This Sunday finds me finally out of the 14 day isolation from the last trip to Ottawa and on my way back.  The House will sit this coming Wednesday July 8^th, and I’ll arrive tomorrow for the Finance Committee meeting on Tuesday.

On Wednesday, Finance Minister Bill Morneau will provide the first economic update since the pandemic began.  It will not be a budget. In case you were wondering if you missed the budget, you haven’t.  The planned tabling of the 2020-2021 budget was originally scheduled for March 30.  It was postponed due to COVID-19 without a new date chosen. The coming economic statement from Bill Morneau is not an economic update.  He has described it as a “snapshot.”

In anticipation of whatever he thinks Canada’s finances look like at the moment of this snapshot, despite all the other critical and urgent issues demanding attention (systemic racism, police killings of unarmed people – indigenous and of colour, the climate emergency), I will take the rest of this Sunday missive to try to put some context around a sea of red ink.

I am not fundamentally worried about our economy.  True, if alone in the world, for no particular reason our government had set a loony course to balloon the debt and deficit, I would be plenty worried.  I would be calling for Morneau’s head – or at least his resignation.

But Canada is responding to the biggest single global economic hit since the Great Depression. And we are acting in lock step with what most major economies are doing. As reported by the International Monetary Fund, all central banks around the world are basically taking the same three steps –  significantly easing  monetary policy, slashing interest rates, focused on increasing liquidity in the markets, and buying billions and billions of dollars in bonds: “To date, central banks have announced plans to expand their provision of liquidity—including through loans and asset purchases—by at least $6 trillion and have indicated a readiness to do more if conditions warrant.”

Canada, like most industrialized countries, concentrated in getting money into the hands of its citizens as fast as possible in order that people would heed the public health warnings and stay home.

The programmes were not perfect and far too many are still struggling. I am not at all pausing efforts to get help to people, institutions and businesses that need help. But billions of dollars in spending was approved in record time for a wide range of new programmes. Nothing was perfect. And everything would have been better if delivered sooner, but without these Herculean efforts, our economy would be in much worse shape and far more Canadians would have succumbed to COVID-19.

The roll-out so far deserves more praise than damnation. Restarting the economy, re-opening businesses and borders must continue to be done carefully. We know we are not out of the woods yet.

The question I hear a lot is how are we going to pay for all this?

I take a lot of comfort from the April report of the Parliamentary Budget Office (PBO).  PBO looked at how much fiscal headroom do we have for the announced spending.

The PBO emphasized two things:

1) That we went into the pandemic in relatively good shape. Pre-COVID-19, our debt to GDP ratio was 30.6 %.  The best in the G-7 and we had nearly full employment. In other words, like a healthy person getting COVID-19, a healthy economy getting the economic whallop of the pandemic, we will do relatively better than others.

After all this spending due to COVID-19, debt to GDP ratio will rise to 38.1%.  But this is not a worst-ever debt to GDP problem.  In 1995-96, it stood at 66%.  That was what led to the, admittedly quite painful, slashing of spending under former Finance Minister Paul Martin.

2) The PBO stressed that this spending is all temporary.  In that, the PBO compared it to spending in the Second World War.

“For example, the measures that were implemented during the peak years of World War II resulted in massive deficits (e.g., averaging 21 per cent of GNP per year over 1942 to 1945 ; however, they were not permanent in nature. Indeed, shortly following World War II, the federal government registered the largest-ever budgetary surplus as a share of the economy (5 per cent of GNP in 1947).”  (PBO’s estimate of federal fiscal room in Fiscal Sustainability Report 2020, March 20, 2020)

I can predict the blistering questioning in Parliament from the Official Opposition.  To listen to Andrew Scheer and his Finance critic Pierre Poilievre you would swear there was no pandemic.  Yes, this is a minority parliament, but the spending was approved through motions that required unanimous consent.  Back in March, the first version of the bill for new spending included some outrageous over-reaching, such as giving the minority government the power to set taxation and spending rates unilaterally until the end of 2021!  That draft (embargoed and never tabled) lasted less than 24 hours.  All the opposition parties were all over it and a lot of Liberals were shocked as well.

So parliament has been functioning and we have held government to account.

We will hear a lot from the Conservative ranks about Canada losing our triple A credit rating from the New York-based bond rater Fitch. The ability of Standard and Poor’s, Moody’s and Fitch to boost or cripple economies around the world is one of the key reasons Greens do not like debt. We particularly do not like debt held by commercial banks. Moving from triple A to AA+ means that as interest rates rise again, more of our public dollars will have to go to banks, debt charges, and not to health care and public spending.  These bond raters are outrageous. They played a key role in the triggering of the 2008 crisis by continuing to give AAA credit ratings to derivative products not worth the paper they were written on. Regulatory reform of these bond raters is long overdue.    I am including a number of links here to the on-going critique of Fitch and their lot.

The Indisputable Role of Credit Ratings Agencies in the 2008 Collapse, and Why Nothing Has Changed

Ratings agencies suffer ‘conflict of interest’, says former Moody’s boss

This brief summary, from an academic review, makes the key points:

“The three dominant international credit rating agencies – Standard & Poor’s, Moody’s and Fitch – have been accused of many faults including:

• false ratings;
• flawed methodology;
• encroaching on government policy;
• political bias,
• selective aggression;
• and rating shopping.”

Read more here.

For now, the costs of borrowing are very low.  We will likely rebound and get back the AAA rating as long as the government does not listen to voices calling for austerity. We will need continued financial stimulus spending to bring our economy out of its medically-induced coma.

We do need a real economic update. We do need the Auditor General’s budget to be boosted to keep track of the effectiveness of government spending.  We do need to take the advice of former Auditors General, Sheila Fraser and Michael Ferguson, and direct CRA to go after the off-shore money.  We will also need to have a conversation about the role of Modern Monetary Theory to ensure we can do all of this, including fixing those things that the pandemic has revealed as fundamentally unjust.

We also need a minority parliament to hold on to the ability to make decisions together to keep spending. Otherwise, we risk a deep Depression.  And, as a country, we need to play our role in a global effort to contain a pandemic, act on the climate emergency and get people back to work – safely.

Some days, I am glad I am not the Finance Minister.

Have a great week,

Love,

Elizabeth

This weekly newsletter is published by Elizabeth’s EDA in Saanich-Gulf Islands. You can sign up for it here.

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At a news conference on Parliament Hill, members of the Green Party outline their proposed plan for economic recovery following the COVID-19 (coronavirus) pandemic. Elizabeth May, the Green Party parliamentary leader, is in attendance in Ottawa, while Jo-Ann Roberts, the Green Party interim leader, and MPs Paul Manly and Jenica Atwin join the event via teleconference.

June 11, 2020

OTTAWA – As Canada starts to emerge from months of pandemic lockdown, the Green Party of Canada unveils Reimagining Our Future, a bold and detailed blueprint for a just and prosperous recovery that will drive the transition to the green economy of the 21st century.

“This deadly pandemic has been challenging and heart-wrenching for millions of Canadians, and we are still not out of the woods,” said Green Party Interim Leader Jo-Ann Roberts. “On so many levels our daily lives and how we do business will be forever changed. Undoubtedly, there will be ongoing discussions and investigations as we unpack the lessons learned and plot our path forward. While this terrible crisis continues to impact Canada and the world, we cannot ignore the present and urgent threat of the climate emergency.

“Reimagining Our Future is the policy framework to propel Canada into a new and exciting future. The plan recommits us to restore resilience in the economy, while remembering the primary lesson of the pandemic – that we are all in this together. Underpinning the plan is a long overdue commitment to evidence-based policy and legislation. And, we will renegotiate societal contracts to reflect a more equitable society that respects all citizens.”

Green parliamentary leader Elizabeth May (MP, Saanich-Gulf Islands) said: “According to a recent poll by Ekos research, 73 per cent of Canadians are looking for transformative change in the post-pandemic recovery. This is a moment of enormous potential. We will not go ‘back to normal’ if that means normal levels of poverty, inequality, abuse of our elders and polluting industries that must be cleaned up. We must reimagine our future.”

The COVID-19 pandemic has demonstrated that governments can act quickly and decisively in response to an emergency. Throughout the crisis, Canadian officials and citizens have adhered to the advice of public health officers. Reimagining Our Future advocates for a Chief Climate Science Officer to regularly update and inform Candians on the climate crisis.

Climate scientists have repeatedly warned that insufficient action on climate will lead to runaway global warming. Reimagining Our Future calls for an orderly retreat from fossil fuels to ensure Canadian workers are part of a just transition and that future public investments are consistent with climate goals.

Greens applaud the federal government’s quick fiscal response to support Canadian citizens and businesses during the pandemic. However, Reimagining Our Future advocates the Canada Emergency Response Benefit (CERB) be converted to a permanent Guaranteed Livable Income (GLI).

“Canada needs a stronger safety net, one that ensures no one will fall through the cracks. A Guaranteed Livable Income is a fair system that alleviates poverty and rewards work,” said Paul Manly (MP, Nanaimo-Ladysmith). “A single, universal benefit will eliminate the enormous cost of administering the current patchwork of federal and provincial assistance programs. The Green Party has been championing the idea of a GLI for decades. The need for it has never been more clear.”

Mr. Manly also pointed out how COVID-19 had exposed the disgraceful conditions in private long-term care facilities, the lack of support for Canadians dealing with mental health issues and many other gaps in our health-care system. Reimagining Our Future calls for de-privatizing long-term care and bringing mental health under the Canada Health Act.

“”It’s clear that a national strategy for long-term care is needed,” said Manly. “Establishing federal standards of care will improve conditions for both seniors in care and the workers who support them. Every loophole or lax regulation that incentivizes operators to wring profit from these facilities through substandard care and substandard working conditions must be removed permanently.”

The pandemic has also highlighted the need to rethink work and education. Reimagining Our Future proposes more telecommuting and shorter working hours, both of which will benefit worker well-being and the environment. Eliminating student debt and providing free tuition is crucial as is ensuring that every Canadian has access to fast, reliable internet service.

“The last few months of lockdown measures across the nation have taught us how much we value the physical presence of our friends, family, and neighbours,” said Jenica Atwin (MP, Fredericton). “That desire for community will equip us to stand together through the economic and societal restructuring to come. I am excited by the opportunity to rethink government services and policies to put people first with a focus on well-being. With this foundation, we can create the transformative change we need.”

Reimagining Our Future

# # #

For more information or to arrange an interview:

Debra Eindiguer

613-240-8921

debra@greenparty.ca

Rosie Emery

Press Secretary

613-562-4916 ext, 204

rosie.emery@greenparty.ca

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“For the first time, we’re seeing a focus on adaptation to climate change in this year’s budget,” said Elizabeth May. “I’m pleased to see signficant investment in clean tech and climate initiatives, and limited funding for improvements to our east-west electricity grid.

“Taking into account losses to revenue this year due to the free admission to National Parks, Parks Canada is also seeing a significant investment for capital acquisitions, although more money is needed on a budgetary basis for increasing scientific capacity.”

“However, we cannot measure Prime Minister Trudeau against years of inaction under the Harper administration. Rather, the benchmark was set by the progressive conservative agenda of Brian Mulroney. By this measure, commitments to funding toward protection of the Great Lakes Area and Lake Winnipeg are welcome, but still fall far short.”

“As MP for Saanich-Gulf Islands, I’m delighted to see $80 million in funding for the the Sidney Centre for Plant Health, a research facility that I fought hard to keep open during budget cuts under the previous administration.”

“Yet this budget misses other low-hanging fruit, like the renewal of the eco-energy retrofit grant, and rebates for electric and hybrid vehicles. These programs would empower Canadians to take individual action in the collective fight against climate change. We’re also seeing little movement on the administration’s plan to ‘phase-out’ fossil fuels, and we will maintain subsidies to the LNG industry through 2024.”

“This budget needed to more aggressively target the elimination of the deficit by implementing simple revenue generating policies, such as a tax on sugary beverages. This tax would also go a long way toward improving the health of the Canadian population, and in particular children.”

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Productivity isn’t everything, but in the long run it is almost everything. – Paul Krugman, The Age of Diminishing Expectations (1994)

It is not worth the ink to repeat the ways in which Canada has fallen behind in productivity. We can recite the stats of how we lag compared to other countries, how our R and D are not delivering and how the largest Canadian businesses tend to stash their cash rather than reinvest.  The pile of “dead money,” so dubbed by former Bank of Canada Governor Mark Carney, is evidence of the unwillingness of big corporations to put money back into their enterprises, nor to fund innovation.

While the economic literature details many ways in which innovation is an indicator of productivity with various theories of how tightly bound are the concepts, there is no doubt that innovation is a factor in the productivity equation.

Clearly, the Trudeau administration wants to be seen as addressing this critical problem. If we do not innovate, we sabotage our economic future.

In my own riding of Saanich-Gulf Islands, there are an amazingly diverse crowd of technology leaders and innovators.  Quester Tangent sells its on-board computer diagnostic “positive train control” to rail lines in China, Europe and the US, but not yet in Canada. (Had this system been on board the fuel train at Lac Megantic, the tragedy would never have happened.)  Meanwhile, in an unassuming building in Saanichton, is a high tech innovator in diagnostic screening.  Redlen Technologies grows crystals and slices them wafer thin for applications in spotting everything from tumours to bombs. To use the technical terminology, Redlen makes high resolution Cadmium Zinc Telluride semiconductor radiation sensors and radiation detection modules.  Last year, they cut a deal with the medical arm of Hitachi. What they do is brilliant, but it takes capital.

The most recent winner of the Green Business of the Year Award, Empire Hydrogen, has perfected the technology to slash polluting emissions from diesel engines.  In an elegant and simple application, a small metal box, on the side of the truck, using only distilled water and the action of the engine itself, generates hydrogen to dramatically reduce fuel consumption and harmful particulates. It pays for itself in months.  It should be installed on every truck in Canada.

Like most innovators, owner-inventor Sven Tjelta has had to fund the company’s development out of personal savings and bank mortgages. So the question is: how can governments help? Can we set in place incentives for our risk-averse banks to step up? Can we fund large pots of venture capital?

When it comes to green and clean tech, Sustainable Technology Development Canada has a great track record. But it is geared to the early stages of establishing that a new technology can work. Commercializing that winning technology still has gaps and hurdles.

So is the new buzzword hope of “moon shots” the way to go?  It will be exactly what is needed if it operates to put great Canadian products on the front shelf. If Canadian investment can be matched with the cutting edge companies that are already out there, ready to sell to the world, but hampered by lack of capital to scale up, it could be exactly what is needed. We should also heed the warnings of Jim Balsillie and ensure our intellectual property protections are up to scratch to protect our great companies in a more predatory global marketplace.

The innovation agenda is an exciting one. My top recommendation to Minister Bains is to pick up the phone and talk to the businesses that are doing the work. Ask them what would help them the most. And then do it.

Article originally published in The Hill Times, available here.

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“The Green Party was the first party to condemn the short-sighted Canada-Panama Free Trade Agreement, which in 2012 gave Panama all the luxuries of trading with our country without requiring any reforms to deal with its status as a well-known tax haven,” said Elizabeth May, Leader of the Green Party of Canada (MP, Saanich-Gulf Islands). “In fact, we were the only party to vote against it.”

“The Panama Papers now reveal much of what the Organisation for Economic Co-operation and Development has been telling us for years: that Panama’s lax banking system is being used to hide the wealth of tax cheats around the world. Canada needs to calculate its ‘tax gap,’ and reform the tax system so that the wealthiest pay their fair share. No more excuses,” Ms. May said.

Ken Melamed, Green Party Finance Critic said: “One of the most upsetting discoveries for Canadians in the Panama Papers scandal is that many of these tax-evading activities may not even be illegal. The Canada Revenue Agency is losing out on billions of dollars a year through these unethical schemes, and it’s long past time we put a stop to it. Everyone should pay their fair share to maintain the quality of life that all Canadians deserve.”

Ms. May has criticized the former administration for failing to deal with Panama as a tax haven. In 2012, Ms. May spoke against the Canada-Panama Free Trade Agreement in the House of Commons:

“When we look at the ways in which Panama has operated as a tax haven, according to the Organisation for Economic Co-operation and Development, Panama is one of 26 jurisdictions in the world that have not yet fulfilled their promise as of 2002 to provide tax-sharing information. That would provide a greater understanding of when a country is operating unfairly and illegally to harbour revenue and wealth so that the country of origin cannot tax it properly. The trade agreement with Panama unfortunately does not deal with any of these issues.”

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The clearest commitment and strongest funding was delivered for First Nations, Inuit, and Metis communities.  At $8.4 billion, it was “historic” as the Minister claimed.  Whether it is enough is another matter, but it was significantly more than the 2005 Kelowna Accord (killed by the Conservatives) had promised.

The 2016 budget contains many encouraging measures for health, education, youth, waste and water works, and public infrastructure. Many of my requests to Finance Minister Bill Morneau have been accepted – including energy retrofits to existing social housing, support for affordable rental housing, re-opening the Coast Guard base at Kitsilano, restoring funding to the CBC, additional $50 million to Sustainable Development Technology Canada, reinstating the Court Challenges Programme, investing in science and returning support for basic scientific research, and action to reduce the burden of student loans and increasing student grants.

But there is so little in the climate action part of the budget.  $3.4 billion over three years for public transit may sound like a lot, but one billion dollars is not enough in a year to make a dent in the infrastructure deficit for a single city. In a budget premised on creating economic stimulus and employment, it made no sense to neglect the opportunity for energy efficiency improvements in Canada’s buildings. Leaky buildings are responsible for 30% of Canada’s GHG.  Employing carpenters, electricians, contractors, and plumbers to retrofit homes, commercial buildings and institutions would deliver immediate economic benefits in creating jobs, while cutting GHG.  Other than retrofits to social housing, it is ignored.  In contrast, the 2005 budget of former Finance Minister Ralph Goodale was much stronger on climate action. It included Eco-Energy retrofits for home owners, rebates for the purchase of hybrid vehicles (which should have been reinstated and extended to electric vehicles), as well as billions more for infrastructure and funding for provinces to meet GHG reductions.

Disturbingly, the budget cites the target of the Paris Agreement as avoiding 2 degrees global average temperature increase, when it was Canadian leadership that helped drive the world to the more ambitious goal of striving to hold temperature to no more than 1.5 degrees C.   The Liberal platform promised carbon pricing which, in fairness, we did not expect to see in this budget.  It is clear that the negotiations with the premiers on carbon pricing will run their course before we see a clear federal plan for pricing carbon. But the Liberal platform also promised to phase out subsidies to fossil fuel, reducing them by $125 million in 2017-18.  Instead, no changes have been made to fossil fuel subsidies and the subsidies to LNG are specifically continued until the end of 2024.

As well, although described as “Restoring Trust in Environmental Assessment,” this budget preserves the devastating changes to environmental assessment of the 2012 omnibus budget bill C-38.  Rather than repeal C-38’s gutting of environmental assessment (EA), the budget commits to four years’ worth of funding for the Canadian Environmental Assessment Agency for “fulfilling its responsibilities” under the C-38 version of the Canadian Environmental Assessment Act.   It also provides funding for what was announced last month as “interim measures” to cope with the broken process under C-38’s environmental review.  But the funding to the National Energy Board for “interim measures” is to last for three years, suggesting they are permanent.  The National Energy Board should not be conducting a single EA that has not already commenced during the previous government.  No new projects should start the EA process under the wrong act, conducted by the wrong agency.  Not for three months more, much less three years.

Do we now declare the Liberals have deliberately broken promises and turned their back on the environment? The rubber stamping just days before Budget Day of the weak environmental assessment of Woodfibre LNG (one conducted under the bogus C-38 version of EA and delegated to the province of BC) might lead some to do so.  And as leader of an opposition party, political culture would expect me to be among the first to denounce them.  But I do not.  Not yet.

Mitigating factors include the budget preparation process. The Minister of Environment never saw the budget before its big reveal on March 22.  The budget was reviewed by the Deputy Minister of Environment Canada. He is well-remembered by climate activists as the lead negotiator blocking action in Copenhagen.  Is it an accident that the 2 degree target, accepted by the Conservatives, is in the budget and not the 1.5 degree target championed by the new government?  Senior civil servants are to follow the direction set by political masters.  It would be a major breach of respect for that tradition for me to suggest any particular civil servant is working against the new government’s interests.  But it is widely acknowledged around Parliament Hill that senior bureaucrats across many departments are having trouble re-orienting to very different priorities.  The mandate letters from the PM to ministers instruct them to respect the advice of the professional civil service.  In respect of the traditional separation between the civil service and the political side of government, which Prime Minister Trudeau is working to restore, there has been no sacking of the old order to bring in the new.  Highly principled, but it does prolong what could charitably be described as inertia in the system.

So, my advice to those frustrated by the failure to reverse the damage inflicted by the Conservatives is “do not despair.”  Do not write off the new government. Instead, redouble efforts to hold them accountable.  Condemn broken promises, but hold out the hope the errors of this budget will be corrected by Budget 2017.

Originally published in Island Tides.

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Many Green Party of Canada requests from the pre-budget submission to Finance Minister Bill Morneau have been accepted. These include:

• energy retrofits to existing social housing;
• support for affordable rental housing;
• re-opening the Canadian Coast Guard Kitsilano base in Vancouver;
• restored funding to the CBC;
• reinstating the Court Challenges Program;
• restored funding for the Experimental Lakes Area;
• an additional $50 million to Sustainable Development Technology Canada;
• investing in science and returning support for basic scientific research;
• funding to go after off-shore tax havens;
• tourism promotion;
• increasing the international assistance envelope;
• elimination of boutique tax breaks that benefitted few, and investing in community, recreational and cultural facilities;
• action to reduce the burden of student loans and an increase in student grants;
• and a strong commitment of $8.4 billion to address the crisis in First Nations, Métis and Inuit communities.

In Budget 2016, the right words are used on a wide range of issues – such as support for VIA Rail, clean technology investment, or expanding the east-west electricity grid – with small amounts of inadequate funding allocated.

The Green Party of Canada was disappointed by a lack of climate-specific elements in Budget 2016.

“The new government’s approach is a vast improvement compared to the previous administration, but when comparing Budget 2016 with the last Liberal budget – from former Finance Minister Ralph Goodale in 2005 – this one misses the mark on climate action,” said Elizabeth May, leader of the Green Party of Canada.

The 2005 budget offered a fully formed climate action plan, including eco-energy rebates for homeowners, substantial funding for provinces to act to address the climate challenge, rebates for the purchase of energy efficient vehicles, and a carbon pricing scheme through a complicated carbon credit approach. The 2016 budget contains none of these measures.

“Disturbingly, the budget cites the target of the Paris Agreement as avoiding 2 degrees Celsius global average temperature increase, when it was Canadian leadership that helped drive the world to the more ambitious goal of striving to hold temperature to no more than 1.5 degrees C,” Ms. May said.

“The Liberal platform promised carbon pricing, which we did not expect to see today given the negotiations with the premiers. It also promised to reduce subsidies to fossil fuels by $125 million in 2017-18. No changes have yet been made to fossil fuel subsidies and subsidies to LNG are specifically continued until the end of 2024,” said Ms. May.

Sold as improving environmental assessment, this budget actually entrenches the gutting of environmental assessment brought in by the 2012 omnibus budget bill C-38. Rather than repeal C-38, this budget commits to four years’ worth of funding for the Canadian Environmental Assessment Agency for “fulfilling its responsibilities” under the C-38 version of the Environmental Assessment Act. It also provides funding for what was announced last month by Ministers McKenna and Carr as “interim measures” to cope with the broken process under C-38’s environmental review.  The funding of these “interim measures” is to last for years, which suggests they are permanent.

“Where is the political will to reverse the horrific environmental damage of the last administration? I knew it might take time to remove Bill C-38, but it is a shock to see a budget entrenching spending for the next four years on the assumption that this anti-environmental law will persist,” Ms. May said.

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These provisions – known by an alphabet soup of acronyms (FIPA, ISDS, IS) – allow a foreign corporation to bring a challenge by way of private arbitration against a government if that government’s actions can be interpreted as “tantamount to expropriation.”  Ever since Chapter 11 of NAFTA where this anti-democratic instrument first emerged, arbitrators have been willing to find that perfectly reasonable measures by governments have reduced foreign corporations’ expectations of profits.   “Tantamount to expropriation” ceased to mean anything close to actual expropriation.  It has become a way for foreign corporations to threaten and punish governments for regulating to protect health, safety and the environment around the world.  Trade lawyer Steven Shrybman once correctly described them as “fundamentally corrosive to democracy.”

The most controversial part of the Comprehensive Economic Trade Agreement (CETA) with the European Union is the investor-state provision.  The most controversial part of the Trans-Pacific Partnership Agreement (TPP) is the investor-state agreement.  These concurrent debates create the opportunity to debate for the first time whether such agreements are in the public interest – anywhere.

Essentially the issue has never been debated.  Despite a significant public debate before Canada ratified NAFTA, Chapter 11 was never identified as a source of concern.  Not even Canada’s NAFTA negotiators had contemplated that the language could be interpreted as it has been.  An elite group of lawyers globally have profited – enormously – as arbitrators, as counsel and as expert witnesses in ripping off governments in the interest of corporate power.  Domestic governments and legislatures at all levels – municipal, state/provincial and federal have lost around the world.

The new so-called reform of ISDS in CETA was put forward by EU Trade Commissioner Cecilia Malmström.  It is described as an Investment Court System (ICS).  Despite being over-sold in the media, the actual proposal is simply rebranding the ISDS mechanism.  One of the few independent Canadian experts in investor-state dispute systems is Gus Van Harten of Osgoode Hall Law School.  In a recent article for the Social Science Research Network, he has carefully critiqued Mme Malmström’s proposal.  Van Harten rejects it as allowing the continuation of ISDS, despite a degree of whitewashing of its sins.  Particularly worrying is the failure to require that foreign corporations exhaust their access to domestic courts before opting for investor-state arbitration.  As the appalling Bilcon case under Chapter 11 has established, a foreign corporation can choose to ignore its access to courts and go to anti-democratic investor-state arbitrations instead.

The sensible thing to do, as the issue is hotly debated in the CETA and TPP context, is to move for a thorough global review of all these agreements in the context of the WTO.  The Canada China investor-state agreement is arguably the worst Canada has ever entered into.  The Conservative cabinet ratified it in secret by order in council.  The earliest Canada can exit the agreement is 2045.  Our only way out is either through a global review or if Beijing agrees to renegotiate FIPA in the course of our new trade talks.

A global review of all such agreements is long overdue.  They are not a necessary precondition to investment. Australia, for example, has a far larger volume of trade with China than Canada and never entered into an ISDS with China at all – much less the lop-sided deal with which Harper has left us.

The Liberal government’s determination is ratify CETA is our first big test of whether citizen engagement against investor-state provisions and increasing global corporate rule can alter the Liberal course.

Originally published in Island Tides.

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I want to start by clearly stating my premise up front, and then speaking to it throughout the 10 minutes I have. My premise is this, fairness for the middle class and societal inequality cannot stand together.

We cannot as a society, and nor can the government, decide that the middle class is the be all and end all of tax policy. I will say this bill misses the mark on delivering for the middle class.

We cannot say that fairness for the middle class is the be all and end all for society, because as long as inequality and poverty persists, every part of society is disadvantaged. Every part of society is disadvantaged by the continuation of poverty.

Recently, within the last half hour, I heard a Conservative member say the people who need the tax breaks the most, the people who need the help the most are the middle class. No, the people who need the help the most are the homeless. The people who need the help the most are the unemployed. The people who need the help the most are the poor.

In terms of inequality, where does Canada’s society stand today? By any measure, we are a fair and more equitable society than the United States. However, in a very real way, we are not as fair or as equitable as we used to be.

During the election campaign, I was digging all the time for stats and arguments for the few leaders’ debates in which I was included. While doing research, I was staggered to come across this stunning statistic: the 86 wealthiest families in Canada have more combined wealth than the 11.4 million Canadians at the bottom of the income brackets. Eighty-six individual Canadian families have more wealth than 11.4 million Canadians at the bottom.

Is this a problem? I submit it is a serious problem, and it is a problem that Bill C-2 will not address. I do not imagine that anyone thought Bill C-2 would address it. I will say, in fairness to the new government, and I will come back to this, I hope that more is planned, if it is serious about addressing income inequality.

Let us just look at this at a higher plane of analysis, which is the mania for neoliberalism, for the policies of Milton Friedman, and for the Thatcher-Reagan era, which launched policies in which no politician would say anything other than that we need smaller government, that we need tax cuts, that we need de-regulation, that we need trade liberalism, as though that mantra would deliver great blessings to a society overall.

One of the economists who I think has skewered this most effectively with detailed empirical research which does not brook a different opinion, because this economist comes fully loaded with the facts, is Nobel prize winning economist, currently a professor at Colombia University in New York, Joseph Stiglitz. Stiglitz amassed all the information any Parliament would need to decide that inequality is unacceptable for a society that wants to succeed at anything.

Joseph Stiglitz’s book, The Price of Inequality is something that I hope every member of Parliament will read. Stiglitz concludes that: “Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset — its people — is not being fully used.”

There are a lot of things one can say about the era of Thatcher-Reagan, neoliberalism and the kinds of trickle-down policies that were supposed to deliver benefits for all, but Joseph Stiglitz has pronounced, and I think it is time we all learned how to say it, the neoliberalism experiment in tax cuts to deliver wealth has been tried and is a monumental failure. Growth is stagnant. The economy is suffering, not just in Canada but everywhere. In Canada particularly more than some of our OECD colleagues, we have had stagnant growth for a while now. We are not seeing investment, and I want to touch on what our corporate sector has been doing or not doing.

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“Under CETA, foreign investors will still be able to attack state decisions in areas ranging from agriculture to consumer protection to public health to the environment. This means tribunals can still order vast payouts to foreign investors without having to go through Canadian courts. We’ve already seen the results of these devastating tribunal rulings under NAFTA. This is a bad deal for Canadians,” said Elizabeth May, Leader of the Green Party of Canada (MP, Saanich-Gulf Islands).

Ms. May noted today’s announcement includes improvements to the appointment of arbitrators and in providing a clearer affirmation of the government’s right to regulate, but said dispute process itself remains flawed.

“Trade deals need to respect labour rights and environmental rights, not just corporate rights,”said Paul Manly, Green Party International Trade Critic. “Under CETA, foreign investors can sue federal, provincial and municipal governments using a custom-made judicial process. But no one has made the case why we can’t settle disputes using Canadian courts, which are reliable, accessible, independent and vastly superior to Investor-State Dispute Settlements (ISDS). The Canadian Labour Congress knows this is a bad deal for Canadian workers, one that will give foreign investors the upper hand at the expense of Canadian sovereignty.”

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