FROLITICKS

Satirical commentary on Canadian and American current political issues

Mar 4

Comparison of Workers’ Wages and Benefits Between the U.S. and Canada

by bcurry

In recent months there has been a lot of discussion about the impact of the pandemic on the labour market in both the U.S. and Canada.  Much of the discussion has now evolved around the issue of hyperinflation in both countries and the resulting worker demands for increased wages.  In addition, there has been a shift in the labour market itself whereby many workers who worked in certain sectors, in particular retail, tourism, services and restaurants, were laid off due to COVID-19 for months on end.  Now that the economies are supposedly reopening in both countries, some of these workers have decided not to return to those sectors, but to seek other more reliable and better paying employment.  Indeed, according to recent stats, there have been record levels of workers switching jobs, a trend that picked up markedly in the second half of 2021.

However, there are still signs that wage raises are stopping fall short of compensating for all of the higher prices.  In some private sectors, unions are now taking advantage of the inequalities and have moved to organize disgruntled workers, offering better wages and benefits.  An example of this is the American United Auto Workers (UAW) that is looking to organize Tesla workers.  Several Starbucks workers have been seeking to organize unions in Buffalo, Boston, Chicago, Seattle, Knoxville, Tallahassee, Florida and the Denver area.  The International Association of Machinists and Aerospace Workers promoted a two-year-long push to unionize thirty Amazon facilities in the U.S.  Generally, such attempts have been unsuccessful.  In Canada, where unionization is easier in the private sector under industrial relations laws, certain unions have been more successful in organizing workers in facilities run by union-resistant companies such as Wal-Mart and Starbucks.

Among the major differences between the two countries is the fact that Canada has a universal health system in place and more labour standards laws offering such benefits as paid sick leave, maternity and adoption leave, paid vacation leave and higher minimum wages.  Canada’s federal unemployment insurance program is national in scope, unlike in the U.S. where states have a lot more leeway to differentiate in their qualifying requirements, amounts and duration of unemployment benefits.  Moreover, the Canadian safety net for the unemployed has been strengthened in recent years, playing an important part in allowing unemployed workers to do lengthier job search, provide additional economic security and keep their job protection guaranteed under the law.

On top of everything, workers are looking at the huge profits made by certain companies during the pandemic, such as Amazon, Wal-Mart, Loblaws Canada, etc., etc.  Many believe, and rightly so, that they have not received their fair share of the record profits in the form of increased wages and benefits.  Instead, they see companies buying back billions of dollars in stock from investors and increasing the dividend rates given to investors by large amounts.  With companies declaring the end of the worst of the pandemic, previous increases in the form of risk pay are also quickly disappearing — this despite the fact that many of the pandemic risks still remain.

Moreover, the pandemic has had a significant impact on the labour markets of both countries.  Employers in both countries are being forced to compete for scarce labour due to the shift in the bargaining capabilities of workers, especially in light of today’s hyperinflation.  Indeed, wage increases are just one of many sweeteners that hungry firms are offering.  Also on the rise are perks like a four-day workweek — offered by some eleven percent of companies surveyed recently by the Payscale data firm —  as well as remote work, flexible schedules, free college tuition and other attractive benefits.

All in all, current hyperinflation will continue to cut into workers’ pay cheques.  The coming months will be difficult ones for both employers and workers.  Both Canada and the U.S. have similar labour markets, suggesting that significant adjustments will have to be made in each country.

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Feb 18

Debate Over Introduction of Emergencies Act to Deal With Trucker Protests in Canada

by bcurry

During the last three weeks Canada has been faced with protests related to a trucker convoy which are against government mandated COVID-related vaccines and public health restrictions.  Although blockades at the Ambassador Bridge in Windsor, Ontario and at the Coutts, Alberta, border crossingwere removed by heavy police operations, the illegal occupation of the country’s capital, Ottawa, had continued.  As a result, the Cabinet of Justin Trudeau’s federal government administration invoked the Emergencies Act.  The federal Act gives the government far reaching powers, allowing the government to freeze financial accounts, press tow truck operators into service and end blockades.  While the Act immediately takes effect, there is a requirement under the Act to table the legislation in Parliament within seven days.  The measures are time-limited to 30 days, but could be extended.  The current invocation is primarily restricted to enforcement at Ottawa’s illegal occupation and at any blockades at U.S.-Canada border points.  In addition, the Premier of Ontario, Doug Ford, declared a state of emergency in the province to clear crucial border crossings, with vehicle licence seizures among the tools at its disposal.

Of course, there are those who believe the Emergencies Act is not needed and is an overreach.  The Canadian Civil Liberties Association has launched a suit against the federal government, claiming that its invocation is in violation of the Canadian Charter of Rights and Freedoms.  In Parliament, some opposition parties such as the Conservative Party and the Bloc Quebecois have stated their opposition to the measure, believing that it is not necessary to resolve the issues.  Meanwhile, the residents and businesses of downtown Ottawa have faced numerous serious problems because of safety concerns, forcing many businesses to be shut down during the three-week old occupation.  As a result, a class action suit against the occupation organizers has now ballooned to a $306-million claim for the disruption to lives and livelihoods from the occupation.

It has to be remembered that the Emergencies Act was created in 1988 as the modern-day replacement to the previous War Measures Act.  The infamous October Crisis refers to a chain of events that took place in Quebec in the fall of 1970 when a terrorist group known as the Front de libération du Québec (FLQ) kidnapped British trade commissioner James Cross and Quebec Minister of Immigration and Minister of Labour Pierre Laporte, who was eventually murdered while in captivity.  The then Prime Minister Pierre Trudeau invoked the War Measures Act, which was the only law available at the time to deal with national emergencies.  This led to the presence of military on Canadian streets to supplement the local police, the suspension of normal civil liberties and the authorization of arrests and detentions without charge.  Hundreds of people were arrested and charged under the Act, mostly in Quebec.  Most historians and jurists believe that that Act’s invocation was definitely an overreach, and something extraordinary that could never occur within the U.S. under its constitution.

This is why the Emergencies Act was written to ensure compliance with the Charter of Rights and Freedoms, and provides for a number of safeguards to ensure its limited use.  The primary question revolves around just what constitutes a national emergency, and its implementation cannot be compared to what happened during the October Crisis of 1970.  A number of guidelines exist within the Act which has not been used since it was written in 1988.  The week-long closure of the Ambassador Bridge and Coutts, Alberta, border crossing definitely has a lot to do with the government’s decision, since there was a huge economic impact on U.S.-Canadian cross border trade.  Auto manufacturers in particular were forced to close down some manufacturing assembly on both sides of the border due to the negative effects on ‘just-in-time’ components.  Other large businesses also complained of the negative effects on the already stretched supply chains, beyond what were caused by the pandemic. 

There is little doubt that there are some extremist domestic and foreign elements that climbed on board the so-called “Freedom Convoy.”  These known provocateurs are using the truckers’ protest to promote their own agenda.  Time will tell what the eventual impact on ultra-right movements will be after the end of their illegal activities. Hopefully, the Emergencies Act will not become a regular go-to tool for governments in the future.

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Jan 26

Canadian Trucker Protest Over Mandatory Vaccination Between U.S. and Canada

by bcurry

This weekend, in something called the Freedom Convoy 2022, hundreds of semi-trucks will be arriving in Ottawa from cities across Canada in order to protest vaccine mandates.  However, plain and simple, their reaction to the Canadian government’s January 15th imposition of a vaccination requirement for truckers entering Canada appears to be just another protest tied into anti-vaxxers’ movements.  Indeed, the largest national organization representing Canadian truckers, the Canadian Trucking Alliance, has denounced the protest.  The Alliance has already stated that 85 percent of its members have been fully vaccinated, roughly the same as for the Canadian population at large.  It has strongly denounced any protests on public roadways, highways, and bridges and has urged all truckers to get inoculated.  However, the Alliance does not represent the majority of independent truckers who one would suggest are primarily involved in this protest, especially those in the West. 

On the other side of the border, the American administration has also imposed a mandatory vaccine requirement for truckers entering the U.S.  Indeed, it is interesting that Donald Trump Jr. this past Tuesday urged Americans on social media to follow the example of the Canadian trucker convoy’s fight against ‘tyranny’ and should carry out similar protests in the U.S.  Apparently, it is estimated that only half of American truckers have been vaccinated, not a dissimilar portion when compared to the general population in the U.S.  What concerns authorities is that the trucker convoy has become a lightning rod for far-right fringe, particularly those against public health measures and government restrictions in the fight against COVID. 

Despite claims that the vaccine mandates will negatively further exacerbate supply chain problems, in monitoring the volume of trucks crossing the border each day since January 15th, authorities have seen no measurable reduction in the number of trucks to date.  Last week, the Canadian Transport Minister noted that almost 100,000 trucks crossed the border — about the same as usual for this time of year.  Unfortunately, those opposed to vaccine mandates have attempted to frighten Canadians by claiming that there will be food and other materials shortages as a result of the government’s policies.  For the vast majority of Canadians, who support COVID vaccination and such mandates, the real issue is in the fight to control the pandemic’s current wave and reduce its terrible impact on a stressed-out health care system. 

Moreover, studies have shown that vaccine mandates work in increasing vaccination rates.  For example, recent research from Simon Fraser University economists indicated that the mere announcement of vaccine mandates last fall led to an average 66 percent surge in new, first-dose vaccinations in Canadian provinces.  From a constitutional perspective, whether a government can mandate vaccines depends on what exactly a new law says.  Canadians have rights to make decisions about vaccination but these rights are not absolute.  And having rights does not mean there will be no consequences for your decisions, including forms of penalization.  In the case of truckers, the government has done more than enough to promote voluntary vaccination.  Since the federal government imposed an immunization requirement last fall on workers in the air, rail and marine transportation sectors, it deliberately gave truckers more time to get vaccinated.  In consultation with the trucking and retail industries, the government waited for a “critical mass” of truckers to get their shots before making it mandatory.  In taking this approach and given the proven effectiveness of vaccine mandates, there is little doubt that the courts would find that such policies legally pass the taste test.

There is no doubt that Canadians and Americans owe much to these essential workers, but truckers need to vaccinate for their own health reasons and those of their families and friends, just like the rest of us.  While independent truckers in particular tend to reflect a ‘wild west’ mentality, they still have a responsibility to themselves and their communities to continue contributing to beating COVID-19 so that life can get back to normal and the economy can open.  They need to cut down on extreme pronouncements about attacking ‘tyrannical governments’ who supposedly are oppressing their people with public health measures.  Instead, they might gain more public support by avoiding such far-right fringe edicts.

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Jan 22

It’s Hard to be Optimistic About the Rest of 2022 — Here’s Why

by bcurry

Well, the New Year began much as the old year ended.  Across the board there are numerous reasons for North Americans not to be overly optimistic about the rest of the year.  Several key factors are leading us to this conclusion.

  • The Omicron variant of COVID-19 has created a fourth or fifth wave, depending on who you are talking to.  Although Omicron appears to have possibly peaked, it has once again severely strained our health care systems.  In addition, the unvaccinated continue to represent the largest number of hospitalizations, especially when it comes to patients in our ICUs.  Our health care providers continue to be under a great deal of strain, especially after two years of treating COVID patients.  There is now a tremendous backlog of elective surgeries and treatments.  In addition, although CDC studies show the effectiveness of booster vaccine shots in preventing severe COVID cases, far fewer adults have gotten booster shots to date.  When will we move from a pandemic to an endemic?
  • In most jurisdictions, kids are back for in-person learning in schools.  However, there are still a large number of children under the age of twelve who have not received their first dose of a COVID vaccine.  With the Omicron variant being twice as contagious as the Delta variant, many parents are concerned about the safety of schools and the potential effect of the disease on their children.  Indeed, statistics have shown that more children are being hospitalized due to Omicron.  Questions have been raised about whether in-person learning can continue in the near future.
  • Even with the economy starting to reopen, a number of economic issues have arisen.  Among these is the forecast of continuing hyperinflation over the coming months.  There continue to be supply chain problems, shortages of skilled labour and increasing fuel, food and housing prices.  With the current annual inflation rate running at around six percent, Canadians have not seen such a high inflation rate since 1991.  A survey of consumer expectations showed Canadian households also expect inflation to stay above 3 percent over the next couple of years, above the two percent average considered normally acceptable.  Central banks have little choice but to raise interest rates this year which will have a major effect on government and personal debt payments down the road.
  • Internationally, both the U.S. and Canada, as members of the North Atlantic Treaty Organization (NATO), will have to deal with on-going Russian threats suggesting a possible military incursion into eastern Ukraine.  Although the Ukraine is not a member of NATO, the allied countries strongly believe that there needs to be an immediate and firm reaction to any Russian incursion.  As a warning to Russian President Vladimir Putin, NATO countries are arming and training the Ukraine military and defence forces in preparation for such an event.
  • China’s economy is slowing, a worrying sign for the world.  China’s National Bureau of Statistics indicates that economic output from October through December of 2021 was only 4% higher than during the same period a year earlier.  This is a far cry from previous annual growth rates ranging between 6 and 9 percent in recent years.  The Omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains.  Being a major supplier to the North American markets, any continuing slowdown in China’s economy will have a severe impact on U.S. and Canadian businesses and consumers.
  • COVID-19 government relief programs for the unemployed and businesses affected by government-imposed lockdowns and public health measures are being phased out.  This could result in many hardships for lower income individuals and small to medium-sized businesses.  The resulting loss of income due to the pandemic will have an impact on government revenues in the near future.  Many government support programs may have to be reviewed for termination or reduction under expected future austerity measures.

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Jan 14

Trade Squabbles Between U.S. and Canada Will Always Exist

by bcurry

When Canada, the U.S. and Mexico signed the U.S.-Mexico-Canada Agreement, known as USMCA, which came into force on July 1, 2020, no one really believed that any trade squabbles between the three countries would disappear overnight.  However, as a major trading nation, Canada has every desire to keep such squabbles to a minimum.  After all, the U.S. is Canada’s biggest trading partner with over 75 percent of Canada’s merchandise exports going to the U.S.  The U.S. and Canada enjoy the world’s most lucrative and enduring trade relationship, with almost $1.6 billion in goods crossing the border each day.  Goods and services trade between the two countries totalled almost $675 billion during 2017, according to the Office of the U.S. Trade Representative.

Despite our close economic relationship, disputes occurred under the former North American Free Trade Agreement (NAFTA) and continue to surface under the USMCA.  For example, the Canada–United States softwood lumber dispute is one of the most significant and enduring trade disputes in modern history.  The dispute has had its biggest effect on British Columbia, the major Canadian exporter of softwood lumber to the U.S.  In turn, it has increased the cost of softwood lumber in the U.S., influencing daily costs in housing construction.  More recently, the U.S. won a key ruling by the USMCA dispute-settlement panel that could allow more American dairy brands to break into the Canadian retail market, much to the chagrin of highly dairy provinces such as Quebec.  The next dispute on the horizon has Canada joining Mexico in formally disputing how the U.S. interprets rules governing the origin of vehicle parts under the USMCA agreement between the countries.  Ever since the auto pact under NAFTA, the three countries have established highly integrative parts and assembly capabilities when it comes to the manufacture of vehicles.  Now with the increased manufacturing of electric vehicles, the Biden administration has proposed that e-vehicles should be primarily assembled in the U.S., using American parts, in order to avoid any kind of tariffs at the American border.

In addition, all three countries are tied together in the energy sector on a truly continental basis.  Both Canada and Mexico have substantial oil and gas sectors, and help supply the thirsty U.S. markets.  None is so dependent as to ignore the other contributors.  Canada for some time now has been trying to increase the flow of Alberta oil via pipelines, such as the now defunct Keystone XL pipeline.  The Keystone XL pipeline project aimed to carry oil from the tar sands of Canada into the U.S. and has been a political football for years.  Led by pressure from American and Canadian environmentalists, both countries will continue to have issues surrounding the extraction and transport of fossil fuels, in particular via pipelines between the two countries.

However, trade wars simply are not effective.  Tariffs result in less capital spending and higher costs.  Any economics student knows that that is a recipe for net job losses across an economy, not net job additions.  For example, trade wars involving the introduction of tariffs result in more paperwork, less efficiency and higher costs as affected companies try to ‘game’ the system and attempt to get around the tariffs in any way possible.  The negative effects were clearly shown when Donald Trump introduced steel tariffs on Canadian steel.  A Canadian committee was quickly set up to make sure that other countries did not ‘dump’ steel into Canada in reaction to the U.S. steel tariffs.  Few new jobs were created in the U.S. steel industry, where the real issue is the problem of competition from modern and more efficient steel production overseas.  Again, Canada’s steel and aluminum industries are fairly integrated with American users and manufacturers, so that tariffs simply lead to market disruptions and increased end costs.

For decades now, people have talked about the need for freer trade between our two countries.  Indeed, most business people would prefer to let the marketplace determine the value of trade, including cost effectiveness and competitive advantages.  Unfortunately, it appears that administrations in both countries prefer to have dispute resolution processes settle their ongoing trade squabbles, often resulting in long, disruptive and costly legal battles.

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Nov 13

Hyperinflation Could be the Death Knell of Current Federal Administrations

by bcurry

According to just released U.S. Labor Department data, the consumer price index (CPI) increased 6.2 percent from October 2020.  The CPI in Canada was not far behind, rising almost 4.5 percent on a year-over-year basis in September, the fastest pace since February 2003.  In general, monetary authorities like to keep the annual inflation rate at somewhere between 2 to 3 percent.  What one is seeing now could certainly be described as ‘hyperinflation’, which causes all kinds of major issues for governments.  Experts also predict that this current belt of inflation is not going to go away any time soon because of a number of underlying factors, many attributed to economic consequences related to the pandemic.

You don’t have to be an economist or a political scientist to figure out the daily concerns caused by the current inflation rates throughout both economies.  The average American or Canadian sees these concerns on a daily basis when they purchase a house or pay rent, go shopping for food, put gas in their vehicles, buy new vehicles, pay their electricity and heating bills, etc., etc. 

While wage rates have been climbing in recent months, higher consumer prices are eroding peoples’ buying power.  In the U.S., inflation-adjusted average hourly earnings fell 1.2 percent in October from a year earlier.  The longer high inflation continues, the more pressure will be put on Federal Reserve and Bank of Canada officials to end near-zero interest rates sooner than expected.  With the increase in interest rates, people with mortgages and outstanding debt will be faced with the greater cost of borrowing and additional debt-related issues.

One must remember that when George H.W. Bush was president, one of the major reasons that he was unable to win a second term in 1992 was because of the early 1990s economic recession during his administration.  Some suggest that he forgot about the most important political maxim that: “It’s all about the economy stupid!”  The impacts of the recession also included the resignation of then Canadian Prime Minister Brian Mulroney.  Administrations cannot ignore a situation of hyperinflation for very long.  Both President Biden and Prime Minister Trudeau are caught in between a hard place and a rock.  With the end to financial assistance related to the pandemic and the economy’s lockdown, people are going to suffer.  Tough choices are going to have to be made, whether to put nutritional food on the table or cut back on medications and basic entertainment. 

Yes, the economy does appear to be opening up.  However, new COVID cases are on the rise once again in certain regions in North America.  Indeed, in these regions one has what is being referred to as “a pandemic of the unvaccinated.”  Consequently, should governments choose to renew or introduce new financial assistance measures, this will only exacerbate the current economic situation by further increasing the ratio of government debt to revenues.  If interest rates increase as expected in light of inflation, the future interest on government debt will also increase accordingly.  Under these extraordinary circumstances, governments can only do so much.  If the current frustrating situation continues, we would most likely see a change in federal administrations in future elections, as was the case in the early 1990s.

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Jun 21

Cities Will Definitely Not Be the Same After the Pandemic Is Over

by bcurry

A recent New York Times headline read: “New York Faces Lasting Economic Toll Even as Pandemic Passes.”  This should come as no big surprise given the nature of New York city’s industrial make-up, a good deal of which depends on foreign and domestic tourism.  Indeed, the article notes that the city had an 11.8 percent decline in jobs from February 2020 to April 2021, almost three times the loss on the national level.  Boarded-up storefronts and for-lease signs dot many of its neighborhoods.  Many of the businesses that depend on office and other workers who work in the core have yet to experience any substantive turnaround, especially in the retail, hospitality and performing arts sectors.  Of concern to the services sector is that several large corporations like Google and Facebook, as major commercial tenants, will not require the same amount of office space with a good percent of their staff continuing to work remotely full time or two or three days a week.  With fewer people commuting daily to downtown businesses, there will also be a substantive need to examine current public transportation policies.

While the example of New York is certainly considered to be an extreme situation, there is little doubt that all urban centers in North America will have to adjust economically and socially in the near future.  The impact of the pandemic will leave a substantial mark on every aspect of urban life for sometime to come.  The most evident immediate impact can be seen in the housing market.  Working remotely from home is only one of several factors influencing the rising costs of housing, especially single detached homes.  The average sale price for a home in Canada for example has surged 38 percent to $688,208 over the past year amid a pandemic-driven housing boom, according to data from the Canadian Real Estate Association.  Technology has allowed more people to work from ‘rurban’ communities than ever before, eliminating much of the need to commute to and from urban workplaces.  Employers are having to adjust their working arrangements to accommodate employees, who in many cases have essential skills in short supply.

Even Ottawa, where I live, is experiencing many of the economic and social consequences of the pandemic, despite being primarily a government town and having less of an economic impact that most cities.  However, as in the case of New York, Ottawa has seen dozens of small businesses, which before the pandemic employed about much of the city’s work force, haven’t survived.  Tourism, a major part of the National Capital Region, is way down, affecting hotels, tour operations, restaurants and bars.  The closure of the American border over the past year to non-essential traffic and major restrictions on international air travel has had a major impact on tourism.  Sports and entertainment venues, including Ottawa’s large festival industry, have been non-existent since the beginning of the pandemic.  Like many urban communities, the city is counting on the vaccination of seventy or more percent of its population to eventually encourage locals to return to recreational and indoor activities across the region.  However, much like projections for New York, most observers predict that it’s going to be a long, slow recovery.  Indeed, one can further predict that the eventual outcome will be quite different from pre-pandemic conditions in North American cities.

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May 9

Reopening of Businesses Brings With It a Shortage of Workers

by bcurry

As immunization of populations against COVID-19 accelerates in the U.S., Canada and the European Union, the lessening of restrictions will allow more and more businesses to reopen, particularly in the leisure and hospitality sectors.  However, in the U.S. and Canada, federal governments had introduced additional unemployment benefits and stimulus checks to provide financial assistance to people who lost their jobs during the pandemic.  Many of the pandemic-related programs are expected to continue to the end of this summer.  However, as more businesses reopen, there will be a demand for workers to return.  The apparent data currently indicates that many workers are reluctant to return to former employment at this time for a number of very valid reasons.  Employers say it is increasingly difficult to attract job seekers to an industry whose future is more or less tied to whims of the coronavirus and the uncertainty of vaccination campaigns. 

The fact of the matter is that there continue to be pockets of COVID outbreaks in both the U.S. and Canada, regardless of increased immunization within the population.  The chances of front-line workers being exposed to the coronavirus remain high with the arrival of more contagious variants.  A good deal of uncertainty still exists.  With the unemployment benefits in place, one cannot blame many workers for being cautious about returning to employment, especially that which involves low-paying jobs.  In addition, women in particular are affected by the lack of affordable and safe daycare for their children.  Remember that in many jurisdictions, schools remain closed and on-line learning, where available, continues to offer a safer option.

Several American states, more so than Canadian provinces, have moved quickly to open up their economies.  However, despite everything, the pandemic is definitely not over.  Indeed, the so-called ‘third wave’ has been worst in terms of hospitalizations, especially among younger Americans and Canadians.  Case loads are still far too high, threatening to overload health care systems.  For this reason, some governments are reluctant to move too quickly in reopening businesses deemed non-essential.  Here in Canada, until a certain proportion of the population is fully immunized, governments actually prefer that many non-essential workers remain at home.  However, in the U.S., some Republican governors have started slashing jobless benefits in their states, hoping that the loss of generous federal aid might force more people to try to return to work.  Other states now require residents to prove they are seeking jobs to continue collecting benefits.

This past week, it was reported that just 266,000 jobs were added in the U.S. which was a disappointment since expectations were high for a hiring surge in April.  It was anticipated that potentially a million Americans would have returned to work.  Regardless of the impact of unemployment benefits on employment hesitancy, the fact is that many front-line workers continue to be concerned about the pandemic in their industries.  For obvious reasons, people don’t want to be bringing home the virus to their families.  Also, A Pew Research Center survey earlier this year found that 66 percent of the unemployed had “seriously considered” changing their field of work, a far greater percentage than during the Great Recession.  People are now more aware of the potential dangers of such outbreaks, and would be more inclined to seek other less hazardous employment.  As reported for example, grocery stores in the U.S. shed over 49,000 workers in April and nursing care facilities lost nearly 20,000 workers.  The same considerations can be found among Canadian workers in these and other sectors.  In addition, more affluent Americans and Canadians are retiring early because their retirement portfolios have surged in the past year and the pandemic may have taught them that life is too short.

In conclusion, what the pandemic has done is force many of the affected unemployed to reassess their future.  Employers will have to also reassess their employment benefits, working conditions and levels of compensation in order to attract and recruit workers.  As a consequence of the pandemic, the eventual result will most likely represent a major change in the operation of labour markets in most industrialized countries, including those in the so-called ‘gig economy’.

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May 3

There is a Catch-22 in Pipeline Issues Between Canada and the U.S.

by bcurry

Following Joe Biden’s inauguration as U.S. president, he took the widely expected step through an executive order of cancelling the cross-border permit for the US$14.4-billion Alberta-to-Texas heavy oil pipeline, the Keystone XL pipeline. The decision marks the third time a U.S. president has blocked the construction of this pipeline.  Next occurred the decision by Michigan’s Governor Gretchen Whitmer last November which ordered Calgary-based Enbridge to shut down its nearly 70-year-old Line 5 pipeline by May 12, 2021.  Line 5 carries each day up to 540,000 barrels of crude oil and natural gas liquids across Michigan and under the Great Lakes.  Line 5 is part of Enbridge’s mainland system carrying fuel from Alberta’s oil sands to the Midwestern U.S. and Eastern Canada, especially to refineries in Sarnia, Ontario.  Not surprisingly, President Biden’s and Governor Whitmer’s decisions were applauded by environmentalists and Indigenous groups on both sides of the border.

The difficulty is that Canada is the world’s fourth-largest producer of crude oil, and the U.S. is its top customer.  While past incidents have occurred where crude oil leakages in pipelines, including those which are part of Enbridge’s mainland system, the alternative means of transportation via rail and trucking also represents serious safety issues.  This potential danger was clearly demonstrated in the fiery derailment in July 2013 in Lac-Megantic, Quebec, which killed 47 people and wiped out part of the town.  From an economic point of view, the transport of crude oil and natural gas liquids by pipeline is the most efficient and least costly option.  Realistically, any transition within the U.S. or Canada away from fossil fuels will take time.  While the elimination of fossil fuels makes good environmental sense in light of climate change, there continues to be a dependence on fossil fuels for servicing our industries, running our transportation hubs, producing electricity and heating our homes.  Both countries have to cooperatively work together towards achieving environmental goals without creating bad relations between our governments and citizens.

Back in January, Alberta’s Premier Jason Kenney asked the Canadian government to push the U.S. government to reimburse the $1.5 billion it stands to lose from the cancellation of Keystone XL and to reimburse TC Energy, the project proponent, for the money it has sunk into the project.  Alberta took an ownership stake in 2020, representing more than $1 billion in taxpayer money to fund the construction of the pipeline.  The Biden administration’s decision to block the Keystone XL pipeline has put Prime Minister Justin Trudeau in a very difficult situation, one which he has raised with the President.  On the one hand he has to support Alberta’s oil and gas industry.  On the other hand the Prime Minister has agreed reduce in Canada’s greenhouse gas emissions by 40 to 45 percent within the next decade.  This brings Canada in line with the Biden administration recent pledge to slash U.S. greenhouse gas emissions by 50-52 percent from 2005 levels by 2030.

Critics of the decision to shut down the Line 5 pipeline note that 6,500 good-paying jobs in Sarnia, Ontario, are on the line.  A further 23,500 indirect jobs in that same region could also be impacted, and thousands more across Ontario and Quebec.  Line 5 also feeds into Line 9, which carries oil to refineries in Montreal and Lévis for Quebec’s supply needs.  According to Minister of Natural Resources Seamus O’Regan, Line 5 delivers 66 percent of the crude oil consumed in Quebec.  This means that besides Alberta, the Premiers of Ontario and Quebec are extremely unhappy with the Michigan Governor’s position.  Any decision to move crude oil and natural gas liquids by alternate means is considered less safe, more costly and realistically not viable given the vast quantities that have to be transported.  This is your Catch-22.  For this reason, both Canada and the U.S. need to work much more closely to resolve all relevant issues pertinent to their respective constituents.  Our continuing good trade and political relationships are in the balance.

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May 1

May Day is here, but where is organized labour?

by bcurry

Today is May 1rst, a day celebrated in many countries as ‘May Day’, including in Canada and less so in the U.S.  It should be noted that May Day is one of the most important holidays in communist countries such as China, North Korea, Cuba and the former Soviet Union countries.  Since the late 19th century, unions and worker groups have celebrated the first day in May as an International Workers’ Day, since referred to as May Day.  In North America, May Day largely grew out of the 19th-century labour movement for worker’s rights and an eight-hour workday in the U.S. and Canada.  In numerous cities, there will be parades, picnics and celebratory gatherings by both unionized and non-unionized workers and families.  However, historically, both the U.S. and Canada chose to celebrate the contribution of workers on an alternative national statutory holiday in September, ‘Labour Day’.  So much for the history lesson.

The fact is that May Day is celebrated much more in Europe where countries have long ago implemented universal health care systems, extensive social welfare nets, labour standards laws and other programs aimed at improving and protecting the livelihoods and health of workers.  This is why European countries did not need to introduce very many new assistance programs during the current pandemic, as their existing programs, including paid sick leave and unemployment benefits, cover most of the labour force.  Europe remains a relative stronghold of social democracy in which higher levels of taxation fund national health care systems as well as programs that automatically help those who lose their jobs.  In this way, European countries generally seek to limit economic volatility.  In addition, unions play a greater role in Europe than in the U.S., often sitting on management boards in countries like Germany, Sweden, the U.K., Austria, France and several others.  Together with a right to elect work councils, this is often called “codetermination” — something rarely seen in the U.S. or Canada.

On the other hand, the American economy has been described as a study of inequality, with risks and rewards stretching to extremes, and failures often capable of precipitating disaster, as unemployment frequently separates people from their health insurance policies.  This has forced the U.S. to be much more dependent on economic growth and emergency relief injections if something goes wrong, as it has under the current pandemic.  The Biden administration is pouring trillions of dollars into supporting American families and communities adversely affected by the pandemic, hoping to stimulate the economy as the U.S. emerges eventually from government-imposed shutdowns.  Increasing economic growth is expected to continue, but there are questions as to just who will benefit from such growth?  Recent studies have indicated that the rich have gotten richer.  Wall Street has thrived versus the evident losses experienced by the Main Street economy, especially small businesses and their workers.

With the decline in private sector unionization in the U.S. and Canada, there are fewer and fewer workers willing to march on this May Day.  The pandemic may have greatly knocked the wind right out of the unions’ sails.  There is also every indication that the pandemic may further reduce the number of good paying blue collar jobs, leaving many workers scrambling to secure employment in lower paying non-unionized jobs.  Alas, it is really difficult to happily celebrate this year’s May Day, or next Labour Day for that matter.

Canada Economy Economy Reopening the Economy Unionization US

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