Harper, Flaherty, Carney, Day: The Gang of Four

The Reopening of Parliament means Mobilizing to Defeat the Harper Regime Anti-Worker Policies

WC O’Casey February 28, 2010

After two months of barring the Canadian people from government, Harper and his gang of ministers, along with his personal clique of assorted overpaid administrators, intellectuals, pundits, advisors, “experts”, observers and handlers will all assemble in the halls of parliament to reluctantly remove the padlocks and chains from the doors of the house. 

The opening of the 3rd session of the 40th parliament will begin on March 3rd 2010.  The following day Finance Minister Jim Flaherty will bring down the federal budget.  By all indications[1] the Flaherty budget will be prepared in a manner that will attempt to hide high unemployment[2] and growing child poverty[3], the looming pension crisis[4], the planned looting of the federal treasury[5], the cost of Canadian involvement in the US-NATO war in Afghanistan[6] and the sell-out of Canadian energy[7],[8] and natural resources which are opening up Canada to even greater foreign control and plunder[9].

Prime Minister Harper will claim in the Throne Speech that the government is facing difficult budgetary challenges that are placing considerable strains on the treasury requiring “all” Canadians to make sacrifices.   Harper will assert that unlike the “rest of the world” Canada has made sensible decisions that have shielded Canadians from the worst effects of the crisis due to its “sound banking system”[10].  The PM will reiterate that “prudent” budgets are necessary and will be required along with strong “fiscal discipline” to guide a “fragile recovery” to future robust and sustained growth.  To make these difficult choices only the firm experienced guidance, responsible fiscal management and balanced approach of the Conservatives will work - Canada look out!

In the mean time the Canada Action Plan will be continued to be implemented well into 2011.  “Infrastructure” spending, corporate handouts and tax breaks will continue to ensure that the economic recovery doesn’t stall.  Privatization of public services will be held out as an “effective” and “rational” way to disengage the Canadian taxpayer from a growing burden of “inefficient”, “unproductive” and “privileged” public service workers.

Leading the charge on increasing Canadian productivity is Bank of Canada (BOC) Governor Mark Carney.  Along with the usual suspects from the Frazer Institute, C.D. Howe Institute, The Conference Board of Canada and the Centre for the Study of Living Standards research will attempt to prove that Canada must become more productive to compete internationally.  In capitalist speak this means greater profits from increased unpaid labour time through a number of mechanisms such as lower wages, more hours worked, less workers, less social benefits, more debt.  Canadian workers have over the last 25 years worked unpaid for 5 of those years.[11]  That is what is meant by increasing productivity.

Carney began the attack on workers with alarmist rhetoric designed to fan the flames of anti-worker frame the question on wage reductions and increased hours of work with less paid benefits.  In a February 4, 2010 speech to the Winnipeg Chamber of Commerce Carney, claiming that productivity was “abysmal”, said that every Canadian stands to lose $30,000 over the next decade if productivity doesn’t improve.  Carney said, “If this differential were to persist over a decade, the cumulative loss of income would be almost $30,000 for every Canadian.”[12]

Comparing the United States’ “sterling” productivity gains to Canada’s “abysmal” performance, Carney laments saying, “Unlike Canada, however, U.S. productivity growth has surged, and wage growth has slowed.  The net result is lower unit labour costs, which have boosted competitiveness and should, ultimately, encourage job creation.”[13]  Well Governor Carney you give us our 5 years of wages back and maybe we will help you out on your productivity issue.

Flaherty, in collusion with Governor Mark Carney, will accelerate growing financial burden of a failing, failed and corrupt capitalist financial system on working class families seeking to increase productivity gains through speed-up, reduced wages and reductions in social services.  They will attempt to absolve their cronies, stooges, appointees and support base from any responsibility for Canada’s growing indebtedness[14],[15] to monopoly capital, the dismantling of basic Canadian industries in favour of finance speculation and investment schemes and their failed policies of corporate tax reductions[16] and energy exports.

The Bank of Canada announced on February 26, 2010 that it will appoint Tiff Macklem to the post of Senior Deputy Governor at the BOC. [17]  After serving as Flaherty’s Associate Deputy Minster of Finance from 2007, Macklem is widely viewed as a “far-sighted” move within Canada’s ruling financial circles.

Mr. Macklem fills the number two spot at the BOC and forms part of the emerging new global financial order that the Harper regime is beginning to shape on behalf of Canada’s ruling class.    The position is approved by the BOC Board of Governors and the Priviy Council.  Macklem is currently serving on G7 and G20 advisory boards and the Financial Stability Board.  Governor Carney says of the appointment that Macklem, “is a member of the Governing Council, which oversees the Bank's monetary policy and approaches to financial stability”.

Macklem’s appointment is significant because it puts another Harperite into the central bank that is charged with synchronizing monetary policy with those of the other G7 nations, but primarily with the US.  The BOC January Monetary Policy Report said, “[T]he recovery continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”   

The report continued, stating that, “[T]he persistent strength of the Canadian dollar and the low absolute level of U.S. demand continue[s] to act as significant drags on economic activity in Canada.  On balance, these factors have shifted the composition of aggregate demand towards growth in domestic demand and away from net exports.  The private sector should become the sole driver of domestic demand growth in 2011.”

The differences within the Canadian financial circles are sharp when it comes to fiscal policies and approaches to US market share.  So much so that former Prime Minister Chrétien takes to publically defending a bank CEO.

Prime Minster Harper criticized Ed Clarke TD chief executive for his remarks claining that a recent meeting of the Canadian Council of Chief Executives (CCCE), almost unanimously all they said to “raise my taxes” to pay down the federal debt.  This illustrates a sharp difference in “approaches” to the current crisis and who stands to profit from it.

What Harper was really taking issue with was not Clarke’s suggestion to “raise taxes” to pay down the deficit (we all know that what that means is to raise workers’ taxes but reduce corporate taxes) but the CEO’s remarks that he is tired of subsidizing the US economic recovery.  Clarke said:

“I met last week with our Prime Minister.  We're in our pre-budget consultation, so he does these things.  He doesn't listen, but you get to chat with him.... In some sense, Canada's done exactly what the United States wants all its partners to do.  So we have been running fiscal surpluses.  So Canadians, as you know, are socially liberal, fiscally unbelievably conservative.  So we have been running large government surpluses every year, paying down our debt. And when the crisis hit, we went into a big deficit position and stimulated the economy.

“We let the exchange rate move up.  And so we went from large current-account surpluses to now large current-account deficits.  That's exactly what the United States needs the rest of the world to start doing.  And if we were now to raise our interest rates as well, to kind of slow down the growth in Canada, then I think we will wipe out permanently Canadian industry.  And I think that would be a mistake.  I think we've contributed all that we need to.”[18] 

There are large divisions within the Canadian ruling class that are sharpening and opening up opportunities for organized labour to exploit.  It is the task of the Communists to begin to more aggressively point these out and lead the fight to bring labour into direct challenges with monopoly capital.

The Plan

We are entering a critical juncture in Canadian history.  The combined forces of reaction are conspiring to place the full burden of the capitalist depression on the backs of Canadian workers.  The Canadian economic depression is so extensive that it has split sections of finance capital from the ruling Harper regime.  While the ruling class is in agreement that the effects of the crisis should be born by the working class, who is to profit from it is causing great divisions which opens up fissures for the organized labour movement to exploit.

The plan to expunge debt from the books of monopoly capital and the organized monopoly finance capital will require transferring it to the backs of workers.  The political machinery will be primed to cry out that the nation is “going broke” and thereby all are required to make determined sacrifices.  They will do this by raising interest rates, cutting social spending and raiding pension funds through a combination of market speculation schemes and administrative manipulations and dropping more people from the public service or increasing the retirement age.

Workers will be called upon to carry a morally degenerate class of finance speculators, arms peddlers and energy monopolies executives and investors and shareholders.  The university intelligentsia, an ethically bankrupt corporate media and various forms of middleclass idlers, layabouts, parasites and ski-bums will all be activated in an all out effort of phoney patriotism and to convince Canadian workers that more hardship is really in our best interests and needed for the long-term growth and stability of the nation.

The crisis in employment is dramatic.  Wages are under attack as well as pensions and other social services.  Unemployment is hidden through a number of mechanisms and will become the over arching question for youth as Canada is has now been relegated to a warehouse of natural resources for US industry.

The Flaherty budget will be a further attack on Canadian workers.  A national conference called for by the CLC which will bring together all progress forces to fight this reactionary government is urgently required.

[1] Bill Curry, “Tories to sell two-sided budget with two-sided tale”, Globe and Mail, Feb. 24, 2010, http://www.theglobeandmail.com/news/national/budget/tories-to-sell-two-sided-budget-with-two-sided-tale/article1480380/

[2] Statistics Canada: Labour Force Survey, Feb. 5, 2010, http://www.statcan.gc.ca/subjects-sujets/labour-travail/lfs-epa/lfs-epa-eng.htm

[3] Campaign 2000, 2009 Report Card on Child and Family Poverty in Canada: 1989 – 2009, Nov. 24, 2009, http://www.campaign2000.ca/reportCards/national/2009EnglishC2000NationalReportCard.pdf

[4] Retirement Lost, Part 1-7, Globe and Mail, October 2009, http://www.theglobeandmail.com/report-on-business/retirement/

[5] Steven Chase, 'Considerable sacrifices' ahead, Stockwell Day warns, Globe and Mail, Feb. 17, 2010, http://www.theglobeandmail.com/blogs/bureau-blog/considerable-sacrifices-ahead-stockwell-day-warns/article1471036/

[6]Bill Robinson, Canadian Military Spending 2009, Canadian Centre for Policy Alternatives, Dec. 10, 2009, http://www.policyalternatives.ca/publications/reports/canadian-military-spending-2009  

[7] Alberta Federation of Labour, Lost Down the Pipeline, March 2009, http://www.afl.org/upload/LostDownPipelineRevised.pdf

[8] WC O’Casey, “Halt the Treasonous Western Premiers”, From the Smoke Pit, June 23, 2009, http://fromthesmokepit.blogspot.com/2009/06/halt-treasonous-western-premiers-for.html

[9] Steven Chase and John Partridge, “Harper promises to relax foreign investment rules”, Globe and Mail, September 12, 2008, http://www.theglobeandmail.com/news/politics/article709589.ece

[10] Bank of Canada, Monetary Policy Report, “How Severe was Canada’s Downturn? A Global Comparison”, January 21, 2010, Page 12, http://www.bankofcanada.ca/en/mpr/pdf/2010/mpr210110.pdf

[11] WC O’Casey, Canadian Workers Labour 5 Years for Free, Focus On Socialism, July 12, 2009, http://www.focusonsocialism.ca/random.asp?ID=250

[12] The Coming Thaw, Remarks by Mark Carney, Governor of the Bank of Canada, Winnipeg Chamber of Commerce, Winnipeg, Manitoba, February 4, 2010,  http://www.bankofcanada.ca/en/speeches/2010/sp040210.html#13

[13] Ibid

[14] Bill Curry, “Budget deficit rises to $39.4-billion”, Globe and Mail, Feb 24, 2010, http://www.theglobeandmail.com/news/national/budget/budget-deficit-rises-to-394-billion/article1482516/

[15] “Quebec among most highly indebted industrial economies in the world”, The Canadian Press, Feb. 27, 2010, http://www.theglobeandmail.com/news/national/quebec/quebec-among-most-highly-indebted-industrial-economies-in-the-world/article1484107/

[16] Les Whittington, “Jim Flaherty's sacred cows - corporate tax cuts”, Toronto Star, Feb. 24, 2010, http://www.thestar.com/news/canada/article/770566--analysis-jim-flaherty-s-sacred-cows-corporate-tax-cuts

[17] Bank of Canada Press Release, Bank of Canada announces appointment of Tiff Macklem as Senior Deputy Governor, Feb. 26, 2010, http://www.bankofcanada.ca/en/press/2010/pr250210.html

[18] Ed Clark's remarks on deficit, 'Raise my taxes', Financial Post, February 13, 2010, http://www.nationalpost.com/related/topics/story.html?id=2559169&p=1