Errol P. Mendes Headshot

Canadian Economy Ain't So Rosy, Mr. Harper

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HARPER GOVERNMENT COMMUNICATIONS DIRECTIVE INDUSTR
AP

While the Harper Conservatives are boasting about Canada having the best economic performance in the G8 (which Germany would contest), the Organisation for Economic Co-operation and Development has just issued an important reality check. The OECD warns that the gap between the top 10 per cent and the rest of Canadians has been growing in the past 10 years above OECD averages, with those at the top earning 10 times more than the bottom 10 per cent. The poverty rate has also increased with a distressing 15 per cent of children living in poverty. The causes should be of immense concern to the disappearing Canadian middle-class and the most vulnerable.

The OECD asserts that the causes of this new Canadian reality range from the loss of good quality jobs, ineffective benefits, and transfer policies to the failure of the taxation system to blunt the growing inequality. The report comes on the heels of the not-so-rosy Stats Canada report that the economy lost 18,600 jobs in November and that the unemployment rate rose to 7.4 per cent. In addition there have been multiple warnings from the IMF and the Bank of Canada that household debt in Canada, one of the highest in the G8, could be the harbinger of future economic and social distress beyond that already described by the OECD.

The usually conservative OECD paradoxically panned the trickle-down economic ideology of the Harper Conservatives with the statement by OECD General Secretary Angel Gurria that, "Greater inequality does not foster social mobility."

Those who wish to replace the Conservatives at the next election should focus on inclusive growth, a key factor in closing the inequality gap according to the OECD report. This should include promoting policies that replace low-paying and part-time McJobs with high quality full-time jobs and investing in early childhood development. It also entails ensuring a fairer taxation system, which includes eliminating tax breaks for the rich like stock options masquerading as income and improving tax compliance that allows government and citizens to establish a more equitable society.

Unequal outcomes can also be the product of a vigorous social democracy, but these outcomes must be used to invest in equality of opportunity and chance. There must also be a Canada-wide exploration for sustainable methods of making higher education accessible to all who have the admission grades so we can ready future generations for an intensely competitive and global knowledge economy.

Fifty per cent of Canadian students graduate with student debt with an average of $27,000 (the children who don't probably had their tuition written off their parents' income).

The data for underinvestment in aboriginal children is so bad it is heartbreaking. This is unfair and dangerous to an excellent Canadian future.

It is vital for those who care about the country's sustainable economic future accompanied with social stability and prosperity -- rather than the perpetual engineering of divisive wedge politics -- to develop Canada-wide policies and actions to rectify the distressing picture painted by the OECD report. This should include partnering with stakeholders and communities that are concerned with the disappearing middle-class and the plight of those in the poverty trap to come up with realistic solutions.

It is also necessary to explore national projects that could result in social, small, and medium-sized businesses created by innovative financing from private and government-backed development banks. This could provide the needed good quality jobs for the middle-class while also assisting in the financing of quality early education childcare critical for those who will come after us.

Time is running out for Canada to dispense with the divisive wedge politics that has exacerbated the inequality gap that threatens the future of the country. Now is the time for closing the gap between the rose-tinted glasses of the Conservatives and the reality that the vast majority of the disappearing middle-class sand those trapped in poverty face every day.

Errol Mendes is A professor of law at the University of Ottawa and editor of the National Journal of Constitutional Law. His latest book is Peace and Justice at the International Criminal Court: A Court of Last Resort.

Paul Summerville is writing a book entitled The Invisible Hand of Social Justice and is an adjunct professor at the Peter B. Gustavson School of Business in Victoria.

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