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.

A good economy

A good economy will feature work rather than growth for growth sake. Some progressives think that negligible growth is inevitable, perhaps even desirable. Too much growth, so the argument goes, consumes too much of the Earth’s resources. It doesn’t have to be that way says Economist Jim Stanford.

“I disagree on all counts. I do not think that slow growth is natural, inevitable or desirable. I do not think that stagnation and recession will fix environmental problems; more likely, they will make things worse (CCPA Monitor, May/June, 2016).”

New jobs can be created when a nation decides to.

New jobs can be created when a nation decides to.

There are many ways to create growth. One is through capitalism and the unsustainable plunder of the Earth’s resources which focuses on fat dividends for investors.

Another is through work. It’s not like there is a shortage of things to be done, much of it in the service sector: better care for seniors, health care, child care, education, and the arts. Many more jobs wait in green technologies; building and repairing roads and bridges, schools and cultural facilities, public transit. Jobs will continue in areas such information technology and as energy extraction (we won’t stop using fossil fuels tomorrow).

Increased service sector jobs are a novel concept when seen through the lens of Neoliberalism where growth is seen as a function of profit. And it’s a mistake to think that growth is even their primary motive. Greed is. Capitalism is organized to reinforce the wealth and power of a few.

Neoliberalism does not encourage growth. To reduce input costs, wages are driven down. Workers are disempowered through de-unionization and precarious work. “These are all anti-growth policies,” says Stanford.

A measure of growth is the Gross Domestic Product: the total value of goods produced and services provided in a country. In order to keep up with the growth of population and productivity, the GDP should grow by about two per cent annually says Stanford. Any slower and unemployment increases.

The growth of jobs in the service sector may sound a bit fanciful because of resistance from capitalists. Try as they might, they haven’t managed to squeeze much profit out of health care and education.

It’s not fanciful when you remember that we did it once before. Canada and other Western nations pulled themselves up by the bootstraps during the Second World War by creating jobs that met a national objective, not corporate profits.

Unemployment disappeared within months. Untapped sources of labour were drawn into the workplace, particularly women. The bloom of job growth lasted decades with a reduction in poverty and improvement of life expectancy.

Who’s going to pay for it? During the war, money was never a constraint in spite of the hard times of the Great Depression. With modern credit, raising capital is easier than ever. Private financial institutions create money out of thin air whenever it suits their profit-driven motives, as I discussed in my column of December, 2015 How to make money.

Governments can similarly create money, as they did when they saved banks and industry after the Great Recession of 2008. The only thing stopping the growth of service sector jobs is the government’s fear that they will offend the sensibilities of corporations.

Canada’s new economic reality

 

As Canada emerges from the Dark Decade, we need to get back on track with a modern economy.

The Harper government’s plan to make Canada an “energy superpower” was a disaster for a number of reasons. The plan reversed our progress as an industrial nation; it insured that Canadians would become the highest per capita emitters of CO2; it failed to anticipate the vagaries commodity markets.

lumberjack

As long as we are hewers of wood and drawers of oil, we are just a colony of economic powerhouses. Mel Watkins identified this failed strategy as the “staples trap” in 1963.

“The tendency for the country to tilt its economic resources and policies in support of one particularly in-demand staple or another that, inevitably, leaves the economy struggling when the staple falls out of favour (David Parkinson, Globe and Mail, July 2, 2016).”

Watkins, now 84, looks back on the Dark Decade: “We bet the farm on oil prices staying high and rising, but that hasn’t happened and, it would seem, is unlikely to in any near future. We need to go back to the 1970s when there was genuine debate in Canada about industrial policy transcending staples.”

Back then, after World War II, Canada had shifted its workforce from agriculture to factories. By 1999, the high-value sectors of automotive, aerospace, transportation, electronics and consumer goods employed 60 per cent of the workforce. At the same time, the resource-sectors of agriculture, energy mining and forestry together only employed one-quarter.

What seduced Canada back into the staples trap? In a word: globalization. We gleefully sent manufacturing jobs to low wage countries with low environmental standards. Exports of metal ores doubled since 2000. Energy exports increased by 55 per cent at the same time as auto exports fell by 11 per cent. Economist Jim Stanford sums it up:

“The global commodities boom shifted Capital and policy attention towards extractive industries. Canada’s economy has been moving down, rather than up, the economic value chain.”

We’ve these cycles before where expansion in one part of the world triggers a global commodities boom. This time it was the modernization of China that triggered the boom. In the past it was the reconstruction of Europe and Japan after the war, and before that it was the rise of the U.S. as an industrial power.

Parkinson looks to future: “For the oil and gas business, the long term prospects look even more grim. The growing global momentum for green energy looks poised to steadily erode demand for fossil fuels over the coming decades. We may one day look back on the oil-price collapse of 21014-15 as the beginning of the end for the industry.”

During the Dark Decade, Canada invested heavily, not only in political resolve to exploit the dirty tar sands, but in the human and financial capital needed to dig the stuff up. It will take time to shift gears but Canada must shed its colonial mentality. It’s happening. Enbridge has invested $1 billion in wind-energy. Alberta has budgeted $3.4 billion for renewable energy.

B.C.’s government still has grandiose dreams of a fossil-fuel economy with liquefied natural gas. While Premier Clark hasn’t yet admitted it, that plan is history.