1-16-08, 9:37 am
First, let us turn to the current state of the Canadian economy which, according to Finance Minister Jim Flaherty and most Bay Street analysts and sycophants, is humming along just fine. Indeed, a superficial reading of key economic indicators appears to sustain such a conclusion. Official unemployment remains at a relatively 'low' 5.9%; inflation stands at 2.4%; and the value of exports continues to grow, driven primarily by high energy and other commodity prices (precious metals, agricultural products, etc.). What is conveniently overlooked in these rosy assessments however is that according to the composite index of 10 leading indicators, the economy is slowing at a significant, if not a precipitous, pace. The index has been falling every month since the beginning of the year, and the annual index now is lower than at any time since 2001.
Most notable is the deepening crisis in the manufacturing sector, which has shed almost 300,000 full-time jobs since 2002, mostly in Quebec and Ontario. Between November 2002 and February 2007, the proportion of the workforce employed in manufacturing declined from 18.6% to 14.4% in Quebec, from 18.2% to 14.8% in Ontario, and from 9.4% to 8.8% in the rest of Canada. Job losses are now spreading beyond the auto, steel, appliance and textile industries into other sectors such as forestry, where the downturn in the U.S. housing market combined with the impact of tariffs, the high Canadian dollar and high energy prices, has resulted in a slew of lay-offs and shutdowns throwing tens of thousands of workers unto the unemployment rolls in Quebec, Ontario and B.C.
While employment in other sectors has mostly made up for jobs lost in manufacturing, most of the jobs created in recent months have been low-wage, part-time, and/or self-employed positions and other types of precarious employment as opposed to full-time higher-wage jobs. The percentage of new employees working in temporary jobs practically doubled in recent times (from 11% to 21%).
The Bank of Canada's high interest rate policy and related fiscal policies of the Harper government, intended to maintain low inflation and attract foreign investment capital to Canada, are largely responsible for the appreciation of the value of the loonie vis-a-vis the U.S. dollar. The soaring Canadian dollar, in turn, has contributed to the current manufacturing crisis, a sector heavily dependent on exports to the U.S. market.
But the root causes of this crisis go well beyond interest or exchange rates; they are based in changes in the international division of labour brought about by the frenzied dispersion of capital around the world in search of low-wage, high yield investment opportunities. That increased mobility of capital has been facilitated by the imposition of neoliberal 'globalization' policies by U.S. imperialism and the international financial institutions it largely controls (the IMF, World Bank, World Trade Organization, etc.) – policies which have actively been supported in Canada by both Conservative and Liberal governments alike, and driven by the monopoly capitalist interests they serve.
While workers in all capitalist countries stand exposed to these impacts, the specificities of the Canadian economy, characterized by exorbitantly high levels of foreign corporate ownership, make it particularly vulnerable. That is why any genuine attempt to reverse de-industrialization must be based on a comprehensive program to restore Canadian political and economic sovereignty, including steps to extricate our country from trade pacts and agreements, such as NAFTA and the Security and Prosperity Partnership agreement, designed to serve the interests of finance capital rather than the Canadian people. And it must include policies that challenge corporate domination of the economic, political, cultural and social life of our country, and expand the public sector.
Two other quick notes on the economy... The first relates to the fact that the rosy economic reports conceal the extent of the concentration of wealth and the growing class disparities within Canada. Soaring profits for the corporations and the rich have come at the expense of the further immiseration of the bulk of the working class. A recent study entitled 'The Rich and the Rest of Us: The Changing Face of Canada's Growing Gap' by the Canadian Centre for Policy Alternatives (CCPA) reports that in 2004, the richest 10% of families earned 82 times more than the poorest 10% - almost triple the ratio of 1976, when they earned 31 times more. The CCPA report also notes that with respect to work time, all but the richest 10% of families are working more weeks and hours in the paid workforce (200 hours more on average since 1996) yet only the richest 10% saw a significant increase in their earnings - 30%.
The most vulnerable Canadians, those forced to survive on social assistance, have fared the worst. The National Council on Welfare recently reported that all welfare incomes in Canada - affecting the lives of 1.7 million Canadians, half of whom are children - have declined in the last decade, dropping further below the poverty line. And last week, the United Way released its 'Losing Ground' study showing that incomes in Toronto, Canada's largest city, have fallen significantly over the past 15 years, especially for single-parent families and among new immigrant workers, reflecting the increasing racialization of poverty, particularly in the main urban centres.
These and similar reports confirm the reality experienced by working class Canadians every day - that we are working harder and making our bosses richer, while we are getting poorer ourselves.
--From People's Voice. This analysis of some recent trends in the Canadian economy is from the main political report adopted by the Dec. 8-9 meeting of the Central Committee of the Communist Party of Canada, presented by CPC leader Miguel Figueroa.
