Indigenous labour is an untapped resource

Canadians opened their hearts and homes to Syrian refugees last year. It was a warm humanitarian gesture as well as an economic imperative: Canada relies on immigrants to sustain our work force.

    image: Government of Canada

Treatment of our Indigenous people is puzzling in both regards. Refugees from Indian Reserves do not receive a warm welcome. Communities don’t sponsor Indigenous families and put them up in homes. They are not being bombed but they are fleeing abominable conditions: mouldy housing, undrinkable water, poor education, appalling health care and little hope for employment. Instead of being helped, First Nations refugees often end up on city streets with few options for integration into society.

Not only are Indigenous Canadians uninvited in cities but the labour resource they represent is wasted.

The Centre for the Study of Living Standards released a report earlier this month entitled “The Contribution of Aboriginal People to Future Labour Force Growth in Canada.” The 36 page report outlines the wasted labour resource of Indigenous Canadians.

Indigenous citizens are the youngest, fastest growing demographic in Canada.

To start with, all Indigenous people are underemployed. More critically, participation of the 15-24 age group is 12 per cent lower than average. Only one-half of Indigenous youth are employed. That untapped resource could contribute to future labour force growth. It’s worse in the North where participation in the labour force is one-fifth the average.

If Canada’s Indigenous work force were developed, they would contribute to one-fifth of the future national labour growth. That contribution could be in the North, where they are most needed. As the global climate change warms and the climate of the North warms disproportionately, opportunities will open for jobs in resource extraction, infrastructure, housing and tourism. The expansion of the Indigenous work force In the North could comprise 83 per cent of total northern growth.

What would it take? The report states rather dryly:

“Indigenous people also face deficiencies in hours worked, employment, income by level of education and health among others. Progress must be based on Indigenous autonomy and this in turn will require strengthening administrative and managerial capacities, most likely under new institutional arrangements.”

In more vital words, it will take a reversal of our colonial past which was designed to dominate and assimilate Indigenous peoples. The Trudeau government made a good start when it divided the Indigenous portfolio in two with Jane Philpott becoming minister of Indigenous services and Carolyn Bennett becoming minister of Crown-Indigenous relations and Northern Affairs.

Some criticise the move as increased bureaucracy but the split was recommended in 1996 by the Royal Commission on Aboriginal Peoples. Both ministers are capable I can only hope they will succeed in ending the anachronistic Indian Act.

National Chief Perry Bellegarde of the Assembly of First Nations is optimistic:

“First Nations are working to move beyond the Indian Act and re-asserting our jurisdiction and sovereignty over our own lands, title and rights.”

Let’s bring our Indigenous brothers and sisters in from the cold. And if compassion doesn’t motivate Canadians, maybe a bleak economic future without them will.

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Good riddance to B.C. LNG

There were lots of things wrong with former Premier Christy Clark’s plan to produce liquefied natural gas but let me start with the good.

image: the Tyee

At least it was a plan that labour and business could agree to. It was a provincial strategy that had workers and industry pulling together in the same direction.

It was an ambitious plan but unrealistic from the start. Markets for were weak and no one wanted to develop the plants. Now one of the last players, Petronas, has pulled the plug.

I can only speculate why they bailed out only one week after the BC Liberals were defeated. Was there some deal with the Clark government to provide concessions such that the LNG plant would be built regardless of whether it was viable? It’s not inconceivable considering how much political capital Clark had invested in the project.

Or was it because of Canada’s so-called anti-business climate, including high taxes, environmental reviews, and Indigenous land claims? Instead of recriminations, let’s celebrate the passage of Petronas says economist Jim Stanford.

Stanford has a unique perspective of LNG projects in B.C. and Australia. He’s a professor at McMaster University in Hamilton, Ontario, and lives in Sydney, Australia.

“In fact,” says Stanford, “far from blaming government red tape for the collapse of this misguided project, we should be collectively grateful. Those rules likely saved us from wasting tens of billions of dollars on the biggest white elephant in Canadian history.”

Stanford’s analysis shoots down an impression I had. I wrote that Australia was a LNG success story and that Australia’s early entry into the market was why B.C.’s plants were doomed. I now realize that Australia’s experience was not as rosy as I thought.

When Asian gas prices started to surge in 2009, Australia decided to chase after those markets. Unlike Canada, Australian developers faced few environmental hurdles and Australia’s Indigenous people had little negotiating power.

What followed was a spectacular construction boom in which $200 billion Australian was spent on LNG plants.

The boom had a dramatic effect on Australia’s economy. Their dollar, now at par with Canada, spiked up to $1.30, resulting in what economists call the “Dutch disease.” When Australia’s currency rose dramatically, the price other countries paid for Australia’s products rose. As well, imports were cheaper. Exports fell, imports rose and Australian factories could no longer compete. Australia became deindustrialized including the shutdown of their auto industry.

With the drop in gas prices, Australia’s LNG online plants are marginal. Boom towns that sprung up during the construction years are becoming ghost towns. Housing prices have collapsed.

Gas plants are selling into markets at discounted prices. Unlike Canada, Australian plants don’t have to supply the country first and so, ironically, there is a shortage of gas in Australia and a glut of gas on world markets. Domestic prices have doubled because of diversion to export markets.

B.C. has no economic strategy. Only one per cent of our GDP comes from mining, oil and gas and most from finance and real estate.

Our new NDP government faces a challenge. In our polarized political climate, unifying strategies are rare. Just ask former Premier Clark.

Stop treating B.C.’s interior like a colony

Premier Clark’s plan for job growth in B.C.’s interior is a failure. Her plan to extract Liquefied Natural Gas from the interior evaporated. She is sending more raw logs out of the interior than any other government according to the Canadian Centre for Policy Alternatives.

Clark treats B.C.’s interior like a colony of Victoria: drill for natural gas and sell it overseas with no regard to the contamination of water or earthquakes that fracking causes; send raw logs, and the jobs that go with them, elsewhere instead of restoring those jobs in the interior.

The interior-as-colony mentality didn’t always exist. Before 2003, the government made sure that jobs stayed in the communities where trees were logged. That meant that sawmill workers could earn good wages where they lived. Once logging companies were free of that obligation, they shut down mills. Since 1997, 100 mills have closed and 22,400 jobs were lost.

That loss of jobs means a transfer of wealth out of the interior. By my calculation, the loss of the above jobs amounts to $1.5 billion.

Since 2013, when Premier Clark was elected, nearly 26 million cubic metres of raw logs worth more than $3 billion were shipped out of BC. No previous BC government has sanctioned such a high level of raw log exports. Last year, about 6.3 million cubic metres of raw logs left the province. Had those logs been turned into forest products in the interior, 3,600 workers could have been employed.

We can do better. B.C. does a poor job of extracting value from our publicly-owned forests compared to other provinces. Ontario’s value-added wood industry was almost three times that of B.C.

B.C. should be a leader in extracting value from our forests, not a laggard. Waste wood can be used for more than paper mills and as fuel to generate electricity. That’s a good start says The Forest Products Association of Canada. They suggest other uses for waste wood -make wood pellets to heat homes, manufacture alcohol for vehicles, and make solvents for industry.

In addition to these bio-products, engineered wood products add more value. Such building systems include wall panels and roof trusses that are made from lumber in factory settings. The completed pieces are then moved to construction sites where they are secured into place, forming the walls, floors and roofs of finished houses or multiple-dwelling buildings.

In one demonstration, two identical triplexes were constructed in Edmonton.  The pre-fabricated building went up faster, with less on-site waste than the building next door.

Victoria can afford to be blasé. Vancouver Island gained 9,000 jobs last year; two-thirds of them went to Victoria. The Lower Mainland did OK as well, gaining 94 per cent of all B.C. jobs.

All other regions outside of Victoria and the Lower Mainland lost jobs last year compared to 2008 before the Great Recession (CCPA Monitor, March 2017).

Rather than treating the interior as a colony the government should create jobs and wealth where people live. The forestry sector is an obvious place to start since forestry has been a proven record as a job creator.

 

Unmasking Uber and Facebook

Let’s stop pretending that Uber is just along for the ride in the gig economy and that Facebook is just a technology company.

gig

At first glance, the gig economy seems great: a way for individuals with an entrepreneurial spirit to improve themselves. The reality is that it’s a race to the bottom. For many workers, it’s all they have. They string together a number of insecure, low paying, temporary jobs to try to keep the wolf from the door.

Mortgage companies are reluctant to lend to those without secure work. Gig workers have trouble saving for retirement; they have no sick or maternity leave; no health care plans. Workers are easily abused because of the one-to-one relationship with employers.

It’s easy to become complacent if you have a reliable income. Someone like me, for example. On my visit Los Angeles last year I used Uber. I marveled at the technology that allowed me watch the car’s progress from blocks away on my tablet. I was impressed by the courteous driver and his new, clean car and the low fare.

But those of us with reliable incomes should worry as full-time positions are eroded by the gig economy.

Uber professes to be just an app that connects drivers with passengers; a dubious claim says Carl Mortished:

“That was Uber’s wizard scheme: to make money from millions of taxi journeys without actually employing a single driver or even being part of the transaction. It was about making money from the gig economy without doing a single gig (Globe and Mail, November 4, 2016).”

Judges in England found Uber’s claim that it was not an employer to be unbelievable. Drivers have no control over choice of customers, fares, and routes traveled. They are subject to a rating system that amounts to a disciplinary procedure. Judges ruled that drivers were entitled to minimum wages and paid holidays.

Facebook harbors its own pretensions. At an event in Rome last year, an audience member asked founder Mark Zuckerberg if Facebook was an “editor in the media?” He replied that Facebook does not produce content but merely “exists to give the tools to give you the tools to curate and have the experience to connect to the world that you want.” Mortished disagrees:

“What Mr. Zuckerberg says is untrue. Facebook is editing and making content. Facebook is paying millions of dollars to celebrities and other media organizations to make videos for Facebook Live.”

Facebook edits its website: banning, deleting and restricting content that doesn’t fit their rules. They ran into a storm of protest when editors deleted the famous Vietnam War photo of naked girl fleeing an American napalm attack.

Facebook should grow up. It’s no longer the college photo-sharing web site it once was. Facebook would prefer not to be classified as a publisher because it would find itself in the messy business of being responsible for content that might be offensive, defamatory, or potentially criminal.

I’m not against Uber. Properly implemented, it could improve taxi service and provide fair working conditions for drivers. I like Facebook. It keeps me in touch with friends and family. But let’s avoid the charade, Mr. Zuckerberg, of the exact nature of the business that you’re in.

Acts of vandalism disturbing in what they say about perpetrators

       Idle hands are the devil’s tools  (18th century proverb)

There’s no shortage of theories why teenagers would enter a petting zoo in Westsyde and bludgeon two caged birds to death.

idle-hands

One theory is suggested by the above proverb – – a struggle between good and evil.  In this theory, work is seen a virtue.  The devil’s influence is exorcised from our thoughts by work.  Idle citizens with time on their hands are open to temptation and will likely do no good.

Then there are psychological implications.  The senseless killing of tame animals is disturbing.   “The perpetrator of this crime may well be more than just a bored kid with a penchant for shock.  Perhaps he is he next Clifford Olsen,” says Greg Dueck in his letter to the Daily News (May 7, 2003).   Psychologists warn that disturbed people may start off with torture of animals and then move on to killing people.

UCC Criminologist Linda Deutschman agrees that cruel acts could be the act of highly disturbed persons. “By highly disturbed person, I do not mean ‘mentally ill.’  The kind of person who kills birds and sometimes goes on to kill humans is very rarely someone who is out of touch with reality,” she told me.

“These people, like Clifford Olsen, are psychopaths, but not psychotic. Mentally ill people are actually less likely to commit violent offences than the rest of us. They scare us mainly because they are unpredictable, not because they are predictably hurtful,” says Associate Professor Deutschman.

Beyond the sacrificed lives of animals, there is the wasted lives of the perpetrators.  The senseless death of birds is one thing but what about the senseless lives of those who did it?   The devil’s work is sometimes labour intensive.

Take the recent case in which 30 grave-markers of war veterans were knocked over  by vandals.  The overturning of headstones amounts to a significant amount of labour.  “They really had to work at it.  They have a solid concrete footing,” said Chris Pyett, who lives near the cemetery.  “There’s one busted right in half,” he added.  That’s just part of a vandal’s work.

After a evening of tipping over bus stop benches,  destroying public toilets, smashing concrete picnic tables with sledge hammers, is there a sense of satisfaction?  Can the vandals come home after a hard day’s night and relax in their favourite easy chair with a beer and reflect on a job well done?

If the vandals put the same amount of effort into a job, they could earn a living.  If someone would hire them, that is.  In all likelihood, such vandals probably can’t find work. Worse still, the longer that they are out of work the less likely that they will find work.

The Corrections Service of Canada has identified this group in society with diminished opportunities as the “baby bust.”

“Studies indicate the emergence of an unemployed (and under-employed) group of youths, who are in neither school or the labour force. This under-employed and under-educated group is not only large, it seems likely to increase unless action is taken,” says Correction Canada in an article called Unemployment and Population Aging: Contradictory Trends Affecting Penitentiary Populations.

These baby busters sit at home waiting for their parents’ generation to retire from well-paying jobs.   This group of youths slowly ages as they watch diminished opportunities in an economy that has been stagnating since the 1970s.

The problem in B.C. has been compounded by the loss of high paying jobs in the resource extraction sector – – forestry and mining – – and the highest unemployment this side of the Atlantic provinces.

Now in their thirties, many of this so-called Generation X are losing their job-finding skills.  In a difficult labour market like B.C., they may lack the basic “social capital” required to achieve success and attachment to the work force.

Legitimate jobs and crime are inversely proportional.  Vandals are more likely to permanently unemployed youths. They tend to have below-average education, irregular job experience.

“Young males with steady jobs are typically believed to be at much lower risk of criminal behaviour and incarceration,” says CSC.

The death of animals and destruction of property is one thing but what about the pointless and non-productive lives of the vandals?  They sit idle with more time on their hands than money.  Maybe this is where the devil comes in.

Pipelines are good politics, bad economics

New pipelines get politicians elected. However, they will remain empty; much like election promises that remain unfulfilled. There are good environmental reasons not to build new pipelines but the economics are rarely discussed.

broken-pipeline

First the politics. Workers in the resource extraction industry like new pipelines because they symbolize well-paying jobs. NDP leader Adrian Dix learned that bitter lesson in 2013 when he opposed the proposed Kinder Morgan pipeline and regular unionized workers flocked to the BC Liberals.

Prime Minister Trudeau understands the politics of pipelines when he approved three pipelines and placed one under review (Trans Mountain, Enbridge Line 3 and Keystone XL approved and Energy East under review.)

However, approval of pipelines does not guarantee that oil will actually flow. Thomas Gunton, Director of the Resource and Environmental Planning Program at Simon Fraser University, has done some number-crunching. His analysis suggests that we are going to end up with a lot of empty pipelines:

“Building all four projects would therefore result in 2.4 million to 2.7 million bpd [barrels per day] of excess capacity in 2025, equivalent to about four Trans Mountain expansion projects worth of empty pipeline space (Globe and Mail, January 12, 2017.”

To put these numbers in context, our current capacity for pipeline and rail is five million bpd. The Canadian Association of Petroleum Producers (CAPP) forecasts that the current capacity will fill needs up to 2025. Note that this prediction is not coming from some environmental group but the very industry that produces the stuff.

Even existing pipelines may remain empty. The National Energy Board (NEB) projects that the price of oil price will drop by $17 a barrel. New climate policies that could further reduce production further.

Empty pipelines are expensive. Guess who’s going to pay for them?

“The capital cost of empty pipeline space would be about $25-billion, which would be borne by the Canadian energy sector in terms of higher tolls and by the Canadian taxpayer in terms of lower tax payments to government due to lower corporate profits. If current rail capacity is included, the surplus capacity would be even higher.”

You, dear reader, will pay for empty pipelines in higher fuel costs. The pipeline builders will recover the cost through higher tolls that oil producers will have to pay in order to move their fuel to market.

Politicians like to build monuments. Premier Clark is doing just that in proceeding with Site C dam. Like empty pipelines, transmission lines from the dam on the Peace River will remain empty. The market for electricity is flat and with conservation, consumption could be reduced by twice the output of the proposed Site C dam, according to the B.C. Sustainable Energy Association . They add:

“In its 2013 Integrated Resource Plan, BC Hydro assessed Site C and other possible resource options in relation to forecast energy and capacity needs over the next twenty years. BC Hydro concluded that Site C is needed for its earliest practical in-service date of 2023.”

Like the Egyptian pyramids, new dams and pipelines will create jobs but serve no practical purpose. The difference is that tourists will not flock to see them.

Conservatives can increase chances by decreasing happiness

The antics of some Conservative leadership hopefuls are pathetic. Chris Alexander at a rally bobs his head in rhythm to the chants “lock her up” in reference to Premier Rachel Notley, tone deaf to the toxic implications; Kellie Leitch calls for immigrants to be tested for “Canadian Values” even though no such test exists and if it did, she would probably fail.

Huffington Post

Huffington Post

Trump-style populism into will not succeed because Canadians are not ripe for such politics –we need more inequality and the resultant unhappiness for this approach to work.

Inequality creates a sense of injustice and anger that manifests itself in a variety of ways. Jan-Emmanuel De Neve and Nattavudh Powdthavee researched the effects of inequality for the Harvard Business Review (January, 2016). They found that anger and stress increased in countries where the richest 1 per cent controlled the greatest share of wealth.

“In societies where the richest hold most of the country’s income, people were more likely to report feeling ‘stressed,’ ‘worried,’ or ‘angry’ on the day before the survey.”

Angry politicians appeal to angry voters. Trump’s anger is what propelled him into power; that’s why his racist and misogynistic views were largely overlooked. He was as mad as hell and wasn’t going to take it any more.

It’s not just anger that is affected. As anger went up, life satisfaction went down.

“We examined data from the Gallup World Poll and the World Top Incomes Database and found that the more income is concentrated in the hands of a few, the more likely individuals are to report lower levels of life satisfaction and more negative daily emotional experiences.”

Life satisfaction exacerbates unemployment. For every 1 per cent increase in the share of income of the top 1 per cent, unemployment rises by 1.4 per cent. There are a couple of factors involved –exporting jobs to areas of cheap labour increases profits; unhappy workers tend to be less productive, take longer sick leaves, and quit their jobs.

At the other end of the scale, greater wealth also creates unhappiness. Nobel laureates Daniel Kahneman and Angus Deaton calculated that day-to-day happiness peaks at an income of $75,000 a year, after which it plateaus. Inequality creates unhappiness at both ends of the wealth spectrum.

Canada is the sixth most happy country in the world according to the World Happiness Report behind the Scandinavian countries but ahead of the U.S. at thirteenth. Can you guess how these counties rank in equality? Right, the Scandinavian countries are the most equal followed by Canada and then the U.S.

Inequality is rising fastest in the U.S. where the top 1 per cent increased their wealth from 8 per cent of total wealth to 19 per cent in just thirty years (Scientific American, September, 2016).

Equality and satisfaction of life can be increased, and anger reduced, through fair taxes and benefits to the poor: like minimum wages, child care, job security, employment insurance, and an affordable education.

Conservative leadership hopefuls can increase their chances by increasing inequality and decreasing the happiness of Canadians by lowering taxes, increasing tuition, resisting wage hikes, and reducing job security.