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 report, which surveys food banks across the country every March, found that in March 2009, food bank use was up nearly 18% nationally, and 15% in BC –– the largest single-year jump and the highest number of people assisted on record.  81% of BC food banks reported an increase in demand in 2009. Of the nearly 90,000 British Columbians who relied on food banks that month, 31% were children, 12% reported employment income, 6% were on EI, 19% were receiving disability-related income support, and 44% were receiving social assistance (yet more proof that our welfare system is structurally dependent on food banks and other charities for people to meet their basic food needs).

Food bank usage had been in decline since 2004, until this year. And so, this report provides important evidence of the impact of the recession. We won’t have up-to-date poverty statistics for another year or so, so reports like this provide an early glimpse of how vulnerable people are impacted by the downturn.

If we are going to end hunger in our society, charity alone is not going to get the job done. We need an income support system and wages that ensure people can meet basic needs. And the report provides yet more evidence that both BC and Canada need comprehensive poverty reduction plans, something Food Banks Canada itself calls for in this report.

Some 1,500 jobs, by mayor Stephanie Killam’s estimate, have been lost in the community as sawmills, planer mills and pulp and paper mills closed. With hundreds of good paying mill jobs gone, jobs in related service industries have disappeared at an alarming rate too, leaving the town’s citizenry reeling.

Killam hasn’t seen anything like it, and she’s lived in Mackenzie since 1972.

During the current election campaign, the plight of forest industry towns was in the news. But the mud really started to fly in the past few weeks in response to an NDP proposal to revise the province’s forest tenure system (a proposal, by the way, that has been made off and on for decades by self-described free enterprisers and socialists alike).

At present, the bulk of the trees logged in B.C. are controlled by a relatively small number of large companies who hold long-term, renewable licences or tenures awarded by the provincial government. The licences grant exclusive access to trees on a non-competitive basis. The NDP propose to change all of that by moving to a system where half or more of all timber logged in the province is subject to competitive auctions rather than being the exclusive domain of any one company.

The presidents of three of the larger companies holding the big licences – Canfor’s Jim Shepard, Interfor’s Duncan Davies and West Fraser’s Hank Ketcham – have taken the unusual step of publicly and vocally entering the electoral fray to champion the ruling Liberals. They warn of black days ahead should the NDP form the next government. Changing the tenure system, they argue, would “jeopardize business investment” in the province. Additionally, Ketcham has personally visited Quesnel, home to NDP forest critic Bob Simpson, a former forest company executive himself, to denounce the NDP’s proposals.

On one level, Killam agrees that redrawing the forest tenure map could, if mishandled, have negative consequences for the provincial economy. She cites as an example events last December in Newfoundland. Danny Williams, populist Conservative premier, “expropriated” global newsprint giant AbitibiBowater’s Crown timber and hydro assets after the company announced plans to close its Grand Falls pulp and paper facility, which had operated in the same location for more than a century.

Williams justified his action on grounds that the company and its predecessors had gained access to Crown resources on the condition that they operate a mill. With the mill closed, the company had broken its end of the bargain. Williams was simply doing the same. Killam, while understanding Williams’ response, says she worries about the signal it may send: “We’re not open for business and therefore investment drops off.”

Music though this may be to the heads of the province’s major forest companies, it would be wrong to assume that Killam is unquestioningly behind them. In fact, some of the other songs in her repertoire would likely strike a more discordant note.

To understand how Killam’s thinking is shaped, it helps to know a bit about how her town’s economy really began to hum. In the late 1960s, the grand vision of former B.C. Premier W.A.C. Bennett came to fruition when the turbines below a massive earth-filled hydroelectric dam, which now bears his name, began spinning. The water impounded by the dam near the community of Hudson Hope created Williston Lake – then the largest reservoir in the world, and today BC’s biggest freshwater body.

The more than 2.4 million kilowatts of power generated at the dam, along with a million plus more kilowatts generated at another dam downstream, would go on to light many a Vancouver home, but also foster the development of the modern day forest industry in central B.C.

That included Mackenzie, north of Prince George, where before long two forest companies – BC Forest Products and Finlay Forest Industries – built pulp, paper and sawmills. They were helped by the Bennett government, which offered up vast tracts of timber on public forestlands in exchange for the companies building and operating mills in specific communities. This quid pro quo policy became known as appurtenancy and it would remain a central facet of forest tenure agreements long after W.A.C. Bennett exited the political stage, indeed pretty much up to the time his son, Bill, stepped aside as B.C.’s premier in 1986.

But by then, the face of B.C.’s forest industry was beginning to change and rapidly so. In 1987, New Zealand-headquartered multinational, Fletcher Challenge, bought out the assets of BC Forest Products, marking the beginning of several ownership changes at mills in Mackenzie and elsewhere. Fletcher’s foray would be mirrored by others, culminating with the disappearance of MacMillan Bloedel, a name synonymous not only with B.C.’s forest industry but its entire resource-driven economy, when US-based forestry giant, Weyerhaeuser Company, purchased it in 1999.

With a few companies holding a monopolistic position, mill closures were certain. Rather than putting dollars into mills in each community, companies made investments in a select few. Older, less efficient mills closed as newer mills with their larger, more efficient outputs, survived for another day.

The idea of appurtenancy was dealt a second blow by the interminable lumber wars between Canada and the United States. During Premier Gordon Campbell’s first mandate (2001-2005), the provincial Liberals formally scrapped appurtenancy on grounds that it was considered a form of subsidy by the powerful US lumber lobby. The truth be told, however, appurtenancy was already dying a slow death in the years of Social Credit and later NDP rule that preceded the Liberal administrations of much of the past decade.

For Killam and other mayors struggling with big job losses in their communities, the question arises: What will replace appurtenancy? If the historic quid pro quo no longer exists between large corporations, the province and resource communities, must communities simply accept that companies get unfettered access to Crown resources to do with what they wish?

Killam thinks not.

Fittingly, AbitibiBowater, the same company that raised Danny Williams’ ire, also controls a large forest tenure in Mackenzie. The global newsprint giant arrived on the scene in northern B.C. only a few years ago. Nevertheless, it closed its sawmills and paper mill shortly thereafter, and has recently filed for bankruptcy protection as it struggles to deal with a nearly US$9 billion debt load. Should a bankrupt company that has neither the ability or, seemingly, the intention, of continuing to operate in the Mackenzie area now be free to simply sell “its” forest assets to someone else? Or, should the province intervene in some way, perhaps signaling that it intends to place some conditions on the transfer of what remains a publicly owned asset to another party?

Killam’s biggest fear is that the company may try to sell its Crown-granted timber holdings to a competitor, perhaps one of the larger forest companies in the province, and that a new buyer would simply treat the forests around Mackenzie as a “fibre basket” to be emptied to feed mills in some distant community.

In response, she has embarked on a series of intitiatives to help her community thrive once again. A new, community-held forest tenure is in the final stages of being negotiated with the provincial Forests Ministry, which would give Mackenzie and a local First Nation approximately 30,000 cubic metres of timber per year. Compared to the close to one million cubic metres per year controlled by AbitibiBowater, the new licence would be small, Killam admits. But it would represent the start of a much-needed transition, she says.

The embattled mayor has also told the provincial government and local MLA and Forests Minister Pat Bell that she wants the province to consider transferring AbitibiBowater’s tenure, in its entirety, to her community and local First Nations. In partnership, the communities could then directly manage local forests and, hopefully, use some of those resources to create new arrangements with companies interested in doing business in Mackenzie and area.

And she has told the government that she thinks changes must be made to a program administered by the province whereby limited amounts of timber are auctioned, rather than turned over to the exclusive control of individual companies.

The objective of a revised auction system should be to promote the interests of small, community-based businesses, Killam says, not as an additional source of wood fibre for the large companies that dominate the province’s forest industry.

Killam and her fellow council members are also doing what they can to work with the larger companies to get something – anything – going in town, and have agreed to tax breaks to encourage one of them – Canfor – to reopen a local mill on a one-shift basis later this year.

But all in all, the objective is to strive for something new: a revised forest tenure system that does not exclude large companies but that allows for substantial community participation. Such a system, Killam says, would mark a new beginning. It would give communities something tangible to build on and, hopefully, encourage new entrants into the industry.

After nearly 40 years residency in a town dominated by big companies who came to be there because of a grand industrial vision, Killam says the time has come to try something new. Getting there means change, and change is something the big companies that have pulled up stakes in Mackenzie and elsewhere have resisted with ferocity this election campaign.

It awaits a new government to determine which perspective will prevail: that of an industry that has closed mills across the province and displaced thousands of workers or that of the shell-shocked communities that are being forced to deal with the fallout.

Late last week, the BC Poverty Reduction Committee released its analysis of the three main parties’ platforms with respect to the call. In summary, here’s where they have landed:

The BC Liberal Party does not commit to a poverty reduction plan with clear targets and timelines. The Premier has written, “the Province of British Columbia has made promising steps to address the challenges associated with poverty and we are working on additional measures to put together a comprehensive plan to continue moving forward.” The closest the Liberal platform comes to suggesting a real target is in the area of homelessness, in titling the one-page policy section on housing, “Ending homelessness with new solutions.” The section describes various initiatives to date (outlined below). But this goal of ending homelessness is not linked to clear timelines.

The BC New Democratic Party platform does commit to “Developing a poverty reduction plan with targets and timelines that build on our initiatives that will raise the minimum wage, support jobs and skills training, increase affordable housing, improve child protection and change income assistance.” This is good news. However, the NDP plan does not specify what the poverty reduction targets and timelines should be (presumably this would be determined after the election), nor does it say if such targets and timelines would be legislated (which is key to accountability). The NDP commitment with respect to homelessness is more concrete. Their plan commits to “Ending the crisis in homelessness in 5 years.”

The Green Party has included poverty reduction as a priority in their platform, British Columbia’s Green Book: “The Green Party understands that immediate action is needed to ensure every British Columbian has a meaningful opportunity to share in the wealth of this province.” The key goals of their plan include ensuring British Columbians can all meet their basic needs, and “reversing the trend towards greater disparity between rich and poor.” Additionally, in the area of housing and homelessness, the Green Party has committed to “safe and affordable homes” for everyone living in BC. As the Green Party is not contesting government, they have not costed out their policies.

A more detailed analysis of the party platforms/positions with respect to the poverty reduction call can be found here.

Premier Campbell’s stubborn refusal to commit to poverty reduction targets has been particularly disappointing. During the election campaign, Premier Campbell has repeatedly been asked by reporters and citizens if a re-elected Liberal government would bring in a comprehensive poverty reduction plan with targets and timelines. On each occasion, he has refused to say yes. Instead, the premier has replied that his goal is “to have the lowest unemployment rate that we can,” because “a job is the best social program.” It is correct that job creation is important to poverty reduction. But most poor British Columbians are already employed in the low wage workforce (where they face a minimum wage that hasn’t moved since 2001), and record low unemployment over the past few years has not changed the fact that BC has the highest poverty rate in Canada. So clearly, a focus on employment is insufficient.

During last Sunday’s TV leaders debate, Steve Kerstetter asked (in a recorded question) what new initiatives the leaders would take to reduce child poverty. Notably, in his response, the premier did not mention any new initiatives, but rather, simply talked about things the province has already done.

Once again, the premier selectively noted that BC’s child poverty rate has declined by 15% since 2003. Why 2003? Because that’s when BC’s child poverty rate peaked at 19%. What the premier neglects to mention is that the latest BC child poverty rate of 16% remains 2 percentage points higher than it was in 2001 (when it stood at 14%).

What is surprising, however, is the lack of substantive discussion over the relative merits of each party’s proposed economic recovery policy, as stated in their platforms. Instead, we are repeatedly told that responsible economic stewardship involves keeping the business sector happy and anything that goes against the interest of “employers” (such as increasing the minimum wage, for example) is bad policy. The Liberals’ tactic seems to be to market themselves as friends of businesses while portraying the NDP as the employers’ enemy.

This tactic was used in the televised leaders’ debate last weekend, when Mr Campbell remarked:

“When you’re talking about the economy, I think it’s fair to ask the question: Why is there not one major employer group in British Columbia – in mining, in tourism, in forestry – that actually supports the New Democrats’ policies?”

Like most other over-simplified messages, this one is also incorrect. Good economic policy does not mean pandering to business-based interest groups. Yes, lowering business taxes and relaxing workers’ rights makes it easier for firms to reap higher profits, which encourages them to set up locally, creating jobs for the local population and increasing economic growth. However, economic growth alone is not a guarantee that everyone (or even most people) would benefit from the increased prosperity. In BC, we’ve seen this clearly over the last 25 years, when economic growth was strong yet poverty remained largely unchanged and income inequality increased substantially.

Where does this leave us? We need to keep in mind that the whole point of having a strong economy is to benefit society by improving the standard of living of people. We cannot continue to ignore our social and environmental problems in the name of having a strong economy. We need to balance the need of businesses to keep their costs low with the needs of workers to earn enough so that they are able to afford the basics like housing, child care, education to make sure we’re all set on the right path in life.

This does not mean that we have to completely ignore the interests of the business sector. Policy-making in a recession involves some trade offs for sure, but it’s not the all-or-nothing proposition that the BC Liberals are trying to make it.

US President Obama summed it up well on March 10th, when he revealed the first details of his education plan (quoted widely in the media, for example here):

I know there are some who believe we can only handle one challenge at a time [but] we don’t have the luxury of choosing between getting our economy moving now and rebuilding it over the long term.

It’s time for our policy-makers to recognize that tax dollars are not simply a drain of resources from individuals or businesses but can and should be used for productive investments that would make the economy stronger and more sustainable in the future. These investments include building up physical infrastructure, as the current government is doing, but they also include making this infrastructure “green,” which they are not doing (as Marc explains here), as well as building up the social infrastructure we require to ensure that our children are well-educated and prepared to face the challenges of tomorrow.

The current US Administration is doing it. Let’s make sure that those we elect next week do the same.

Here’s some background from the release:

Between February 2008 and February 2009, the increase in the number of beneficiaries in British Columbia was widespread. At the same time, the decrease in employment affected a large number of sectors, including manufacturing; construction; transportation and warehousing; retail trade; and forestry and logging.

In British Columbia, the number of beneficiaries almost tripled in Williams Lake, and it doubled further north in Quesnel. The number also roughly doubled in Kelowna, Cranbrook, Chilliwack, Powell River and Penticton. In Victoria the number of beneficiaries increased 88.8%, while in Vancouver, the 12,300 additional beneficiaries represented an increase of 75.3% in one year.

UPDATE: The online version has now been fixed.

Can the NDP deal with B.C.’s economic challenges?

By Marc Lee

In BC’s 2009 election, parties must respond to two fundamental challenges: first, a crashing provincial economy with rapidly rising unemployment; and second, the global climate crisis, which demands that BC dramatically reduce its greenhouse gas emissions.

Rather than pit these objectives against each other, good policy choices should instead link them together: our efforts to boost employment through stimulus packages should be strategic investments that put BC on a sustainable path, not just a return to old patterns of development.

While the NDP platform takes some important steps on both fronts, it does not offer the bold new direction and vision many might expect with global capitalism on its knees. The NDP attacks head-on some of the most egregious and controversial policies of the Liberals, like run-of-the-river power projects and the flawed P3 infrastructure model. But ultimately, the platform is cautious and lands very much in the middle of the road.

This is problematic in that the NDP platform accepts both the culture of fiscal conservatism that has come to dominate Canadian politics (manifested in an over-emphasis on tax cuts and balancing the budget), and an overly rosy view of the state of the economy. It takes as given the Liberals’ February budget, which describes an alternative universe in which unemployment averages 6.2% for 2009, and BC weathers a small storm just in time for the opening ceremonies of the Olympics.

But the provincial unemployment rate hit 7.4% in March, up from 4.3% a year before. Since last summer, 83,000 jobs have been lost. With new housing starts down 70% compared to last year, construction employment will plummet even further as current projects are completed, meaning an unemployment rate that could hit double digits by year-end.

This inevitably means the half-billion dollar budget deficit tabled by the Liberals is a work of fiction. Both parties need to come clean about how they would amend their plans given higher-than-budgeted deficits in the $1-2 billion range.

Moreover, falling consumer spending and business investment mean government must lean even harder against these adverse economic winds. In terms of stimulus, the 2009 budget package will do little to curb rapidly rising unemployment. BC is in an excellent fiscal position, and should err on the side of doing too much, not too little.

The NDP platform adds more stimulus, with a modestly larger deficit and higher capital spending. Together, these provide additional stimulus of 1 to 1.5% of GDP if we count the multiplier effects. How the stimulus is spent is also important, and the NDP’s plan is focused on green infrastructure and social investments.

The NDP platform also takes aim at the climate change file. Its program would cap emissions from large industrial sources starting in 2010, and will harmonize those efforts with a North American cap-and-trade system. They also propose major public transit investments, low-interest loans for building retrofits for energy efficiency, and a royalty on “flaring” in the oil and gas sector (the source of 13% of BC’s GHG emissions).

Unfortunately, most of the attention of climate policy has been on the BC carbon tax, which is neither as horrible as the NDP paints it, nor as potent as advocates make it out to be. Given BC’s fiscal challenges, the NDP would do better by fixing some of the problems with the tax (like ensuring it covers all GHG emissions), using the revenues to fund climate action (rather than borrowing), and shoring up a low-income credit that fails to protect low-income households as of 2010.

The incrementalist approach of the NDP platform also shows on social policy. Even during the recent boom, many British Columbians were left out. The Liberals have overseen the shredding of social assistance, the gutting of social housing construction, and the dubious distinction of BC having the lowest minimum wage in Canada.

The NDP platform would reverse some of this damage. It would raise the minimum wage to $10. It aspires to create 2,400 new social housing units this year, and 1,200 per year after that – a move aimed at a major reduction in homelessness. The NDP have said they would bring in a poverty reduction plan with targets and timelines, but do not say what those targets should be. And the new money for social assistance in their platform is inadequate given this goal and the economic situation.

Now that BC’s housing and commodity booms are over, and the recession is getting worse each week, structural weaknesses in BC’s economy have been revealed that were not cured with a tax cut. BC needs a bold new vision that combines social justice principles with a sustainable economy. By this yardstick, the NDP makes some progress, but by pandering to tax cuts falls short in its ambition.

Almost all of the increase was among two groups – women and young people. The overall unemployment rate jumped from 6.7% to 7.4%. The increase for men over the age of 25 was 0.2%, from 6.5 to 6.7%.

But for women the jump was nearly a full percentage point, from 5.0% to 5.9%. Among young people 15 to 24 the unemployment rate jumped from 11.6% to 13.5%. Young people and women made up 80% of the increase in unemployment last month.

That doesn’t mean men over the age of 24 are not being hit. They have been hit very hard in the last six months. Now it looks like substantial numbers of men over 25 are leaving the labour force, while women are entering the labour force. And these are just the numbers for one month. But it does suggest that the recession is reaching down further in the economy, well beyond construction and resource jobs.

And it also raises questions about the solutions being proposed. We do need infrastructure investment, but how much good will this do for women and young people not trained in the trades?

If this trend continues, it is just one more reason why, no matter who wins the election, we will see a new provincial budget in a very short time. The unemployment rate this summer for young people will be enormous. And no government will be able to just ignore continually rising rates of unemployment for women.

That is a loss of 22,600 jobs, of which 9,900 were full-time jobs. If we go back to March 2008, total job losses are 76,600 jobs, although a larger number of full time job losses (-85,300) is offset by some modest part time job gains (+8,600). In percentage terms that is a drop of 3.3% overall from March 2008, with 4.6% fewer full-time jobs.

Looking forward there is no end in sight for unemployment increases. According to the Canada Housing and Mortgage Corporation (CMHC), housing starts in the first quarter of 2009 were down 70% from the same period in 2008. That means most of the construction jobs that are wrapping up in the next three to nine months will send workers right to the back of the unemployment lines. And, on average, for every primary job like construction we lose another gets shed somewhere else.

I have been speaking on the economy for a series by Metro Vancouver in four locations across town. In the first installment, a month ago, I was saying that unemployment would hit 8-9% by the end of 2008. After the February stats came out, I revised that to 9-10%. And now I am feeling like those numbers could surge even beyond that. If you are interested in the fourth installment, drop by the Wosk Centre next Wednesday at noon.

Speaking of people seeking jobs, as for the election, this takes away one of the key cards the Liberals would have played: that they are better stewards of the economy. March’s unemployment rate is higher than when the Liberals first took power in 2001, and the rate will be close to, perhaps even over 8%, when April’s results are announced just before the election on May 12. They still may be able to play the economic manager through tough times role to electoral success, but that is a tougher job.

Not that I believe the government in Victoria has much influence over the economy in BC. It is external factors that drive BC’s economy; mostly export markets, Bank of Canada interest rate policies, and federal fiscal policies, all of which have been powerful tailwinds for the BC economy, largely through the channels of high commodity prices and residential construction atop spectacular real estate price increase. The Premier and the Liberals have tried to take credit for the boom. If one wants to concur with that credit, however, one must also accept that the current collapse is their fault, too.

While the big picture is beyond the province’s control, what the BC government can do is be effective in its key jurisdictional role of providing social programs. Here the government has not done a great job, given the poverty and homelessness we saw during the boom, the shredding of social assistance, the end of new social housing construction, and now, the title of having the lowest minimum wage in Canada. During a recession it is essential that the BC government maintain public spending, and if anything, we need to plan for big increases in transfers to those shut out. Expenditures will naturally rise as more people go on social assistance (the rolls are up 37% over a year agao). But we also need to make the program more responsive to the needs out there by shoring up benefit levels and reducing barriers that prevent people from getting on welfare.

Secondly, the rapidly rising unemployment needs to be countered by infrastructure spending that takes up the slack in the labour market and puts it to good use. While there are some projects that have been announced, in total employment numbers they will not make a dent in the rapid rise of the ranks of the unemployed. Now is the time to rebuild public transit, develop high-speed inter-city transit, sharply increase energy efficiency through retrofits, and invest in alternative energy. These are no-brainer, green jobs that will help transition the economy onto a sustainable growth path. The dumbest investments would be ones that move us away from sustainability, like expanding highway capacity for suburban commuters or the oil and gas industry.

So, the writ is dropping. Parties, show us your strategies for fighting an increasingly ugly recession.

There is a lag in the EI numbers, since the most recent data are for January. But we already know that in February, unemployment rates rose again, so the growth in the number of EI recipients is even greater.

The main point is that both EI and social assistance, the two key “automatic stabilizers” have been greatly weakened since the mid-1990s. Back in 1990-91, EI benefits were about $600 per week in today’s dollars; the current maximum EI benefit is $447. Inflation has also eroded the real value of social assistance benefits, which are already much smaller than what one could access on EI.

Even more troubling is that only 42% of BC’s unemployed workers qualified for EI benefits in December, and this percentage is even lower in Vancouver (33%) and Victoria (31%). This will put more pressure on provincial social assistance rolls, which were up 37% at last count. Social assistance also suffers from tremendous barriers for those in need to access the program.

Removing these barriers and increasing benefit levels would be a wise means of stimulating the economy, as almost all of that money would get spent, thereby supporting demand just at the time we need it.

Alas, in its 2009 budget the government planned for only a small rise in temporary assistance caseload of 6%, and for the total caseload, 4.6%. We noted on budget day that given a then-50% (now 60%) increase in the numbers of unemployed over the past year, the budget is essentially on a different planet.

So just as February’s unemployment rate has exceeded the budget’s projection for the whole year, budget projections for social assistance are essentially out the window a month after the budget was tabled. As reported in the Sun:

Welfare numbers in B.C. soared by 36.5 per cent in January compared to the previous year, and government expects the figures to keep increasing. Between January 2008 and January 2009 — the last month for which the province has figures — the number of people in the temporary assistance/ expected to work category rose from 20,800 cases to 28,391. In the month between December last year and the end of January this year, the caseload increased by 10.8 per cent.

The grim reality that this recession is going to be worse than the BC government is admitting. That increase alone if annualized will add about $128 million to provincial expenditures, and I would not be surprised if the caseload continues to rise at a rapid clip over the remainder of 2009.

But let me get this straight: when the budget was tabled in mid-February, the government did not know that the social assistance caseload from January had shot way up? Surely, it cannot be correct that the officials in the Ministry of Finance were ignorant of this fact, even if just anecdotally, even though everyone has been talking about a recession for months, and even though this is a major source of cost pressure in the budget.

Technically speaking, the number of employed dropped by 4,900 and the size of the labour force grew, so we have to be careful about the numbers. These are also monthly survey data, which have some swings to them, so we should mostly note the trends. But the conclusion is inescapable: this is bad and it shows the utter state of denial of the BC government, who just weeks ago in their 2009 budget forecast that the unemployment rate for the entire year of 2009 would be 6.2%. In fact, we are likely to see an unemployment rate above 7% by the time we vote, perhaps pushing 8%. I’ve been musing that unemployment rates would close the year in the 8-9% range; if present trends continue, that will have been overly optimistic.

BC Stats has the full set of numbers and breakdowns by industry and other key characteristics. Total employment in the good-producing sector, which constitutes much of the primary employment and income that supports other (mostly, service-oriented) jobs in the economy, fell by 8% compared to a year ago. After a large drop in January, construction employment was essentially the same in February, which is a relief in the short-run anyway. The big challenge for 2009 is going to be rising unemployment from this sector as projects wind up, and new ones are not there to replace them (housing starts are down 70% according a report earlier this week).

In the service sector, total employment is just below where it was a year ago, but down quite a bit from its peak in June 2008. Losses in a number of sectors have been kept at bay by some growth in the public sector, notably education, and health care and social services (offset somwhat by civil service cutbacks). So thus far, the public sector is cushioning the fall – we certainly do not want to pile on right now with major public sector cuts, although that would appear to be the case given a read of BC Budget 2009.

In its latest annual Service Plan report, the Ministry notes that jobs in compliance and enforcement will decline by more than a fifth or 63 full-time equivalent positions over the course of the coming fiscal year. Total C&E staffing will shrink from 292 FTEs to 229, a decline of 22 per cent.

The coming cuts make it harder and harder to sustain the belief that anything approaching a proactive, rigorous and effective approach to monitoring forest company activities on public lands can be maintained by our Forest Service. Or that the public will not be shortchanged in some significant way either through unreported and unnecessarily destructive logging methods, insufficiently reforested lands, unacceptably high levels of usable wood waste at logging sites, or stolen timber on which no stumpage fees have been paid.

This is all the more troubling when one considers that it was only five years ago that the Sierra Club of Canada’s BC Chapter released a study documenting the elimination of 800 Forest Service jobs during the first Liberal mandate. The 2004 report – Axing the Forest Service – noted that 40 per cent of the jobs to disappear in the Ministry of Forests fell into a broad category called “Scientific Technical Officers”, which took in most of the men and women working in compliance and enforcement.

As goes the public’s eyes and ears in the forests, so goes the health of our publicly owned forests.

The reason for the closings, according to a Catalyst press release, is the collapse of newsprint consumption and pulp demand:

The rapid decline in North American newsprint consumption is unprecedented,” said Richard Garneau, president and chief executive officer, “and it requires us to focus sharply on cost management as we optimize production across our mills to match capacity with the order book.

As devastating as the closures are, they aren’t entirely surprising. Things have been rough at Catalyst for a while: Crofton curtailed production for 30 days in the fall, and the Elk Falls sawdust/containerboard mill near Campbell River closed at the end of November.

Reacting to the most recent news, Jim Sinclair, president of the BC Federation of Labour, remarked that we are witnessing the “slow de-industrialization of the province”. For the folks on the Island and in Powell River, of course, it probably does not feel slow, but whatever you want to call the pace of change, the problems are expanding.

Sinclair went on to call (again) for some cooperative efforts by industry, labour, and the province to find a way out of this mess, echoing the BC Fed’s letter sent to the Premier earlier in the month:

Contributing close to 40 percent of BC’s exports and 25 percent of our GDP, it is only fair, reasonable and just that British Columbians through their government join hands to assist workers and communities in that sector as it endures bad times. We believe a strong, sustainable forest industry can continue to be a vital component of our economy.

That letter contains some very concrete suggestions regarding what the government can do: extend forest workers’ EI coverage, fund retraining, reforest, and assist forest-dependent communities like Crofton with some money to cover tax losses.

These are excellent ideas. In the short term, the government must follow through on this. Failure to do so—and the budget sure makes it look like we are headed for a failure to do so—can only suggest that the provincial government has no idea how bad things are, and how much worse they are going to get.

As for taxes, it is only recently that Catalyst has laid all the blame on the global downturn. Last summer, when the Elk Falls closure was announced, the company said

The decision reflects the severe impact of a permanent loss of traditional sawdust supply, as well as significant energy and chemical cost inflation, high labour costs and the heavy toll being taken by the uncompetitive major industry municipal tax levied on the Elk Falls mill.

In January, Catalyst CEO sent a letter to officials in Powell River, Campbell River, Port Alberni and North Cowichan that threatened mill closure if annual property taxes were not reduced from $23 million to $6 million.

The heavy-handedness of this kind bullying may be offensive, but Catalyst’s annual losses show there is no denying that costs have to come down, and unions have been trying to help them do exactly that.

The government, in contrast, seems to feel that workers and communities need to eat all the cuts in costs. It apparently has no idea what it is getting itself, and everybody else in the province, into. The provincial forest industry is in freefall, and not just on the coast, of course. Whether it can ever be resurrected in a socially and environmentally acceptable form is a good question, one the province needs to take seriously.

What is essential right now is immediate short-term aid to forest-dependent communities, and a provincially-coordinated industrial restructuring with a long-term vision, the capacity to ask big, tough questions, propose a range of creative solutions, and the authority to follow through and work with communities to rebuild.

The government must step in to this morass, and do so with some enthusiasm and resources. This may mean taking a significant public stake in forest operations, even “provincializing” aspects of the industry and the coordination of industrial production.

These are huge problems, and they call for unprecedented action. If we wait, this one may appear to “go away”, but I’d bet the farm that much bigger ones will have taken their place.

Forest sector workers are looking for a little support for them and some solid new thinking for our industry. We had hoped that the recently completed Round Table consultation process would bring some innovative and successful ideas to the table, but alas, it was not to be. In this budget the government could commit to a few things that would indicate some commitment to workers and to the industry. Here’s a few ideas:

As the Premier himself has recently said, it’s about jobs. Indeed.