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The road tolls for thee

Last week, Toronto mayor Join Tory announced a plan to toll two major Toronto highways, the Gardiner and the DVP. The city is starved for cash with huge shortfalls for both infrastructure (new housing, new transit lines) and even everyday operating expenses. Tolls are supposed to help close this gap. But despite the absolutely huge revenue needs of this city, there a case to be made against tolls from the left.

There is a simple practical argument against the proposed tolls: they won’t raise very much money and any revenue is years away. City planners calculate about $200 million per year of new money once tolls are in place. That may sound like much but Toronto needs are in the vicinity of $30 billion just to catch up with a growing population and ageing infrastructure. And the city needs the money now.

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John Tory has challenged those who oppose the tolls to spell out the alternative. Taxing parking spaces would raise $500 million and could be done right away. Getting residential and commercial property taxes to at least match long-term inflation and beat it, even with the necessary rebates for those house-rich, income-poor, would raise another huge chunk of cash. This isn’t even getting to more creative options—many of them included in an appendix to a KPMG report commissioned by Metrolinx.

Given the revenue crisis, lefties could easily come up with a viable, progressive money-raising plan even from a list prepared by the market-friendly consultants at KPMG. A municipal income tax? Why not since the province and the feds are raising less then they used to through this measure. Even a municipal sales tax with hefty rebates for low-income and working-class folks. It’s not a question of options but political strategy.

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Trudeau’s economic model is clear and it is not good

Last week gave us a good idea of the economic model that Trudeau’s Liberals are gradually putting forward and it is business-friendly to the core. The infrastructure bank privatization scheme was the big news item in the fall fiscal upate (see my post from last week), but there are far more goodies to make business happy tucked away in the update and in news from recent weeks. The Liberals plans for the economy are not just about being business-friendly today but about integrating government with business ever further, in ways harder for future governments to unwind. Theirs is a tweaked neoliberalism for an age of stagnation. The mantra remains the market and the state is there to support it.

Here’s the broad strokes of how the Liberals’ plans are shaping up on economics.

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The great rentier give-away

With today’s fiscal update, the Trudeau government has really shown itself to be at the forefront of global left neoliberalism. Taking nearly all his cues from his business-dominated Advisory Council on Economic Growth, the Finance Minister announced a new Canada Infrastructure Bank as the centerpiece of the fiscal update and the Liberals’ economic strategy. Don’t believe the fanfare that is bound to come from the Canadian and international press, this isn’t anything progressive. It’s a new elite consensus that might become one of our main exports, pumped via virtual pipelines across the globe.

Here’s how Dominic Barton, the managing director of McKinsey Global, one of the world’s largest business consulting firms and head of the Advisory Council, framed the impetus behind the new bank:

Barton said infrastructure aimed at improving productivity will be of huge interest to foreign investors in search of steady returns with record low or negative interest rates in many parts of the world. “Infrastructure is the new fixed income,” Barton said in a speech over dinner at the conference. The mix of public and private capital has the potential to “jolt the system.”

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Growing the middle class or adapting the elite consensus?

Today’s federal government budget is a litmus test for the new Liberal government. They campaigned on promises of “real change” from the last regime, including a willingness to increase social spending even if it meant running deficit budgets. And, in keeping with this pledge, spending is up, and the deficit is forecast at $29.4 billion.

This is fine in the short term, but it isn’t just about how much spending will be created. The really crucial thing is what kind of spending. Since the 1990s, the Liberals across the country have been masters at implementing a slow-grinding austerity that has cut programs, given away our public services to private interests, and reduced taxes, largely for business and the rich.

More than anything else, this budget reads like new technocratic consensus. Like 1990s austerity, Canada’s Liberals are once again at the forefront of global elite policy. In an era of slowing growth and productivity, with monetary policy by central banks all but exhausted, even the OECD and IMF have called for higher deficits. The Liberals are forging the path that the global elite will try to travel to get global capitalism working again — especially for the elite. As Greg Albo remarked, with this budget the Liberals have rolled back Harper but left Chretien and Martin untouched. (more…)

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Fiscal policy for the left, or Corbyn vs Mulcair on deficits

The question of deficits dominated a lot of the economic debate in Canada during the 2015 federal election and even today. Jeremy Corbyn’s Labour Party introduced a new fiscal policy last week that, on surface, appears to mirror the NDP’s anti-deficit stance from the 2015 campaign. Looking closer, however, Labour’s policy diverges quite substantially and points to more honest and transformative economic policy for the left. (more…)

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