August 2011 Labour Force Survey – Manitoba Weathers the Storm

Errol Black

The August Labour Force Survey was released on September 9th.  Although Manitoba fares better than most, the results are not encouraging.

A number of analysts have noted in recent weeks that the lack of growth and job creation in the economy is attributable to a combination of factors.  These include the appreciation of our dollar and the sad state of the U.S. economy which is hurting the export of manufactured products to the U.S.,  and a growing sense amongst consumers and firms that things are likely to worsen in the immediate future because of a deterioration in the global economy.

Progressive economists argue that the latest numbers are good reason for the federal government to put its rush to austerity on hold and focus attention instead on the worsening problems in the economy and labour market.

For the country as a whole, employment growth has all but stalled.  Over the 12 month period ending August 2011, employment was up by 223,000 jobs or 1.3%. This increase in employment bumped the employment rate from 61.8% to 61.9%.  On the flip side of the coin, the number of unemployed workers fell by 138,300.  While this was reflected in a reduction of the unemployment rate from 8.1% to 7.3%, it is also important to note that there were 132,000 less individuals in the labour force, a result which reduced the participation rate by 0.5 points (from 67.2% to 66.7%).

These results suggest that job creation in the country as a whole has not gained much traction over the past year.  This is confirmed by the changes in the past month – July to August, 2011- that has seen the employment rate unchanged at 61.9%, the participation rate down 0.1 points (66.8% to 66.7%), and the unemployment rate up 0.1 points (7.2% to 7.3%).

Manitoba fares better than most

Not surprisingly, the conditions in the national labour market over the past year are replicated in most provinces, including Manitoba, Saskatchewan and British Columbia.  The sole exception is Alberta where job creation does have traction.

A silver lining to this otherwise discouraging situation is that the unemployment rate remains low in Manitoba at 5.4%.

There are a few other bright notes in the Manitoba economy.

  • According to a recent survey by the Canadian Federation of Independent Business, confidence of small to mid-size businesses in Manitoba tends to be stronger here than in the country as a whole.  One result of the CFIB survey that is especially encouraging in relation to the labour force is that “20 per cent of Manitoba businesses plan to increase full-time employment in the next three to four months (as compared  to 14 per cent nationally) and only five per cent plan to decrease (as compared to 12 per cent nationally).”
  • University enrolment is up.  According to Free Press reporter Nick Martin“Enrolment in Winnipeg’s two largest universities has soared to record levels” (Winnipeg Feee Press, September 10).
  • Over the longer term, the province’s plan to move ahead with strategic investments in Hydro power development and physical and social infrastructure projects will bolster employment and contribute to improvements in productivity.
  • The continued recruitment of immigrants from off-shore, the expansion of training for the skilled trades, and initiatives to increase retention levels in the public school system, such as support for off-campus high-school programs and adult education programs, will enhance employment and productivity growth.
  • Ongoing investments in infrastructure by all levels of government plus private-sector initiatives that are in the works should help ensure that small business growth and job creation prospects are further improved in the coming months.

Like the rest of Canada and the world, Manitoba has challenges ahead, but we are better positioned to weather the storm than are most.

So You Think You Can House?

The Right to Housing Coalition (of which the CCPA-MB is a member) and Planners Network present an election forum on affordable housing in Manitoba. Come to hear the Liberal, NDP, and PC housing platforms.

September 19, 7pm
Winnipeg Free Press News Café, 237 McDermot


See you there!

Election 2011 UnSpun

A Clock Worth Watching

The editorial in September 7th’s Winnipeg Free Press about the Canadian Tax Payers Federation’s “debt clock” conjured up a funny image for me: a group of people watching a free-floating number growing while they get more and more agitated. The more the number grows, the higher their blood pressure goes. Will they be O.K.? Should we give them blankets and water? Should we call the paramedics? 

Relax!! There’s really no reason for people to stress out over one number: there are other equally important numbers that have to be added to the analysis before we can determine the state of Manitoba’s economy. Once a real assessment is done, you’ll be happy to learn that we’re doing amazingly well. 

In order to help you chill out and think clearly before you vote, CCPA Mb. is presenting a series designed to help you cut through the spin.

Our Election 2011 UnSpun series will calm your election vertigo and let you think clearly about important issues before you vote.

A Clock Worth Watching explains why another “value-added” clock would be much more interesting than that scary debt clock. Check it out: it’ll make you feel better.

Lynne Fernandez


Election 2011 UnSpun

McFadyen’s Fitness Tax Credit for Adults – Really?

The bad public policy ideas are beginning to pile up as Manitoba’s provincial election shifts into overdrive.

A favorite of mine is Hugh McFadyen’s Fitness Tax Credit for adults.  McFadyen’s plan will allow gym members to claim up to $500 of eligible costs for a maximum tax credit of $54.00.  This policy was announced as part of the Conservative Economic Strategy.  It comes with a price tag of $20 million.

Susan Auch, the Conservative star candidate in Assiniboia said that “Expanding the fitness tax credit would make organized physical activities more accessible and affordable for Manitobans of all ages”.

Really?  Do they honestly believe adults are going to shell out $500 for a gym membership or join a hockey league to get $54 back at tax time?

Here’s how I see this one playing out.

People like me who are already committed gym goers will cash in.  For several years now I have had a gym membership that costs me about $600 annually.

It is highly unlikely that the credit will inspire adults to join a gym.  And it certainly isn’t going to help low-income families in greatest need.

This is $20 million out of the public purse put into the pockets of people who don’t need it.

Here’s an idea.  Perhaps the Conservatives could allocate this $20 million toward their crime strategy.  They could invest in the excellent community-based programs already providing much needed sport and recreation activities for high-risk youth in the inner city.

This could replace their current plan, which offers up no funding, promising only to “coordinate existing programs”.

Shauna MacKinnon is the Director of CCPA Manitoba

Measuring Economic Well-Being in Canada and the Provinces

This note, written by Errol Black, shows how Manitoba’s economic well-being has changed over the last 30 years, compared with Canada and the other western provinces.

For many years now, a group of scholars in Canada have been producing estimates based on an Index of Economic Well-being developed in 1998 by the Centre for the Study of Living Standards (CSLS).

The Index is based on four components of economic well-being, namely: effective per capita consumption flows; net social accumulation of stocks of productive assets; income distribution, including the intensity of poverty…and the inequality of income; and economic security from job loss and unemployment, illness, family breakup, and poverty in old age.

In 2010, the CSLS published a Research Report by Lars Osberg and Andrew Sharpe titled New Estimates of the Index of Economic Well-being for Canada and the Provinces 1981-2008.

There is much useful information in this report. Of particular interest are three inter-province comparisons based on different weightings for components of the overall index of well-being. Overall Manitoba has performed well relative to both the country as a whole and other provinces. Under Alternative II which assigns weights of 0.40 to consumption, 0.10 to wealth, 0.25 to equality and 0.25 to security, for example, the record for Manitoba compared to Canada and the other western provinces is as follows:

 

Canada

Manitoba

Saskatchewan

Alberta

British Columbia

Index in 1981

0.435

0.362

0.463

0.570

0.462

Index in 1989

0.510

0.487

0.480

0.515

0.523

Index in 2000

0.522

0.501

0.523

0.600

0.518

Index in 2008

0.646

0.623

0.665

0.776

0.644

 

per cent change:

1981-2008

48.3

72.1

43.7

36.1

39.6

1981-1989

17.0

34.5

3.8

– 9.7

13.4

1989-2000

2.5

3.0

8.9

16.5

– 1.0

2000-2008

23.6

24.2

27.2

29.4

24.4

These data show that Manitoba’s relative performance was especially strong over the entire period 1981-2008 and the period 1981-89, especially weak in the period 1989-2000.

In OECD countries:

The most recent OECD Index of Economic Well-being for selected countries 1980-2007 (Andrew Sharpe, Beyond GDP: Measuring Economic Well-being) yields the following ranking for 2007: Norway, Denmark, Netherlands, Belgium, Sweden, France, Germany, Finland, Canada, UK, Australia, Italy, United States, Spain. The United States is, of course, way at the bottom on the Index of Equality (Canada, Spain, Italy and the UK are also at the lower end of the scale).

The moral of this story would seem to be that we need to start paying more attention to the measurements of economic well-being and less to the sorts of data that governments, business organizations and right-wing think tanks rattle on about in their commentaries on the state of societies and the world.

Errol Black is the chair of the CCPA-MB’s Board.

Happy Labour Day!

This was published in the Brandon Sun this morning.

As we mark Labour Day on September 5th, we should perhaps reflect on the current state of Canadian society and our economic prospects. We are justifiably proud of our framework of laws governing labour relations, employment standards, minimum wages, and safe workplaces. We are also proud of our many public programs that guarantee us access to educational opportunities, health care, and benefits to survive in retirement such as Old Age Security and CPP.

Unfortunately, we tend to take the things we enjoy for granted with little knowledge or appreciation for how they were achieved. As a working person and trade union activist, I have always considered the labour movement as the conscience of society. Our vision and our actions are inspired by a belief that together we can achieve social justice, eradicate poverty, stop racism and establish programs that ensure all families have the necessities of life – a roof over their heads, food security, health care, etc. – and make the world the place we want it to be.

At the present time, crisis conditions in the North American economy and across the globe have had a negative impact on thousands of families through job loss, wage cuts, and the erosion of their savings and pension benefits. 

As we look ahead to the coming year, the Brandon & District Labour Council can take pride in the fact that many of the projects we have fought for in recent years are now coming to fruition. The Construction Industry Wages Act has been restructured to ensure construction workers in Brandon and rural Manitoba now get the same minimum wages in their trades as their counterparts in Winnipeg. A new Workers Compensation Board office is coming on stream to provide services in this part of the province, and very soon we will have a Worker Advocacy Office up and running to assist people who need help accessing services and advocacy for appealing denied benefits such as CPP, social assistance and workers compensation while they are unemployed. 

In the next year and beyond we will be seeking to preserve the gains that we have successfully lobbied for in Manitoba over the past decade, including: regular increases to minimum wage, improvements in employment standards, and an extension of these benefits to agricultural workers; safer work places with more inspections and harsher penalties for failures to comply with legislation; more services “outside the perimeter” for people in Brandon and rural areas of Southwest Manitoba without taking a step backward. 

Also we will be promoting initiatives at all levels of governments to adopt policies and programs that will generate economic growth, create quality jobs that pay living wages and provide working families with the resources they need to ensure their children get the benefits of a decent education and opportunities for recreation and other related activities. 

Locally we will be working with everyone in the community to support and stimulate our local economy that includes small business, family farms and the rejuvenation of downtown. These efforts will continue to involve us in campaigns to support the Canadian Wheat Board, keep federal Service Canada jobs in Brandon, and bring new industry to Brandon. 

As a final point I would note that all of the measures that we support and promote are consistent with what governments say we should be trying to achieve in Canada. First, working people have always understood that there is no future in cutting wages, destroying quality jobs, and attacking unions. Our proposals will raise wages and incomes in the community, which in turn will improve business conditions in the economy. Second, we have also understood that there is no future in blaming particular segments of our population for the problems that arise during periods of economic crisis – immigrants, union members, public sector workers, etc. Our proposals will improve living conditions for all members of our community, leaving no one behind, which will in turn nurture our pride in being citizens in a progressive and visionary community. 

In conclusion, as the struggle continues to protect and improve our standard of living, have a Happy Labour Day.

Jan Chaboyer is the President, Brandon and District Labour Council.


Bloated Public Sector or Bloated Rhetoric? …You Decide….

Yesterday I sent a letter to the Winnipeg Free Press about an August 31st op-ed decrying Manitoba’s supposedly “bloated” public sector. The op-ed was just begging for a response. Let’s hope the letter gets printed, but in case it doesn’t, here’s the scoop.

The op-ed in question, authored by Eisen and Wensveen, is a shortened version of a report they did for the Frontier Centre for Public Policy. Both versions talk about Manitoba’s “unusually large” public sector, but upon examination of the data contained in the report, their alarm is difficult to justify. Assuming that their calculations are correct, they show Manitoba to be in upper levels of the middle of the pack. Their calculations show municipal public-sector employment and provincial and municipal-sector employment as percentages of total employment. If one removes the extremes from their data (Alberta and B.C. at 16 and 17% respectively; Newfoundland at 31%) Manitoba, at 26% is keeping close company with many provinces who are hovering between 22 and 27%. 

But the fact that Manitoba does not stand out at all one way or another is not even the most worrisome part of their report. The authors do not explain why public-sector employment is in itself a bad thing. Their main argument is that public-sector employment causes unemployment in the private sector, which, if it were correct, would amount to no more than a red herring; it wouldn’t change aggregate unemployment numbers. They do not put their hypothesis in the context of the current recession which has seen the private sector shrink, with huge losses in employment. If it weren’t for public-sector employment, the economy would have shrunk even more than it did and the private sector would find it that much harder to recover.

Comparing public-sector wages and benefits with the private sector, as the authors do, sets off another smoke bomb. The public sector by nature includes highly-trained professionals such as nurses, teachers, engineers etc. who have to be paid higher salaries, especially when compared to “the lower wages, fewer benefits and less security” the authors admit are features of private-sector employment. The fact that these workers earn decent wages and benefits should inspire private-sector workers to demand more from their employers, not demand that others lose ground. 

The authors also do not consider that Manitobans derive real value from the services provided by the public sector. In order for their conclusions be meaningful, they would have to include a comparison of the quality and quantity of services provided by the provinces’ public sectors. The median Canadian household realizes benefits from public-sector services that are equivalent to 63% of their private income. Significantly, the public sector gives low-income earners the tools they need to look after their families – thereby softening the debilitating blows of the low-wage, precarious employment the authors seem to be wishing on us all.

Lynne Fernandez is a political economist with the Canadian Centre for Policy Alternatives Mb.

CCPA-MB Fundraising Brunch with Justice Sinclair

PLEASE NOTE: The Brunch with Justice Sinclair has been cancelled, and will be rescheduled. Please stay tuned for more information. 

Justice Murray Sinclair, the chair of the Truth and Reconciliation Commission, has graciously agreed to be a guest speaker at a CCPA-MB fundraising brunch in the Star Grill restaurant in the Assiniboine Park Conservatory. The theme of his presentation will be “Understanding the Legacy”. Seating is limited, so please order your tickets soon.

Fundraising Brunch with Justice Sinclair: Understanding the Legacy.

Sunday, September 18, 2011, 10am.

Star Grill – Assiniboine Park Conservatory.

Shauna MacKinnon wrote a Fast Facts last year about child welfare devolution and the opportunity presented by the Truth and Reconciliation Commission to both share and hear stories about Canada’s legacy of colonialism. You can read it here.

PUB’s Lack of Vision is Risky for Manitoba

The PUB’s July 2001 Order regarding Manitoba Hydro’s proposed rate increase has received quite a bit of media coverage.  Pundits have used it to suggest that the government is mismanaging Manitoba Hydro, but their arguments are not defensible, especially in the light of the PUB’s weak analysis regarding Hydro’s export plans and the need to make our own energy supply more secure.
This Fast Facts by Errol Black and Lynne Fernandez explains: 1. why the Order’s recommendations should not be adopted, and 2. how, by cherry picking certain details and ignoring important background information, some pundits have misrepresented both the spirit and context of the Order, allowing them to arrive at  inaccurate and sensationalist conclusions.

The Implications of the Public Utilities Board Report on Manitoba Hydro

On July 29, 2011, the Public Utilities Board (PUB) of Manitoba issued an interim Order denying Manitoba Hydro requests to “finalize existing interim rates and for an additional 0.9% rate increase for all customer classes, effective August 1, 2011.” The Order also notes that these requests “…will be further considered and may be adjusted on a final basis in a subsequent Order of the Board.”

The PUB report is a preliminary assessment of Manitoba Hydro’s future investment and development. The documentation supporting the report is extensive, but not complete. Missing are: “…export contracts, financial projections, alternative development scenarios and other information requested by the Board.” Apart from whether the PUB should have access to export contracts with Minnesota and Wisconsin [contracts that were available to the experts consulted by the PUB and therefore reflected in their testimony], which is to be determined in the courts, much of the information requested will no doubt be forthcoming from Manitoba Hydro.

The statement of findings deals specifically with the Keeyask and Conawapa generating stations and the Bi Pole III transmission line. Of particular concern are Manitoba Hydro’s plans relating to market conditions, pricing arrangements and risk management. While some of the questions raised in the statement may merit a response, the statement also includes observations that are acknowledged as highly speculative, and subject to qualification. At no time does the PUB state that its findings are in anyway definitive.

The investment and development plan referred to in the interim Order is one that Manitoba Hydro has been developing for the last decade. It includes major hydro-electric projects that will meet the growing needs of Manitoba and export markets. Wuskwatim, a $1.3 billion project, will be completed in 2012. Keeyask, a $5.6 billion investment, and Conawapa, a $5 billion project, are slated for future development. A new Bi Pole III transmission line ($3.3 billion) to accommodate increases in sales and improve the security of the system is planned for the west side of the province.

Following completion of the East Side Planning Initiative, the Province announced that it would not allow construction of transmission lines through the east-side Boreal Forest, and then announced its intention to protect the Boreal Forest and pursue a UNESCO World Heritage Site designation for the area. CCPA has explained in several publications why this strategy makes sense. The Keeyask generating station got the go-ahead in May upon completion of contracts with utilities in Wisconsin and Minnesota. It is important to note that since all such projects are subject to regulatory approval on both sides of the border, the Province must carry out an alternative hearing before final approval is given. If the project does get final approval, it will be completed by 2021. Conawapa has an estimated in-service date of 2023, but it too must get regulatory approval. Conawapa will only proceed if a transmission line is constructed in Minnesota to carry power to U.S. markets.

The PUB expresses concerns about the sluggish US economy which may reduce the demand and price for hydro power, and the increasing output of shale gas which could also decrease future demand for hydro exports. According to the PUB, this situation may result in Manitoba Hydro ratepayers subsidising the price of hydro power exported to other jurisdictions and states that it may be prudent to defer construction of future projects until we have a clearer idea how these forces will evolve.

However, given existing export commitments already made with Wisconsin and Minnesota and the long-range planning required for new hydro infrastructure, it would be unwise to delay construction. Even if the global economy continues to stumble for the short term, over the medium term it will improve, leading to rising interest rates and a weaker Canadian dollar. Borrowing and construction costs would continue to churn during the time projects are put on hold and may eventually end up significantly higher. Moreover, any delay in our construction plans will result in US utilities seeking alternative suppliers, which could dry up opportunities for export sales in future.

The PUB acknowledges that shale gas extraction is controversial and that the shale gas ‘revolution’ may not unfold as anticipated. The impact of extraction on “the environment, energy, toxic hazards, worker safety, pollution and climate change” continue to proliferate and are likely to curtail, if not derail, the current shale-gas frenzy.

The Board acknowledges the vulnerability of southern Manitoba to outages caused by the failure of Bipole I and/or II and the need to address reliability. But then it justifies delays in construction because there is no guarantee that net export profits will be sufficient to cover the costs of the new transmission, leaving domestic customers to absorb costs through higher rate increases. But if Bi Pole I or II failed, the costs to ratepayers and/or taxpayers would be far greater than any rate increases. Exports and reliability are separate issues; one should not be made contingent on the other.

In spite of the preliminary nature of the PUB report, some pundits are brandishing it as proof that the government is forcing Hydro to make unwise business decisions. Nothing could be further from the truth. The report asks legitimate questions, and in doing so, the PUB fulfills its mandate to protect Manitobans’ investments. But its recommendation to halt construction on major projects—required to meet our contractual obligations with two U.S. states and to secure southern Manitoba’s power supply—should not be heeded. Two major export contracts and a plan to deliver energy security trump speculation about a volatile economy and questionable fracking technology.

We are puzzled as to why the PUB is seeking information that deals with plans for the next ten or fifteen years in order to make a determination on rate increases required to deal with current circumstances. The Board has committed to reassess its findings in a subsequent Order; we suggest that the reassessment focus on Manitoba’s present situation so that Manitoba Hydro can move forward with its long-term plans.

Errol Black is a CCPA Mb. board member and Lynne Fernandez is a CCPA Mb. research associate.