Manitoba Employers Council and Manitoba Chambers of Commerce layout an agenda that is long on rhetoric but short on good ideas
by Errol Black
On August 29, 2011 the Manitoba Employers Council (MEC) released a report titled, Are we there yet? The Manitoba Prosperity Report. The purpose of the report is to review Manitoba’s economic performance since 2001, relative to Ontario and the provinces west of us.
The Chambers of Commerce immediately adopted the MEC’s recommendations dealing with tax reductions as part of an initiative called Manitoba Bold. This is not surprising since tax cuts have become the Chambers’ mantra during elections and budget reviews.
More interesting is what they don’t say. CCPA’s Errol Black gives us the highlights and slows the spin in his analysis of The Manitoba Prosperity Report.
by Ian L. Robson
I seem to be writing a lot about this issue these days. I wish I could be farming. The soil is still very wet and will not support big loads, but weirdly the hay and pasture-land is dried out and not producing—probably compacted and the moisture ran off.
I spoke with a woman following the Brandon Chamber of Commerce (or CJOB radio info-tainment talk show) leaders forum with McFadyen, Selinger, and Gerrard on Monday.She gave me her opinion of Hugh McFadyen’s response to farmers and Manitoban’s over the Federal Government meddling in the affairs of the elected Canadian Wheat Board Directors. She thought it unwise to vote for McFadyen because he would not question things that the federal government proposes.
Another woman I spoke with whose brother is a dairy farmer thought that changing the CWB would be okay if we saw the plan from Minister Ritz. She was surprised when I told her that farmers currently have the freedom to sell their grain through the CWB Producer Direct Sales program. Minister Ritz has been careful not to advertise this because it essentially kills his argument that the CWB is restrictive. The CWB is restrictive on the Producer Direct Sales program in this way: The farmer must find a buyer who will pay a large premium over the going market price—which happens sometimes. This allows farmers who want to increase the market value to do so while also benefitting from the extra profit.
At the leaders’ debate in Brandon, McFadyen said that the CWB decision is a done deal and farmers should prepare for life after the CWB. Both Selinger and Gerrard said listen to the majority of farmers who themselves paid for a democratic process to determine whether support for the Single Desk continues.
Manitoba and its farmers have a lot to lose. Farmers know it and this is why the majority voted in support of the Single Desk that CWB provides.
Without the Desk we are merely transferring wealth from the farmer to the grain trader and we already see these traders licking their chops—share price of multinational Viterra increased immediately after Ritz made his announcement. For more information about this issue and to get involved, go to the Canadian Wheat Board Alliance website.
Ian L. Robson is a cattle and grain farmer from Deleau, Manitoba
by Sarah Cooper
For most of the ’80s, at least 10 percent of the new housing built in Canada was affordable housing. After 1993, the number dropped to less than one percent. This means that very little housing that is affordable to lower income families is now being built in Canada.
Combined with increasing housing costs and the growing gap between upper income earners and lower and middle income earners, this is putting a serious crunch on housing.
It’s no wonder that over the last two decades, the number of homeless, hidden homeless, and precariously housed people in Canada has skyrocketed.
Thanks to Michael Shapcott (Wellesley Institute) for the original chart.
Why Does Down Look Like Up to the Conservatives?
by Lynne Fernandez
Coming into work today I was struck by two large billboards. One has a photo of Hugh McFayden with a promise to cut taxes. The other delivers a simple text message: Conservatives will cut taxes; NDP will raise taxes. That a Conservative party would promise to cut taxes is old hat, but can we say the same about this NDP government raising taxes?
Given that a government’s future behavior is best predicted by past behavior, let’s examine the NDP’s record on taxes since coming into office.
CCPA Mb. started reporting on the NDP’s tax record in our 2006 Alternative Provincial Budget: “As cited in Budget 2003, the period between 2000 and 2003 was witness to the ‘largest four-year cut in personal income taxes in Manitoba history.’ Between 2001 and 2003, the average Manitoban received an 11.5% personal tax cut.”
Want more detail? The corporate tax rate was 17% when the NDP took office in 1999. Today, the corporate tax rate is 12%. That would be a 5% decrease in the corporate tax rate.
Manitoba is the only province in Canada to have a 0% tax rate for small business.
Finally, last year CCPA Mb. noted that since it took office, the current government has removed $1 billion from revenues through tax cuts.
CCPA Mb. has spent the last 10 years criticizing the NDP government for cutting taxes too much, so this Conservative prediction is pretty hard to take seriously.
It would be helpful if the Conservatives would back up their predictions with credible evidence. Presented as it is, this one falls flat on its face.
So back to the question: why does “down” look like “up” to the Conservatives? Answer: Too much spin is disorienting.
Now you’re “unspun”.
Lynne Fernandez is a political economist with the CCPA Mb.
Education Funding Not “a Game of Chicken”
by Shauna MacKinnon
In a letter to the Brandon Sun published on September 14th, Robert Rivard, the President of Manitoba Schools Board Association, expressed concern with the Let’s Pay Fair Coalition’s campaign seeking to eliminate all property taxes in support of education.
Rightly so he worries about the recklessness of assuming that the $750 million revenue shortfall would miraculously appear from elsewhere. He cautions that this approach is dangerous, amounting to “a game of chicken with our children’s futures”.
Shauna MacKinnon is the director of CCPA-Manitoba.
Where is Poverty in the Debate?
by Errol Black
During the current election campaign we’ve heard a good deal of noise from people with power about how hard done by we are in Manitoba. Their biggest beef is that corporate profits and personal incomes are taxed too high relative to resource rich provinces to the west of us.
However, we haven’t heard anything from individuals and families who are trapped in poverty situations – earning their poverty in low-wage, short-hour jobs, unemployed, on welfare, homeless, dependent on food banks and soup kitchens, etc. This is because the poor have no voice and no political clout. Therefore, they are of little interest to the people who run businesses and governments in our communities.
The sad thing about this state of affairs is that we have massive amounts of data and analyses which confirm that pervasive poverty adversely affects virtually all aspects of life in our communities including, crime, ill health, poor educational outcomes, and the overall quality of life, which in turn imposes significant burdens on resources in the health care, educational and justice systems. This was set out very clearly in a book published in 2010 by the Canadian Centre for Policy Alternatives-Manitoba, titled The Social Determinants of Health in Manitoba and by Wilkinson and Pickett (2009) in their international best seller The Spirit Level: Why More Equal Societies Almost Always Do Better.
Given these links between poverty and everything else, it would seem to make sense that in this province political parties would be attempting to develop economic and social plans that include at their core a commitment to invest in policies and programs that are designed to drive down poverty and alleviate the pressures on all levels of the public sector.
Is it too late for us to demand that party leaders participate in a debate based on poverty-related issues?
In yesterday’s leaders debate, all three leaders referred to poverty as a root cause of crime and comments were made about needing to support kids living in poverty and ensure them access to education. Selinger pointed to their record and intentions regarding minimum wage in recognition that poor kids have poor parents who need to earn a decent income. McFadyen is on record as opposing minimum wage increases and Jon Gerrard has been silent on the issue.
A question that won’t be raised during this election is: how are people on social assistance faring in Manitoba and what are the leaders going to do about it? The answer to this question is that people on social assistance are not doing very well. This is confirmed by a report from the National Council of Welfare on welfare incomes in 2009 which shows, amongst other things, that: (i) the welfare incomes of Manitobans rank near the bottom in most categories; and (ii) these incomes are much below welfare incomes in 1992, the peak year for Manitobans after which time they began a decline.
The poorest of the poor are those who must rely on social assistance for support. All political parties are able to avoid addressing this because people living in poverty have no political clout, and many are disillusioned and less inclined to vote.
Is it too late to get this important issue on the agenda?
Errol Black is the Chair of CCPA Manitoba
by Errol Black
Buried at the bottom of the business section in today’s Winnipeg Free Press is an update on Canada’s economic prospects.
A more appropriate headline for the Winnipeg Free Press report might have been “Banks take gloomier outlook on jobs, economy, but prospects for Manitoba much improved in 2012.”
The story reports that RBC has reduced its estimates for real GDP growth for the Canadian economy in 2011 from 3.2 per cent to 2.4 per cent. The estimate for 2012 is 2.5 per cent.
RBC downgraded this year’s economic forecast for nine of the ten provinces—it pared back Manitoba’s forecast to 2.8 per cent in June anticipating bad weather to affect wheat and canola production by 20 per cent and weak U.S. economic growth to take a bite out of Manitoba exports to the United States.
This latest report has good news for our province. It shows that “Manitoba and Alberta were the only two provinces to receive an RBC upgrade in their 2012 economic forecast.”
The RBC places Manitoba among the top three performers for both 2011 and 2012 (following Alberta and Saskatchewan) and better than the national average. The forecast for Manitoba has been upgraded from 3.4 percent to 3.5 per cent.
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.
September 19, 7pm
Winnipeg Free Press News Café, 237 McDermot
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.