The Bruce Report

In the titanic struggle to rescue New Brunswick from the rubble of fiscal collapse, the casualties begin to mount. Among the first, it seems, is coherence.

Late last year, Premier David Alward chastised his political counterparts in Ottawa for unilaterally setting the funding formula for health transfers to the provinces. This, he said, was “unacceptable” in that the “proposal” materialized “with no dialogue, no consultation.”

It was, of course, the safest of all possible positions to assume, given his and his government’s once promising, now toothless, commitment to involving New Brunswickers in the mechanics of public administration.

After all, four of six principles Alward’s party espouse ceremoniously bow to the largely meaningless sentiment of inclusion, encapsulated thusly: “It should not be difficult for people to engage with their government. . .We need to do more to put people at the heart of decision-making in this province.”

Still, one wonders what brand of consultation was on display in October when Horizon Health Network – one of two such authorities in the province – declared it would cut jobs, reschedule surgeries, and reduce hours of operations at its rural centers without ever feeling impelled to engage “people” in its decision.

“Perhaps there might have been some co-operative ways that we could have worked together in making the hours work for both of us in some way,” McAdam Mayor Frank Carrol complained. “But there was no discussion.”

Regardless, Alward appeared sanguine. “We’ve challenged both health authorities to look within their budgets to see how they can find savings,” he said. “Horizon. . .has gone forward. . .and they are working through those (decisions), ultimately, with communities.”

Actually, its not. But why let a little conundrum stand in the way of public policy?

Similarly, last week, the Province announced it will no longer guarantee business loans to companies that could, at some point, fail – a strategy that makes about as much sense as denying insurance to an individual because he might, at some point, stop breathing. And yet, said Finance Minister Blaine Higgs, “We don’t want to be a bank. But if we are forced to be a bank we should act like one.”

So, then, was it acting like a bank when, on the same day, it extended a $7.5-million loan guarantee to Twin Rivers Paper Company of Edmundston, a firm that blossomed from the wreckage of Fraser Papers?

Certainly, there’s no evidence that Twin Rivers is in any danger of shuttering and throwing 400 people out of work. Indeed, said Business New Brunswick spokesman Bruce Macfarlane, “A new term loan (is) part of an overall financing package . . .for working capital purposes to hep preserve New Brunswick jobs.”

But, surely, the pertinent point is that a government that talks out of both sides of its mouth – in this case, one that embraces consultation and financial conservatism in theory, only to repudiate them in practice – is difficult to trust. Hypocrisy in a time of hunger isn’t much of a governing principle.

The question of consistency tasks elected leaders daily. The gulf between what they say they cherish and what they do is the chasm into which public sympathy plummets, and never more broadly than during periods of great trouble.

Candor, alone, can’t bridge this canyon. But, at least, it won’t erode the precipices. And, given New Brunswick’s enormous challenges – unsustainable deficits and debt, a dwindling and aging population and tax base, moribund economic growth, an underperforming tech sector, a plethora of low-paying jobs, and the escalating cost of government services – straight talk must become the lingua franca of the age.

The power of consultation to direct tough policy is, at best, limited. So, stop pretending that electors are happy partners with the elected. The latter expect (or should expect) the former to solve problems. If we don’t like the solutions, we can revisit our relationship at the ballot box. In the meantime, get on with it.

Should governments secure loans to private businesses? As no one’s crystal ball is pellucid enough to predict either solvency or bankruptcy, the answer is simply binary: yes or no. Pick one. Again, get on with it.

Let’s have some coherence before the rubble of New Brunswick’s finances claims the worst casualty of all: the truth.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

If, as New Brunswick Finance Minister Blaine Higgs suggests, elections are actually auctions for the affections of the electorate, bid with promises, then someone has neglected to pay the bill, which is, in a way, the besieged cabineteer’s politically unorthodox point.

“There is nothing that is more like an auction than an election,” he brazenly declared last week during a pre-budget consultation in Saint John. “What are you going to promise me? It was who was going to get there first, who could promise the most.”

Interim Liberal Leader Victor Boudreau seemed to agree, at least with the analogy. Reflecting on the result of most recent provincial election, and echoing his rival, he told the Telegraph-Journal, “Every time we promised something, they out bid us. We promised to have the catastrophic drug program in place within two years of our mandate, they said ‘it wasn’t good enough, we’ll do it in a year.’”

Now, the Grit honcho reportedly wants the Tories to come clean and concede that they had no intention of keeping their pricey promises when they made them. “If you are to be a responsible party,” he said. “you have to come up with the costing.”

Astonishingly, Higgs concurred. Sort of.

“Creating controls around elections so we don’t create this massive shopping list of any kind will help us get back in shape,” he said. “[It is] what has driven the situation we are in. . .The tremendous pressures that are put on [civil servants] through the election process. . .They are left to fill that requirement. . .We do that every election.”

There’s nothing like a little well-timed acquiescence to confuse your enemy, which may only indicate that Higgs is more chess master than auction bidder.

Whichever is the case, the pre-budget roadshow, a putative exercise in the Alward government’s already shopworn principle of consultation, is shaping up to be an unexpectedly dynamic campaign of managing expectations.

Higgs comprehends the dimension of the province’s fiscal dilemma better that any. Now, he wants the rest of us to wake up and pay attention, even if that means he’s willing to shoulder a large burden of blame, on behalf of his government, for New Brunswick’s $550-million annual deficit and $9.5-billion longterm debt.

It’s a brilliant strategy: Concede what everybody already knows about politicians as a way to defuse the opposition’s inevitable charges of breaking promises and willfully misleading the public. “Oh, right,” Higgs might rejoin. “Are you telling me you don’t also overpromise and underfund? Come on, boys, it’s in our DNA.”

But that doesn’t mean – the message might continue – we can’t be more responsible, realistic and circumspect in the future. It won’t be easy. In fact, it will be downright painful. It will take a concerted, coordinated effort by everyone of all political stripes to right the ship of state and return her to a safe harbour.

Or purple prose to more-or-less this effect.

Still, and for the moment, it’s impossible to estimate the degree of reform that will be necessary and, therefore, the likely temperature of public reaction when some version of hell breaks loose.

The Tories have promised no new taxes. Should they renege and introduce, say, a hike in the provincial portion of the HST or higher levies on alcohol and tobacco products, consumer rights advocates as diverse as the Canadian Taxpayers’ Federation and the New Brunswick Anti-Poverty Association will marshall their forces in a way that will make the shale gas controversy seem, by comparison, a high-school debate.

Likewise, deep cuts in the public service or dramatic adjustments to civil pensions, bonuses and retirement pay-outs could easily provoke protracted job action at a time when the province can ill afford any further malfunctions in the variously spluttering engines of its so-called prosperity.

Ultimately, though, New Brunswick’s choices are either perishing or becoming perishingly small.

Someone has neglected to pay the bill for the promises successive governments have actually kept. We cannot assume there’s money to cover the cost of those that remain merely empty.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

Apparently, the largest encyclopedia in human history, the venerable and omniscient Wikipedia, never heard of the escape button located in the upper left quadrant of the more than four billion keyboards currently in use all over the the world.

If it had, its long-gone Wednesday “blackout” of its site to “raise awareness” and protest pending legislation by U.S. Congress, which it says “could fatally damage the free and open Internet,” might have worked.

As it was, I obtained access to the online tome – when I should have been denied entry – simply by pecking “esc” repeatedly before the splash page loaded fully. Within seconds, all four million articles lay waiting for my perusal.

Indeed, I used this “workaround” to determine what the compendium, itself, says about workarounds. To wit: “A bypass of a recognized problem in a system. . .typically a temporary fix that implies that a genuine solution is needed. . .brittle in that they will not respond well to further pressure from a system beyond the original design.”

Yeah, sure. Wiki wishes.

But my real point is that I am, by no one’s definition, a code maker. Hell, I can’t change the ribbon in a standard typewriter. (Remember that old-fangled contraption? Ask your grandfather).

Still, after 20 years of cruising the Internet for fun and profit, even I know how to break a block activated by simple JavaScript. And if didn’t, I could have found out easily enough just by trolling other antechambers of cyberspace.

“You can still use the site by creating a new Ad Blocking Rule in Adblock Plus,” one geek helpfully advises.

“You only really need to block the JavaSript,” another assures. “NoScript does the job as well.”

In fact, Wikipedia’s somewhat lackluster gatekeeping is an object lesson for all who seek to control the flow, disposition and use of Internet content, including, ironically,  those who the encyclopedia and other providers and browsers now oppose: A few Republican politicians and their friends in the entertainment industry who want to punish or shut down online thieves of copyrighted material (mostly, movies and music).

In the crosshairs are two bills introduced before Congress last year – the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) – that would give content owners the legal tools with which to choke off business to sites they claim infringe on their rights. The targets of their ire are, for the time being, foreign pirates, which are not subject to U.S. law.

So far, so good. As a so-called creative worker myself, my bank account rises and falls by the number of times I can persuade a client to pay for what I happen to be thinking on any particular day.

But, as in so many contentious cases, the devil is in the details. The proposed legislation recognizes that its grasp is effectively limited by its reach in overseas markets. To solve the problem, it requires U.S.-based providers and browsers (like Wikipedia, Facebook, Reddit, Yahoo, Flikr and the almighty Google) to “play ball” and censor its worldwide connections on demand and without judicial oversight.

Or, as one online source explains: “If Warner Bros., for example, says that a site in Italy is torrenting a copy of ‘The Dark Knight’, the studio could demand that Google remove that site from its search results, that PayPal no longer accept payments to or from that site, that ad services pull ads and finances from it and – most dangerously – that the site’s Internet Service Provider prevent people from even going there.”

Hence, Wikipedia’s decision to protest this week by “going black” for 24 hours.

Yet, the larger and more important question is: What makes anyone think that either SOPA or PIPA, as they are currently configured, will actually work any better than Wiki’s brownout did?

The proposed Acts are ludicrously blunt instruments that are far more likely to damage the myopic lawmakers who now support them than a “free and open Internet.”

Beyond this, they are virtually unenforceable, and any law that can’t be enforced gets what it deserves: It gets ignored as tens-of-thousands of online denizens operate their various workarounds to popular acclaim.

Online piracy is a real problem. But its solution (if there is one) lies in forging sensible, nimble and nuanced partnerships among those who create and those aggregate and distribute content.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

Draw any conclusion, lay any indictment, utter all the “I-told-you-so’s” you like. In the end, none of it will rouse the sleepwalker that is the New Brunswick economy.

Of course, Auditor General Kim MacPherson is correct when she insists the Alward government must make “significant changes” to rescue the province from its persistent vegetative fiscal state.

But she’s not saying anything in her latest report that others – from economic development guru Donald Savoie to members of the New Brunswick Business Council – haven’t been observing since the Tories grabbed the reigns of legislative power from Graham’s Grits.

The question is: What is the precise nature of the necessary changes? What are their dimensions and what should they affect?

The provincial government has had two years to ponder these issues and roll out an action plan to address moribund economic growth, rising multi-billion-dollar debt loads and ballooning multi-million-dollar deficits.

That it’s had only slight success speaks more about the political unpalatability of real reform in a jurisdiction that’s exceedingly comfortable with the status quo than it does about the current chief executive officer’s sincerity and commitment, which is, nonetheless, genuine.

“We need to go and understand what services we need to provide,” Alward told me recently. “We need to know what our core values are, what our core services are and focus on those services. We need to find ways to deliver them more efficiently. It’s about how we can reorganize government.”

Indeed, he added almost plaintively, “In the last four years there’s been a growth in the public service of 8,000 positions. We have to look at the long term.”

Inarguably, though, the time for gazing into the naval of public administration is over. Further “consultation with stakeholders” won’t return high-paying jobs to the struggling tech sector; neither will it remediate the deficiencies of provincial governance.

The patient needs much stronger medicine than this – and now.

Of 12 financial indicators the auditor general examined, only two show “favourable results”. And one of these measures the government’s vulnerability to currency fluctuations (something that is not within its power to control anyway). Three others are “neutral”. Fully seven are “unfavourable”.

The government “expense by function-to-total expenses” and “total expenses-to-GDP” gauges are particularly revealing. The former indicates that over the past two years, the cost of essentially running the province has nipped up to $725.5 million, the fourth-largest line item in the annual budget (nearly nine per cent of the total). The latter shows these and other expenses growing faster than the economy, itself.

Just as troubling, perhaps, the cost of servicing the province’s longterm debt has risen, over the past four years from $577 million to $643 million, which amounts to roughly eight per cent of all spending, with no sign of abating in the foreseeable future.

What’s more, MacPherson reports, “The rapid growth in New Brunswick’s net debt reflects a declining fiscal situation that is outpacing that of comparable provinces. We compared our fiscal results to Nova Scotia, Manitoba and Saskatchewan. The numbers show our province has the highest percentage increase in net debt, highest percentage increase in net debt per capita and highest percentage increase in net debt per gross domestic product.”

All of which leads her to conclude: “This illustrates the immediate need for the province to develop a viable plan to improve the financial health of the province.”

Which is where we came in: With an indictment, but no discernible path to sustainable prosperity.

Courage is that most precious of all political commodities precisely because it is rare. If the Alward government obtained its mandate largely by studiously avoiding words like “transformative” and “self-sufficiency” it can no longer skirt their resonance or relevance under circumstances that, if left unchecked, are destined to upend the public’s cherished expectations of convenience.

Real change involves pain. It’s time to wake the sleepwalker.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

The Switzerland-based World Economic Forum has just issued its “Global Risks 2012” report, and from the looks of this particular recipe for disaster, now would be a good time to prepare out palates for a lifetime of sour grapes.

The think tank, which traces its origins back to the early 1970s when jet-setting financiers had only just begun to dream about a planet untroubled by national borders, predicts an unappetizing future for most of humanity.

So unappetizing, in fact, that its managing director, Lee Howell, is at a loss to comprehend how we poor peasants will survive the coming famine of opportunity.

“In the two years following the liquidity crisis of 2008, 27 million people lost their jobs,” he writes in the online edition of The Independent. “Many countries have experienced increases in rates of poverty, mental illness, substance abuse, suicide, divorce, domestic violence and child neglect. . .It is impossible to disentangle one type of risk from another: economic crises swiftly feed into social crises in today’s interconnected world. . .creating a fragmented, dystopian future.”

Good word, that. Dystopian. It conjures all the appropriate images for our times.

Charlie Sheen announcing that he doesn’t need food because his body is “a lockbox of diamonds, uranium, and assassin nobility.” David Hasselhoff, blitzed on booze, searching in vain for the burger inside the bun. Mel Gibson wailing about the evils of unleavened bread and Hollywood insiders.

Sort of Mad Max finds Gilligan’s Island, but only after the professor told Ginger to hide the coconuts.

Still, to fully appreciate the meaning of dystopia, one must at least have a passing familiarity with its sunnier counter notion. And it’s a safe bet that no one, these days, really understands what Sir Thomas More had in mind, some 500 years ago, when he coined the term “utopia”.

Well, almost no one.

The World Economic Forum is an exclusive club whose membership comprises 1,000 of the wealthiest corporations and individuals on earth. Once a year, they gather in the European Alpine resort of Davos to ponder and pontificate, over plates of sushi, the shape of things to come for the 99.9 per cent of people who aren’t them. Naturally, this gives them the moral authority to prescribe whatever vitamin supplements they deem necessary to the health of the global, “interconnected” economy.

“As the world grows increasingly complex and interdependent, the capacity to manage the systems that underpin our prosperity. . .is diminishing,” this year’s Risks report solemnly declares. “Our safeguards may no longer be fit to mange vital resources and ensure orderly markets and public safety.”

The solution, naturally, is to engage “a wider group of stakeholders to establish more adaptable safeguards which could improve effective and timely responses to emerging risks.”

If this doesn’t actually mean anything, don’t worry: It’s not supposed to. This is the deliberately obfuscated language of privilege. It implies that while the very rich are in the world, they’re not really of it. In fact, they’re above it, hovering over the wreckage they, themselves, played a pivotal role in causing. And from this lofty perch, their remedies transform society only apocryphally, as water into wine.

If the “Davos Men” (a phrase that American political analyst Samuel Huntington coined to somewhat derisively characterize these pan-national, pro-market global leaders) sincerely wanted to make the world a better place for people other than themselves, more of them would start with their own net worths – a process that would actually involve a more narrow, not wider, “group of stakeholders to establish more adaptable safeguards.”

Safeguards, such as: Dismantling corporate monopolies, which keep commercial markets closed and uncompetitive; investing in poverty reduction and early childhood education programs; promoting environmentally and, by extension, economically sustainable approaches to energy development; and reducing the despicable, and escalating, disparity in earned incomes.

If these global capitalists deigned to write even one, practical recipe for success, the harvest for humanity would be sweet, indeed.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

We in the frozen north have basked in the warmth of our own self-regard ever since the American industrial behemoth fell to its knees at the end of the last decade.

Our leaders have congratulated themselves, not unjustifiably, for their prudence and perspicacity, qualities that have managed to spare the country’s economy from the ravages of global recession and financial dislocation.

Our “fundamentals” have been strong, they have repeatedly insisted. Our banking system has been both supple and resilient. As a result, our unemployment rate has been more-or-less fixed to a largely manageable 7.5 per cent, while our chief economists have achieved near rock-star status among the world’s free-market geeks.

But success can also be insidious, as ruin is sometimes the only crucible in which real hope distills.

Earlier this month, the U.S. Department of Commerce issued a report that’s both stunningly candid, in its assessment of that nation’s current predicament, and refreshingly sincere about solutions.

In the 160-page document entitled, “The Competitiveness and Innovative Capacity of the United States,” Commerce Department officials, in concert with the National Economic Council, all but state that America’s hegemonic dominance in the world is over. And, they concede, this decline is almost entirely self-engineered.

“The U.S. economy reigned supreme in the 20th century, becoming the largest, most productive, and most competitive in the world,” they correctly observe. “Amazing new technologies were invested and commercialized; the workforce became the most educated in the world; and incomes soared while a large middle class thrived.”

But a funny thing happened on the way to complacency: Uncle Sam got lazy.

“As the 21st century approached, however, alarms began to sound. . .Incomes stagnated and job growth slowed,” the authors write. “Other countries became better educated and our manufacturing sector lost ground to foreign competitors. Observers have expressed concern that the scientific and technological building blocks critical to our economic leadership have been eroding at a time when many other nations are actively laying strong foundations in these same areas.”

Such ruminations are neither novel nor particularly penetrating. For years, if not decades, think tanks and academic institutions have been warning about the decline of the American industrial empire. But they are exceedingly rare coming from an instrument of the U.S. government. And it’s hard to imagine the current crop of polticos in Ottawa assuming a similarly confessional tone – harder, still, to envision their response along the following lines:

“One way to approach the question of how to improve the competitiveness of the United States is to look at the past and examine the factors that helped unleash the tremendous innovative potential of the private sector,” the officials suggest. “Among these factors, three pillars have been key: Federal support for basic research, education and infrastructure.”

The corollary is, of course, that government not industry, with its short-term focus on profit and shareholder value, points the way toward economic salvation. And when you consider the umber of commercial innovations that are creatures of public investment, it’s an argument that’s hard to dismiss.

The integrated circuit, the Internet, broadband, national highway systems, air travel, rail transport – indeed, everything we now take for granted as the essential lubricants of modern, industrial progress – all began with government-supported research and development.

Try telling that to the conservative cabal that holds much of popular sentiment in both the United States and Canada in its icy grip. The enemy of prosperity, they insist, is public-sector waste. And, to extent, they are correct. But to extrapolate from this no legitimate, responsible role for government in economic expansion is simply to deny history and abandon the future.

Ottawa’s objective to cut the fat from its various departments is prudent and reasonable. To be truly effective, however, it needs to redirect its resources and bolster the real pillars of the Canadian economy: basic research, education and infrastructure, without which even the most frugal society becomes less competitive, even as it grows more complacent.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

As Natural Resources Minister Joe Oliver draws a line in the tar sands, daring well-financed “radical groups” opposed to Alberta oil development to cross, Green Party Leader Elizabeth May wags a scolding finger at the petro-lobby and their willing dupes in high government office.

And so, dear viewer, another episode of “Dynasty: Canadian Style” unfurls, chocked full of the sort of hyperbole we expect from a prime-time soap opera.

Casting himself in the role of patriot, warning his countrymen of the dark forces at work to upend their sovereign right to poison the planet, the Honourable Mr. Oliver writes in an open letter this week: “There are environmental and other radical groups that would seek to block this opportunity to diversify our trade. Their goal is to stop any major project no matter what the cost to Canadian families in lost jobs and economic growth. No forestry. No mining. No oil. No gas. No more hydro-electric dams.”

He speaks specifically about the regulatory review, currently underway, to ascertain the environmental, economic and social implications of building a new pipeline west to the Pacific coast – a review that, he says, could be “hijacked” to achieve a “radical ideological agenda. . .These groups seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects.”

What’s worse, “They use funding from foreign special interest groups to undermine Canada’s national economic interest. They attract jet-setting celebrities with some of the largest personal carbon footprints in the world to lecture Canadians not to develop our natural resources.”

Enters from stage left Order of Canada recipient, former Sierra Club of Canada executive director and sitting Member of Parliament Ms. May with a predictably dissenting opinion:

“Dear Joe. . .I respect you and like you a lot as a colleague in the House. Unfortunately, I think your role as Minister of Natural Resources has been hijacked by the PMO spin machine. The PMO is, in turn, hijacked by the foreign oil lobby. You are, as Minister of Natural Resources, in a decision-making, judge-like role. You should not have signed such a. . .rant.”

For anyone who has been faithfully following the arc of the plot lo’ these many months, May’s choice of words is telling. “You should not have signed such a rant,” clearly suggests that Uncle Joe is not a willing participant, but rather a government foil, stripped of volition: a good soldier simply following orders.

On the other hand, the senior factotum might say the same thing about her.

“Our regulatory system must be fair, independent, consider different viewpoints including those of Aboriginal communities, review the evidence dispassionately and then make an objective determination,” he writes. “It must be based on science and the facts. . .We do not want projects that are safe, generate thousands of new jobs and open up new export markets, to die in the approval phase due to unnecessary delays.

Unfortunately, the system seems to have lost sight of this balance over the past years. It is broken. It is time to take a look at it.”

Oh Joe, May rejoins, there you go again!

“The repeated attacks on environmental review by your government merit mention. . . Your government has dealt repeated blows to the process, both through legislative changes, shoved through in the 2010 omnibus budget bill, and through budget cuts. . .The idea that First Nations, conservation groups, and individuals opposed to the Northern Gateway pipeline are opposed to all forestry, mining, hydro-electric and gas is not supported by the facts. I am one of those opposed to the Northern Gateway pipeline. I do not oppose all development; neither does the Green Party; neither do environmental NGOS; neither do First Nations.”

In fact, as both combatants acknowledge, a regulatory process is in place and commissioners will hear from 50 interveners representing all sides of the debate as well as 4,000 individual presenters. So, the idea that the system is broken, compromised or otherwise rigged thanks to either Big Oil or environmental activists is hardly credible.

But facts make poor drama. Political theatre is far more entertaining.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

Dawn refuses to break in the long, dark night of the Canadian labour movement’s soul. And even those who cling to the notion that a fair wage for permanent work is not only a human right, but necessary to a productive and competitive economy, question whether morning will ever come.

In a stunning move last week, breathtaking for both its arrogance and sheer aplomb, the trans-national owner of Ontario-based Electro-Motive Canada, told the union representing more than 400 workers to accept a 50 per cent pay cut, no cost-of-living adjustment and a higher co-payment for health coverage.

Take it or leave it, Caterpillar Inc. of Illinois said. Unsurprisingly, the Canadian Auto Workers (CAW) rejected the “offer”, prompting the corporate giant, which posted a third quarter profit in 2011 of $1.1 billion (USD) on sales and revenues of nearly $16 billion, to lock out its workers on New Year’s Day. (In a cruelly ironic twist, the company reported in a news release that its financial results were, in fact, “record breaking”.)

“I don’t recall it ever happening where a company in that situation came at workers to cut their wages in half,” mused a clearly astonished Mike Moffat, a professor of labour at University of Western Ontario’s Ivey School of Business.

Truly, wondered CAW president Ken Lewenza, “How do we negotiate?”

But it was Electro-Motive employee Paul Dona who hit the nail squarely on the head when he said, “It’s not just about the union. It’s about the whole country. Where the hell’s it stop?”

Where, indeed?

These are hard times not only for Canadian workers, who have seen their manufacturing jobs vanish in unprecedented numbers, but for the organizations that have historically represented them and negotiated their salaries and protections.   Although union membership has actually increased since 1997 (by about 19 per cent or 660,000), density, or membership as a proportion of the labour force, has dropped.

“Total employment grew faster than union membership, rising by 23 per cent over the same period (1997-2007),” explains Pradeep Kumar, Professor Emeritus of Industrial Relations at Queens’s University, in a 2008 article published by Our Times magazine. “Thus, union density declined. The continuing losses in the private sector and male unionization rates were most noticeable.”

What this tells him and other experts is that “the labour movement has been facing a new environment, one that includes mass plant closures and the relentless privatization of public assets and services, with global warming as a backdrop, threatening to deprive much of humankind of a secure future.”

But it goes deeper than this.

With notable exceptions, Canadian unions, particularly in the private sector, have been sidelined into near irrelevance thanks to deregulated markets that have hastened the concentration of capital in global conglomerates. The same forces that have merged smaller companies into larger ones – competition from low-cost, emerging nations; reduced government oversight; even right-wing, ideological triumphalism – have dismantled the social contracts between owners and employees that bargaining units once effectively defended.

To an extent, labour representatives, themselves, have exacerbated their woes. “Organizing . . .workers is critical to the survival of the. . .movement,” Kumar writes. “It is particularly important in the current environment where employment in non-union workplaces is growing faster than in unionized workplaces, and unions find themselves running just to stay in the same place.”

But, he says, “the organizing rate over recent years (2000-2005) is now less than one-half of the average in the 1980s and early 1990s. Data also suggests that the decline in organizing is pervasive across jurisdictions and is not limited to the number of newly organized employees, but is also evident in the number of certifications granted and the number of applications filed.”

All of which spells doom for the future of progressivism in this country. And that’s a shame, for despite their occasional indulgences and excesses, unions have always been the most reliable advocates for the dignity, and central role, of work.

What governments and corporations too often fail to appreciate is that good, long-term jobs are not the by-products of economic growth; they are the building blocks of it, if only because people pay the taxes that keep governments in the black and corporations reasonably certain of the public perks they can expect to reap.

Who remains to remind us of this as our nights, indentured to faceless institutions, grow longer?

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

Most Canadians believe the recession never ended. Technically, economists and bank presidents argue, most Canadians are wrong and they’re not doing themselves any favours by clinging to the myth of economic calamity.

The textbook definition of a recession goes something like this: When a nation endures two consecutive quarters of falling gross domestic product, which is the market value of all final goods and services produced within a country in a given period, that nation can be said to be “recessed”.

A full-blown depression is something altogether different and more serious. It is characterized by years of unemployment and underemployment, price deflation, financial instability, and even political turmoil.

Canada’s recession ended some time in 2009. Since then, the country’s economy has actually expanded. But try telling that to 70 per cent of the citizenry who, according to Michael Marzolini, chairman of Pollara Strategic Insights (a Toronto polling company), are convinced that the long, slow slide to perdition is a more-or-less permanent fact of life in the second decade of the 21st Century.

In fact, a growing constituency of the populace seems to think the economy is mildly depressed and is unlikely to regain its health without radical reforms in both the public and private sectors. And, says Marzolini, this phantasm could work its evil magic on the corporate and consumer landscape in the months and years ahead.

“Public attitudes toward the economy usually drive events,” he observes in a Globe and Mail article published last week. “They impact on people’s collective spending, investing and saving. The perceived reality is often a self-fulfilling prophesy.”

On the other hand, who can blame them.

Following a blue-chip meeting of economists from Canada’s top five banks the other day, the major media were bursting with tales of doom. “What does 2013 look like?” speculated Avery Shenfeld, chief numbers cruncher for CIBC World Markets. “Not a whole lot better than 2012. As the U.S. defers fiscal tightening for another year, 2013 is set up for huge fiscal tightening to hit the U.S. economy.”

Fiscal tightening is economics-speak for government spending cuts and/or tax increases, which are usually deployed when a nation is growing too fast for its own good (how quaint, under the circumstances). That they should be used during comparatively tough times testifies to the dimension of the sovereign debt crisis in both Europe and North America.

All of which suggests that Canadians are not wrong to part company with the soothsayers, who can’t seem to agree on anything even on their best days. Whether or not the “R” word befits the times, the signs of dissolution are everywhere.

New Brunswick’s Labour Market Analysis Branch now says the province is shedding thousands of high-paying jobs, replacing them with low-skilled positions in the accommodations and food services sector. In a little more than six months, employment in professional, scientific and technical services has dropped by 3,000 while jobs for hotel staff and restaurant workers have increased by 3,600.

Meanwhile, the province’s crummy track record of attracting and retaining immigrant talent prompts one expert to ponder the alternatives.

“Right now, there are twice as many 50-year-olds in New Brunswick,” Michael Haan, the Canada Research Chair in Population and Social Policy at the University of New Brunswick, told the Telegraph-Journal last week. “We have an aging population and this aging population is going to require care; they’re going to want to shop; they’re going to want to have their feet done and everything else. There is actually a growing need in lesser skilled areas of the labour market.”

It’s not entirely clear how a policy that encourages legions of foot-rubbing Mexican matrons to pick up and move to New Brunswick will bolster the province’s flagging competitiveness. The suggestion, however, does underscore the absurd economic conditions in which we find ourselves.

Canada may not be in a technical recession. But the point is moot.

The structural problems and misfires that speak to a persistent failure of imagination and courage among those who dominate private and public capital in this country are sufficient to depress even the Polyannas among us.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.

It comes as no great surprise that corporate CEOs are different from you and me. After all, they have more money and, in the words of a popular song lyric from one of the recent decades of ostentatious greed, money changes everything.

But the degree to which Canada’s executive fat cats have evolved into a species wholly unfamiliar, at least by common anthropological standards, is staggering and the subject of a fascinating, little study by one Hugh MacKenzie.

He is a researcher and spokesperson for the Canadian Centre for Policy Alternatives in Ottawa. He holds a Masters in economics from the University of Wisconsin and runs his own consulting business. And he believes, with all his Wobbly, lefty heart, that the vast sums major companies pay their most senior employees is not merely irritating to those of us not similarly blessed; it actually threatens to upend the principles of justice and fairness that underpin society, itself.

“What the data say loud and clear is that Canada’s CEO elite 100 have left the rest of us behind in their gold dust,” he writes in his fifth annual survey of executive compensation. “Those with incomes in the stratosphere no longer live in the world occupied by the rest of us. They live on another planet, in a world largely created by them, that few of us would recognize if we stumbled into it.”

His data is, indeed, compelling.

Overall, Canada’s top CEOs pulled down a median $8.4 million in salaries, bonuses and stock options in 2010. The range was broad – from $62 million to Magna International chairman Frank Stronach to $3.9 million to Bombardier’s Pierre Baudoin. But, taken together, this club of 0.1 percenters reaped 189 times more than the average Canadian wage earner.

In fact, a CEO who enjoyed a compensation package valued in the mid seven figures pocketed by noon on January 2 what the typical working Joe (or Jane) must spend the entire year to accumulate.

What’s worse, perhaps, is that the gap is widening, reversing the trend since the end of the Great Depression, and taking the very rich further and further away from the quotidian concerns of the common majority.

“Their total average compensation. . .in 2010. . .represents a 27 per cent increase over the average $6.6 million they pocketed the year before,” MacKenzie writes. “How much longer can Canada sustain a trend that polarized America and has spilled over into our own borders without seeing the well-documented effects of inequality – social unrest, rising crime rates, diminished trust, as well as worsening health. . .issues?”

It’s a good question. Some recent research seems to corroborate the notion that having too much money is bad for you and, by extension, everyone around you.

According to an article in the Economist last year, “Experiments by Paul Piff and his colleagues at the University of California, Berkeley, suggest. . . it is the poor, not the rich, who are inclined to charity. One interpretation of all this might be that selfish people find it easier to become rich. . .Dr. Piff, himself, suggests that the increased compassion which seems to exist among the poor increases generosity and helpfulness, and promotes a level of trust and co-operation that can prove essential for survival during hard times.”

Fundamentally, though, such obscene income disparity is a public policy concern if only because it’s been allowed to proliferate in clubby secrecy on the backs of the taxpaying public.

There is nothing fair or competitive about a closed market for executive compensation that treats salaries for services like commodities on a brokered exchange. This system actually strips long-term value from shareholders and tethers executive decision-making to short-term gains, which is, if nothing else, a clear conflict of corporate interest.

This condition ripens even further when CEOs obtain the bulk of their largess from stock options which are taxed like capital gains at a fraction of their actual value and provide executives with publicly underwritten boons that are often unrelated to their job performance.

At a time when so many people are suffering, so many governments are reeling under unsustainable debt loads, so many public services are falling to the predations of a brutal age, Government’s role should be clear.

Tax the fat cats back into recognizably human form.

Alec Bruce is a Moncton-based writer on politics, economics and current affairs. Check out his other blog here at Atlantic Business Magazine (ABMOnline): The Uneasy Chair.