Convention wisdom has it that the public heavily subsidizes post-secondary education. The illusion of a subsidy comes from the fact that tuition fees, high as they are, don’t cover the entire cost of education. But this common misconception ignores a second way in which students pay for their education: through higher taxes after graduation. When these tax payments are added up over the course of graduates’ careers, it turns out that university students fully repay the cost of their degrees and then some.

The report’s main findings are captured in this infographic:

There’s a broad based agreement in this country that higher education is important for our long-term social and economic prosperity, and that it’s something that, as a society, we should promote and invest in. My report finds that we all come up ahead when more people have access to education. Then why is it that what we’ve seen the BC government increasingly withdrawing its financial support for advanced education and downloading the costs to students?

Thirty years ago, government funding covered 88% of BC university operating revenues, but in 2009, government only paid for 58% of the costs of educating students. Universities made up the shortfall by hiking tuition fees, which now account for 44% of all university operating revenues according to CAUT (see fig 1.2 and 1.3). Tuition fees in BC now run over $4,800 per year, and, along with the erosion in student grant programs, present a significant barrier to education.

There’s no better time than now to start reversing these trends. Expanding our society’s investment in higher education today will pay dividends in higher tax revenues, lower unemployment and better social mobility for decades to come.

You can also read my op-ed on this topic in the Vancouver Sun. Or check out the full report, which contains some really interesting — and little known — tidbits about just how big the gap between men’s and women’s earnings is when annual incomes are considered.

But there is one idea to promote jobs in communities we won’t be hearing about from the province. It is an idea that is creating thousands of jobs in communities across the United States. The idea is simple. Local governments should support small businesses in their communities by giving them an advantage when bidding on government work.

Here in BC, thanks to interprovincial trade agreements, it is forbidden for local governments and school boards to give a price advantage to local businesses. And if Canada signs the Canada European Union Trade Agreement (CETA) with support from BC, the situation will get worse.

One example of how a local preference program works is in the City of Los Angeles. The City instructed its lawyers to create a bylaw that would give local businesses an eight percent advantage when it came to bidding on projects. According to a study by Charles Swenson of the University Of Southern California Marshall School Of Business, this move by itself will create 10,000 jobs locally.

According to news reports:

When Mayor Antonio Villaraigosa unveiled the proposed ordinance in September, he said the city “spends approximately 84 percent of its procurement dollars with businesses that are located outside of the city of Los Angeles; therefore, out of $1 billion allocated for governmental contracts, only $180 million goes back to local businesses.”

The City also allows a bidding advantage for local businesses that are certified as minority, women, disabled veteran or disadvantaged-owned business.

This idea is not unique to Los Angeles.  In the US dozens of cities and states have local preference programs for local business. According to the Institute for Local Self Reliance:

A 2007 survey by the National Association of State Purchasing Officials, found that 26 states have preferences for in-state bidders or products grown or manufactured in-state.  These policies may apply broadly or only to certain types of goods and services or in certain situations.  They may be absolute preferences or, more commonly, percentage preferences  (i.e., if a bid from a local business is within a certain percentage of the lowest non-local bid, usually 5 percent but as high as 15 percent, then the contract goes to the local business).

Ironically, the government has acknowledged the value of local purchasing at the same time it has prevented local governments from doing it.  In December 2006 the then Minister for Small Business Rick Thorpe expressed the idea eloquently in the Fort Nelson News when he said:

I’d like all British Columbians to consider the direct, positive impact you can have, on your neighbours, your local businesses, and your community’s growth – simply by supporting local small businesses. By shopping at home, you show that you value your friends and neighbours and the investment they’ve made to keep your community vibrant and growing. Most retailers I know are interested in meeting your needs and earning your business. However, one retailer summed up his dilemma this way:

 ”I’d love to expand my selection – but if it’s not going to leave the shelves, it just becomes a liability for my business.”

 When you buy from sellers outside British Columbia, you just help retailers elsewhere to keep their stores well-stocked at the expense of local businesses. Shopping at home also supports local hospitals, schools and important public services. Provincial sales tax revenues totalled almost $4.2 billion last year. When you choose to shop locally and pay the provincial sales tax on your purchases, you know you’re helping to pay for services of importance to patients, students, seniors, people in need and, in fact, all British Columbians. I’d like all British Columbians to consider the direct, positive impact you can have, on your neighbours, your local businesses, and your community’s growth – simply by supporting local small businesses. By shopping at home, you show that you value your friends and neighbours and the investment they’ve made to keep your community vibrant and growing.

If this is such a good idea for individuals you would think it would be a good idea for our local governments. However, BC’s Trade Investment and Mobility Agreement and the New West Partnership Trade agreement specifically forbid measures that provide for any “preferential treatment of a province’s people, investments and goods, except for justified actual cost-of-service differences.”

Canada is now in the process of negotiating an international agreement with the European Union and one thing the Europeans are pushing hard for is access to local government procurement.  Because local governments fall under provincial jurisdiction, however, the provinces get a say in this. But British Columbia refuses to say what they are putting on the table. If past agreements are any example, BC will give up far more than anyone else will. 

What are the arguments against this? Some people argue that taxes will be higher but the investment in the community will create far more economic value than it will take out in taxes. The government argues we need to give up these rights to get access to trade deals, but the US has managed both to get trade deals and to leave their states and cities with the right to local procurement policies. And yes there are no communities in BC the size of Los Angeles but surely the program could work at a regional or provincial level and in many less urban communities as well.

We now have a situation where American cities and states can give preferential treatment to their local businesses and we cannot.  Soon, under CETA, the Europeans may have access to our local procurement.

Perhaps we should be asking the premier just how that builds jobs in British Columbia.

In the United States Michael Shuman has written extensively on buy local campaigns.

Here in BC this website discusses the value of shifting some of our consumer spending to local businesses.

First, over just over 100 candidates have responded to the Open Letter issued by the Living Wage for Families campaign, covering almost every Lower Mainland municipality. Almost all have expressed support for this proposal or at least indicated interest in exploring the implications for their city.

In Vancouver, COPE has said it is supportive of undertaking a city study to investigate the feasibility of passing a living wage policy. Vision Vancouver and the NPA are a little more cautious, saying they are interested, but want to find out more before deciding how to proceed.

In Burnaby, both main parties have expressed a clear interest in exploring the possibilities of a living wage policy. Both Richmond and Surrey have a number of candidates running on a living wage platform, while the City of North Vancouver has already unanimously agreed to study this issue.

In the outer suburbs of Maple Ridge, Pitt Meadows and Coquitlam a large number of candidates have expressed an interest in pursuing this issue.

You can see all the candidate responses here.

Second, today our friends at the Columbia Institute Centre for Civic Governance released some very interesting poll results related to the municipal elections. Among the results: 67.1% of respondents asked about a Living Wage said they would favour their municipality adopting a bylaw. You can read more results here.

Hopefully we will see new activity on this front after Saturday.

The Living Wage for Families Campaign, along with 54 organizations representing over 300,000 British Columbians, recently issued an Open Letter calling on all municipal election candidates to help low-income families in their cities by passing a Living Wage policy if they are elected (available here).

Many families are struggling to get by; they are working hard but just can’t keep up with ever rising living expenses. Despite the recent increase in the minimum wage, it is estimated that at least 25% of families with children in the Lower Mainland still earn less than a living wage income, that is, a wage that allows them to cover their basic living expenses (calculated at $18.81/hour in Metro Vancouver). Fifty percent of single parents with children don’t earn a living wage. This is especially true of the ‘hidden workers’ who support the work of our cities; the people who clean our buildings, who provide our security services, or who serve us our food.

Why should municipal governments care about this? Because it is municipal governments themselves that end up paying a large price for these low wages.   Families earning low wages mean there is less money circulating in the local economy, and parents (forced to take on more hours or a second job to make ends meet) have less time to spend with their children. Municipal governments and school boards consequently end up filling the gaps by paying for additional services and policing costs.

Some business leaders are concerned about the living wage. They claim that it will negatively affect the private sector. Yet leading businesses around the world are voluntarily agreeing to become living wage employers. Businesses like KPMG and LUSH in the UK, and now Vancity credit union here at home. These employers commit to pay the living wage, not only to their direct staff, but also to contracted staff in traditionally low-paying sectors. And here’s the big surprise – they have all determined that doing so is good business practice.

The call for a living wage has also been falsely labeled as a “union” demand. In fact, most people earning less than the living wage are not unionized. Moreover, the call for a living wage has come from a broad cross-section of organizations – faith groups, parents groups, immigrant groups and community organizations such as the United Way of the Lower Mainland and the Health Officers Council of BC. They understand that a living wage is key to ensuring healthy childhood development and community cohesion.

Opponents of the living wage have claimed that small businesses will go bankrupt, that cities will face huge cost increases, and that even your granny will be negatively affected. Yet these attacks conveniently forget to mention that countless studies have shown that the cost to cities of living wage policies are minimal – New Westminster’s Living Wage Policy is costing less than a quarter of one percent of their budget – or that families who earn living wages have more money in their pockets to spend in local businesses.

Wherever you stand on the political spectrum, nobody can deny the fact that many families are struggling to get by. The data indicates that child poverty in BC is mainly a low-wage story; the vast majority of the 100,000 children living in poverty have at least one parent in a low wage job, with a third working full time in the paid labour force.

This is an area where municipal governments can and should lead. In doing so, BC cities will be joining 140 US cities who already have living wage ordinances of some form.

Will living wage policies result in a slight increase in costs for municipal taxpayers. The short answer is “Yes, but only slightly.” But the real question is this: do we as municipal taxpayers want people employed –– on our dime –– at a wage rate that cannot ensure healthy childhood development or allow parents the time to be with their children and participate in the social and civic lives of our communities?

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Michael McCarthy Flynn is an organizer with Metro Vancouver Living Wage for Families campaign. Seth Klein is BC Director of the Canadian Centre for Policy Alternatives and a co-author of Working for a Living Wage.

The following are just a few of the issues that hit the convention floor.

The RCMP and public private partnerships

There was a lot of coverage in the media about the breakdown in negotiations over a new RCMP contract between British Columbia and the federal government. A side bar issue that got no coverage dealt with the new RCMP Division Headquarters in Surrey.

Solicitor General Shirley Bond complained to a UBCM panel about the province’s inability to control rising RCMP costs. The example she gave was the RCMP’s new Division E headquarters that saw costs balloon from $300 million to $1 billion.

However, it turns out that the new headquarters is a federal public private partnerships and that so far the province’s privatization agency, Partnerships BC, has billed $2.5 million in consulting fees on the project. Remember when the government argued that P3s offered fixed costs and price stability?

The Municipal Auditor General

Mayors and councilors were not happy about the province’s decision to impose a Municipal Auditor General on them. Councilors argued from the convention floor that they were already forbidden by law to run a deficit and had many of their major projects subject to referendum.

However, the province backed down on most of the issues promising to pay for the new office (but not for the cost of audits) as well as swearing that new MAG would not have the power to second guess local policies, including tax policy.

The big issue that still remains is governance. The UBCM wants the same model the province enjoys in its relationship with its own AGM. That would mean an MAG would report to an accounting board made up of local government representatives. No dice Communities Minister Ida Chong told the convention. Apparently local governments will make up only a minority of the board. The business community has been promised its own chair at the table.

The business community (primarily the Canadian Federation of Independent Business) is on a full-court press to see business property taxes cut with the cost being shifted to homeowners. Of course business, unlike homeowners, can write off their property taxes against federal and provincial taxes.

Government downloading and rural areas

Every UBCM convention holds individual forums for different sized communities. My favorite is always the Electoral Area Directors’ forum made up of mainly people representing spread out rural areas. While diplomacy is the order of the day when big communities talk to the provincial government, with Area Directors you get a lot more down-to-earth candor.

Over the years Area directors have had a continuing complaint about downloading of costs. This year the complaint was over diking policy. As a Central Kootenay Director told the provincial officials at the forum, “One of the reasons you are downloading is that you lack resources. If you can’t handle it, we sure can’t.” The chair of the presentation on diking sent the provincial officials away with this message:

We don’t have the expertise, equipment or money. Flood mitigation needs more funding. Send the message back.

Extended Producer Responsibility (EPR)

Over the years residents, particularly in urban areas, have become used to a growing level of recycling. Blue boxes take away our newspapers, cans and plastics. For many of us there will soon be recycling of kitchen scraps.

It turns out there is some risk of things going the other direction. The Area Directors heard a presentation on Extended Producer Responsibility. Under this program producers and consumers or products will have responsibility for them. It sounds attractive but what will it actually mean?

A Director from the Sunshine Coast told the panel they were planning to extend their blue box program and asked for advice considering the EPR policy. An industry spokesman advised the Director that they couldn’t give practical advice but that it would be “prudent to wait.”  An industry spokesman reported that some governments were putting a pause on such projects. “Remain nimble” she advised.

It turns out we may all have to be more nimble if we have to start taking our newspapers to depots rather than having them picked up in blue boxes.

Wages for public employees

It appears Christy Clark’s government is determined to make public employees pay for the government’s ineptitude on the HST. In a panel on the economy Finance Minister Kevin Falcon told the audience:

With respect to the wage mandate for the whole public service at net zero for two years – that tough mandate is likely to continue.

Public sector wages have already fallen due to inflation and the two year wage freeze. The Finance Minister appears determined to push them down further. Meanwhile, at least for now, wages in the private sector are going up.

Ferries

At the forum on the economy an Island Trust Trustee told the panel of Ministers:

Ferry fares are killing our communities. We are losing jobs because of the ferry fares.  If government isn’t willing to put money into ferry infrastructure we are going to continue to lose jobs.

Transportation Minister Blair Lekstrum said they were cutting 400 sailings but that it would not likely affect fares. Finance Minister Falcon suggested fares really didn’t make much difference because when they cut fares temporarily during the recession, ridership didn’t go up. The Island Trustee disagreed.

Open government

I went to one of the 7:30 am “clinics” on Thursday morning on “open government.” I had hoped it might deal with the government’s poor record on access to information but instead it dealt with the governments new web sites.

It wasn’t a total loss though. The government’s data website that now contains more than 2,400 data sets looks pretty interesting. And the open information site that publishes the government’s FOI releases is certainly worth reading on a rainy Sunday afternoon. Too bad their policy of releasing the information only 72 hours after it goes to the FOI requestor will probably discourage media from using FOI.

Workshop on market housing

Thursday afternoon there was a workshop on market housing that was much more interesting than last year’s all day workshop. Last year was mainly taken up by how little the province could or would do. This year instead focused on how much was actually being done in communities like Vernon, Langford and Surrey.

 There were dozens of other policy issues addressed in the week long convention. Paul Willcocks has an interesting column on the debate about smart meters here. It is remarkable just how much information flows in a meeting like this.

The plan for new jobs is concentrated on the development of very electric intensive projects that will impose major financial losses on BC Hydro — losses that existing ratepayers will have to make up.

The proposed LNG plant in Kitimat provides a good example. The first phase of that project reportedly needs 1.5 million megawatt hours of electricity per year, and apparently the developer hopes to buy that power from BC Hydro instead of producing it itself (which LNG plants in the rest of the world commonly do). With that additional demand for power, BC Hydro will sooner or later have to acquire or develop 1.5 million megawatt hours of additional supply. And the cost of that will greatly exceed what the LNG plant will pay under BC Hydro’s current rate policy.

The average cost of new sources of electricity supply in BC Hydro’s last call was over $125 per megawatt hour. The revenues BC Hydro receives from industrial customers averages less than $40. Based on those new supply costs, the loss to BC Hydro would be over $85 per megawatt hour, or over $125 million per year.

BC Hydro should be able to acquire or develop new supply at a lower cost than what it did in its last call — an expensive vestige from former Premier Campbell’s Energy Plan. But new electricity supply is still expensive and the loss will be substantial, at least $60 million, likely closer to $100 million per year. That is the amount that the rest of us will have to make up just for the first phase of the LNG plant to proceed. Then there are the next phases, and the next plants, each adding to the losses BC Hydro incurs and we have to pay.

Though not to the same extent as LNG, metal mines, another major component of the government’s jobs strategy,  are also very electric intensive. Each one of those that go ahead will be purchasing power from BC Hydro at far less than the cost they impose on BC Hydro, contributing tens of millions of additional losses per year.

The problem is that we have a jobs strategy premised on the offer of cheap power that BC Hydro does not have. The cheap power that was developed years ago is fully committed. New demands for power  require new supply, and new supply even without the nastier provisions of the Clean Energy Act is costly, both in economic and environmental terms.

And here is the ultimate irony. The answer to the upward pressure on rates, at least in the government pronouncements to date — is to lay off more BC Hydro workers. Beyond that, rates will simply go up whatever adverse disposable income and jobs impact that may have. It isn’t a jobs strategy. It’s a jobs for jobs strategy.

The idea of leveraging education, especially post-secondary education, to boost the economy is in itself a good one. Education is a policy area where strategic investment made today can produce large benefits down the road in the form of better educated, more innovative and adaptable citizens, who can be the engine of the economy of the future.

However, the BC post-secondary education system is stretched thin after a decade of mandated enrollment increases that were not accompanied by sufficient funding to properly educate and support these new students. As a result, many of our programs are underfunded and university leaders have started to acknowledge that:

The quality of undergraduate education at Canada’s universities is eroding, even as the price of earning a degree rises steadily, leaving students more anxious about their prospects after graduating.

The Ministry of Advanced education already has a service plan outlining goals and challenges for education policy in BC. It identifies several important challenges to be addressed, including the need to:

• provide high quality education choices that are affordable and accessible to address the fact that 77% of job openings over the 10-year period 2009 – 2019 are expected to require some form of post secondary education while only 60% of the BC population has this level of education.
• provide education & training opportunities in areas that address BC’s future workforce needs
• increase the participation of Aboriginal People & other under-represented groups

Focusing on these key challenges is what would strengthen the BC education system and provide jobs now and in the future.

The Premier’s announcement of regional workforce tables and bringing training closer to where British Columbians live and work makes some sense within this framework, though arguably is neither new nor very well funded.

But instead of focusing funding to remedy the declining quality and increasing lack of affordability & accessibility of education in BC, the Premier plans to increase the number of international students in post-secondary institutions by 50% over just four years.

It’s hard to see expanding international student enrollment as a top priority at this stage, before we have addressed the eroding affordability and quality of education (after years of underfunding teaching), and got a handle on how we can enable all British Columbians, particularly Aboriginal people and other underrepresented groups, to realize their full potential.

And what the Premier is proposing is a huge increase, close to 20,000 more students every year (it is estimated that there are 39,000 international students in the BC post-secondary system). That’s 10% of the total projected spaces in public post-secondary institutions in 2013/14 (202,114 according to the Ministry of Advanced Education Annual Service Plan).

It is not clear whether the Premier is proposing to increase enrollment by 10% over this year’s service plan or whether the international students would take spaces that would otherwise go to Canadian students.

Either way, it’s hard to read the government’s press release and not end up feeling like they’re treating international students as a revenue generator (aka cash cow). Yes, international students pay higher tuition fees and spend money in the local economy, but it is not reasonable to rely on international tuition to make up funding shortfalls in college/university budgets.

Bringing in international students will benefit BC and Canada in the long run. However, we need to make sure that we have the resources to offer them good quality education and that the international students that we do attract are prepared to learn.

Far too many international students are already enrolled in local colleges and universities without having the necessary English-language skills to learn well. Anybody who has recently been in college or university has seen that. Ask any post-secondary instructor, and they will readily share frustrating stories of otherwise intelligent students in their classes with such severe English language difficulties that they were having trouble understanding much of the material. Even if they manage to get a diploma, these students end up receiving a very poor education.

It hardly makes sense to focus on growing the number of our international students without providing proper educational supports for them. And I didn’t see anything in this announcement about that.

Martin Luther King speaking in 1961

On Labour Day 2011 unions in North America are facing historic challenges. Governments and corporations are increasingly disputing the right of unions to exist and to represent working people. This is true not just in the United States. Here in Canada the president of the Canadian Federation of Independent Business, Catherine Swift, told the London Free Press:

What would be ideal is getting rid of public-sector unions entirely.

Not that long ago such a view would have been considered extremist. Now it is common in both much of the business community and the main stream media.

So Labour Day is a good time to review both what unions have given us and what has been lost in much of the world as governments reduce the rights of working people to democratically choose to act collectively.

Most people will acknowledge some of the legacy we have from unions. Unionized workplace pioneered the eight hour day and the five day week. They introduced health and safety rules and the ending of child labour. An Australian video encapsulated it rather well here.

But unions do much more. They help level the playing field both in the workplace and in society as a whole. In fact, as Dr. King suggested above, the argument can be made that since the end of WWII it was unions that were responsible for us having a prosperous middle class.

At the workplace level there is an enormous power imbalance between an individual employee and the boss. Acting with other workers through a union, that employee has a say on issues like wages, hours of work, schedules and working conditions.

Unions have promoted the rights of women and opposed racial discrimination. In unionized workplaces, the gap in pay between these groups and white men is smaller than is true for society as a whole. There are grievance procedures to protect their rights.

While some would stoutly deny it, many employers benefit from unions. Union employers tend to be more productive. Most union contracts contain education and training provisions. Better compensation and more respectful workplaces reduce the cost of employee turnover.

The benefits of unions reach beyond union workplaces. Non-union employers will often raise wages either to keep unions out or to compete with union shops for employees.

In society as a whole unions have played an important role in promoting social and economic equality.

Last autumn three international organizations published reports linking the decline of unions with growing economic inequality and the recent economic crisis.  UNICEF made among the most powerful statements saying:

The only sustainable way to reduce inequality…is to stop the underlying widening of wages and income from capital.  In particular we have to make sure people are capable of being in employment and earning wages that keep them and their families out of poverty.

The International Labour Organization called for more effective collective bargaining and for higher minimum wages. 

And the International Monetary Fund, no radical left wing organization, called for a restoration of bargaining power for low and middle income workers.

The common theme here is that for 30 years the influence of unions has been falling and for 30 years wages have been stagnant and profits have risen.

Unions have exercised an influence that goes beyond the economics of the workplace. Historically, unions were among the strongest advocates for Medicare and the Canada Pension Plan. The Canadian Labour Congress and its affiliates continue to be the most powerful voice for better public pensions for everyone. More recently, and closer to home, it was the unremitting campaign of the BC Federation of Labour that finally forced the government to end its 10 year freeze of the minimum wage.

Politically, unions have provided a balance to the power of money. This is something that the moneyed powerful cannot stand. That is why in the United States Republicans are working to destroy collective bargaining rights for unions. That is why in Canada grandees like Catherine Swift call for the elimination of public sector unions.

So this Labour Day spend a minute to think about what Canada would look like today if unions had not been there. And spend a minute thinking about what our future would look like with no balance at all to the power of money.

The northern coastal Nation has been active in logging for some time, and with its opening of its own trade office in Beijing two years ago has stepped up its direct efforts to boost trade with one of the world’s most rapidly industrializing economies.

Two years after opening that office, as noted in a recent story in the Globe and Mail, one of the largest province-wide aboriginal organizations in the province – the First Nations Summit – along with the Asia Pacific Foundation of Canada has unveiled an initiative aimed at emulating the Lax Kw’alaams example.

“The First Nations-China Desk is a portal to help native communities gain access to markets for their forestry and fishery products – at a time when China is emerging as a key customer. In May, for the first time, China surpassed the United States in the value of shipments for B.C. lumber exports,” the Globe’s Justine Hunter reported.

For members of an isolated First Nation operating in a region of the province that has witnessed a sharp drop in sawmill and pulp mill jobs in the past decade, an economic development strategy that puts band members to work logging trees and exporting raw logs has some immediate economic benefits that for obvious reasons are attractive.

But more broadly, is aggressive marketing of the lowest value of all forest products – raw logs – along with growing shipments of low-value commodity lumber products to China a wise move for BC’s forest industry and one that provincial government policies ought to promote?

While it is true that the shocking contraction in the US housing market, now entering its fifth year, has been a harsh and stubbornly persistent reality for the province’s forest industry, forest-dependent communities and the provincial government alike, is simply attempting to replace one market with another a wise move? Or is it possibly setting us up for even deeper economic pain down the road?

I believe the answer to the first question is no and the answer to the second question is yes, and I outline why in a new report released today by the BC office of the Canadian Centre for Policy Alternatives – Making the Case for a Carbon Focus and Green Jobs in BC’s Forest Industry. You can check it out here. Or, if you want to, you can read a stripped down version of some of what is in the report in an op-ed of mine published in today’s Vancouver Sun.

What we desperately need and so richly deserve in this province is a new forest policy roadmap. With tens of thousands of forest industry jobs lost over the past decade; with a forest resource showing signs of great stress due to the effects of stupendous insect attacks, increasingly frequent and severe forest fires, unsustainable logging rates and ill-considered reforestation choices; and now, with the with great uncertainties of climate change staring us in the face, we need policies that restore health to our forests and that reinvigorate our decimated forest sector.

The way to do that lies in seriously ratcheting up carefully targeted, publicly funded reforestation efforts and in accepting that now and for the foreseeable future we must extract greater social and economic value from a smaller pool of natural resources. In other words, for each tree we cut we need to produce more jobs and, more to the point, more sustainable jobs. Our government’s and forest industry’s overemphasis on diversifying markets for BC’s forest products outside of the United States and their preoccupation with penetrating the Chinese market in particular is not the way to go if most of what we end up shipping are low-value products that lack distinction on the global stage.

Now, more than ever, we need to embrace product diversification, not market diversification. Happily, there’s plenty of evidence to suggest that BC has considerable room to improve in that regard.

Right now, the province manages to generate one full-time forest industry job for very 1,189 telephone pole’s worth of trees logged. Ontario manages to generate one full-time forest industry job with close to one sixth the wood, while Quebec manages the same feat with about one quarter of the wood volume used in BC.

The irony is that despite having what is still one of the richest forest resources in North America BC is embarrassingly low down the value chain. It’s time to move up several rungs on that chain – before it’s too late.

Hochstein is president of the Independent Contractors and Business Association of BC – representing non union construction corporations. He is the public face of the hard right in British Columbia and has a long history attacking unions. He opposed raising the minimum wage and supports, through the HST, shifting taxes off corporations and on to working people.

While the views in his op-ed come as no surprise it is worth having a look at their validity and perhaps speculating on the makeup of the growing chorus supporting his views.

Hochstein complains that local government taxes have been rising faster than the cost of living. He is not the first to make this complaint. The Canadian Federation of Independent Business makes this complaint so regularly that last May the Union of BC Municipalities (UBCM) was finally moved to respond.

The UBCM acknowledged that local taxes had gone up faster than the Consumer Price Index. They then showed the reasons why. The fastest areas of growth were protective services, parks and recreation. These are areas where the public has demanded more services from local governments. Whether you agree with it or not, the demand from the public for more police on the streets is almost unlimited. As a percentage of total costs, general government expenditures – the cost of running local governments – has actually declined.

 Downloading of costs from the federal and provincial governments to municipalities had also raised the cost of delivering local services. New environmental mandates have been a big part of this. As well in many provinces municipalities get more in provincial grants than BC municipalities do.

One other thing is worth noting here. Based on the most recent Stats Can figures available, local taxation in BC is significantly lower than the national average.

Hochstein’s next complaint is twofold. First, public workers are paid better than private sector work, and second, municipal wages went up during the recession.

Both accusations are correct. How does this come to be? One of the most important reasons why average wages are higher in the public sector is that there is less discrimination in wages.

CLC Economist Andrew Jackson has published some excellent work on this.  He quotes one report saying:

While now somewhat dated, the best independent Canadian empirical studies show that a modest public sector pay advantage is mainly the product of higher pay for women in lower paid occupations, offset by lower pay for mainly male workers in managerial jobs.

He cites another study finding:

Based on the 2006 census data, this study shows that visible minorities and Whites receive similar pay for similar jobs in the public sector. By contrast, in the private sector visible minority men earn significantly less than observationally comparable Whites.

Discrimination against women and minorities does not appear to rank highly in Hochstein’s priorities.

And yes, because of long term contracts signed prior to the Olympics, wages for government workers did go up faster than inflation during the recession. But over the last ten years they have gone up more slowly than those for unionized private sector workers.

Now Hochstein is no fool. He is aware of all these things yet he continues to make arguments that do not stand up to scrutiny.

In this he is not alone. These are the same arguments made by the Canadian Federation of Independent Business, the Fraser Institute and the many Fraser Institute clones such as the Frontier Centre.

And these are exactly the same arguments we are hearing by the Tea Party Republicans in the United States and the billionaires who back them. Their goal is not just the reduction of taxes; it is the undermining of progressive forces that oppose their view of the world. For them attacking unions is not just about driving wages down, though that is important to them, it is about undermining one of the only forces left today pushing a progressive agenda.

Make no mistake, Philip Hochstein and the people like him look admiringly to Governor Scott Walker and his agenda for Wisconsin. Their policy agenda is low wages and high taxes for workers and a monopoly on power for corporations.

This is the question I investigate in my latest CCPA report The Cost of Poverty in BC. If you’re not in the mood for reading the report, you can watch a short video that summarizes the findings here.

Study after study has linked poverty to poorer health, lower literacy, more crime, poor school performance for children, and greater stress. In this report, I use the statistical association between poverty and these negative outcomes documented in the research literature, and combine this information with estimates of the costs these outcomes impose on government finances and on society at large.

My findings confirm what we’ve already suspected: poverty comes with a very high price tag. The cost of poverty to government alone is estimated to be between $2.2 to $2.3 billion per year. The costs to society as whole is $8.1 to $9.2 billion annually. That’s a lot of money – close to 5% of the total value of our economy.

The study focuses on two types of costs in particular. First, I quantify the societal resources devoted to tackling poverty’s negative consequences. These include the health and crime-related costs of poverty. Second, I capture the economic value of foregone economic activity and lower productivity that are associated with poverty. BC isn’t using all the talents and productive potential of its citizens who live in poverty and this acts as a drag on our economy. These costs are what economists call “opportunity costs:” they do not represent resources we’re actually spending now but rather resources that would become available to society if poverty was significantly reduced or eliminated.

The methodology is based on a landmark Ontario study, The Cost of Poverty in Ontario: An Analysis of the Economic Cost of Poverty in Ontario. The Ontario project was a collaboration of a number of prominent business economists and researchers, who developed a systematic way to account for the monetary cost of poverty both in Ontario and in Canada as a whole. The advisory team included then TD Bank Senior Vice President and Chief Economist Don Drummond, Canadian Policy Research Networks Senior Fellow Judith Maxwell, among others.

Here is how the cost of poverty in BC breaks down:

Note that these estimates do not capture all of the costs of poverty. Notably excluded are the costs that child poverty imposes on future generations by perpetuating the cycle of poverty. I also do not measure many of the less tangible costs, such as the impact of high poverty levels on social cohesion and our feelings of safety in our communities. The direct cost of providing frontline social services to those in poverty are also not counted.

Poverty takes an enormous toll on the people who experience it. On this basis alone, we must do better than having one in nine British Columbians in poverty (the highest poverty rate in Canada).

The high costs of poverty in BC should make us all concerned about poverty for additional, purely economic reasons. It makes more sense to tackle poverty directly than to continue bearing the costs of its consequences.

The best way to do that is with a comprehensive poverty reduction plan that contains clear targets and timelines for reducing poverty. A plan is needed to focus government efforts and ensure that different initiatives are coordinated and build on each other. Seven Canadian provinces and two territories have such plans or are in the process of developing them. BC should be next.

In an earlier CCPA report, we estimated that the cost of a comprehensive, poverty reduction plan in BC would cost $3 to $4 billion per year when fully phased in. This may seem like a lot of money in a slow economy, but it’s an investment in a better, more prosperous future for BC.

With an aging population starting to retire and a looming skills and innovation shortage, the real question is not “Can we afford to reduce poverty?” but “Can we afford not to.”

Almost everything that is vital to a healthy community, from life expectancy to levels of depression to crime rates, is affected by inequality. This is true in both rich and poor countries.  (The Spirit Level: Why Equality is Better for Everyone, by Richard Wilkinson and Kate Pickett).

Social factors begin to affect us at conception, so that life in the womb and the perinatal period can affect well-being later on.  Even if exposed to stress in the womb, however:

A nurturing environment after birth can provide the child with enormous potential to change their course of development. This is known as “developmental plasticity,” which means that the brain can adapt and change as the child grows with a positive environment.

The important message here is in how we as a community support pregnant women. Stressful lives are most often linked with socioeconomic disadvantage. This research shows we should be targeting these women with support programs to ensure the stress does not negatively affect the unborn child.  (Repeated Stress in Pregnancy Linked to Children’s Behavior)

Poverty can even cause brain damage. Researchers discovered that U.S. children from “low socioeconomic environments” displayed a response in their pre-frontal cortex that was similar “to the response of people who have had a portion of their frontal lobe destroyed by a stroke” (Poor Children’s Brain Activity Resembles That Of Stroke Victims, EEG Shows).

The damage may result from conditions such as poor nutrition, lack of time with over-worked and over-stressed parents, or fewer opportunities for intellectual stimulation – all of which may affect the quality of care that a child receives.  This does NOT mean that all poor children are so afflicted, but the average poor child is more likely to suffer.

Every dollar invested in the young not only saves lives and prevents illness, but it will also save at least $7 dollars in future social costs. For instance, lead poisoning, ADHD, and autism resulting from toxic chemicals and pollution in the United States cost $77 billion annually. Globally, almost 350,000 women die each year in childbirth – most of whom could be saved for the cost of just six fighter jets. Even worse: over 22,000 children under the age of 5 die every day from hunger and preventable diseases – almost 9 million every year. This year’s U.S. military budget is around $800 billion, and the world spends twice that on war. The simplest change would be to redirect wasteful military spending to end the worst elements of global poverty.

In 2009, the combined net worth of the world’s 1,011 billionaires increased to $3.6 trillion, up $1.2 trillion in just one year. This NEW wealth alone could end global poverty.

Perhaps the most important point is that none of these social, economic, and environmental problems are necessary. All scarcities, as Murray Bookchin pointed out over 40 years ago, are artificial. We possess the knowledge and the wealth to eliminate the worst of these afflictions. Why aren’t we doing so?

Last year 143 BC workers lost their lives.  That’s up from 121 people in 2009 at the height of the recession.  On average, more than 1,000 Canadians die annually in their workplaces.  Many of these people are killed while working.  Many more die later from exposure to things like asbestos.  WorkSafe BC publishes the sad list of causes annually.

In 2009 nearly 100,000 British Columbians were injured on the job.  Nearly three million work days were lost.  Construction and forestry see many injuries, but nearly 12,000 people working in health care and social assistance were also injured.  Young men face the highest risk of occupational injury.  Each day 30 are hurt on the job.

People talk about entrepreneurs taking risks, but this is the real human cost of working for a living.  The first Day of Mourning was honoured by the Canadian Labour Congress in 1985.  In 1991 the Canadian government recognized the day.  Since then other countries have also recognized the day.

The BC Federation of Labour, the Canadian Labour Congress and the Vancouver and District Labour Council invite people to come to Hastings Park at 8:00 am April 28^th to honour the workers who have been killed and injured.  Other day of mourning events in other communities are listed here.

The economy is about business, right? Sure, we have a dynamic mixed economy, and most people support decent social programs and government intervention to protect the environment or to improve living conditions for the poorest. In fact, the countries who have the biggest public sectors not only do better on social outcomes but also tend to be the most competitive, when ranked by organizations like the World Economic Forum.

Still, the commonly-accepted framework is that any positive things from government can only happen on the back of a successful market (that is, capitalist) economy. So we are often chastened by stern voices representing business that we ought to be careful not to “kill the goose that lays the golden eggs.” As much as we seek to make the world a better place, we have to accept runaway CEO salaries, fossil fuel addiction, financialization and tax cuts as preconditions for doing good.

One way out of this is to change the game by not ceding business as purely the sphere of capitalist enterprise. John Restakis reminds us in his book, Humanizing the Economy: Cooperatives in the Age of Capital, that when it comes to business, capitalism isn’t the only game in town. Indeed, at a time when inequality has reached alarming proportions (and the looming policy agenda promises to make them even worse) and climate change points to wrenching challenges for human civilization, we need a big break from business-as-usual.

“Cooperatives,” says Restakis, “are enduring evidence of another way of living our lives.” His thesis is that cooperatives show us an alternative model of economic and social exchange based on cooperation and reciprocity. It is a very different path from the standard polarity between business and government, “a middle path that avoids the extremes of market rejection on the one hand (as in the case of Marxism) and the unbridled power of capital as expressed in neoliberalism on the other.”

Humanizing the Economy is a profoundly readable and accessible book in spite of its sweeping scope. Cooperatives read like a forgotten chapter in our economic history. I found the early part of the book, in which Restakis reviews the intellectual and practical history of cooperatives as a reaction to the excesses of early capitalism, particularly fascinating.

In the 20th century, trade unions and public ownership have gotten more attention in Canadian political economy, and their impact is still manifest today as a means by which inequality is reduced and other broader social objectives achieved. That these acts reduce the massive slice of the pie going to the very top earners and owners explains why they have been under attack federally and provincially (and worse, south of the border). The other grand narrative of the 20th century — revolution — used to be galvanizing to working classes and compelling to idealists, but seems officially dead in the wake of failures of Soviet Russia.

Restakis points out the quiet and incremental revolution represented by the cooperative movement, which has emerged as a counter-force to capitalism in its own right, claiming 800 million members across 85 countries. By documenting the steps from early history of coops to modern examples in different industries and different parts of the world, Humanizing the Economy provides a long list of “yes, we can” case studies of the cooperative form, showing its versatility across different contexts. If we were to include the not-for-profit sector this scope of non-capitalist enterprise is greater still.

The promise of cooperative institutions reaches beyond profits for a shrewd and small minority of investors to democratizing the production system, and in doing so rebuilding the very social capital that capitalism erodes. Agriculture was central to early cooperatives. There is a long history of farmers’ coops, supply management practices and marketing boards in Canada, and not only that they have been very successful in response to a ruthless free market more inclined to leave farmers bankrupt.

But coops can exist in pretty much any sector, from housing to car-sharing to outdoor equipment (MEC) to financial services (credit unions). They are just another way of organizing in order to produce things of value. Coops are of the marketplace, but transcend the atomized producer-consumer model we see in economics textbooks by creating new nodes of market power based on the mutual interests of many members. The book covers a diverse range of examples, from major industry to social care services to consumers to sex trade workers to fishers, each with the common element of people joining together to find economic strength in numbers.

Perhaps one area that needed more attention in the book is around finance and banking. Cooperative credit is peppered throughout the book in the context of the various coops in different locales, but hammering the point home with a review of credit unions would have been nice. Take Vancity credit union as an example (one conspicuous by its absence since Restakis hails from Vancouver). Serendipitously, I just opened up my member package that gives me a vote in the upcoming board elections. In the package the latest financials show that Vancity has $14.5 billion of assets, more than $12 billion of which are loans, mostly mortgages. The credit union charges competitive interest rates, and the profits go back to members (the total membership equity in the credit union is $770 million), not distant shareholders only concerned about stock value. If Vancity disappeared, the flow of funds to Bay Street would be noticeable.

So now is a great time for the entrepreneurial, socially-minded and environmentally-conscious folks to develop networks to reclaim economic space from global megacorps and put it back in the realm of local people. With any luck, they’ll be popping up like mushrooms. Coops thus offer us a new chance to reinvent citizenship as mutual co-owners of enterprises that meet our collective needs, “firing the boss” as Naomi Klein and Avi Lewis put it in their movie, The Take.

But how this will all come about is a question I’m left struggling with. It requires precisely the entrepreneurial spirit of small business, but harnessed in a different direction. In addition, there are many coops that struggle to make things work. We are part of a consumer coop, Neighbours Organic Weekly, that connects to local farmers but through bulk purchasing supplies lower cost organics. The coop is viable, but has not experienced surging growth in membership. How can such cooperative models be scaled up?

The most successful cooperative economy model in advanced economies is Emilia-Romagna in northern Italy. Restakis’s review of the region’s history is lively and fascinating, but also raises some key challenges for coops. First, there is historical inertia as a barrier to change. How easily replicable is a regional economy like Emilia-Romagna to a province like BC? Coops arose in Italy out of a distinct time and circumstance that cannot be easily replicated in other jurisdictions (just as public auto insurance, ferries and electricity did in BC). Secondly, does scaling up change the nature of the exercise. One challenging example Restakis gives is SACMI from Imola, Italy. It is a dominant player among regional coops, and with “control of 60 capitalist firms, 37 of them abroad, and sales in 100 countries.” This fusion of coop and capitalist is not what we might normally think of. This coop provides employment for 5,000 workers, but has only 390 coop members. It reads almost like a law firm, where some workers eventually can make it to become partners.

Just keeping the idea of coops alive is an important contribution of Restakis’s book, so that when the circumstances present themselves people can self-organize. It would be fascinating to think about what a legislative agenda supportive of coops could look like, especially in areas like food and energy, where we are likely to want greater insulation from climate impacts. Restakis’s thoughts on how that could happen, given the urgency of change we need in our economy, would be welcome.

Humanizing the Economy plants some seeds of radical change. If nurtured by enough of us, a cooperative economy could be a new model for how we do business in the 21st century, although non-profits and public enterprises would be part of the world I envision. Small and large businesses will inevitably have a role to play, too, but to the extent that a cooperative model can democratize key parts of the economic system, and remove the absentee shareholders of megacorporations from the picture, it could drive a huge improvement in developing an economic system more aligned with good social and environmental values. Restakis tells us it is possible, and though we still need a strategy and a roadmap, he should be thanked for lifting the veil of narrow economic debates and showing us that “business community” need not be an oxymoron.

For a party that is campaigning on fiscal responsibility, income splitting for families with children under 18 is a rather irresponsible way of spending $2.5 billion.

Let’s be clear — this is not a policy that helps young families. This is a policy that helps a small minority of families — about 13% or 1 in 8 of all Canadian families with children. The Conservatives themselves estimated that income splitting would benefit 1.8 million families, which sounds like a lot until you look at the total number of families in Canada, which at last count was 14.1 million.

The kicker is that income splitting does not help the 1.8 million Canadian families that need it most — those who live in poverty or barely make ends meet slightly above the poverty line.

Income-splitting works by allowing families to allocate more of their earned income to a lower tax bracket by sharing the earned income between the spouses when filing taxes. Automatically, this means that the 2 million single-parent families in Canada will get no benefit from income splitting, as there’s no spouse to split the income with. Dual-earner families with spouses who earn equal incomes will also get nothing. Single-earner families with an earner whose taxable income falls in the bottom tax bracket (currently under $41,544) get nothing. And among families with a stay-at-home parent or a parent working part-time only, the higher the salary of the working parent, the higher the benefit.

The highest possible benefit — $6,408 — goes to the few families with a single earner whose taxable income falls at least $50,000 above the cut off of the top tax bracket (at the 2011 tax brackets, you’ll need taxable income of at least $178,800 to get the maximum benefit). Calculation details are here.

What we have here is a reverse Robin Hood situation, where the government would be giving more money to the people with the higher incomes. This is hardly a fiscally responsible way to spend taxpayers money.

While I’m sure that every single family with children, no matter what their income, can easily find a way to spend another $1,000 or even $6,408, we need to get smarter with our government spending and make sure that our limited resources go to the families which need the most support.

There are better ways to spend $2.5 billion to support young families. Increasing the per-child benefit amount of the Canada Child Tax Benefit would be my first choice, as this is an effective income-tested tax benefit for families with children that most Canadian families receive (currently up to family income of about $110,000).

But it won’t be your first choice if you wanted to subsidize families with a stay-at-home parent. In fact, if you asked tax experts to design tax policy to give women incentives to stay home with the kids, income splitting is what they’d come up with. This is family tax policy based on the outdated notion of the 1950s family where women stay home to take care of the kids while men go to work to support the family.

Conservatives claim that our tax system is unfair to stay-at-home parents, but we already provide plenty of incentives to keep women home. The high costs of child care make work pay a lot less for women, especially those with more than one child under 12. Add to this the extra transportation costs and other work expenses, and you have a significant barrier for women who want to go back to work after maternity leave.

A friend of mine, Mary, is a smart and well-educated software engineer with 7 years on the job before she decided to start a family. She went back to work for a year after her first child was born, then had a second one. Going back to work after her second mat leave, she calculated that her well-paid, full-time software engineering job is only netting her family about $470 extra per month after childcare and work-related expenses are paid. Needless to say, she quit. And that’s before any income splitting. Add income splitting to the mix, and her family would be netting another $200 per month more with her off work than if she was working (given her and her husband’s tax brackets).

While Mary can afford to stay home because her husband’s salary is high enough, and she enjoys taking care of the children, what do you think is happening with her software engineering skills? If she takes 5 or 10 years off work while her children are young and need childcare, do you think she’d just be able to walk into the same job when the kids grow up? That’s highly unlikely.

What expensive child care and tax incentives for stay-at-home moms (all the way to children’s 18th birthday) lead to is a tremendous erosion of job skills among women. With an aging labour force and looming skill shortages, the Canadian government should be looking for ways to tap women’s skills and potential in the workforce, not providing incentives for them to drop out of the workforce.

But Mary is not representative of the average Canadian family, because most Canadian families cannot live on one parent’s salary alone. Half of all two-parent Canadian families with children earn a combined income of $80,000. And that’s largely with both parents working.

For most families, there is no choice between earning $40,000 each or having one parent bring home $80,000 while the other one takes care of the kids. The choice is between earning $40,000 each or having one parent quit their job while the other continues to earn $40,000.

Statistics tell us that people with higher education and higher earning potential tend to find spouses with similarly high education levels and earning potential. So we really are talking about significant skill erosion here if income splitting is successful because the only families who can afford to take advantage of this tax subsidy offer are families of software engineers or other professionals.

In summary, the Conservatives are proposing a $2.5 billion subsidy to stay-at-home mothers, where the higher your husband’s income is, the more you get. A tax subsidy, which, if successful at incentivizing more mothers to quit their jobs will lead to a large-scale erosion of women’s labour force skills at a time when we need all hands on deck to keep our economy running.

Though clearly fiscally irresponsible and aimed at subsidizing an outdated notion of the family, I don’t think we should get too excited about this spending announcement, given that it’s not likely to come into effect during the 4-year term of the next elected government. This is clearly a non-commitment to support families as the earliest it could possibly be implemented is 2015/16 and that’s if deficit-reduction goes as planned. But in politics — and economic forecasting — 4 years is an awfully long time. Who knows what our top priorities would be then?

Canadians know what the Conservatives’ real priorities are — these are the ones that have actual dollars attached to them now. The list includes a new round of corporate income tax cuts that’s costing us $2.8 billion this year alone, fighter jets estimated to cost $29.6 billion, more prisons at who knows what cost. These were all deemed priority initiatives that are worth borrowing for.  Support for families, on the other hand? According to the Conservative Party, that’s not worth borrowing for.