Until the early 1970s, municipalities in Ontario were involved in a free-for-all competition to attract business and industry. They offered tax breaks, free land, free infrastructure, utilities or services, housing — whatever it took to get a plant or office to open within their boundaries. A lot of small Ontario communities were able to attract businesses that way, and many got major industries.
Of course, the local taxpayers paid for these benefits, but the towns subscribed to the theory that eventually the extra jobs and tax revenues coming into the municipality would pay for the up-front largesse through increased revenue across the community. The plants would bring jobs, which would translate into new homes and property taxes, and the increased population would create a demand for other businesses such as retail stores, restaurants, and the service industry, themselves creating new jobs.
For a while, that system worked, mostly to the advantage of municipalities which could both afford the largesse, and had the land and services readily available. Not everyone considered such competition the best way to run a province, however, and there were arguments that through bonusing, municipal taxpayers were increasing the profits of private enterprises.
Then, in 1974, the provincial government stepped in and said the practice wasn’t fair. All municipalities, the province decided, should compete on a level playing ground: bonusing of this sort was made illegal in Section 106 of the Municipal Act. The Act even makes loans illegal:*
106. (1) Despite any Act, a municipality shall not assist directly or indirectly any manufacturing business or other industrial or commercial enterprise through the granting of bonuses for that purpose. 2001, c. 25, s. 106 (1).
(2) Without limiting subsection (1), the municipality shall not grant assistance by,
(a) giving or lending any property of the municipality, including money;
(b) guaranteeing borrowing;
(c) leasing or selling any property of the municipality at below fair market value; or
(d) giving a total or partial exemption from any levy, charge or fee. 2001, c. 25, s. 106 (2).
David Sunday, a lawyer writing on the Sorbara Law website, noted in late 2014:
Section 106 of the Ontario Municipal Act, 2001 is a much worried about “anti-bonusing” provision of broad application. It is worrisome because its limits and applications are far from clear. By its terms, the provision purports to create an unqualified prohibition on municipalities directly or indirectly assisting any manufacturing, industrial, or commercial enterprise through “bonusing”. The scope of prohibited “bonusing” extends to the giving or lending of any municipal property, including money, guaranteeing borrowing, leasing or selling any municipal property, or giving a total or partial exemption from any levy, charge, or fee.
The change was made more than a generation ago. Since then, the Auto Pact has become defunct, the Canadian dollar has risen too high to offer the economic benefit that once attracted U.S. firms and its recent slide came too late to turn things around. Many factories closed in North America and reopened in Asia, creating massive unemployment everywhere. Consumer buying trends have shifted from quality products to the least expensive on the big-box store shelf. Wages, especially in unionized plants, have escalated to uncompetitive levels compared with Asian workers. It’s a different, more challenging world today.
The C.D. Howe Institute released its report on beer and wine sales in Ontario, today, advocating for a more liberal approach and allowing beer and wine to be sold in other outlets, such as supermarkets and convenience stores. You can read the report here.
I have a grudging respect for the C.D. Howe Institute, but not always an agreement with their conclusions, because I feel they are seldom as free of right-leaning ideologies as I would hope. But the report is a good read, nonetheless. It has a local significance in that we have seen three craft breweries open in Collingwood this term and their well-being is important to our local economy.
Coincidentally, the Beer Store was an exhibitor at the recent AMO convention*, and made presentations (as well as handing out reports) that proved a counterpoint to the C.D. Howe study. It’s a battle of conflicting figures and facts being tossed about.
Of course, The Beer Store (TBS) has a vested interest in keeping its near-monopoly on beer sales. Contrary to what some folks think, the Beer Store – we knew it as Brewer’s Retail when I was growing up – is not a government outlet like the LCBO. It’s privately owned; although it’s technically designated “not for profit” some reports say it managed to garner $700 million in “incremental profits” every year for the past few years.
This figure is challenged by Jeff Newton, President, Canada’s National Brewers, who writes:
The Beer Store does not make $700 million a year in profit; it actually makes no profit, a fact that can be confirmed by reviewing the corporation’s publicly available financial statements.
The so-called 2013 study that produced this erroneous claim was funded by the convenience store lobby association and has since been proven false by two former assistant deputy ministers of finance in the Ontario government.
What the convenience store lobbyists claimed to be a $700-million profit was actually shown to be higher Ontario beer taxes. The report debunking this claim can be found at ontariobeerfacts.ca/files/studies/earnscliffe_comparison.pdf.
Well, if The Beer Store itself isn’t making those profits, the brewers who own it are, according to the CD Howe report:
The Beer Store enjoys significant economies of scale. These factors combined allow brewers to earn what we estimate to be $450 to $630 million in additional profits compared to what would have occurred in a competitive retail market similar to that in Quebec.
Nothing against profits, mind you: they keep the brewers in business. But maybe we could shave off a couple of points to allow some of the smaller, Ontario brewers to get a bit more of the action. Encourage local, home-grown craft breweries.
Over the past few years, TBS has been the subject of considerable political controversy over its practices and policies that, some companies say, are prejudicial against small, craft breweries. The ownership of The Beer Store is also controversial because it is now an international conglomerate, not even Canadian:
…when you buy beer at The Beer Store, you’re actually supporting massive corporations based at least in part in the States, in Brazil, in Belgium, or in Japan — regardless of the brand of beer you actually buy.
The Beer Store, as you probably already know, is actually owned by Labatts, Molson-Coors, and Sleeman, and however Canadian these household brands may sound, they’re not. Molson isn’t really just Molson anymore. It’s Molson-Coors, a company with equal ownership in Canada and the United States. Labatt Brewing Company is owned by Anheuser-Busch InBev, a Belgian-Brazilian multinational company headquartered in Leuven, and, since 2006, Sleeman has been owned by Japanese brewer Sapporo.
As the owners of The Beer Store, these three brewers are not only taking in an astounding 79.2% of the market share of all beer sold in Ontario, but they also gets to make up standards and fees to which any other brewer must adhere if he or she wants the store to stock his or her products.
Why can’t I buy Yorkshire Gold tea in town? I can buy Barry’s tea, from Ireland, and Morse’s tea packaged in Nova Scotia locally. As well as other brands. Surely someone can bring in Yorkshire Gold… and yes, I’ve gone to every grocery store in town and asked for it. Even Sobeys – where I had been told it was available – the staff there had no idea what it was. Never heard of it, I was told.
Barry’s tea is nice: a bit on the robust side, which we like, but the tea bags could use a tiny bit more to give it that oomph. Available at Metro.
Tetley has two new teas on the shelf: Bold and Pure Ceylon.The Bold doesn’t taste to me any different from their regular tea. But I like the Ceylon, albeit it’s not as full-bodied as I would prefer. Still, it has a nice flavour and may replace my regular Tetley. Available at Freshco.
What happened to Tazo Tea? I used to really like their full-leaf Awake tea, an English breakfast tea, and often ordered it at Starbucks. But the last two times I’ve bought a box for home consumption (one bought at a grocery store, the other from Starbucks), I’ve been greatly disappointed. The first time because the tea turned out not to be full-leaf (the box label was unclear…). The second because the full-leaf bags contained only a small portion of what they used to contain. The result in both cases is a weak, watery, insipid tea. No more Tazo for me, in future.
I prefer whole-leaf teas and tea bags because they seem fuller and richer than the broken leaf and leaf dust you get in the standard grocery-store tea bag. But they’re not the common product: most brands don’t offer full leaf. Most are called “orange pekoe” but are really broken orange pekoe – a low-level grading.
Lately we’ve taken to drinking Typhoo Tea. Even the decaf is pretty good. PG Tips, another Brit tea, is fair, not really much different from Tetley. Have to ask Susan to bring back some other teas from England when she goes across the pond this summer.
I bought a box of Choice organic English breakfast tea at Costco last week. Ho hum. Like the Tazo Awake, the bags or their contents are too damned small to make a decent, strong cuppa. Takes to bags for my large cup. Another one to avoid in future.
Costco (at least the Barrie store) has a limited and rather unexciting choice of teas (not to mention it seems to have dropped the green cerignola olives – the best olives they’ve ever stocked – and their superb vidalia onion salad dressing in favour of mediocre product . Which means we are on the verge of giving up on Costco entirely (well, maybe if they keep those large bottles of marinated artichokes, we’ll hang on, albeit grimly…).
Too many products we get to know and love that get dropped. Happens at local grocery stores, too.
Used to really like Costco, and made a trip there every three or four months. Now my respect has plummeted and the few times we do go there, we buy very little compared to the past. Even their selection of DVDs is flaccid, and their selection of books is sheer crap. But they do have good shirts and clothes. Still… why can’t they keep a single brand of olives in stock?
A few weeks ago, we were down in Brampton and visited an Asian food market. Great place, full of wonderful produce, fish, sauces… I ended up buying a bag full of green teas (and a hot sauce). One of those boxes was a Korean green tea, which I have not yet tried, but I have never sampled Korean tea, so I’m looking forward to it. As soon as I finish my current supply of Lung Ching (Dragonwell) green tea, I’ll open it.
Dragonwell is my current favourite Chinese green tea. The current box is from Golden Sail, but it’s only fair quality. There seems to be a faux market in Dragonwell teas, with some low-quality products being passed off as the real thing. I can’t tell which is authentic, but I can tell which tea tastes good; which has a full, rich body. Frankly, that’s all that really matters to me.
I enjoy some Japanese green teas, but not a steady diet of them. Sencha is my favourite, and matcha when it can be had, but I’m iffy about the roasted brown rice and barley in some other varieties.
In my experience, most of the green teas in the Asian markets are only fair quality; some are actually mediocre. It’s a guessing game, but because the prices are usually modest, it’s not a big investment. I buy several and hope for the best. Regardless, I usually use them all. The boxes don’t really give you a lot more than vague promises of quality, but now and then you get a treasure.
We used to buy a lot of tea and sauces at Soon Lee’s, in Scarborough (along with many great hot sauces), but since they moved, we don’t have a good substitute Asian market (although we did find a good one on Kingston Road last year). In Brampton, we went with a Chinese woman who translated the labels so i could pick products by description, rather than just guessing (which is why I ended up with a bottle of Uncle Chen’s “chilliciously hot” extra hot sauce when I would have otherwise overlooked it).
You can get a nice, organic green tea called Uncle Lee’s, from both Metro and WalMart. It’s almost as robust as Ten Ren green tea, but not quite. Ten Ren you’ll have to get out of town – we buy ours in Chinatown at a tea shop on Dundas Street West. To my palate, Ten Ten makes the very best green tea. I have tried a few of their black and herbal teas, too.
The fine for distracted driving in Ontario will soon nearly double.
As of March 18, driving with the display screen of a phone, computer, MP3 player or tablet computer visible to the driver will jump to $280 from $155. The total includes a $25 victim surcharge and $5 court costs.
Last week Ontario chief justice Annemarie Bonkalo signed a judicial order approving the new fines.
The fines will not apply to GPS screens.
It’s not enough. The legislation needs to be tougher. It needs to parallel the legislation about impaired driving, or street racing, with similar penalties and fines.
Curiously, as The Star notes, the provincial Liberals (an inconsistent and meandering party seemingly adrift the policy sea, but that’s another post…) didn’t support one of their own MPP’s private member’s bill which would have increased fines and added demerit points:
…the Liberals haven’t pushed a private member’s bill introduced last year by one of their own MPPs, Bas Balkissoon (Scarborough-Rouge River), calling for fines between $300 and $700 and demerit points after one of his constituents, a young mother and community volunteer, was killed by a distracted driver.
“This is a serious, serious community safety issue,” Balkissoon said. “One way or another, I’ll get it.”
He said he was concerned any legislation the government introduces could be delayed by a spring election, and also said he was “disappointed” Bonkalo set the fine at $280 and not his preferred level of $500, the Highway Traffic Act maximum.
So one has to question how seriously the Liberals take the problem.
As the Economist calls it, distracted driving is the “new drunk driving.”
THE driver who killed Jennifer Smith’s mother in 2008 by hitting her car at a crossroads was sober and had never received a speeding ticket. But he was talking on his mobile phone. He was so engrossed that when the policeman later asked him what colour the traffic light had been, the driver said he had not even seen one.
As the article notes, even hands-free devices add to distracted driving:
The human brain has to work harder to process language and communication with somebody who is not physically present. (Conversation with passengers is much less distracting, apparently because those passengers are also aware of the traffic situation and moderate their conversation.) A study by Carnegie Mellon University using brain imaging found that merely listening to somebody speak on the phone led to a 37% decrease in activity in the parietal lobe, where spatial tasks are processed. This suggests that hands-free use of mobile phones cannot help much. Such distractions, according to one study, make drivers more collision-prone than having a blood-alcohol level of .08%, the legal limit in America. It appears to raise the risk of an accident by four times. Texting multiplies the risk by several times again.
So we need some serious attention paid to technology and its social and cultural impact. One of the reasons our health care costs are skyrocketing seems to be easily found here: distracted drivers are causing an increasing number of accidents and deaths.
Simply raising the fine won’t change that. Paying $280 may be more of an annoyance to people than a real game changer.
Why don’t we treat it like street racing and stunt driving? That gets the driver an immediate suspension of his/her licence at the roadside, a minimum fine of $2,000, and it can be as high as $10,000. A street racing conviction can mean imprisonment for up to six months. It can also lead to a further suspension of the driver’s licence for up to two years for the first conviction and that can go as high as ten years for a second conviction! A convicted driver’s insurance rates increase 100% for the next three years, plus they get dinged six demerit points!
Now that’s a serious law. Distracted driving law? A slap on the wrist. The Ontario Ministry of Transportation’s own Road Safety Report for 2010 (the latest published) barely mentions distracted driving. Yet clearly the problem – and threat – is accelerating.
Tuesday, Council got a combined debt-and-budget presentation that set the stage for the upcoming, fuller 2014 budget deliberations starting next week. CAO John Brown gave us a recap of a report (produced by BMA Management Consulting) about the town’s debt situation and financial wellbeing. It was a mix of good news/bad news.
The good is that it’s not as bad as it seems, certainly not as bad as some other municipalities, but mostly in the middle of the peer group selected for the report. The bad is that it’s not as good as we’d like it to be. But barring a big tax increase to reduce the debt and funnel more into reserves, I don’t see how it could be a lot better.
His report also included a comparison of Collingwood’s financial situation to six other municipalities:
I have to wonder why several of these were chosen as comparators by the consultants. The majority are not at all like Collingwood:
Wilmot Township, according to its own website, is “…approximately 20,000 persons living in small towns, settlements, and on farms.”
Springwater Township “…consists of both urban and rural communities, with a population of over 18,000 people. There are nine settlement areas, with Midhurst and Elmvale being the largest with a population of 3100 and 1700 respectfully. Other settlement areas include Snow Valley, Centre Vespra, Minesing, Anten Mills, Phelpston, Orr Lake and Hillsdale.”
Innisfil is similar: small communities, some bedroom residential development close to Barrie, but mostly rural. Cookstown, one of the largest centres, has a population of about 2,000.
Only Orillia and Owen Sound are similar, small urban centres. Why would we not compare ourselves to Midland or Wasaga Beach? Brockville? Uxbridge? Huntsville? Orangeville? Surely these small urban centres would provide more of the apples-to-apples comparisons.
I’d also like to have seen such data as how many employees are on the municipal payrolls in each; if they have their own or use OPP police service (and how much their police and fire budgets were – our services for 2014 will consume 22%, or $6.1 million, for policing, and 16%, or $4.4 million, for fire: more than a third of our budget in the combined costs).
I’d like to know their total budget, including operations, capital, how many buses they run, and so on. What are they spending their money on and why? What reserves do they have, what assets? Municipal finance isn’t so simple it can be reduced to a few lines.
Rural communities have very different needs, infrastructure demands, growth issues, etc. that make it difficult to adequately compare them to Collingwood.
We are also a combined retirement and tourist destination centre, which creates different sorts of challenges for services and infrastructure. Our percentage of people 65 and older is about 23% – much higher than the provincial average of 14.6%, and our percentage of people under the age of 55 is lower than the provincial average. That has implications for housing, employers, services, and commercial and industrial growth.
On page 8 of the report, it notes that the average percentage of farmland by assessment value in our comparators was 5.2%, while the amount is only 0.1% in Collingwood. But if you look at the maps, the actual, physical amount of farmland in those four “peers” significantly dwarfs the whole area of the Town of Collingwood. Farmland is the lowest on the assessment ladder, so having less is good for potential tax revenue.
We also have a higher percentage of commercial and industrial assessment, which is equally good for tax revenue.
What we never learned from the report was how much money had any of them invested in major infrastructure projects or municipal facilities over the past decade or more. Collingwood has had an ongoing infrastructure upgrade and replacement program, as reflected by the projects paid for by debentures. Plus we have a fairly modern museum, a new municipal building (library and planning services), a new fire station, upgraded police station, new parks, new recreational facilities, new trails, new works building, an airport, a harbour and a comprehensive municipal transit system. Not many municipalities can boast all of that.
Our CAO explained that debt wasn’t all bad – debt means you are building, upgrading and maintaining infrastructure, erecting new facilities. We maintain our infrastructure constantly else face higher costs when it fails. Debt isn’t operational: it’s used for capital projects.
But, the CAO cautioned, it’s important to manage that debt wisely. Which this council has been doing. And, he said, we can’t continue the status quo; we don’t want to push our debt capacity to its limit.
First, of course, we have to manage our spending. The initial overview of the budget has a projected 2.1% increase (about $67 per average household). However, in light of the CAO’s sobering presentation, I would not be surprised if department heads were told to come back with lower budgets, even in the negative area. I will certainly argue for a lower amount in many areas.
Personally, I’d rather see an overall increase in taxes no more than 1.2%, but even better would be a small reduction, say -1% or even -2%.
Of course, it may mean a reduction of non-essential service in some areas. You cannot continue to provide certain levels of service without paying for them – and costs always increase. Utility costs, inflation, fuel costs, food, wages, benefit costs, materials – they all go up. So to maintain even a zero-increase-based budget, you need to cut something or someone. Essential services won’t be affected.
Therein lies the rub. Quality of life is measured by some of those services. Taxpayers pay for a good life – and we do have a good life here in Collingwood. So what, if anything, are they willing to forego in order to avoid any increase? Or would they rather pay a little more to retain these services?
What can council or staff find in the budget that is non-essential and can be removed or reduced without affecting that perceived quality of life? We need to find more opportunities for shared and contracted services.
There’s a poll online asking if a resident should run for council next election. I believe I understand the intent, but decision-making by poll is not effective leadership. Internet polls, in particular, are weak, inaccurate, easily manipulated, and ignore necessary demographic constraints – they are unacceptable as the foundation for any serious decision.
Sure, you want public input for major issues, and you are legislated to get it on some planning matters. Council tries very hard to be as open and transparent as possible. But in the end, you get elected to make decisions. You can’t keep deferring while you ask for polls, surveys, reports and hold public meetings. You have to make the decision. The buck, as they say, stops with you.
Council, working with staff, is privy to a different, often deeper and broader, picture that includes information about all departments, projects, staffing matters, costs, demographics, service delivery, facility use and most important of all: budget and taxes. We learn quickly what every decision will cost taxpayers, and how expensive some dreams really are when you need to borrow the money to achieve them (a $35 million loan, for example, translates to more than $49 million over a 20 year debenture and means a 10.12% increase on the average tax bill).
From the outside, it’s easy to second-guess council’s decision because most people only weigh their own interests in the matter, not all of the other things and all the different user groups and residents council has to consider.
I’ve been there: I was in the media covering local politics for a dozen years here. Before I ran for office, I thought I knew just about everything I needed to know about how the town ran. I knew the procedures, I knew the staff, I knew the politicians. I sat through hundreds of meetings, I conducted hundreds of interviews. I pontificated weekly on council’s decisions in the media because I thought I knew at least as much as they did, and often knew better.
I was deeply humbled in my first term to realize that I had not fully understood or appreciated how complicated, how demanding, how stressful and how difficult the role often is. I didn’t appreciate how much council has to consider when making a decision, how the interplay between staff and council affects decisions, how information and data can be interpreted or mis-interpreted. I didn’t realize that some decisions were often tough compromises. Later, I apologized to several former politicians for some comments I made in the media during their term.
Anyone who is a resident and meets the requirements of the provincial election act can run for municipal office. Usually about 20 people run for council here. Seven get elected, plus mayor and deputy mayor. These are nine local people – business owners, employees, teachers, retired people, real estate agents, parents, grandparents – they are your neighbours, your relatives, your family; people you will see in the grocery stores, in the bowling alleys, on the golf courses, walking their dogs on local sidewalks, people who went to local schools, or go local churches, have families, shop at the mall, exercise at the Y, donate to local charities. Sometimes people get angry at council and forget that councillors are ordinary, local people, just like they are.
Democracy is best served by a wide range of ideas, experiences, skills, opinions and attitudes. Debate is crucial, so is dissent. That can be emotional and trying. Few people are raised in a work or home environment where debate, argument and intellectual challenge are common. We tend to avoid confrontation. But council is often embroiled in it and it can be acrimonious. For many people, caustic debate is a stressful and anxiety-laden time. That’s why people often choose committee and board work where cooperation is more common than controversy. That’s also why an angry or loud voice can dominate the council table, even bully other council members, because most people don’t want to fight.
Every person on council, even those I disagreed with, or whom I personally disliked, I respect for running for office and accepting the burden that places on us. Every one of them cared passionately and deeply for the community and their causes. I didn’t have to like or agree with them to respect the challenges and stresses we shared. We all ran for office because we cared enough to accept the responsibilities that go with it.
If you want to run for council, as long as you meet the requirements, do so. Here are my caveats and considerations:
Be prepared to have your integrity questioned, your honesty assaulted, your best efforts at being fair and open ridiculed, your wisdom and experience deprecated, your credibility and reputation eroded.
Be prepared for you and your decisions to be publicly insulted, ridiculed, dismissed and your sanity questioned. Be prepared to be misunderstood, to have simple mistakes or innocent comments turned into public humiliations, to have off-the-cuff remarks hung around you like an albatross. Be prepared for misinformation and disinformation to be used against you, sometimes deliberately, sometimes maliciously.
And you will make mistakes, trust me. Humans naturally do, but when you are in politics, those mistakes will stay with you. Unlike in your personal life, you won’t be able to take your mistakes back or beg forgiveness. If you wake up the next day and realize you cast the wrong vote, too bad. Live with it. Few people will accept your apologies. The media will dredge out old comments, old quotes, old votes and remind people of your foolishness long after you had forgotten it.
Be prepared to be frustrated by process and procedural rules, to be disappointed that everyone else doesn’t share your enthusiasm for your ideas or initiatives, to be slowed by budgetary realities, and see even simple goals take years to achieve.
Be prepared to trim some of your election promises and your fondest, most fervently-held dreams in order to achieve more modest and more realistic compromises.
Be prepared to have your preconceptions publicly refuted, your ideas and beliefs overturned, and your core values challenged – and then reported in the media for everyone to see or hear.
Be prepared to swallow your pride and vote for something you don’t like, something you don’t want or agree with, because it’s simply the only viable choice. You will be vilified if you change your stance, and vilified if you don’t.
Be prepared to be lobbied by both individual residents and groups, sometimes relentlessly. People will call you at home, at work, in the middle of the night to talk about issues, argue, denounce and confront you. And a few will also congratulate you.
Sometimes you get so many emails or calls on an issue that just can’t respond to all of them.
You will have to work at the job – reading, learning, asking questions, digging through books, files, records, agendas and minutes. You will have to learn the byzantine rules of procedure, codes of conduct, and read dense laws and bylaws governing your every action.
You will have to learn to be cool, calm and restrain your anger, even when you feel yourself under attack. And you have to learn to let your failures go.
Everything you say or do will become public. Casual jokes, off-hand remarks, personal habits, your dress and appearance, even simply not hearing a comment properly or losing your place in the agenda will be repeated in the media and the coffee shops.
No matter what decision you make, someone will disagree. Someone will be angry at you for it. Someone will think you a fool. Or worse. You will be accused of being underhanded, dishonest, disingenuous, secretive and manipulative. Even if you made the best decision you could, in the most open and transparent manner, even if you believed that your decision was the absolute best for the community and its residents, it will be questioned and attacked by those you failed to please.
Even more frustrating, things you ran on, things you were elected for, things you believed in when you made your decisions, will be challenged, discredited and ridiculed by both the public who elected you and the media when that decision does not meet their post-election expectations.
It will affect your work, your family, your friendships, your recreation time. You will lose friends and customers. You may gain others, but that won’t make the loss hurt any less.
If you have a thick enough skin for that, if you think you can still rise above the tribulations and give it your best effort every meeting, then by all means, run for office. If you win, and it doesn’t grind you down first, you may learn to become patiently philosophical about politics.
Collingwood’s main anchor store in the Blue Mountain Mall, Zellers, will close by March, 2013, according to a story in this week’s Globe and Mail. It is one of 29 scheduled to close in Ontario, and one of 64 across Canada.
As the Globe and CBC pointed out in their stories, with an average of 100 people per store, that means a net lost of around 6,400 jobs, Canada-wide.
The impact locally is much greater. 100 jobs in a community of 20,000 people is a lot, even if most are part time.
Many retail outlets and supermarkets here offer only part-time work. People often have two or three of these jobs, just to get by. A single mother I worked with briefly had a job at a local supermarket, and as a housekeeper – both paying minimum wage – while trying to raise two kids.
If the workplace is unionized, the best most employees can get is 28 hours a week, forcing them to find other sources of income to make a livable wage. If you don’t have the seniority, you may not be able to get more than four hours a week in a union operation. And out of that you have to pay a minimum $7 in union dues, which gets you… well, nothing that I could see when I had that position.
I doubt there are 100 jobs available here, even part-time, to pick up the loss of Zellers. People may have to look for work much further afield, which will only increase their expenses.
Collingwood was an industrial hub almost from its inception in 1858 to the late 1980s. Industry means jobs – generally better-paying jobs, full time, and usually with benefits. Aside from the famous shipbuilding (which was moved overseas by its owners in 1985), it has had a tanner, flour mills, a nail factory, carpet factory, pottery, aircraft parts maker, furniture maker, automobile wheel plant, automobile hose plant, backyard recreation set manufacturer, seat-belt plant, distillery, starch plant, automobile glass plant, designer glass plant, piezoelectric ceramic plant, house truss maker, candy manufacturer, and other factories.
Today, most of those have been long closed, although a few remain.
Instead we have mostly “McJobs” in the hospitality, food, service, tourism and retail sectors. These are usually minimum wage, part time, may involve shift work or evenings-weekend work, and have no benefits, no pensions, and little opportunity for advancement or raises. Often people need to hold multiple McJobs just top pay the rent and eat. These jobs certainly don’t provide the money for people to become homeowners, and it is a struggle to raise children well at these wages.
It’s not a story unique to Collingwood – most of Ontario has been facing the loss of industrial and manufacturing jobs since the early 1980s. It accelerated in the 1990s, not only because more jobs were being shipped overseas to serve the consumer demand for low-price/low-quality goods, but because of increasing automation. That latter is the reason you see fewer bank tellers today – they have been replaced by ATMs. Many big box stores have self-serve pay stations so they can reduce the need for human cashiers. Some restaurants like Tim Horton’s, have replaced bakers and cooks by bringing in pre-cooked, frozen food that simply gets reheated, not actually prepared, by the local staff.
Plus we have a growing number of seniors here who are not retiring, because they need more income than their old age security or government pension provides (the total being somewhere between abject poverty and utter despair, worse if you want to live under a roof, not a piece of cardboard, and you like to eat at least once a day – but don’t fret: your MPs and Senators have gold-plated lifetime pensions that ensure that they will never have to eat cat food, even if you – the taxpayers – do…).
Locally, we need to craft a new economic development strategy in Collingwood, one that takes into account the erosion of industry and manufacturing jobs, and the need to improve and develop our tourism-entertainment-recreation sectors so we can attract more visitors (creating the critical mass of visitors necessary to sustain current and new businesses, events and services.
Andrea Horwath needs to do some more reading before she decides to negotiate further with Ontario Premier Dalton McGuinty. Specifically, she needs to read more Machiavelli. The Prince, in particular.
This week the Globe & Mail reported that Horwath announced that, “…NDP Leader Andrea Horwath (is) now abandoning another major proposal in return for her party’s support of the governing Liberals’ budget, it will be easier for the two sides to strike a deal.”
Her “proposal” – actually a demand in exchange for the NDP’s support of the Liberal budget – was to remove the provincial portion of the harmonized sales tax from home heating bills. Her plan would have given tax relief to millions of Ontario homeowners.
Instead, she chose to drop that demand and decided to push for the government to tax the rich more.
Wrong, wrong, wrong strategy. The rich are few. The people are many. Horwath has not read her Machiavelli otherwise she would have chosen differently. She chose to abandon her strength (the people) while attacking those few (the rich) who are not her supporters anyway. Bad choice. Start the countdown to the NDP leadership review…
In Chapter IX of The Prince, Machiavelli wrote what Horwath should be reading:
“…a prince can never protect himself from a hostile people, because there are too many of them. But he can secure himself from the nobles, as they are few in number.”
McGuinty will balk, because the Liberal party (as well as the Conservative party) get much of their financial support from the upper-middle to upper class. The NDP, however, get their financial backing from unions, and working class families, who are the majority of voters. The working class families will be hurt by the HST on fuel bills, but not helped at all by the tax on the rich.
McGuinty doesn’t want to tax the rich, probably because he HAS read Machiavelli, who wrote:
“The worst that a prince may expect from a hostile people is to be abandoned by them; but from hostile nobles he has not only to fear abandonment, but also that they will rise against him. The nobles have more foresight and cunning. They always act in time to save themselves, and to seek favours from him whom they expect to win.”
Even if the rich are taxed more, they won’t care because it’s a temporary annoyance. The NDP will never get into power, so the rich will back the party that promises to repeal those extra taxes next election – and odds are McGuinty will promise that next campaign if he is forced to concede that demand to Horwarth to save his rule.
McGuinty surely realizes that the worst he can lose is an election. But if he saves his backers, he will still have a chance to rise again with their funding. Horwath doesn’t get it. Pushing for a new tax bracket for the super rich doesn’t matter to the public except as a token gesture. It doesn’t help the average homeowner, the working stiff, the seniors and those people struggling on a small fixed income.
The NDP had the power to gain a significant concession from the minority Liberals and bend the budget to their alleged goals as the party of the working class. Plus a chance to win huge accolades and public affection. Instead, Horwath dropped the ball and has left the Liberals to continue to pummel working class taxpayers.
Damn. Who will stand up for us now the NDP have betrayed the working class? My recommendation for NDP supporters: deduct the amount of the provincial portion of the HST on your home heating bills from any future donation you make to the party. That will send an unmistakeable message to the NDP’s leaders who chose to pursue this strategy.
The outlook for Canadian manufacturing, warns the CIBC, will remain grim as long as a strong dollar keeps labour costs high, “deepening the hollowing out of the industrial heartland and boosting regional income inequality in the years ahead,” says the Huffington Post.
The Canadian loonie looks good for shoppers who buy consumer and retail goods made outside Canada. Our import prices are actually 10% lower than they were a decade ago. Back in 2002, when the loonie was $0.62CAD to the $USD, our labour costs were lower, so it made Canada a good place in to make products. Now we’re not: we’re too expensive. Our labour costs are now 20-25% higher than those in the USA (see graph, below).
The factories have moved elsewhere and they’re not coming back any time in the foreseeable future. So you have to ask which is the greater advantage for Canadians: being able to buy cheaper goods from China or having good-paying jobs so you can afford better products?
The CIBC report notes that, “Canada is no longer a cost-effective location for a host of non-resource-related manufacturing activities. Initially, shutdowns were seen in sectors like apparel and furniture that had earlier hung on in part due to an undervalued exchange rate. More recently, Canada has lagged in attracting or retaining facilities for autos and parts, rail cars, steel mills, and other goods where the competition is now more weighted to US producers… barring a big correction in the currency, or a sharp shift in relative wages, factory growth will subsequently stall.”
Ontario has been hardest hit, the report continues. “Real GDP growth in that province has now trailed the rest of the country for nine straight years—underperformance that has coincided with C$ appreciation. Had Ontario kept pace with the rest of the country, its economy would be almost 10% larger than it is today, making it much easier for the government to dig itself out of deficit.”
Only last month, the HuffPost reported that Canada lost industrial plants at twice the pace of the United States in 2011. The story adds,
Ontario led the decline in industrial plants, shedding 33 of them for a total of 7,853 jobs lost, the report stated. Quebec shed 23 plants, costing nearly 3,000 jobs. Western Canada and Atlantic Canada lost fewer than 2,000 industrial plant jobs each.
But the 14,000 jobs lost at shuttered plants don’t tell the full story. According to Statistics Canada, total employment in manufacturing declined by 50,000 from December, 2010, to December, 2011.
The IIR report suggests the pace of industrial job losses will be similar this year. There are already 76 plants scheduled to close in the next few months in the U.S., while Canada already has four closings scheduled, for job losses totaling 2,700.
At the bottom of the story is a slide show that documents the 10 hardest-hit manufacturing sectors, with the greatest job losses since before the 2008 recession.
Manufacturing isn’t the only sector hit. It’s the classic domino effect. Last month we saw a story on the grim outlook for the air cargo industry: “The immediate future doesn’t look at all rosy for the air cargo business.”
A report from TD Securities just after the recession began stated, “There’s no reason to expect anything good from the Canadian manufacturing shipments report on the 16th, with every single leading indicator that we know of in negative territory.” That picture has not improved significantly. A look at their forecasts for 2012 doesn’t show any improvement predicted. The once robust automobile sector remains flat: “…there is limited upside for new auto sales over the medium term. Perhaps the most difficult challenge facing automakers is the likely absence of any meaningful pentup demand in the Canadian market.” The housing market is at a crossroads: “Overall, we expect sales to record annual average declines of 2.4% and 3.5% in 2012 and 2013, respectively. Prices are poised to suffer a similar fate – annual average declines of 1.9% in 2012 and 3.6% in 2013.”
Furniture sales forecasts have been rewritten with lower expectations. Canadian retail sales in December – the best month of the year – were lower than expected (“There is also a direct connection between the retail shopping numbers and the Personal Consumption Expenditure (PCE) line item in gross domestic product (GDP). PCE accounts for 55% of Canada’s national output.”)
Overall, the economic future does not look rosy for Canada, and especially not for Ontario. Coupled with the Drummond Report on Ontario’s troubled economy and its recommendations for significant cuts to government spending, it looks like we’re in for a few lean years. It’s something for Collingwood Council to keep in mind when working through its next few budgets.
“It’s not all doom and gloom,” quips Rick Mercer in this video. “Drummond predicts the province could still turn things around, if it acts now, and no one gets sick, needs a job, or educates their children, for the next… ever.”
The Drummond Report – from the Commission on the Reform of Ontario’s Public Services headed by economist Don Drummond – was released last week. It’s a sweeping, 529-page, brick-thick study of Ontario’s fiscal policies and structures, with 362 recommendations about how the province should run its public service. It reads like the findings of an inquest after a particularly gruesome series of industrial accidents. Perhaps it is.
If followed, those recommendations will have a huge impact on municipalities and taxpayers (Drummond says government spending must decrease 16.2% every year for every man, woman and child in this province). Adopting them is the only way, says the report’s author, to get the province out of its $16 billion deficit before we become North America’s Greece with a $30 billion deficit.
Drummond says we must accept all of his recommendations or face financial meltdown. All, not just some. We can’t pick from them like a smorgasbord, he says. But that’s just what Premier Dalton McGuinty has already done, with his recent announcements about what he won’t implement or cut.
I’m not sure if that’s McGuinty’s way of telling us he doesn’t have the backbone to implement unpopular recommendations, or he’s just dancing one last song with political popularity while the ship sinks, or that we should buckle up because the light at the end of the tunnel is an oncoming train called The Deficit. But maybe, he’s actually wiser than we normally give him credit for being.
In a few short weeks, the report has spawned a small, but intense industry of commentators who have weighed in on the pros and cons of Drummond’s recommendations. Rex Murphy, for example, penned this scathing comment in the National Post:
With the exception of the writings of the prophets Jeremiah and Isaiah at their bleakest, flavoured with a touch of H.P. Lovecraft on the days when that lightless mind was wrestling with a migraine, the recent meditations of Don Drummond on Ontario’s fiscal situation set the standard for prose that vibrates with gloom and foreboding.
To be fair, the chances of any National Post writer making even the most remotely backhanded compliment about anything even vaguely Liberal is akin to my chances of winning the lottery, so we have to take his comments in the conservative spirit in which they were written: a self-righteous, anti-Liberal, “I told you so.”
And as expected, the Toronto Star weighed in against it, albeit from another side. Thomas Walkom wrote:
That the rich will fare best under Drummond is true by definition.
The well-to-do depend less on government programs than the poor and middle class. That is a fact. Drummond’s call for government to roll back the Ontario Child Benefit will hurt poor families who receive the subsidy. It will not affect the rich who do not.
Nor are the wealthy being asked to chip in through higher progressive taxes. Drummond did advocate that some taxes, including those on property and gasoline, be hiked. He even wants a special tax (he calls it a user fee) levied on rural parents who bus their children to school.
But these kinds of regressive taxes hit the poor and middle class proportionally harder than the rich. A surtax on high-income earners could correct that bias. But Premier Dalton McGuinty specifically told Drummond to stay away from such remedies.
Add to this the real world of politics, a world in which some groups have clout and others do not.
AMO – the Association of Municipalities of Ontario – has weighed in with an early comment, noting:
AMO is anxious about the potential for altering the upload agreement and the Ontario Municipal Partnership Fund. The Commission is recommending to delay planned uploads of provincial costs from the municipal property tax base by two years.
Translation: Dalton McGuinty’s Liberals promised to reverse the downloading of services and expenses onto municipalities perpetuated by Premier Mike Harris. McGuinty has been undoing it, albeit slowly. He reiterated his promise to continue the uploading at the annual AMO convention, in 2011, and again at the ROMA/OGRA convention in 2012. He promised to have it all reversed by 2018. Drummond suggests pushing that to 2021, which means additional years of expenses to Ontario’s municipalities (you, the taxpayers will pay either way).
AMO credited Drummond with several worthwhile recommendations in the areas of social programs and housing, health care, infrastructure, real estate, electricity, full-cost pricing for water and wastewater treatment services, the justice system, and improving the arbitration system. However, why these recommendations are worthy and others are not is not explained
AMO executives may not want to stray too far into critical commentary because it could alienate the organization from the government, and that would backfire on municipalities. Still, even if it is preliminary, the response noted above is annoyingly vague. I hope to see a much more comprehensive analysis from AMO in the near future, one that looks more closely at what the recommendations mean to municipalities.
Exhaustive as it may appear to some, the report has gaping holes in it. One area, for example, is in the labour arbitration process. Municipalities are frequently burdened with high salary agreements through arbitration. But the executive summary in the report says, “The interest arbitration system has come under increasing scrutiny and attack. We do not find the system to be broken, though it can be improved.” To any municipality trying to wrestle with the escalating costs of, say, their fire service, that statement is a mere nod and a wink to a seriously broken and very expensive process. School boards face the same issue with local teachers’ unions.
Like Walkom pointed out, the provincial tax structure was overlooked and most of the recommendations will have the greatest effect on those with the lowest incomes. One example is full-day kindergarten (which the right-wing QMI media’s writer, Christina Blizzard, caustically calls “free baby sitting”). Working parents who struggle to make ends meet depend on all-day kindergarten to enable them both to stay in the workforce. It’s not a handout.
Drummond’s recommended cuts could slash another 250,000 jobs from the provincial workforce and reduce the provincial economy by billions of dollars. McGuinty may be right by not leaping into these waters without carefully looking at what’s lurking in their depths first.
To the right who view every government program with suspicion, Drummond didn’t go far enough and the cuts should be made regardless of their impact on lower-income and working-class families. To the left, Drummond’s recommendations are a recipe for disaster that will decimate our workforce, our economy and cripple our already struggling labour force with additional costs. These are simplistic views. We’re in a mess and we need to fix it, but Drummond’s report is not the sole answer. It’s a start and some of what he recommends will be necessary, but not all. So Dalton may be right to proceed with caution and not simply dive in without some serious thought to what has to be done.
Here’s an idea Drummond didn’t offer, but I put forward for your consideration. Once upon a time, the province used to charge licencing fees for vehicles based on their number of cylinders. That was dropped, inexplicably. Why not return to that system and put the extra revenue directly into infrastructure spending? Or perhaps base the license fee on the vehicle’s gas mileage ratio? It would serve the double duty of discouraging sales of gas guzzlers, which will only help our environment.