The huge crisis of capitalism is opening the way for the dominant financial plutocracy to destroy, one at a time, all of the significant social and economic measures that the people have won. It looks as if nothing can resist this brutal steamroller that day by day leaves a trail of unemployed and excluded people. And Canada is no exception.

In Canada the year 2011 ended and the year 2012 began with two important lockouts to cut wages and destroy unions. The first is that of the Electro-Motive Canada of London, Ontario, a branch plant of the transnational Caterpillar of the United States, which is demanding of their 420 workers a fifty per cent cut in wages, pensions and benefits. The second lockout is in the refinery of the transnational mining company Rio Tinto Alcan in Alma, province of Quebec, where 780 workers were locked out after several weeks of negotiations to renew the collective agreement that expired last Sunday.

Both cases are hardly surprising. The cutting of wages and pensions, and the weakening or destruction of unions under the government of the conservative Prime Minister Stephen Harper, who has also limited, if not eliminated, the right to strike in the federal public sector, in Crown corporations and federal registered private enterprises, as was seen in the recent intervention of the government to end a strike in Canada Post -- an autonomous corporation -- and in Air Canada, a private enterprise.

The year began, if one follows the headlines of the large Canadian newspapers, such as the Globe and Mail, recalling that in the first three hours of 2012 the rich entrepreneurs or executives had already pocketed the equivalent of the average annual wage of a worker in 2010 (1), that is, 44,366 Canadian dollars (the Canadian dollar is almost at par with the US dollar), and that the average income of the "heads of big enterprises" in 2010 was the equivalent of 189 annual incomes of the average worker, that is, eight million three hundred and eighty-five thousand dollars, according to the Canadian Centre for Policy Alternatives (CCPA).

 

The Toronto Star, the paper with the highest circulation in the country, underlines the same information, emphasizing that in 2010 the one hundred best-paid executives of the country gave to themselves an increase of 27 per cent, while the average Canadian worker had an increase of 1,1 per cent, that is less than the rate of inflation.

Imposing inequality at a forced march

For those who have lived in Canada during the last four or five decades, as is the case of this writer, the rapid demolition has been clear and tangible, since the mid 1990s and with a strong acceleration from the middle of the past decade, when the Harper conservatives formed a government, of a system that had reached -- among advanced capitalist economies -- levels of economic and social equality more comparable to the Nordic European countries than to the United States, as can be seen in charts measuring the Gini quotient, in the last three decades, of countries forming the Organization of Economic Co-operation and Development (OECD).

The last OECD report about the increase in inequality within member countries (2) reveals that from the mid-1990s, the gap between the rich and the poor has increased in Canada: The top one percent has gone from 8.1 per cent of all revenues in 1980 to 13.3 percent in 2007, and the portion of wealth appropriated by the wealthiest, the 0.1 per cent of the richest, went from 2 percent to 5.3 percent.

To a large extent, this is explained by the lowering of taxes to favour big business and the wealthy. The marginal rate on personal incomes imposed by the Federal State fell by 14 percent: from 43 percent in 1981 to 29 percent in 2010, according to data from the OECD.

And if we talk about the large and middle enterprises established in the country (both Canadian and foreign), according to the agency Statistics Canada, they are “sitting” in more than 583 billion Canadian dollars of reserves and bank deposits and in 276 billions in foreign currency, which represents an increase of 9 percent since 2010 and 27.3 percent since 2007. And on top of that, in 2012 and for the fifth consecutive year, their taxes will be lowered by 2.85 billons dollars, a gift from the conservative government of Mr. Harper.

 In effect, in 2012 a tax cut of 1.5 % will be applied to taxes on private corporations, who will pay rates of 15%, that is 7.5% less than in 2007, and 15 % less than in the decade of the 1990s.

As the economist Jim Stanford of the Canadian Auto Workers (CAW) wonders, why, in these times of fiscal deficits, does the government go deeper into debt to increase the capital flows of companies that are not investing the capital on which they are “sitting”, in the economy?

The increasing inequality of income in Canada is due in great part to the combination of a number of factors, but particularly to the commercial liberalization that began with the Free Trade Agreement with the United States at the end of the 1980s and extended to Mexico with the North American Free Trade Agreement (NAFTA) in the 1990s. This commercial liberalization leads directly to the application of policies of "flexibility" in the labor market, that is to say, an attack on unions to eliminate collective agreements that would ensure full employment, and to reduce wages, pensions, benefits and working conditions, and the establishment of "independent work" which, as the OECD report on Canada points out, increases the inequality of incomes, since "self-employed" workers in general are paid less and have no pensions or benefits.

In other words, in a capitalist economy labor unions ensure better wages for workers, and in addition tend to increase the minimum wage. The elimination of unions, the objective of neoliberal policies, is to reduce wages and pensions and leads to worsening labor conditions.

In recent decades, according to Craig Riddell, an economist specialized in labour from the University of British Columbia, “fully 20 per cent of the growth in income inequality among Canadian men can be attributed to the decline in union density. The link, he says, is particularly apparent in the private sector, where the drop-off has been most pronounced” (http://www.huffingtonpost.ca/2011/12/12/canada-income-inequality-decline-unions-middle-class-jobs_n_1139136.html).

 

The role of unions in the reduction of inequality of income has been associated historically with measures of income redistribution adopted in the mid-1930s to overcome the Great Depression, including progressive taxation and policies of full employment -- the Welfare State -- policies that have been or are being abolished in advanced capitalist countries where austerity policies have been introduced to reduce fiscals deficits.

Hence the importance of the reduced role of the State in the redistribution of wealth. Until the mid-1990s, according to the OECD, the Canadian tax system and fiscal redistribution was as effective in limiting inequality as that of the Nordic countries of Europe, compensating for more than 70 per cent of inequalities in income resulting from the market (stock market gains, etc.). The effects of redistribution have declined since then and at the present time taxation and benefits only compensate less than forty per cent of the increase in inequality.

From Canada to AcáNada (nothing left here, in Spanish)

In the Globe and Mail of December 16, the Canadian academic Gerald Caplan raised an alert with an article entitled "Be very afraid: Stephen Harper is inventing a new Canada." One must fear the "new Canada" that Prime Minister Harper "is inventing" since he came to office in 2006, and which has already "dramatically changed the old Canada."

Caplan points out that with Harper one sees the "nature of true believers and ideologues to believe that any means to their sacred ends are justified", and quotes Canadian analyst Laurence Martin -- of the Globe and Mail –, that “there is already a Harperland whose nature is quite apparent. Like the American conservatives whom the Harperites so envy, our government has concocted a new reality of its own that it is systematically imposing on the Canadian people. The values and moral code of Mr. Harper’s new Canada are clear”.

 

As Lawrence Martin wrote, a central tenet of the new reality is the repudiation of the need for anything as irrelevant as evidence, facts or rationality whenever they are inconvenient. As in cancelling the long-form census, without a shred of reason. As when Injustice Minister Nicholson defends his back-to-the-jungle crime bills by reminding us of a Harperland article of faith: “We don’t govern on the basis of statistics.” Or, as we now know, on the basis of the findings of serious experts both in and out of the government.

 

And Caplan emphasizes that “Harperland values demand fundamental changes in our governance processes – the outright attacks on trade unions, the unprecedented measures taken to silence critical NGOs, the muzzling of ostensibly independent federal watchdogs and the open repudiation of “decades of cherished Canadian policies” in the United Nations.

Caplan said the “the new Canada is a place where militarism is given pride of place over peacemaking”, and he quotes Lawrence Martin, for whom “the blending of sport and the military, with the government as the marching band, is part of the new nationalism the Conservatives are trying to instill. It is another example of how the state, under Stephen Harper’s governance, is becoming all-intrusive. … State controls are now at a highpoint in our modern history. There is every indication they will extend further”.

 

Any observer of Canadian politics can note the contempt for Parliament on the part of the Office of the Prime Minister; the radical change in foreign policy in order to conform to the most aggressive policies of the United States and Israel; the desertion of the Kyoto agreement in order to torpedo any attempt to curb global warming; the conclusion of treaties and agreements (such as that relative to continental security together with the United States) negotiated without consultation and behind the back of Parliament, among many other things.

 The list is long, and as Campbell Clark writes in summing up the balance of 2011 (Globe and Mail, December 28, 2011), "in a year when the world shook from financial crises and Arab uprisings, Canada’s place in it was shifting, too (…) Even before Canada pulled out of a ground war in Afghanistan in July, it joined an air war in Libya. When it was over, Mr. Harper touted victory, and promised a military ready for more. He blocked part of a G8 leaders’ statement urging peace talks on Israel, and bucked the UN majority in vocally opposing a Palestinian bid for statehood”.

 

Among Canadian institutions in danger, since the conservatives do not accept criticism or any mention of other than official government opinions, is the public Radio Canada/Canadian Broadcasting Corporation.

In 2010 the Harper Government will establish, within the ministry of Foreign Relations, the Office of Religious Freedom, seen by analysts as another sign of a change in foreign policy, and without doubt one that aligns the conservative government with conservative religious movements in Canada and in other countries. The Office of Religious Freedom, according to the Globe and Mail, can publicly criticize "regimes" that oppress religious minorities, without attention to moderating filters of diplomacy or the position of Parliament.

In the "old Canada", with liberal democracy in a regulated capitalism, even with many defects that are still with us or are aggravated under the Harper government, such as the terrible situation of many indigenous communities, there were nonetheless many positive features, since within the framework of North America it was the only relatively egalitarian, progressive, affable, socially and politically tolerant society.

A country of respected and respectable institutions, with a vibrant Parliament imbued with respect for the division of powers, of legislative procedures and a real opposition, with a foreign policy with some semblance of independence, this Canada is now under siege by a government that in the last analysis and beyond the usual fig leaf, populist rhetoric, moral or religious questions, is shamelessly dedicated to the direct service of private economic interests. Which ones? The principal ones are the oil companies that are exploiting the dirty tar sands of Alberta and want to exploit oil and natural gas in the Arctic seas to supply the US market; mining companies that exploit minerals such as gold, silver, copper, zinc and other minerals in every continent, and particularly in Latin America; the interests of the big banks and investment houses, such as the Bank of Nova Scotia (Scotiabank), to cite one that has tentacles in almost all of Latin America.

Notes

 (1) The CCPA uses data from 2010 since those of 2011 are not yet available.

 (2) OECD: http://www.oecd.org/document/10/0,3746,fr_2649_33933_49147850_1_1_1_1,00.html

- Alberto Rabilotta is an Argentine-Canadian journalist.