Admittedly, I’m no longer surprised by this government

Bill anything but fair

Published in the Waterloo Record, Friday April 11, 2014: http://www.therecord.com/opinion-story/4457955-bill-anything-but-fair/

Bill C-23, the so-called Fair Elections Act, is an affront to Canadian democracy and needs to go.

Those are strong words, but I write them with no hesitation, given the bill would disenfranchise thousands of Canadians. Students, seniors, First Nations and some persons with disabilities, in particular, will all face significant hurdles as a result of this proposed legislation.

This, despite the fact that as testimony in committee has noted, there is no evidence voter fraud has taken place under the current system.

Stephen Harper’s government is also working to muzzle Elections Canada and undermine the agency’s independence. In light of the numerous cases of misconduct uncovered by Elections Canada, notably by the governing Conservative party, the government’s hostility to independent oversight is not surprising.

However, just because we’ve grown accustomed to this type of ideological attack by the Conservatives, it doesn’t mean we shouldn’t speak out loudly against it.

The Fair Elections Act will fundamentally undermine Canada’s electoral system. While it’s understandable that politics will see disagreement on many issues, Canadians of all beliefs and political affiliations should be united in asserting that Canada’s democratic institutions be free from political interference.

We need to demand the Conservative government change course. Rather than attack voter participation, we should be working to engage more Canadians in the politics and policy that shape this country’s future.

We have more tools, both online and offline, than ever to do so, so let’s get to work on making those in power listen.

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Make childcare an election issue

As a relatively new father, one whose son just entered daycare, I’ve quickly learned that the early childhood educators (ECEs) who care for my son are some of the most important people in my life. Every day he returns home with new words and new skills, benefits that help moderate the stress that the cost of this service brings. As I’ve quickly learned, sending my son to a registered daycare centre here in Waterloo costs the equivalent of small car and far more than a year of university tuition.

It’s an investment, right?

Well, if so, we might want to revisit how we fund daycare in Ontario and across the country.

Having just returned from a couple of days in Montreal, I was struck by the loud debate currently taking place related to the Quebec government’s decision to raise the daily cost of its subsidized daycare program… from $7 to $9 a day by 2016. Compare this to my $40/day payment here in Waterloo and the difference couldn’t be more stark. And while my wife and I are fortunate enough to be able to cover these costs, many are not.

Thankfully the Region of Waterloo provides subsidies to cover a significant share of the cost for 2,800 local children. However, as this year’s regional budget process highlighted, without a long-term commitment from either the provincial or federal government, such support is not guaranteed.

Quebec’s model is instructive for several reasons. While its system of subsidized daycare is not perfect, it ensures that all families who wish to send their children to a registered, licensed daycare are not limited by dollars to do so. Introduced in 1997, the subsidy sees parents pay approximately 15% of the cost of service with the provincial government covering the rest. Setting aside the question of whether this split is appropriate, what matters most is research that highlights the significant benefits of early child education, notably on children from lower socio-economic backgrounds. Moreover, a study by University of Montreal economics professor Pierre Fortin found that Quebec’s subsidized daycare system pays for itself thanks to increased tax revenue due, in large part, to an increased rate of female participation in the workforce. Fortin’s study found that for every $1 invested in the system, $1.49 returns to the Federal and Provincial government.

Despite these benefits, Quebec is rather lonely in its approach to early childhood education. Only Prince Edward Island has implemented a similar system of support. In fact, as a whole, Canada spends just 0.2% of GDP on childcare, placing us last amongst comparative OECD economies. We spend 10 times less than the Swedes do on childcare, five times less than the Finns, and half of what the Brits spend.

Increasing our public investment to meet the OECD average would take upwards of $3 billion a year, a figure some will certainly scoff at. Yet given the aforementioned financial returns, and the long-term impacts on inequality and social mobility that a level playing field for children provides, we may want to reconsider our unwillingness to make such investments.

As a small fish in a big pond, Canada’s economic success in a global knowledge economy will be built on our ability to get the most out of every one of our citizens. A significant commitment to childcare and early childhood education is an important step in this direction.


Our government’s treatment of Veterans is deplorable

When we ask the women and men of our armed forces to serve abroad, we do so with an understanding that they’ll be taken care when they return home. By eliminating service access points for our veterans and reducing compensation for those disabled as a result of their service, the Conservative government is shirking its contract with our men and women in uniform.

These moves ignore an evolving set of needs. As the increase in cases of post-traumatic stress disorder, and associated suicides, attests to, the needs of former soldiers require attention. A Library of Parliament report released in December noted that upwards of 6,000 new veterans will be released from the Canadian Forces over the coming years who will suffer from mental health issues. At least 2,750 of these veterans will suffer from severe post-traumatic stress disorder.

To close offices and expect those who served abroad to wait in line with me as I renew my health card shows an ignorance of the issues they face, and perhaps more important, shows an absolute failure to think about how to innovate the services we provide to this part of the population. Moreover, we can’t attempt to address the issues veterans are facing if we don’t sit down with them before decisions are made and make them a partner in any reforms.

If Canadians wish to feel proud when we see our troops helping make peace abroad, we need to be willing to uphold our end of the bargain and make sure they are taken care of at home. 


Pragmatic solutions to Canada’s employment challenge


Last Friday’s Statistics Canada Jobs report sent policy makers across the country scurrying for solutions.  

Canadian employment fell by 60,000 full-time jobs in December resulting in a year of nearly zero full-time job growth. What jobs were created in 2013, about 83,000 of them, were all part-time. And if one looks back to the first signs of the recession in 2009, we’ve yet to rebound to an employment rate that accounts for a labour force that keeps growing.

In short, we need jobs. And we need them now.

Looking forward, whether this past years stagnant job performance is indicative of what’s to come for the economy, or whether it’s just a blip in the road, is debatable. A falling loonie promises some breathing space for Canadian manufacturers and exporters, though the benefits of relatively cheaper export prices need to be balanced against the costs of rising import prices. The recently negotiated, though yet to be ratified, Comprehensive Economic and Trade Agreement (CETA) with the European Union is similarly two-faced. While it opens significant opportunities for Canadian firms, we’ll only reap those rewards if public and private actors step up to provide assistance to small and medium sized (SME) businesses unsure of how to access new markets, and how to navigate different regulatory systems.  Many will need it in the face of growing competition with European counterparts who on average have far more experienced in dealing with linguistic and regulatory differences (a 27-member economic union has its advantages…)

And so if 2014 is to provide the job creation that Canada needs, far more focus needs to be placed on stimulating demand at home.

Tax credits for job creation are a popular political tool to create that demand but as a small business owner myself, I’ll tell you that a tax credit with no demand won’t add to my workforce. I’ll hire more when the pinging sound on my BlackBerry grows more consistent. Others promise the benefits of cheaper energy, however we should be weary of grandiose promises that avoid the realities of rapidly changing global economy. And finally, dampening consumer demand through an iron-fisted goal of balancing the budget prior to the 2015 Federal Election is certainly of no help either.

So instead why not focus on making our BlackBerry’s ping with a series of pragmatic and feasible solutions that actually make sense:

  1. Leadership and investment in infrastructure. According to the Federation of Canadian Municipalities, gridlock costs the Canadian economy $10 billion year. If you’ve had the misfortune of traveling the 401 between KW and Toronto you know why. We desperately need to fund rapid transit between these core nodes of the economy to get people more effectively to and from, and to free up our highways for the movement of people and goods.
  2. Understand and act on the fact that social services are good long-term investments. Whether it’s childcare, crime prevention programs, refugee healthcare or a form of basic income,  investments in helping people help themselves are amongst the soundest we can make. In contrast, cuts to such services will end up costing up far more in the medium and long-term. And while this might mean finding new dollars to fund necessary programs, we need all those who want to do better to have the tools to do. For when they benefit, every business owner, tax payer and community member wins too.
  3. Open up new pathways for financing for SMEs and startups. Across the globe, jurisdictions are thinking creatively about how to ensure good ideas and potentially significant job creators don’t lie idle due to a lack of capital. Tech-enabled crowdsourcing platforms need regulatory approval at the provincial level to get off the ground. Doing so will open up new avenues for small businesses needing capital to get off the ground or to expand, and could mean significant additions to payrolls. There are certainly risks with these models, however there’s no reason we should shy away from a few bold pilot projects and experiments to make sure we’re doing everything we can to catalyze the economy.
  4. Expand programs like the Canadian Digital Media Network’s Soft Landing program, which helps SMEs set-up in emerging markets for short periods to learn about potential export opportunities, and leverage the concept of IT accelerators and incubators across other sectors of the economy, notably the service sector and additive manufacturing. The University of Waterloo’s Velocity Program is well on its way regarding 3D print related incubation, but we need to see these models replicated across the country.
I don’t doubt that others have ideas, likely better than mine, to share.
And given the current state of Canada’s job market, now would be the time to start getting them on the table.

Bill C-4 and some strange changes to health and safety regulation

While I usually write on the economy and social policy, tucked into the recently announced budget bill are a series of changes to health and safety regulations that don’t smell right.

If you’re new to my writing, note that I am not a member of a labour union, nor associated in any way with one. I focus my professional and academic work on the economy and innovation, and address the subsequent issue from, I believe, an objective point of view.

Bill C-4, the current Canadian government’s omnibus budget legislation, contains significant amendments to the Canada Labour Code that have raised the ire of labour groups and worker rights organizations. For example, read this.  These changes, however, should concern all of us given their impact on safety in the workplace.

You can see the proposed bill here:  http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6263082&Language=E&Mode=1&File=128

Notably, changes in the definition of the term “danger” as it relates to workplace hazards raise significant concerns related to the ability of workers to refuse work and seek outside review of work conditions perceived as unsafe. Here I borrow from a labour lawyer speaking on this bill who happens to be a friend and neighbour. I sought his advice earlier this week upon learning of the proposed changes. 

He notes:

The current definition of “danger” is as follows:

“danger” means any existing or potential hazard or condition or any current or future activity that could reasonably be expected to cause injury or illness to a person exposed to it before the hazard or condition can be corrected, or the activity altered, whether or not the injury or illness occurs immediately after the exposure to the hazard, condition or activity, and includes any exposure to a hazardous substance that is likely to result in a chronic illness, in disease or in damage to the reproductive system

The proposed amended definition is as follows:

“danger” means any hazard, condition or activity that could reasonably be expected to be an imminent or serious threat to the life or health of a person exposed to it before the hazard or condition can be corrected or the activity altered

He goes on to note that “by requiring the danger to be “imminent” , and expressly deleting the reference to “hazardous substances”, the government seems to be suggesting that exposure to such substances doesn’t merit a refusal to work.”

The implications are evidently significant and require clarification.  If his, and my, judgement are correct, they should be repealed.

Second, under the proposed amendments, the use of health and safety officers as the first line of investigation into allegations of unsafe conditions is to be phased out in favour of “Ministry approval”.

This is of significant concern given the ambiguity of this amendment and the potential removal of objective, non-partisan analysis of workplace concerns.

On both issues, something just doesn’t smell right. Canadians require immediate clarification as to the procedural impacts of these changes. For as currently drafted, these amendments leave the distinct impression that Canadian law will leave workers less safe, and less able to draw attention to issues that may lead to future injury and/or impairment.

I fully acknowledge that my reading of these changes may be incomplete, and have sought professional legal input in order to better understand these changes. To be sure, the inclusion of such changes in omnibus legislation does little to quell apprehension that such changes are being “snuck in.” Moreover, while it’s clear that several labour unions have raised the aforementioned issues, I do so not in support of their efforts, but rather in support of every Canadian who deserves a safe work environment and the right to question and object, within reason, work they deem unsafe.

These caveats noted, if I am incorrect in my understanding of these amendments, I would certainly appreciate insight as to why and how my reading of the changes is incorrect. If you know something I don’t, please let me know.

Ultimately, while the rhetoric of waste and competitiveness is popular, we can’t forsake the health and safety of workers to save a few dollars. Rather we need to work to find a middle ground that protects workers while ensuring this regulatory framework promotes the competitiveness of industry. It might take longer but it’s certainly not impossible.


On balance, Canada-EU trade deal a move in the right direction

(Published in the Waterloo Record on November 2, 2013:  http://www.therecord.com/opinion-story/4187196-on-balance-canada-eu-trade-deal-a-move-in-the-right-direction/ )

At first glance, pulling off what Stephen Harper’s government has called the Wayne Gretzky of international trade deals is certainly to be applauded.

Based on the limited documents so far released by the government of Canada on the “agreement-in-principle” reached with the European Union on a comprehensive economic and trade agreement, the agreement offers significant improvements for Canadian exporters, and the promise of decreased costs for a variety of imports.

Whether they’re of the Gretzky variety is debatable given that prior to this agreement, three-quarters of tariff lines for trade between the two parties was already duty-free, and the average tariff on Canadian exports was a paltry two per cent. However, what’s clear is that the trade agreement helps solidify the diversification of the Canadian economy away from its gravity-induced dependence on the United States.

In so doing, Harper completes a process of economic diplomacy that began in the early 1970s when then-prime minister Pierre Trudeau proposed Europe as a “third option” and the key to lessening Canada’s economic dependence on the U.S.

The agreement will certainly have its critics. Some sectors of the economy, notably those previously protected by closed government procurement processes, will now face increased competition and potentially pressure on margins.

However, complaints about increased imports, for example from the Canadian dairy industry, are likely unfounded given the still-tiny share of European cheese in our consumer baskets and the unlikely event that French blue cheese will replace cheddar in many of our grilled cheeses.

Important questions remain, however, regarding the effects of increased patent protection on medicines and the subsequent impact on provincial health care budgets, as well as the impact of changes on labour mobility for contract workers.

Moreover, the gains from the trade agreement are likely to be nowhere near those advertised by the Canadian government. The government’s oft-quoted $12 billion and 80,000 jobs increase is based on a series of assumptions related to market share and productivity increases that most serious commentators have noted are unrealistic.

Perhaps most disappointing about the comprehensive economic and trade agreement process has been the lack of public engagement.

In the 1980s, a joint Senate-Commons committee held thousands of public hearings on the topic of U.S.-Canadian trade, and on the then-proposed U.S.-Canada free trade agreement.

On the comprehensive economic and trade agreement, however, there has been no such public participation.

The government has done little to engage Canadians on the topic, with only leaked versions of negotiating texts available via European sources prior to the announcement of an “agreement-in-principle” in October. Our understanding of whether this is truly a Gretzky-type deal is thus limited by a lack of detail and fine print.

This, however, should not obscure from the trade deal’s importance. Not so much for its immediate economic impact but rather that as a small, trading nation we need to keep a step ahead of our competitors.

The launch of U.S.-EU talks on a transatlantic trade agreement between the world’s two largest economic blocs placed significant pressure on Canadian negotiators. Had Canada failed in its talks with the EU, the Europeans could have turned to the U.S. and offered privileged access to U.S., rather than Canadian exporters.

Given the similar basket of non-resource goods and services originating in both Canada and the U.S., allowing four years of negotiation to lead to failure would have meant significant disadvantages for Canadian producers and consumers.

Let’s just hope that the final negotiating text, if we ever get to see it, doesn’t include any unforeseen surprises.


Basic income & entrepreneurship

(A slightly adapted version of this piece is published in the Cord Community Edition on November 11, 2013:  http://www.community.thecord.ca/community-conversations-time-for-bold-ideas/)

What if tomorrow someone walked up and handed you a cheque that covered your monthly living expenses ? And next month, and the month after, they did the same?

In theory, you’d never have to work. You could stay home, watch Jerry Springer, and live on the fringes with little effort.

But would you?

This question, and competing perspectives on it, are at the heart of a debate on the appropriateness and effectiveness of a basic annual income (or guaranteed annual income). The concept would see every individual in a jurisdiction receive a guaranteed payment from the government. At its most basic, the income paid would be sufficient to meet basic needs but insufficient to alter the incentives that drive an individual to look for work and to improve their personal welfare.

Doing so would replace other social transfers (EI, Social Assistance etc), in a potentially more effective and less costly manner.  Those whose incomes lay above a certain threshold would pay taxes over and above that income, those whose incomes fall below would not. There’s no doubt that some would lie back and enjoy the fruits of my tax payments. But they’re the same, ultra-small minority that does so today.

For most, according to the five guaranteed income experiments run in North America, the result will be little to no economic change, with vastly improved health outcomes for those at the bottom of the socio-economic ladder.

The only Canadian experience with a BAI is well documented by Evelyn Forget on the 1974 to 1979 income experiment in Manitoba. She notes, “We found a significant reduction in hospitalization, especially for admissions related to mental health and to accidents and injuries, relative to the matched comparison group. Physician contacts for mental health diagnoses fell relative to the comparison group. A greater proportion of high school students continued on to grade 12. We found no increase in fertility, no increase in family dissolution rates and no improvement in birth outcomes. Our results … demonstrate that a relatively modest GAI can improve population health suggesting the possibility of health system savings. See http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf for more. Moreover, the experiment found no change in employment or hours worked.

Alicia Munnell, former SVP and Director Research at the Federal Reserve Bank of Boston, provides an overview of the four “income maintenance” experiments run in the United States in the same period. New Jersey and Pennsylvania hosted a first experiment between 1968 and 1972 across 1357 households. Iowa and North Carolina conducted a second experiment from 1969 to 1973 involving 809 households. A third experiment was run in Gary, Indiana between 1971 and 1974 involving 1,780 households. And a final experiment, the largest involving 4,800 families, was run in Seattle and Denver from 1971 to 1982.  Her team finds that “Generally, the experiments caused moderate reductions in work effort. The responses were greater among women than among men (17 vs. 7 % ).” The reductions, however, are in the form of hours worked and not exits from the workforce, and are not found to be significant enough to detract from the potential value of the exercise. See http://www.bostonfed.org/economic/conf/conf30/conf30a.pdf for more.

The social benefits alone seen in the five above example should justify significant attention to the topic. Yet for the most part, attention to the topic is relegated to tangential policy circles and has so far failed to gain mainstream credence. (On an optimistic note, across the pond in central Europe, Swiss voters will soon have a chance to vote on a similar initiative . Perhaps they’re onto something. )

The explicit health and educational outcomes, however, have been unable to sway political favour towards this initiative. Perhaps more focus on an economic analysis will. For a guaranteed income might do one of three things to the economic incentives presented to individuals within a jurisdiction that implements it:

A)     Nothing: For those whose income is more than the basic income payment, their behaviour won’t change given it does nothing to alter their personal incentives.

B)      Something ambiguous: Another group will use the payment as a means of justifying personal choices to invest in their education, families or other activity. Measuring the long-term value of these choices is difficult as it involves the net benefit between reduced work hours and a more less immediately measureable social and personal return (and thus I’m leaving them as ambiguous, albeit likely positive).

C)      Something good/entrepreneurial: Others, and this is what I’m most interested in, will see the BAI as a means of providing a safety blanket for entrepreneurial risks.  I’ve found no research on this save for a similar hypothesis posed by a European professor in the mid-80s. It’s possible that this is for good reason, notably that there is no change in entrepreneurial activity owing to the basic income. However as youth employment, as well as other forms of participation in the economy, stagnate and decline, I think this bears revisiting.

Given ongoing difficulties related to employment experienced by young, old and middle-aged male labour participants, would a minimum income (supplemented by business training) provide them with a cushion with which to launch new entrepreneurial initiatives?

The structural shift away from mass employment that has accompanied post-1980s cut backs in both private and public sector employment makes it is clear that we need to build a nation of dynamic entrepreneurs, willing where appropriate to take risks in bringing new product and services to the market, be it here or abroad. I write more on this here. Yet according to an Ernst and Young report on global entrepreneurship, “Canada scores below average on perceptions of entrepreneurship as a viable career choice, a result the firm notes doesn’t bode well for the general ecosystem with relatively low self-employment figures.”

And thus while many choose the path of regular employment because it provides stability – would more choose an entrepreneurial route if they were provided an alternate form of stability?

I realize calling for a study on everything isn’t the most popular, nor immediate, route. However it would seem to me that the significant challenges we face regarding youth employment, as well as underlying issues related to poverty, necessitate a concerted and evidence-driven approach to this topic. Moreover, if we want to make decisions on the back of sound evidence, we have to be willing to invest, where appropriate, in the development of evidence and data. And we have to be willing to accept that such evidence may rule out what we hypothesize as good ideas.

Ultimately, if you’re interested in the concept of a basic income, check out http://www.basicincomepilot.ca/about . They’re advocating for the development of a pilot project to further study the effects of a basic or minimum income. I’m in full support, notably if it focuses on the effect on entrepreneurship and self-employment.