Poverty Reduction and the Politics of Setting Social Assistance Rates

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by Shauna MacKinnon

Over the past ten years we have begun to see provincial governments across the country implement poverty reduction plans in various forms. Manitoba is the most recent to introduce anti-poverty legislation. The Poverty Reduction Strategy Act includes requirements for the government to take its poverty reduction and social inclusion strategy into account when preparing budgets each fiscal year.

The Act does not include the kinds of timelines and targets community groups have called for, but it requires that the government of the day “prepare a yearly statement, to be tabled in the Legislative Assembly along with the budget, which will explain how the strategy is implemented by the budget, what the financial implications of the strategy will be, and what indicators (as prescribed in regulation) will be used to measure the progress of the strategy.”

Although The Poverty Reduction Strategy Act is far from perfect, it moves Manitoba in the right direction. Reducing poverty, inequality and social exclusion will require a complementary mix of policy measures designed and delivered by all levels of government. In particular, it will require the restoration of a strong federal role and a comprehensive social safety that ensures all Canadians have access to things like housing, childcare, extended health benefits including pharmacare and homecare, public pensions and unemployment insurance.

We must also ensure that our provincial and territorial governments implement a transparent process to regularly assess and increase income assistance rates that allow all individuals to live in dignity.

In a report to the Manitoba Legislature in 2008, the Office of the Auditor General (OAG) identified a number of issues regarding Employment and Income Assistance (EIA) rates, including how rates are set. The report recommended that “the Department institute a formal documented process for reviewing and making recommendations for periodically updating basic and shelter rates, income and asset exemptions, and other income assistance allowances in a logical and equitable manner.”

In 2010, the Manitoba Ombudsman’s Report on Manitoba’s Employment and Income Assistance Program endorsed the OAG recommendation, adding that “in that process, program staff be consulted” and that “the rate-setting process be documented and made available to the public.”

Later in 2010, the Manitoba Government put forward the All Aboard Strategy, which highlighted a series of measures taken by the Province to improve the social and economic outcomes of low-income individuals and families. It did not deal with the fundamental issue that social assistance rates are severely inadequate

In a 2011 paper titled Improving the Adequacy of Social Assistance Budgets: A rationale for making current rates more adequate, retired Manitoba Family Services senior policy analyst Harvey Stevens makes a case for clearly defining and pricing budgets for a market basket of goods and the setting of social assistance (SA) rates at levels adequate to purchase those goods. Social justice advocates may have trouble with Steven’s methodology and final costing that leads to thresholds that are significantly below the Market Basket Measure (MBM), which he uses as a base. However, few would disagree with the basic premise of his argument—that we need a systematic process to create adequate social assistance budgets.

The MBM was developed in 2000 by the Government of Canada in consultation with provincial governments. Prior to 2000, the Statistics Canada before- and after-tax Low Income Cut Offs (LICOs) were the most commonly used measures of poverty in Canada, although they have never been accepted as official measures and have not been used to set income assistance rates. The MBM is based on a budget for a reference family of two parents and two children and includes food, clothing and footwear, shelter, transportation and ‘other’ items such as personal and household items, recreation and education expenses. The MBM is priced annually for 49 regions across Canada. While provincial and territorial governments are increasingly using the Market Basket Measure to measure poverty there is currently no standard process in which the MBM is used to set social assistance rates.

Provincial and territorial governments in Canada are responsible for the delivery of SA programs. Legislation creating SA programs sets out lists of basic needs that SA budgets will provide funding for. But the manner in which provincial governments construct SA budgets is a bit of a mystery and the result has been that SA budgets continue to be far less than what is necessary to cover the basic needs set out in legislation. For example, Stevens (2011) describes the current pricing of social assistance budgets in Manitoba as dating back to a basket of goods including basic necessities identified in the 1970s. The items included were last re-priced in 1996.

As a program of ‘last resort,’ social assistance allowances have never been generous. They declined further in the mid-1990s when the federal government eliminated national standards with the abolishment of the Canada Assistance Plan (CAP), giving the provinces greater flexibility with the Canada Health and Social Transfer (CHST).(1) As social justice advocates predicted, flexibility did not result in improved incomes for recipients.

The Filmon government began their attack on social assistance through a process of cutbacks starting in 1993 that later escalated when the federal Liberal government eliminated CAP. The amendments to the Social Allowances Act in 1993 included (MacKinnon, 2000):

  • Reduction in exemptions from $240 a month to $130 for families and from $125 to $95 a month for single people (exemptions refer to theamount of money social assistance recipients are able to earn in addition to their assistance. Money earned beyond the exemption limit is deducted in full from the recipient’s social assistance payment.)
  • Elimination of the $205 monthly exemption on child support payments received during their first three months on welfare.
  • Elimination of income tax refunds from the list of exempt income.
  • Elimination of provincial income supplements of up to $30 a month per child in low income families and a provincial supplement of more than $100 every three months for people 55 and older from the list of exempt income.

Also in 1993, supplemental health insurance coverage for welfare recipients was cut back; medication and services previously covered for recipients were trimmed; major restorative dental services were subject to new dollar limits and new welfare recipients had a three month waiting period imposed on them for non-emergency dental and vision care. Special welfare programs for students ended, resulting in the return of over 1,000 people to social assistance.

Cutbacks continued to mount in 1994. Shelter allowances were cut by $14 a month for employable single people; the $30 supplement received monthly by single people and childless couples was cut; the income definition used to determine tax credits was broadened to include incomes previously exempt (including Social Assistance). In effect, tax credits for welfare recipients were reduced and therefore the supplement paid directly to Social Assistance clients through Family Services was reduced. Grants to welfare organizations, day care facilities and nurseries were cut; special needs policies which included newborn allowances, assistance to purchase appliances, moving expenses, school supplies, household start up needs, bedding, beds and other extraordinary expenses were eliminated; there were further cuts to the range of prescription medication covered by social assistance.

The long list of cutbacks to an already meagre program was highly criticized by anti-poverty activists as being punitive and mean-spirited. The Conservative government’s perception of the poor became most evident with the creation of the Welfare Fraud Line in 1994—a ‘service’ designed to encourage the reporting of suspected fraudulent welfare clients as if welfare fraud rather than the severe cuts was the problem.

The NDP government terminated the Welfare Fraud Line soon after they were elected in 1999. They also ended the clawing back of the National Child Benefit (NCB) supplement, which improved the income of recipients with children. They have implemented minor increases for persons with disabilities and Northern recipients; however they have not responded to CCPA-MB and Make Poverty History Manitoba’s requests that EIA rates be restored to inflation-adjusted 1992 levels and systematically assessed annually.

Both the previous Conservative government and the current NDP government would argue that their actions have served to reduce SA caseloads. However welfare caseload fluctuations are a function of various factors, an important one being economic performance. An increased focus on labour market training programs has likely helped as well, though a longitudinal assessment of the social and economic outcomes of individuals participating in short-term training and employment programs has yet to be done.

Building a Basket Toward Social Inclusion

A closer examination of current EIA caseloads shows a trend that requires a policy shift if we are to substantively tackle poverty and social exclusion.

Stevens’ paper provides data to show that the composition of the SA caseload today is very different than it was in the mid-1990s. A significant number of individuals on social assistance are long-term recipients for whom quick-fix approaches are not suitable. Stevens shows that:

  • In six of the ten provinces in 2007, 24 percent of those without a disability had been on SA for more than 2 years during their current spell, while 75 percent of those with a disability have been on for more than 2 years. When all spells on SA recounted over the previous six years, the proportion who have been on SA for more than 2 years rises to 46 percent of single persons without a disability, 60 percent of two parent families, 70 percent of lone parents and 85 percent of those with a disability in Manitoba.

The reality, as Stevens states, is that long-term dependency is “now the rule and not the exception.”

In light of this evidence Stevens proposes a policy focus on improving benefits for those incapable of finding employment; improving the SA program to ensure that basic needs budgets for long-term recipients include access to a broader range of everyday goods and services like replacement of household goods, entertainment, recreation, education supplies and services; and building capacity to adequately assess recipients with barriers to employment who do not ‘fit’ the existing suite of employment training programs which are focused mainly on the employable. Stevens takes the position that recipients of assistance for less than one year need less than those on assistance for extended periods. This sets in motion a policy proposal and costing method that comes with some challenges but nonetheless offers a useful contribution to the policy debate.

Developing an adequate social assistance budget using a market basket approach requires two important elements. First, it requires that the basket of goods include items that individuals and families need not only to survive, but also to participate fully in society. Second, it must be accurately costed and adjusted regularly. As Stevens points out, this has not been the case and the result is that “SA budgets bear little or no relationship to actual cost of purchasing the basic needs items they contain.”

Who decides, who deserves, and what should the rate be?

There is a political challenge when it comes to costing welfare budgets that dates back to the inception of income support for the unemployed. The policy tradition has been to keep rates meager, especially for those who are deemed ‘employable,’ to ensure that social assistance remains a program of last resort.

Stevens proposes that Manitoba adopt systems similar to those in place in Alberta and British Columbia, which differentiate between long-term, short-term and disabled recipients. BC, for example, has a three-tier structure that includes one rate for ‘employables,’ one for people designated with Persistent Multiple Barriers to Employment (PPMB), and one for people with disability status. BC anti-poverty advocates are critical of the model, which sets the rate for people with PPMB marginally higher than the basic rate. The three-tier categorization also raises concerns that those deemed to be ‘employable’ or ‘undeserving’ become further marginalized and not awarded the dignity that all individuals have a right to. So while the three-tier approach might seem pragmatic, it also moves away from a social justice approach to income security, toward the less humane model introduced through the British Poor Laws in the early 19th century, which were designed to punish people who were poor.

Although the idea of further categorization muddies the debate, the compromise that Stevens puts forward is an honest attempt to seek ways to reduce the number of Manitobans living in poverty. The OAG and the Manitoba Ombudsman concur that welfare budgets in general have not been regularly reviewed and revised. For example, rental allowances for all EIA recipients are far below market rental rates. The basic housing allowance for individuals in the single employable category is $243.00 per month while the current median market rental rate in Winnipeg is $665.00. EIA recipients who rent in the private market commonly frequent food banks and soup kitchens because they need to draw on their food budgets to cover the cost of rent. It should also be noted that many of these individuals are in the short-term category and are vulnerable to eviction, as are long-term recipients, especially in markets where the vacancy rate is less than 1 percent, as is the case in all Manitoba cities. When people lose their homes they are at greater risk of becoming dependent on social assistance. And this, as shown in the report The Cost of Poverty in BC, ends up costing us much more in the long-term.

It should also be noted that the three-tier approach begins with the assumption that providing a livable social assistance allowance is a deterrent to work. While this is a commonly held assumption, it is not clear that it is based on anything more than ideology. In fact a recent analysis of the 1970s basic income experiment in Manitoba (Forget 2009) shows that providing people with a basic livable income does not deter them from working.

Aside from the concerns with recipient categorization and concerns with the contents and costing of the basket that Stevens assembles (what it includes and how prices are determined) he, the OAG, the Ombudsman and social justice advocates agree that a process and method must be established to regularly price social assistance budgets. The Government of Manitoba has made positive steps forward with the All Aboard Strategy which has now been further enhanced by the Poverty Reduction Strategy Act. The next step will be to work closely with advocates for those living in poverty to ensure that income assistance rates are brought back to a level that allows all individuals to live in dignity.

(1) The CHST was later separated into two programs – the Canada Health Transfer (CHT) and the Canada Social Transfer (CST).

Shauna MacKinnon is the director of Canadian Centre for Policy Alternatives – Manitoba


CCPA-MB. (2010). The View From Here: Manitobans call for a poverty reduction plan. Available at www.policyalternatives.ca

Forget, Evelyn. (2009) Life in a Town Without Poverty. www.cihr-irsc.gc.ca/e/40308.html.

Ivanova, I. (2011). The Cost of Poverty in BC. Sparcbc, Public Health Association of BC, CCPA-BC. Available at www.policyalternatives.ca

MacKinnon, Shauna. (2000) Workfare in Manitoba, in Solutions that Work, Jim Silver Editor. Winnipeg: Fernwood

Manitoba Ombudsman. (2010) Report on Manitoba’s Employment and Income Assistance Program. Government of Manitoba.

Office of the Auditor General of Manitoba (2008). Report to the Legislative Assembly – Audits of Government Operations. Government of Manitoba.

Stevens, Harvey. (2011) Improving the Adequacy of Social Assistance Budgets: A rational for making current rates more adequate and a methodology for pricing budgets. Winnipeg: Social Planning Council of Winnipeg.

Youth Voices: Disenfranchised youth voters ditch polling stations

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By Jonny Sopotiuk

Canada’s 41st general election was one of the most exhilarating elections in recent years and the result is unprecedented change in the political landscape. The obliteration of the Bloq, decimation of the Liberal party and surge of the NDP had even the most seasoned political observers in shock. With a total of 167 seats, Stephen Harper’s Conservative government has found the elusive majority his party has been chasing for years. That Conservative majority has lead many to call for a unification of the political parties of the left, namely the NDP and Liberals. The entrenched interests in both parties have effectively put these calls to rest for the time being. However, the debate around how to stop future Conservative majorities, possibly through a party merger, ignores the important reality that only 61.4 percent of the voting population bothered to cast a vote in this election.

In the weeks leading up to voting day, observers and pundits were projecting voter turnout increases due to the heightened engagement and excitement of the campaign period. Student-led ‘vote mobs’ swept across the country and social media was buzzing with youth-created videos and election debate. Elections Canada reports that 14.7 million, or 61.4%, of 23.9 million Canadians voted this year. This is just slightly up from the lowest ever voter turnout in Canadian history during the 2008 election where only 59.1 percent or 13.8 million Canadians voted. Although youth turnout for the 2011 election has not yet been reported, based on previous trends the results do not look promising. In 2004 only 43.8 percent of youth between the ages of 18 to 24 voted. In 2008 that number dropped to 37.4 percent. It’s likely that youth numbers stayed relatively the same with only a slight increase in 2011. So what happened?

Cynics will be quick to suggest that youth are apathetic, unengaged and uninformed. But myself and many of my peers see the results as a reflection of something else. The results show that many Canadians, especially young people, are disenfranchised by the electoral system itself. In my many conversations with young people I hear the same response over and over: they didn’t vote because they believe their vote wouldn’t make a difference or count.

So would a merger between the so-called political parties of the left solve these problems? Absolutely not. The idea completely disregards the existence of the Green Party and the many other smaller left of centre political movements and ignores the fact that many progressive people view the Liberal party as a right-of-centre governing party. As concerning as consecutive majority Conservative governments are, the real issue lies within the electoral system itself.

Across the ocean, a debate on electoral reform has been raging within the United Kingdom. In early May, 2011, a referendum was held to move away from the first-past-the-post (FPTP) electoral system, the system that Canada is currently modeled upon, to the Alternative Vote (AV) system that Australia has been using since 1918. The referendum ultimately failed with around 68 percent of UK voters rejecting the proposed AV system. During the campaign the anti-AV and pro-FPTP status quo campaign gained considerable support. Many progressive voices ignored the campaign altogether and criticized the AV model as being nothing more than a hybrid of the FPTP system. Criticisms of the system aside, the UK debate is at least focused on the right topic: electoral reform.

Fair Vote Canada, the leading voice on electoral reform in Canada, analyzed a report by political scientist Arend Lijphart that studied democratic models of political systems across the world. The study split the systems into two groups: the majoritarian model, the kind the Canadian system is based upon; and consensus democracies, the kind that countries including the Netherlands are based upon, which use proportional representation.

Lijphart’s study found that the consensus democracies have a diverse and increased range of political parties, increased voter turnouts and create an overall greater satisfaction with democratic systems compared to those countries that use majoritarian models. It was also notable that Lijphart found that the consensus democracies had higher percentages of women elected and represented within the governing systems.

The electoral reform movement is nothing new to Canada but it hasn’t received the attention and support it deserves. A referendum on scrapping the FPTP system in exchange for a Single Transferable Vote System was held and defeated in British Columbia in 2009. That same year, Fair Vote Canada launched a new initiative called Students and Youth for Fair Voting. SYFV is a self-directed and democratically governed campaign working with Fair Vote Canada to push for electoral reform. Following the recent election results, Fair Vote Canada held a national day of action on May 14, 2011. The event received little attention from both the mainstream press and from progressive movements across the country. Whether this can be attributed to a lack of excitement around the issue, election burnout and fatigue or general lack of vision or knowledge of an alternative system is hard to say.

So this election leaves progressives and young people with few options: we invest our energies in electing an NDP-led government, we admit defeat and boycott the system, or we work to change it. We cannot rely on the entrenched interests and mainstream political parties to start that conversation. If we cannot mobilize youth to participate in the existing system we need start engaging them in conversations and campaigns on electoral reform. It’s time for progressives to shift the debate and for youth to lead the charge. Whether the solution is a new system based on AV, proportional representation or some other model needs to be explored. But in the meantime, any solution that falls short of electoral reform is no solution at all.

Jonny Sopotiuk is a full-time student activist and artist living between Winnipeg and Vancouver. You can follow his writings and work at jonnysopotiuk.ca

CLOUT- Community Led Organizations United Together

by Shauna Mackinnon, Director of CCPA -MB

Community Led Organizations United Together (CLOUT) is a coalition of nine community-based organizations providing direct service to inner-city children and families. They are: Andrew Street Family Centre, Ma Mawi Wi Chi Itata Centre, Community Education Development Association (CEDA), Native Women’s Transition Centre, North End Women’s Centre, Ndinawemaaganag Endaawad (Ndiniwe), Rossbrook House, Wolseley Family Place and Wahbung Abinoonjiiag.

Collectively, CLOUT organizations have been building capacity in the inner-city for many years. Their approach to capacity building is as grassroots as it gets.

In the 2010 State of the inner City Report title “We’re in it for the long haul” Carole O’Brien tells the story of CLOUT. The full 15 minute video is available at CCPA Manitoba.

Watch the preview: [youtube=http://www.youtube.com/watch?feature=player_embedded&v=Wvjh6Crf5vE]

Youth Columnist speaks up on SAFE work environments

by Michael Champagne

Once upon a time, I did a presentation to a group of young people in the North End about health and safety. I told them about how hey had worker rights, about how workers compensation works, and how they can spot and deal with hazards in their workplace. I was able to work with this same group a couple of times and was able to build a nice comfy relationship with the group It also helped that I knew one of these young people from my other work that I do in the North End. Now, months and months had passed since this presentation had been done, but just yesterday, I received a text message from this young person and said he needed to speak with me urgently. He said: “im ok its just my friend he works at ________ and he has massive burns on his hands from working there…he doesn’t want to do anything about it cuz he doesn’t wanna lose his job“. At this point I tried setting a time in the next couple days to meet and chat about it.

I still haven’t had a chance to deal with it in person yet but this is something that enrages me. This is an example of an employer creating an environment of fear in workplaces where, when young people DO get hurt, they feel afraid to do something about it. They will continue to go through the injuries because they are afraid of losing a job.

I am of the opinion that there is no job that is worth your health and safety. A young people, we have a very important example to set. If we walk into a workplace (or any situation for that matter) and allow ourselves to be taken advantage of, injured or silenced, that makes us feel like crap. I don’t want my nephews and nieces, the little ones in my life, the next generation of workers to have to deal with any unsafe situations. Many people in workplaces that have been there a long time, will say things like ‘That’s just the way it is’ and imply that there is nothing that can be done to improve the unsafe situations that constantly cause harm to employees.

I will never be silent and will never accept that ‘that’s the way it is‘. The health and safety of our communities, of our next generation is too important for me to just give up and look the other way. I won’t. Because the young ones in my life deserve better. And so do you.

If you haven’t had a chance to learn about what is happening internationally with Canada and Asbestos, you should follow this link. (For the record; I am disgusted with Canada’s position on this issue.)

 Michael Champagne works for the SAFE Workers of Tomorrow, and is a member of AYO!, (Aboriginal Youth Opportunities), a network of young leaders from the North End.

A note from AYO!:

“We stand together and learn from each other. We began in March 2010 and committed to working together. This group is just us young people volunteering. Our method of operating is writing letters of support to see who we can work with to strengthen this network of young leaders that are committed to helping our community get better; to see who wants to provide Aboriginal youth with opportunities to be awesome.”

Bi Pole III: Winnipeg Free Press and the Conservative campaign of misinformation

by John Ryan

On July 5th, 2011 I submitted a letter to the Winnipeg Free Press in response to information they presented in their July 4 editorial “Best use of Hydro’s millions”

The Winnipeg Free Press chose not to publish my letter.

I am very concerned with the lack of clear and honest information being presented to allow for an honest debate on an issue that has significant economic, social and environmental implications for all Manitobans. In the Fast Facts titled “Bi Pole III – Winnipeg Free Press and the Conservative Campaign of Misinformation” I show, as did Errol Black and Lynne Fernandez in the CCPA Fast Facts titled “McFadyen’s Crazy Numbers Won’t Fool Manitobans” that Hugh McFadyen’s cost estimates are ‘all wet’. I also argue that the Winnipeg Free Press editorial failed to shine a light on some major flaws in the arguments put forward by East Side proponents. By doing so they effectively advance the Conservatives campaign based on misinformation and a deliberate distortion of facts. As Manitoba’s largest newspaper, The Winnipeg Free Press should endeavour to try and ensure that their readers get all the relevant facts.


The Winnipeg Free Press editorial “Best use of Hydro’s millions” (July 4) obfuscates several straightforward matters on Bipole III. The editorial states that Manitoba Conservatives claim that Bi Pole III’s west route “wastes” $3.2 billion (actually $3.62 billion is the latest claim by Hugh McFadyen on June 28). The editorial says the Conservatives “appear to reach their number . . . by throwing in every conceivable expense, including the kitchen sink.”

What the Free Press does not make clear is that the Conservatives don’t arrive at their costs by some innocent procedure of including various questionable expenses.

First, they cite the overall cost of the west route as being $4.4 billion, asserting that this is based on a Manitoba Hydro estimate, without disclosing the exact source so it is impossible to verify this number. Second, they cite the east route’s cost as being $800 million and subtract this from $4.4 billion. They then claim that the resulting figure of $3.62 billion is the cost of the extra 500 km within the west route – and that this constitutes “waste” and will cost each Manitoba family $11,748.

This disingenuous argument has no foundation in fact. In the first instance, on March 31, 2011 Manitoba Hydro released a report citing the overall cost of the west route to be $3.28 billion, not the unverified Conservative claim of $4.4 billion. Secondly, in citing the cost of the east route as $800 million, the Conservatives omitted the $1.83 billion for the necessary converters, which are required for both routes. This calculated manoeuvre leads to the preposterous claim that the extra 500 km of the west route transmission line would cost $3.62 billion or $11,748 per family. What they haven’t said is that this would work out to $7,240,000 per km, as opposed to the actual cost of $910,000 per km, which is the identical figure for the east route and the usual cost of a DC transmission line.

On May 30, at a legislature committee meeting, Mr. Brennan, Hydro President and CEO, reported that for the extra 500 km in the west route, over a 60 year period (the lifetime of a line), the actual costs per Manitoba household would be $13.68 per year. He also stated that since Manitoba households account for only one-third of the total power in the line, this should be divided by three. Although Mr. Brennan did not include line losses, this could be rectified by adding one-third more to Mr. Brennan’s adjusted figure. Overall, on the basis of his figures the annual cost should be about $6.00 per household – somewhat less than Mr. McFadyen’s figure of $11,748.

The editorial’s claim that Manitoba Hydro’s official estimate was determined by “throwing out every conceivable cost, save the kitchen sink” is unmitigated rubbish. Hydro’s overall estimate of $3.28 billion for the west route consists of $1.83 billion for two converters, $1.26 billion for the transmission line, and $.19 billion for extra apparatus. To determine the cost of the extra 500 km of line on the west route, the $805 million cost of the east transmission line is subtracted from the $1.26 billion cost of the west line. The result is $455 million, and to this should be added the line losses of $232 million (Hydro’s data) – for an overall total of about $690 million.

For the Conservatives to claim that instead of less than $700 million, the cost of the extra 500 km of line would be $3.62 billion is absurd. Yet, for the past several months, this is what has been steadily presented to the Manitoba public. By failing to address these inaccuracies, the Free Press editorial continues to advance the Conservative’s campaign of misinformation.

The editorial errs further by accusing former premier Gary Doer of a decision “seven years ago to prevent Hydro from negotiating with east-side communities.” In actual fact, the Manitoba government and Manitoba Hydro conducted negotiations with First Nations for several years. After some 80 meetings, stakeholders were unable to reach a consensus.

When these meetings came to an impasse because of lack of unanimity in allowing a transmission line to pass through their territories, and because of the possibility of a UNESCO world heritage designation for this area, in 2007, confronted with these seemingly irreconcilable problems, the Province decided to direct Bipole III along the west route.

In its concluding remarks the editorial makes the argument that the money spent on the additional costs of the west route would be better spent on the people on the east side. While concern for the people on the east side is a welcome progressive move since previous concerns have been focused solely on ‘savings’, the editorial loses credibility by perpetuating the false argument that this money could be used “to build a road along an east-side corridor”.

In actuality, an east side transmission line would veer away as far as possible from the settlements of the First Nations, whereas roads are required to go directly to these settlements. Such roads are now being built. Moreover, no road is necessary for the construction of a transmission line, other than a caterpillar trail to haul the cable and cement for tower pads. In all likelihood, the steel towers would be brought in by helicopter and fastened by guy wires to the cement pads. So although the editorial opens the door slightly on the prospect of monies going to east side people, it drops the ball in lacking a concept on what is really involved. It also fails to note that proponents of the east route have never acknowledged that substantial funds may have to be paid as compensation to First Nations in order for a transmission line to pass through their territory.

There are legitimate advantages and disadvantages that could be put forward in debating the east and west routes, but deliberate distortion of facts is not helpful. As Manitoba’s largest newspaper, the Winnipeg Free Press should try to ensure that their readers have all the facts so that they can decide for themselves what makes best sense.

John Ryan, Ph.D. Retired Professor of Geography and Senior Scholar, University of Winnipeg

Fast Facts: The expiration of operating agreements in social housing

by Carole O’Brien

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One of the most pressing issues facing social housing providers is the on-going expiration of long-term operating agreements. These subsidies, created by the federal government in the 1970s in light of the high operating costs of various housing projects, were meant to give social housing providers some breathing room while they paid the debt on their mortgages. These agreements were struck for periods between 25 and 50 years depending on each situation. Some subsidies also assisted with operating deficits. When the program was designed, it was presumed that once mortgages matured, cash flow requirements would fall and housing projects would be able to continue operating with affordable rent levels, without subsidies. While the presumption that projects would become viable at expiry may be true for some housing providers, it has not been the case for all.

A study of the operating agreements was commissioned by the Canadian Housing and Renewal Association (CHRA) in 2005. It found that most social housing projects implemented after 1986 were most likely to be non-viable once the agreement expired. This was the year federal subsidies began to decline in Canada, leading to many shifts in social housing policy, including a gradual adoption of neoliberal economic ideals and Ottawa’s retrenchment from housing in 1993. While social housing providers were experiencing funding cuts, the number of homeless people in Canada was also increasing. More importantly, the needs of households living in poverty deepened, as did the needs of rent-geared-to-income (RGI) households, especially urban Aboriginal households.

The end of operating agreements means that once the mortgages expire, housing providers must survive on their rental revenues alone. This is especially problematic for agencies who serve a majority of people on RGI who, by definition, cannot pay full market rents. Most worrisome, however, is that even with subsidies, some agencies are experiencing yearly deficits because inflation is increasing operating expenses faster than revenues. In their case, the annual subsidy they need is greater than their mortgage payments, a defining characteristic of non-viable housing projects.

Housing providers serving urban Aboriginal households with a high proportion of people with very low income levels and in need of deep RGI subsidies – in most cases, 100% of their tenants – are especially vulnerable when their operating agreements expire because the rental revenues they can realistically collect are insufficient to cover the operating costs of the housing projects. The assumption underlying the operating agreements, that once mortgages were paid off projects would become viable, does not account for this reality.

The purpose of the CHRA study was to help social housing providers, funding agencies and governments understand the implications of expiry, and to adopt some corrective measures before the agreements expired. Here is a list of possible solutions offered:

a) Increase market revenue

b) Explore opportunities to transfer surplus from one project to another

c) Increase RGI revenue

d) Increase rents for social assistance tenants

e) Increase the RGI ratio charged to tenants to a higher percentage of income

f) Move RGI units to market rent – raise the num­ber of market units

g) Negotiate a new rent supplement agreement with funders

h) Reassess the need to retain non-viable projects also in poor state of repair

While these possible remedies were presented to protect the availability and viability of social housing assets over the long term, they have a definite neo-liberal flavour in that the overriding concern is to increase revenues with market-based mechanisms. Without the financial support offered by operating agreements, and with limited rental revenues, some Aboriginal housing providers are now being forced to look at these options to create more revenue. Some have had no choice but to replace their RGI tenants with tenants who can pay full market rent values – a solution that deeply contradicts their mandate to provide affordable housing for all. More to point, the lack of governmental support will only increase the number of homeless people, and create an even greater need for affordable housing.

The CHRA study calculated that once all the operating agreements expire, around 2040, federal, provincial and territorial governments would economize about $3.5 billion annually. This raises questions about what to do with the dollars in reduced expenditures. The study called for a reinvestment into housing projects experiencing viability issues, or assisting them with capital replacements, given that these housing assets are paid for and it would be less expensive to reinvest in them than replace them. Given the current homelessness issue, another use would be to expand the affordable housing stock, especially where the need is greatest. So far, there has not been any movement by the federal government. Housing activists are also raising questions about what to do with the CMHC surplus, which could be used in a similar manner since it was collected through housing activities in Canada.

Given the new federal political landscape, housing activists will need to redouble efforts to sensitize politicians into developing housing policies that reflect the real affordable housing needs of all Canadians. The argument that government programs and taxes are effective methods of redistributing wealth and creating social justice may, however, fall on deaf ears for at least the next four years. In frustration, some housing activists are looking at other courses of action, such as seeking donations from the private sector to set up trust funds targeted for housing. Will corporations be more amenable to the argument that all Canadians have a right to housing than all three levels of government? It will be a sad day in Canada if, and when, social housing solutions become dependent on that.


Carole O’Brien is a student in the Master of City Planning program at the University of Manitoba.

Fast Facts: Lessons of the Canada Post lockout

by David Camfield

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Recent events tell us a lot about some of the challenges facing working people in Canada today.

The Canadian Union of Postal Workers (CUPW) began rotating strike action on June 2nd, after over seven months of negotiations with Canada Post Corporation (CPC) for a new contract covering some 48 000 postal workers. CUPW members had voted almost 95% in favour of authorizing a strike if necessary, with a turnout that set a record for the union.

The reasons why postal workers were so determined to strike if need be are not hard to understand. Starting in Winnipeg, CPC management is introducing new machinery and reorganizing work. Under the new system letter carriers must now carry two or more bundles of mail, leading to more work-related injuries. Inside workers face cuts in full-time positions, more evening and night shifts and a faster pace of work.

CPC has been a profitable Crown Corporation for the last 15 years yet management was insisting that workers make major concessions. As postal worker Cindy McCallum Miller put it, the employer was aiming to “gut our collective agreement for the next wave of workers as they plan for a future where workers have weaker rights, benefits and protection” (“What’s at stake at Canada Post?”).

Postal workers’ past struggles won a living wage (approximately $50 000/year on average), benefits and rights for what was once low-wage work. CPC went into negotiations demanding that new hires receive lower pay and a worse pension than current workers. Management also wanted workers to give up their sick leave rights and accept an inferior Short Term Disability plan. These concessions would be steps towards the goal — shared by Conservative and Liberal federal governments — of a privatized postal service whose workforce is smaller, cheaper and has many fewer rights.

Many media commentators initially claimed that the strike wouldn’t have much impact. But the rotating local strikes did affect some businesses and therefore CPC’s revenue, without causing much disruption to most people’s postal services. CPC tried to provoke CUPW into calling an all-out strike but failed. So on June 14 CPC locked out the workers.

The next day the Conservative federal government announced it would bring in legislation to force an end to the dispute. It appears that CPC’s goal all along was government intervention to impose the kind of settlement on postal workers that it was unable to achieve through collective bargaining. The lockout gave the government the excuse it was waiting for.

It’s no secret that the Conservatives hate CUPW — the union has consistently opposed the corporate agenda, defended public services and supported social justice struggles. So it was no surprise that when the final vote on the back-to-work bill was held in the House of Commons “the Conservative benches erupted in cheers and back-slapping” (“Mail could resume within days as back to work bill for Canada Post passes”).

What wasn’t as predictable was just how aggressively anti-worker the legislation would be. Many media reports have mentioned that it imposes wage increases lower than CPC’s previously-tabled offer (also well below the inflation rate for consumer prices). But that’s not its worst aspect by any means.

The law dictates that the new collective agreement for urban postal workers will be determined by an arbitrator appointed unilaterally by the Minister of Labour, using a method called final offer selection (FOS). FOS is uncommon in Canada, and is very rare in back to work legislation.

In this case, the union and the employer are each required to submit a final offer covering the many disputed issues. The arbitrator will then select one offer or the other in its entirety. In addition to allowing the Conservatives to handpick whoever they want as the arbitrator, the law includes guidelines that the arbitrator must follow in choosing a settlement. These are clearly designed to weight the outcome in favour of weakening postal workers’ rights and benefits, including their pension plan. This puts intense pressure on CUPW officials to submit a final offer that includes concessions they would never have agreed to in bargaining, in the hope that the arbitrator will pick their offer rather than an even-worse one from the employer.

With this law the Conservatives are sending a signal to unionized workers: if you resist the concessions that employers demand you risk ending up with an even worse outcome. The Harper government’s move against CUPW encourages provincial governments to intervene in similar ways against striking or locked-out workers in their jurisdictions.

The legislation threatened earlier this month against workers at Air Canada – a private company, unlike CPC – who had just gone on strike sent the same message. Public sector workers are not the only ones who should be concerned about governments intervening yet again on the side of employers to suspend the basic democratic right of workers to collectively negotiate their wages and working conditions.

Just how hostile the Tories are to unions isn’t the only lesson here. Another is that unions confronted by governments need much more solidarity action by other people than CUPW received in order to avoid defeats. The sympathy strikes that took place in British Columbia to support hospital workers in 2004 and teachers in 2005 point to what’s needed to improve the odds for unions attacked by governments. For this reason the call by the Fredericton labour council for a National Day of Action to support CUPW and Air Canada workers was a small step in the right direction.

David Camfield teaches Labour Studies at the University of Manitoba and is the author of Canadian Labour in Crisis: Reinventing the Workers’ Movement.

What is a CETA, and why should we be worried about it?

by Larry Brown

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The Canadian Government is well down the road, with the European Union, towards negotiating a Comprehensive Economic and Trade Agreement (CETA). They tell us that CETA will have everything that NAFTA has, plus more. They say that like it’s a good thing. But the more one looks at this Comprehensive Economic and Trade Agreement, this CETA, the more there is to dislike.

NAFTA cost us hundreds of thousands of manufacturing jobs, plus made our regulations and our social programs vulnerable to challenges from US and Mexican companies. The proposed CETA is all of that and more, with a much larger economic bloc.

Here are just some of the reasons to be very concerned about CETA.

1) Like most such agreements, the proposed CETA is not so much about trade as it is about putting limits on the ability of governments to control the actions of large corporations. It’s not really about tariffs and borders, it’s about adding to the list of things that governments can’t do if they interfere at all with the corporate sector’s unfettered right to make a profit.

2) This proposed deal would for the first time apply directly to Provinces, and cities, and crown corporations, and school boards, and hospitals. In particular the European Commission wants access to ‘procurement’ by all these levels of government. Procurement is the purchase of goods, like buses, and services. That means that Provinces, and cities, would lose their right to use taxpayers’ money for the benefit of local taxpayers. The proposed CETA would prohibit governments at all levels from spending tax dollars to encourage local development. Bids would have to be open to European companies and the only consideration allowed would be the cost of the bid.

Pretty much everyone who looks at CETA comes to the same conclusion. Hydro Quebec has a Research Institute. They studied CETA and concluded that CETA would limit the ability of government agencies to use public spending to achieve social goals like economic development and regional employment.

3) Crown corporations, like provincial power companies or liquor boards, would be up for grabs. The EU has made it clear it wants access to crown corporations and for example has complained about the way provincial liquor boards display and sell their products; they claim Canadian producers are favoured, and they don’t like it. But step two will be an attack on liquor sales monopolies, otherwise known as privatization – and serious commentators don’t even pretend that’s not on the agenda.

4) Drug costs in Canada, already one of the biggest factors in rising health care costs because of the sweetheart deal our brand name companies get on patent protection, would rise even higher if CETA is signed.

Pharma companies are trying to expand their patent rights under the cover of CETA. They want to use the Canada-EU trade deal to gain rights that they have been unable to get from Canada’s Parliament. These companies are actively encouraging the EU to demand provisions in the proposed trade agreement that will expand their patent rights and ultimately boost drug prices. If they succeed, brand name drugs, at their higher prices, will be protected even longer against cheaper generic drugs, and that will cost our public health care system and Canadians billions of dollars more. $2.8 billion more per year, by one study.

5) The proposed agreement would include the right of individual companies in the EU to challenge decisions of our democratically elected provincial governments, city councils, and so on. We’ve already seen the effect of this provision under NAFTA; Canada has paid millions of dollars to companies for deciding to ban toxic waste, and for banning a gasoline additive that was a known carcinogen, and for taking back the water and timber rights of a company that walked away from its obligations in Newfoundland – all because those decisions supposedly interfered with a company’s right to make a profit. Because CETA would apply to the provinces and municipalities, all their decisions would now be subject to the same kind of challenges, and they would likely bear the cost of damages.

6) The biggest private water companies in the world are in the EU. CETA would give those companies a huge club to use against cities to make them open up their water systems to privatization. The decision would be taken away from city council and city residents, and would be made by an obscure and trade-oriented disputes panel.

7) Contrary to the completely unsubstantiated claims by the Canadian government, a CCPA study by Jim Stanford shows that a free trade deal with the EU would cost Canada between 28,000 and 150,000 jobs. Those are cautious conclusions; the actual result would likely be much worse.

8) The proposed deal would include a provision that says anything not listed as exempt from the free trade agreement would be automatically covered. That means that if a city or province makes a small error and forgets to list any of the thousands of programs they deliver, that program is covered by the deal, and EU companies will be able to bid on the delivery of the service. If a province or city wants to develop a new program, like pharmacare or home care, it will automatically be covered by the rules of free trade, and that includes compensation for any company whose right to make a profit is affected by a new social program.

CETA is a dangerous and potentially destructive new international agreement, based solely on the desires of European and Canadian companies.

But it is not a done deal. It can be stopped, and if Provincial governments, and city governments, and hospital boards, and the citizens for whom all these agencies exist, figure out just how bad a deal this is, the federal government will never be able to consummate it.

We can stop this sell-out of our right to democratically govern ourselves, we can refuse to be governed by corporations that want to profit from our every need.

We need to speak up, and we need to stand up.

Larry Brown is the Secretary Treasurer of National Union of Public and General Employees and the National President of the CCPA

McFadyen’s Bloated Numbers Make For Murky Bi Pole III Debate

by John Ryan

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As recorded in Hansard, since the beginning of the Legislative session on April 12, there have been ongoing relentless attacks, on Hydro, the West route for Bipole 3, and the government. The attacks, mainly by Conservative leader Hugh McFadyen, have centred on the costs of the West route, claiming that it will cost $11,748 per family. His erroneous claim distorts the fact that it’s only the extra costs of the West route that should be considered. The Premier and the Minister responsible for Manitoba Hydro have refuted these charges, but the media continues to disregard their arguments and the attacks continue. Mr. McFayden recently debated Premier Selinger on CJOB radio and kept repeating the $11,748 figure, without explaining how he arrives at such an inflated number. Now there are billboards and a website that spread the same specious message.

It is legitimate to debate the issue of the West route vs the East route on rational factual grounds, but it is not legitimate to base such a debate on unsubstantiated claims and purposeful distortion. Letters in the WFP from Mr. Laliberte and the East-side Coalition, of which Mr. Laliberte is a member, further muddy the waters.

The Conservative Party’s preference for the East route and its attacks on the plans by Manitoba Hydro and the government for the West route have become a cause célèbre and obviously this issue will be a major plank in their campaign in the forthcoming provincial election. Rather than just being a debate, this matter has degenerated into a propaganda war — and as in all wars, truth has become a frontline casualty.

It is not that the basic facts on this matter are difficult to obtain. All the data that follow were obtained from Manitoba Hydro, either from their website or from specific inquiries to the corporation, and additional calculations were made based on these Manitoba Hydro data.

As of 2007, the total extra cost of the West route was approximately $650,000,000. This difference was based on the higher cost of the construction of the West side arising from the 500 extra kilometres ($410 million) and the amount of the line losses coming off the extra length of the West side ($232 million). No one ever debated these amounts.

Recently all the estimates have changed because of increases in construction costs. The $410 million difference in cost for the extra 500 kilometres has increased to $455 million. The $232 million difference for line losses has remained the same. The total difference between the two routes is now approximately $690 million when extra apparatus costs are factored in.

As mentioned, for some years, the $650 million figure was correctly used by critics, but some now claim, without explanation, that this figure has jumped to over $1 billion. The $1 billion figure continues to erroneously be used my many commentators, including the media.

Then in September 2010, McFayden raised this already bloated figure to $1.75 billion, with the additional claim that this amounted to $7,000 per Manitoba family. The claim that the difference between the two routes would equal $1.75 billion is incomprehensible given that at the time, the cost of the total line was only $1.1 billion.

On March 31, 2011 the revised costs for the West Route were announced and the extra cost for the West Route, calculated from Hydro data, was confirmed at $690 million.

Despite this official confirmation, on April 1, 2011, the Conservatives announced that the extra costs for the West Route would be $2.94 billion or $11,748 per Manitoba family. This new bloated figure is more than 4 times the actual extra cost of $690 million. No explanation was offered on how the Conservative Party arrived at the figure. The East Side Coalition has now distanced itself from the Conservative position and is sticking with the $1 billion estimate which, wrong as it may be, is not as outrageous as the Conservatives’ figure.

Since all these data are readily available, it is certain that the Conservative Party must have the correct information, otherwise the party apparatus would be hopelessly incompetent. Hence, if they have the correct information, what is behind their concerted barrage of deliberate misinformation to the media, public and in the Legislature? To add to this mix of distortion they at first included unsubstantiated leaks (later to be proven baseless) on the cost of the West route that were apparently sent to them by a disgruntled employee at Hydro.

Unbelievable as it may seem, instead of conducting a debate based on the legitimate advantages and disadvantages of the West route and the East route, the Conservative Party appears to be conducting a propaganda war on both Hydro and the government based on outright fabrication and deliberate distortion, with the objective of bringing about confusion and misinformation in the public on a major public policy. This is irresponsible in the extreme – all for the sake of partisan politics. This is in the worst tradition of the Tea Party element in the Republican Party in the USA.

Such a tragedy to see this tradition in full bloom in Manitoba.

John Ryan, Ph.D. Senior Scholar, University of Winnipeg and CCPA Mb. research associate

Fast Facts: Canada Post locks out postal workers; Harper locks out collective bargaining

by Jan Chaboyer

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Members of the Canadian Union of Postal Workers (CUPW) initiated job action on June 2 in response to Canada Post’s refusal to continue the collective bargaining process for the purpose of achieving a new collective agreement. The main unresolved issues were: health and safety, staffing, sick leave and short-term disability, wages, pensions and benefits, job creation and service expansion.

Initially, CUPW members conducted rotating strikes beginning in Winnipeg, as a means of informing the public of the reasons for the impasse in collective bargaining while at the same time minimizing disruption of service.

When Federal Labour Minister, Lisa Raitt, raised concerns about the economic impact of the rotating strikes, CUPW offered to suspend strike action on June 10th and resume collective bargaining provided Canada Post would agree to reinstate the terms of the collective agreement until a new agreement was reached. Canada Post rejected this offer and announced on June 13 that CUPW members would be locked out on Tuesdays and Thursdays. On June 15 Canada Post announced a total lockout informing the public that “all mail processing plants and letter carrier depots are closed and all facilities have been secured. No new mail will be accepted.” Although it was the employer, not the union, that disrupted service to the public, the Conservative government is threatening back-to-work legislation and settlement of the dispute by arbitration – actions that will effectively punish the workers for actions taken by their employer.

Canada Post’s refusal to negotiate at the bargaining table and the Harper government’s derailing of the collective bargaining process will hurt all Canadians.

Canada Post is undermining the working conditions of postal workers and degrading postal services for Canadian citizens. Most Canadians know the difficulties and hazards faced by both outside and inside postal workers. Letter carriers deliver our mail, rain or shine. They contend with 40 below weather, heavy snow and slippery sidewalks. It is not uncommon for letter carriers to encounter vicious dogs and other dangers. In recent years, postal workers have been saddled with bigger bundles and more weight and higher production quotas. This has added to the hazards of work and increased injuries.

Many Canadians are dependent on the door-to-door delivery service that Canada Post workers provide. This is especially the case in rural areas and for seniors and individuals with mobility issues living in urban areas.

Canada Post’s anti-union agenda, and the Harper government’s tacit support for it, concern all Canadians who believe that workers should be treated fairly and postal services improved, not degraded. Since CUPW members’ last national job action in 1997, Canada Post has made $1.7 billion in profits. Clearly, there is room to negotiate a collective agreement that works for both Canada Post and its workers.

CUPW proposed measures to improve postal services, including the expansion of door-to-door delivery, provision of banking and financial services (which would be particularly beneficial in remote locations) and an increase in job opportunities for young people coming into the labour market. Canada Post rejected these innovative proposals and instead proposed to reduce worker salaries and benefits as well as service to the public. They also want to scale back wages by paying new workers 30 per cent less than existing workers; reduce employee and retiree benefits, pensions and sick leave provisions; and weaken job security.

Canada Post’s strategy and the Harper government’s support for it suggest an alarming parallel to the recent attacks on public sector workers in Wisconsin and other states. The U.S. agenda of drastic cuts to the public service, cutting public sector wages and contracting out public sector jobs while undermining public sector unions will not benefit ordinary people, in the U.S. or in Canada. Most of us rely on the quality services provided by these workers, which we get at far lower cost than comparable services bought from private firms.

Public sector unions also contribute in important ways to the quality of life we value. Fair wages, job security and other advantages bargained by public sector workers help maintain the community standards that benefit all workers by slowing the “race to the bottom” that leads to low wages in precarious jobs with few benefits. Public sector unions also offer a bulwark against declining union density. Overall, less than 32 percent of Canadian workers are unionized, but 71 percent of public sector workers are union members. Higher unionization is good for all Canadians, even those not lucky enough to be union members. Recent studies show conclusively that countries with higher unionization enjoy more social equality, better health, fewer social problems, more trust, and a higher quality of life. Public sector unions protect the good life that we in Canada enjoy.

Canadians want and deserve good jobs with decent wages and working conditions. Regressive changes to collective agreements undermine those objectives. A two-tier wage structure that would pay new employees 30 per cent less to do the same job as their co-workers, with no chance at comparable wage for seven years, is unfair. Reducing the number of good paying jobs and scaling back benefits makes workers more vulnerable and will lower community standards and weaken the economy.

Like the thousands of Manitobans who gathered in solidarity with postal workers in Winnipeg on June 16th the members of the Brandon and District Labour Council fully support CUPW members in their efforts to get a better agreement and better postal services for all Canadians. We believe that these are goals that all Canadians can support.

Eliminating good jobs and reducing the quality of services provided by crown corporations is not in Canada’s best interest. And undermining the collective bargaining process by legislating workers to return to work shows disregard for worker rights.

The Conservative government must take back-to-work legislation off the table and order Canada Post management to negotiate a collective agreement that addresses the concerns of postal workers and improves the quality of services to citizens.

Jan Chaboyer is President of the Brandon & District Labour Council.