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The Business Unit
Don Pittis has been a Fuller Brush man, a forest fire fighter and an Arctic ranger before discovering journalism. He was principal business reporter for Radio Television Hong Kong before the handover to China and has produced and reported for CBC and BBC News. He is currently senior producer at CBC’s business unit.
Janet Yellen, soon to be the new head of the world’s most powerful central bank, sure seems like a nice person. In some circles, being nice is an insult. Some Americans say Canadians are too nice – we even thank our bank machines, goes the joke. But despite all that, JanetYellen does seem nice.
Not that the outgoing chair of the U.S. Federal Reserve, Ben Bernanke, is a bad man. And surely the one before that, Alan Greenspan, meant well when he kept cutting interest rates to keep the stock and property boom alive – long past the moment when, most now agree, they should have been allowed to take a rest.
But Janet Yellen – soft-spoken, seemingly concerned about America’s disenfranchised as much as she is about stock market growth – exudes character. With Yellen assuming the role of Fed chair on Feb. 1, the question is, what does the character of a central banker mean for the economic future of the U.S., the world… and Canada?
- 5 key facts about incoming U.S. fed chair Janet Yellen
- Janet Yellen cleared to become next chair of U.S. Federal Reserve
For all the supposed clout of the U.S. central bank, the chair of the Fed does not have the power of a dictator. In a rare foray into central bank humour, comedian Rick Mercer reminds us that the levers of that power are subtle.
There is no question that Yellen is smart. That will count in her job of swinging the 19 members of the committee that makes interest rate decisions toward consensus. But it will also be helped by the feeling that she is motivated by the best intentions for the entire U.S.
Central bankers a product of their time
It may be that each of the recent central bankers was perfectly suited to their times. Greenspan, who trained at the knee of Ayn Rand, presided during the era of Greed Is Good, when everyone in the world was supposed to be fighting to get to the top of the heap.
When the house of cards suddenly collapsed, it was the turn of Ben Bernanke, a man who has made a career studying the economic mistakes that turned a 1929 market collapse into the Great Depression. He wanted to prevent the same thing from happening again, at all costs.
Now, we are in a different era. It appears that Bernanke’s strategy managed to avert a disruptive economic collapse. But one of the results of the Fed’s emergency measures was to give a giant handout to the people who Greenspan had allowed to climb to the top of the heap, creating a class divide not seen since before the Great Depression.
Like almost everyone else in the upper echelons of U.S. government, Yellen is elite, with elite friends. As she said in a revealing interview in the early 2000s with fellow University of California, Berkeley economist Kenneth Train, when she voted in favour of interest rate hikes in the 1990s, she says she felt pressure in social circles.
“Higher interest rates are things that people really don’t like,” she told Train. “I would go to parties and meet people [and people would say,] ‘I’m losing money because you’re raising interest rates and what you’re doing is harming me.'”
She goes on to say that while it drove home her personal responsibility for making rate decisions, she had to put the interests of the wider economy before those of her friends.
An easing of quantitative easing?
Yellen’s job now could have even more of an impact on her well-off friends. As I have said before, the distorting effect of Bernanke’s quantitative easing (or QE) – buying bonds to stimulate the economy when interest rates could go no lower – has been great for the stock market. But there are growing doubts that the extra injection of cash is making it into the hands of the poorer Americans who need it most.
Yellen knows she will have to cut QE eventually. But it is a scary process. You may argue whether or not QE really worked. But if buying bonds stimulated the economy, then ending the buying of bonds will definitely de-stimulate it. As with plans to halt fiscal spending in 2010,stopping a strong stimulant is effectively indistinguishable from taking a strong depressant.
As the Fed said in recently released minutes, even if reducing QE does not have a huge, direct impact on Main Street, it might cause an “unintended tightening of financial conditions if a reduction in the pace of asset purchases was misinterpreted as signaling that the Committee was likely to withdraw policy accommodation more quickly than had been anticipated.”
That’s Fed-speak for bond and mortgage markets taking fright, sending interest rates shooting up. It’s not just hypothetical. It happened once last year, just because people thought policy would change. And that wouldn’t just be bad for Americans. World bond and mortgage rates are set in the U.S., and the Canadian housing market might be severely hurt by such a shock.
If you believe, as I do, that QE is hurting a majority of Americans and Canadians, and maybe doing long-term damage to the entire society by increasing the disparity of rich and poor, Yellen has a balancing act ahead of her. Her feat must be to reduce QE as quickly as possible without scaring the markets into thinking she is doing it too quickly.
Thankfully, Yellen is appropriately humble.
“Macroeconomics, I think it’s a very useful set of tools for thinking about the economy,” she said in her interview with Train. “But in terms of our ability to know the future and forecast where things are going, that’s a very difficult thing to do. There are a lot of imponderables.”
If Yellen succeeds, it will not be a feat of strength. It will be a feat of wisdom. It will be a feat of experience. And it will depend on being nice. Nice as a Canadian. With luck, Yellen, like Greenspan and Bernanke, will be the right person for her time. The world needs a little nice.
Canada’s wealthiest people are paying a shrinking amount of the country’s total tax burden, according to an analysis of new StatsCan data.
The share of federal and provincial taxes paid by the richest one per cent of earnersfell to 20.8 per cent in 2011, from 23.3 per cent in 2007, says an analysis from the Globe and Mail’s Economy Lab.
That’s not because the rich are getting poorer; StatsCan’s data on high-income earnings finds little change in recent years in the share of income taken by the wealthiest Canadians.
It’s another potential sign that Canada’s tax system is incrementally becoming more favourable to high-income earners, as well as to corporations.
For the first time ever, in 2014 more than half of the federal government’s revenue will come from personal income taxes, the result of aggressive tax cuts for corporations over the past decade and a half.
But the shrinking share of taxes paid by the richest Canadians may have to do with the collapse in stock prices during the last recession, StatsCan analysts told the Globe, because wealthy people earn more of their income through investments than middle earners, and those investments took a beating in the last recession.
Some analysts argue the rich are still paying more than their fair share of taxes. While the top one per cent paid 20.8 per cent of taxes in 2011, they collected half that share of total income — about 10.6 per cent of all earnings.
A recent study from human resources firm MacDowall Associates said the CEOs at Canada’s 60 largest publicly-traded firms made 133 times the average industrial wage in Canada in 2010 — $6.2 million, compared to an average $46,600.
But the study found taxes paid by those CEOs were 316 times the taxes on the average earner, with the top-60 CEOs paying an average of $2.52 million in income taxes, compared to just under $8,000 for the average earner.
“Do Canadian executives pay their fair share in taxes? We believe the answer is a resounding ‘yes’ based on our research,” the study concluded.
All the same, an ever-larger share of taxes in Canada is being paid by middle- and low-income earners. Personal income taxes next year will account for 50 per cent of the federal government’s total revenue, up from 30 per cent five decades ago, according to an analysis from economist Toby Sanger of the Canadian Union of Public Employees.
Opposition parties have been hammering the Harper government over “hidden” taxes that they say impact middle- and low-income Canadians in particular, such as hikes in EI premiums, which have been rising steadily, and tariff hikes in the government’s latest budget, that the opposition says will raise prices for consumers.
The annual United Nations climate conference, known as the 19th Conference of the Parties or COP 19, is underway in Warsaw with considerably less fanfare than years past. Expectations for this one are even lower than usual, after the disappointments and plodding progress of the last few conferences.
World leaders are backing away from the 2015 target for a global climate treaty to succeed the Kyoto Protocol, and the news for people concerned about climate change has not been encouraging.
It’s a situation former Irish president Mary Robinson finds profoundly worrying. She now runs the Mary Robinson Foundation – Climate Justice, and she has a blunt and rather inconvenient message for global leaders and fossil fuel-producing countries like Canada: If you’re serious about preventing the worst of climate change, you have to leave that bitumen, oil and gas in the ground.
Last year marked another record year for global greenhouse gas emissions. And a recent report from the UK found fossil fuel subsidies around the world added up to about $500 billion in 2011 – on the order of five times the amount of subsidies doled out to renewable energy.
The prospect of keeping the global rise in temperature below two degrees Celsius looks highly unlikely if current trends persist. And Canada, for its part, is not on track to meet its own commitment to reduce greenhouse gas emissions.
Robinson’s message about reducing oil and gas production is one that would seem to be a tough sell in a country whose economic strategy is largely built around fossil fuel exports.
‘Moving to a low-carbon economy would be very good for Canadians’ futures, and for everyone’s future. And as well as that, we don’t have a choice. We’re running out of time.’– Mary Robinson, former Irish president
“We need two messages,” Robinson told The Sunday Edition’s Michael Enright. “Moving to a low-carbon economy would be very good for Canadians’ futures, and for everyone’s future. And as well as that, we don’t have a choice. We’re running out of time.
“How can Canadians not see that their grandchildren will share the world with nine billion other people (by 2050)? And I have no certainty at all that it will be a livable world.”
Robinson adds that she fears it will be, “a world of catastrophes over and over again. The 200 million people who may be climate-displaced – where are they going to go? There will be no country that will be immune to this. If [the planet] becomes too dangerous, it will be too dangerous for Canadians, for the children and grandchildren of those alive today.”
- Climate change draft report predicts war, heat waves, starvation
- Climate change report’s ‘temperature hiatus’ fuels skeptics
- Time for climate change fix running out, IEA warns
Robinson served as the United Nations High Commissioner for Human Rights from 1997 to 2002, and she approaches climate change as a human rights and justice issue.
She argues that in the developing world, climate change impinges on the most fundamental human rights to food, water and life itself.
“Canada is one of the countries that has benefited from fossil fuel growth and has a responsibility to give leadership. And the whole of Africa is responsible for about the same level of emissions, but African countries are suffering hugely in their food security and long periods of drought and flooding. There is an injustice in how climate is impacting them.
“Canada has been a country proud of its development record. It gives a lot of development aid. Well, all that development aid will be wiped out by terrible climate impacts.”
Robinson plans to be a vocal presence in Warsaw. She has no great hopes for a breakthrough on a global climate pact by the time the conference closes next Friday, but she remains optimistic that the global community will respond to the challenge before it’s too late.
“We’re not, I think, a stupid race. I know that political timescales can be very short. But I believe that these next two years – 2014, we have to change course, and 2015, when we need sustainable development goals and a robust, fair climate agreement – we can still do it.
“We need a forward-looking leadership, and that won’t come from Canadian politicians unless it comes from the Canadian people.”
[Listen to Michael Enright’s full conversation with Mary Robinson on The Sunday Edition this weekend, just after the 9 am news, or on theSunday Edition website.]
The number of Canadians using food banks has fallen off slightly but still remains near record highs almost four years after the end of the economic recession.
The annual study by Food Banks Canada shows that more than 833,000 people relied on food handouts during one snapshot month earlier this year, compared with 872,379 the previous March. More than a third of them were children.
“Underlying this small drop is a concern of enormous proportions: food bank use remains higher than it was before the
recession began,” the report states.
“During a time of apparent economic recovery, far too many Canadians still struggle to put food on the table.”
Abundance of low-income jobs
Low-income jobs are the culprit, the report found, and there’s an abundance of them thanks to a Canada-wide loss of manufacturing jobs over the past three decades.
The annual HungerCount study provides one of the most up-to-date national indicators of poverty. The latest Statistics Canada numbers show that 8.8 per cent of people were living below the low-income cutoff in 2011.
Who is going hungry in 2013? More than half of those turning to food banks are families with children, the report concludes.
Twelve per cent of households asking for help were currently employed, while another five per cent were recently employed.
Eleven per cent of those using food banks self-identify as First Nations, Metis or Inuit, and another 11 per cent are new immigrants to Canada.
“Both of these groups continue to face unacceptable levels of poverty, and are forced to turn to food banks as a result,” the study found.
Food Banks Canada called on governments to invest in affordable housing, better income supports and to “increase social investment in northern Canada to address the stunning levels of food insecurity in northern regions.”
“We lose billions of dollars each year trying to address the health and social consequences of poverty after it takes its toll, rather than preventing it in the first place,” the study found.
Katharine Schmidt, the organization’s executive director, said the while federal and provincial governments are attempting to do more to combat hunger, the numbers remain disturbingly high.
“We’ve got a long way to go,” Schmidt said in an interview.
“One child going to bed hungry is one child too many, and we have 300,000 of them in this country.”
She added that while the country’s thousands of food banks are “really doing their best,” they do not represent a long-term solution because they cannot address the root causes of hunger.
“We believe that government does care, that they do see that they have a role to play,” she said. “The challenge is actually implementing a change in policy.”
Women lead a march at Elsipogtog. Photo via Twitter.
In the mid-1990s I moved to Mi’gma’gi to go to graduate school. I was expecting to learn about juvenile Atlantic salmon on the Miramichi River. I was naive and misguided. Fortunately for me, the Mi’kmaq people saw that in me and they taught me something far more profound. I did my first sweat in the homeland of Elsipogtog, in the district of Siknikt. I did solidarity work with the women of Elsipogtog, then known as Big Cove, as they struggled against imposed poverty and poor housing. One of them taught me my first song, the Mi’kmaq honor song, and I attended her Native Studies class with her as she sang it to a room full of shocked students.
I also found a much needed refuge with a Mi’kmaq family on a nearby reserve. What I learned from all of these kind people who saw me as an Nishnaabeg in a town where no one else did, was that the place I needed to be wasn’t Mi’gma’gi, but in my own Mississauga Nishnaabeg homeland. For that I am grateful.
Nearly every year I travel east to Mi’gma’gi for one reason or another. In 2010, my children and I traveled to Listuguj in the Gespe’gewa’gi district of Mi’gma’gi to witness the PhD dissertation defense of Fred Metallic. I was on Fred’s dissertation committee, and Fred had written and was about to defend his entire dissertation in Mi’gmaw (Mi’kmaq) without translation—a groundbreaking achievement. Fred had also kindly invited us to his community for the defense. When some of the university professors indicated that this might be difficult given that the university was 1,300 kilometers away from the community, Fred simply insisted there was no other way.
He insisted because his dissertation was about building a different kind of relationship between his nation and Canada, between his community and the university. He wasn’t going to just talk about decolonizing the relationship, he was determined to embody it, and he was determined that the university would as well.
This was a Mi’kmaw dissertation on the grounds of Mi’kmaw intellectual traditions, ethics, and politics.
The defense was unlike anything I have ever witnessed within the academy. The community hall was packed with representatives from band councils, the Sante Mawiomi, and probably close to 300 relatives, friends, children, and supporters from other communities. The entire defense was in Mi’gmaw, led by community Elders, leaders, and Knowledge Holders—the real intellectuals in this case.
There was ceremony. There was song and prayer. At the end, there was a huge feast and giveaway. It went on for the full day and into the night. It was one of the most moving events I have ever witnessed, and it changed me. It challenged me to be less cynical about academics and institutions because the strength and persistence of this one Mi’gmaw man and the support of his community changed things.
I honestly never thought he’d get his degree, because I knew he’d walk away rather than compromise. He had my unconditional support either way. Fred is one of the most brilliant thinkers I’ve ever met, and he was uncompromising in his insistence that the university meet him halfway. I never thought an institution would.
All of these stories came flooding back to me this week as I watched the RCMP attack the nonviolent anti-fracking protestors at Elsipogtog with rubber bullets, an armored vehicle, tear gas, fists, police dogs, and pepper spray. The kind of stories I learned in Mi’gmagi will never make it into the mainstream media, and most Canadians will never hear them.
Instead, Canadians will hear recycled propaganda as the mainstream media blindly goes about repeating the press releases sent to them by the RCMP designed to portray Mi’kmaw protestors as violent and unruly in order to justify their own colonial violence. The only images most Canadians will see is of the three hunting rifles, a basket full of bullets and the burning police cars, and most will be happy to draw their own conclusions based on the news—that the Mi’kmaq are angry and violent, that they have no land rights, and that they deserved to be beaten, arrested, criminalized, jailed, shamed, and erased.
The story here, the real story, is virtually the same story in every indigenous nation: Over the past several centuries we have been violently dispossessed of most of our land to make room for settlement and resource development. The active system of settler colonialism maintains that dispossession and erases us from the consciousness of settler Canadians except in ways that is deemed acceptable and non-threatening to the state.
We start out dissenting and registering our dissent through state-sanctioned mechanisms like environmental impact assessments. Our dissent is ignored. Some of us explore Canadian legal strategies, even though the courts are stacked against us. Slowly but surely we get backed into a corner where the only thing left to do is to put our bodies on the land. The response is always the same—intimidation, force, violence, media smear campaigns, criminalization, silence, talk, negotiation, “new relationships,” promises, placated resistance, and then more broken promises.
Then the cycle repeats itself.
This is why it is absolutely critical that our conversations about reconciliation include the land. We simply cannot build a new relationship with Canada until we can talk openly about sharing the land in a way that ensures the continuation of indigenous cultures and lifeways for the coming generations. The dispossession of indigenous peoples from our homelands is the root cause of every problem we face, whether it is missing or murdered indigenous women, fracking, pipelines, deforestation, mining, environmental contamination, or social issues as a result of imposed poverty.
So we are faced with a choice. We can continue to show the photos of the three hunting rifles and the burnt-out cop cars on every mainstream media outlet ad nauseam and paint the Mi’kmaq with every racist stereotype we know, or we can dig deeper.
We can seek out the image of strong, calm Mi’kmaq women and children armed with drums and feathers and ask ourselves what would motivate mothers, grandmothers, aunties, sisters, and daughters to stand up and say enough is enough. We can learn about the 400 years these people and their ancestors have spent resisting dispossession and erasure. We can learn about how they began their reconciliation process in the mid-1700s when they forged Peace and Friendship treaties. We can learn about why they chose to put their bodies on the land to protect their lands and waters against fracking because—setting the willfully ignorant and racists aside—sane, intelligent people should be standing with them.
Our bodies should be on the land so that our grandchildren have something left to stand upon.
Leanne Simpson wrote this article for the Huffington Post, where it originally appeared. Leanne is a writer, spoken-word artist, and indigenous academic.
- Another Story From Elsipogtog (in Opinion) (thetyee.ca)
- HPC: Elsipogtog Protest: We’re Only Seeing Half the Story (sacredfirenb.com)
- “FRACK OFF!” Elsipogtog First Nation announces major land reclamation in ongoing anti-fracking struggle (tworowtimes.com)
- MC: Elsipogtog: “Clashes” 400 Years in the Making (sacredfirenb.wordpress.com)
A civil liberties watchdog is suing Canada’s electronic spy agency for allegedly breaching the constitutional rights of Canadians.
The British Columbia Civil Liberties Association says Communications Security Establishment Canada violates the Charter of Rights by intercepting Canadians’ private communications.
The organization filed the lawsuit in the Supreme Court of British Columbia.
Ottawa-based CSEC monitors foreign communications — from email and phone calls to faxes and satellite transmissions — for intelligence of interest to Canada.
CSEC says it operates within all Canadian laws, including the charter, the Criminal Code, the Canadian Human Rights Act and the Privacy Act.
The National Security Agency, CSEC’s American counterpart, is at the centre of a storm of leaks from former contractor Edward Snowden that document the U.S. agency’s vast reach into cyberspace.
Read the entire statement of claim by the BCCLA:
- Civil liberties group suing snooping agency (metronews.ca)
- Civil Liberties Watchdog Suing Communications Security Establishment Canada (blogs.ottawacitizen.com)
- BC Civil Liberties Association launches lawsuit against Canadian government over CSEC spying (blogs.vancouversun.com)
- Civil liberties group files suit against Canada’s electronic surveillance agency (calgaryherald.com)
- BCCLA files lawsuit against CSEC – Spying in Canada? Eh? (lunaticoutpost.com)
- Canadians on hunger strike in Egyptian jail claim they were beaten (theguardian.com)
- Detained in Egypt: Canadians Tarek Loubani and John Greyson saw dozens die before their arrest (vancouversun.com)
- Greyson and Loubani still held in Egyptian prison (thestar.com)
- Canadians describe detention conditions in Egypt (newscanada-plus.com)
- Photos: Hundreds rally in London for Tarek Loubani, John Greyson (metronews.ca)
- Tarek Loubani and John Greyson say that prior to arrest they saw 50 die in Cairo demonstration (macleans.ca)
- Canadians household debt climbs with rising mortgage costs (cbc.ca)
- Who are Canada’s top 1%? (talesfromthelou.wordpress.com)
- Canada’s spy agency may have illegally targeted Canadians: watchdog (news.nationalpost.com)
- US needs to ‘keep war on terror going’ (rinf.com)
- 12% more Canadians have debt this year, BMO says (cbc.ca)
- Canadians taking longer to pay down debt: BMO (cp24.com)
- Poll suggests more Canadians in debt (castanet.net)
- More Canadians are in debt and making lower monthly payments: poll (calgaryherald.com)
- Canadians are paying off less debt: poll (globalnews.ca)
- More Canadians are in debt this year and taking longer to pay it off, new poll suggests (business.financialpost.com)