Category Archives: Politics

UN calls for new paradigm on progress

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Following up on the fascinating dialogues at Davos, where some of the world’s richest individuals discussed reforming capitalism for the 21st century, the UN is calling on the world to establish a new precedent for progress: sustainable development.

Preceding the Rio +20 Summit this year, held on the 20th anniversary of the first Earth Summit in Brazil, the UN High Level Panel on Global Sustainability has outlined the need for a “new paradigm for economic growth, social equality and environmental sustainability.” The panel says that traditional economics have notable market failures, neglecting to factor in the costs of carbon emissions or “quantify the economic cost of sustained social exclusion.”

That sustainable development is right is self-evident. Our challenge is to demonstrate that it is also rational – and that the cost of inaction far outweighs the cost of action.

Some of the panel’s specific suggestions:

  • Measure growth beyond GDP and develop a new sustainable development index
  • Global sustainable development goals to replace the Millennium Development Goals
  • Incorporating social and environmental costs into the pricing of goods and services
  • A global fund for education to provide universal access to post-primary education by 2030
  • Employers, unions, and governments should establish non-discrimination policies and publicly report on progress
  • Develop labeling schemes for goods that reflect their full impact of production and consumption to enable consumers to make informed choices
  • Applying price incentives and disincentives on goods based on universal sustainable product standards
  • Establish regional and global ocean management frameworks for major marine ecosystems
  • Begin an “ever-green revolution” to double agricultural productivity while drastically reducing resource use
  • Universal access to affordable, sustainable energy by 2030; double the rate of energy efficient and the global share of renewable energy by 2030
  • Transparent disclosure of, and planned removal of all subsidies which cause the greatest detriment to natural, environmental and social resources
  • Phase out fossil-fuel subsidies by 2020
  • Sustainable development criteria for all government procurement
  • Business and governments should develop a framework for sustainable development reporting and should consider mandatory reporting by corporations with market capitalizations larger than $100 million
  • Establish a Global Sustainable Development Council to improve integration of the three dimensions of sustainable development, address emerging issues and review progress
  • Establish a peer review mechanism to encourage States to share experiences and fulfill their commitments

The panel was chaired by Jacob Zuma, President of South Africa, and Tarja Halonen, President of Finland.

I personally found the document inspiring and incredibly enlightened. Combined with the talks on Davos, it seems as though dialogue is moving towards a new model of ethical capitalism – that is, a market which quantifies and values those three dimensions of development equally: social, economic, and environmental. In a sense, it replaces capitalism’s drive for profit at any cost to one which pursues progress in a holistic sense. Under such a paradigm, expansion of the oil sands, which may provide short-term economic value, but have long term detrimental environmental impacts, is ultimately an unethical pursuit and would not be pursued when fully quantified.

As noted in many of the suggestions, moving towards this model requires a new form of economics, one that quantifies the opportunity costs within all three dimensions of sustainable development. The most obvious intervention in our current system is applying financial disincentives to that which we don’t want – carbon, for example – and applying financial incentives to that which we do want – green energy products perhaps. Pricing signals, rather than traditional regulation, would let the market naturally direct capital towards that which we want more of. Similar market reforms have been successful in reducing tobacco usage, and could be replicated on unhealthy foods which contribute to obesity.

But how do we start to quantify other attributes, such as biodiversity, or ocean health, into economics? What about the costs of “sustained social exclusion”? Neglecting large segments of the global population and relegating them to poverty actually costs society the returns investment would produce. How specifically capitalism could integrate these measure into the market without global governance regulations is unclear. Indeed, it seems as though an entire new breed of economists would need to develop such a system. However, if it were achieved, the potential results of such a paradigm shift could truly change the world.

Old Age Security is a waste of tax dollars

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The Prime Minster was in Davos last week for the World Economic Forum. During his speech, he laid out a bold vision based on structural reforms to many Canadian governmental programs, including Old Age Security. As a young person with no immediate focus on retirement or pensions, I went about learning more on this program and why seniors and opposition parties were immediately against any changes.

First, we must not confuse Old Age Security with the Canada Pension Plan. Under the CPP, all Canadian workers must pay into a government managed long term investment fund, from which retirees will eventually receive their pension payouts based on their contributions. Meanwhile, OAS provides all seniors – Canadians over 65 – with a cheque from the government of about $500 a month. For low income seniors, they also receive the Guaranteed Income Supplement of up to $700 a month. Both the OAS and GIS payments come out of the federal budget and require no contributions on the part of the recipients.

While Harper’s proposed changes are not yet public, many believe it will entail moving back the eligibility age from 65 to 67, due primarily to shifting demographics. When OAS was introduced, life expectancy for men was 66 and for women, 71. Today, men live to 78, women to 82, and those numbers will continue to rise. This effectively means that payouts to seniors are increasing as people live longer.

There’s also the concern of the baby boomers threatening the sustainability of OAS. Whereas today only 12% of the population accesses the program, in 20 years that figure will boost to 1 in every 4 Canadian. OAS currently costs the federal government $36 billion, projected to rise to $108 billion by 2030! Ottawa had a federal budget of $237 billion in 2011, meaning OAS is currently 15% of revenues, but would come to consume nearly 40% of the budget in 2011 terms.

Raising the eligibility age from 65 to 67 is an obvious and acceptable change. There’s no reason a senior who expects to live to 80 should start receiving cheques from the governments at 65, on top of their pension. The only arguments I’ve heard defending the status quo is moralistic: seniors have paid their fair share over the years and deserve comfort and dignity in retirement.

But, in a world of smaller government and tighter finances, I’d argue that OAS itself should be abolished. $36 billion is not chump change by any means and using that money for OAS is an absolute waste. Instead of an investment, like health, education, or infrastructure, OAS is an expenditure with no return. It is simply money down the drain.

Furthermore, is it a handout to those who should least need it. Seniors have had the entire lives to plan for their retirement. Not only do they receive CPP payments, they also have plenty of opportunity to save money in RRSPs or investment portfolios. Additionally, seniors who are homeowners would have long ago paid off their mortgages, providing them with a large piece of financial equity for retirement. Also, seniors can, or should be able to, rely on support from productive members of their family. There should simply be no excuse for a government cheque of up to $1200 a month for the last 15 years of their lives on top of everything else they’ve accumulated during their working years.

The irony is that young people struggling to start a family receive no such government support. Nor do low income Canadians, many of whom are stuck in a cycle of poverty. Putting that $36 billion into direct government support for this segment of the population would be a far smarter investment, as it would reduce poverty and its associated government costs (policing, courts, health, housing), while increasing national incomes, boosting the economy and tax revenues. For some perspective, note that paying the full tuition of all 1.2 million Canadians in post-secondary education would cost just over $5 billion. The Kelowna Accord of 2005, which promised to make significant progress on reducing opportunity gaps for Aboriginal Canadians through education, health, and infrastructure investments, cost just $5 billion over five years.

So tell me, what’s the better use of money? Putting those tax dollars back into the system to help produce greater dividends for the country, or using them to support the last fifteen years of a senior who should already have access to income from a myriad of sources.

One is a investment and the other is a expense. I know where I’d put the money.

Let’s cut the tax rhetoric

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“The sky is falling!”

That line, famously tied to Chicken Little, could just as easily be linked to politicians and business leaders when talking taxes.

We’re living, still, in an era dominated by neo-liberal economics, an ideology that calls for limited government, privatization of services, de-regulation, and low taxes. In fact, it’s so ingrained in our society that any politician that would dare proclaim they supported raising taxes would simply be laughed off the stage by citizens and the media alike. Of course, business groups and economists, with their primal focus on wealth and jobs, reinforce this notion that all taxes are a drain on private capital and productivity.

The rhetoric is extreme with their claims that any tax increases would destroy the economy and put untold numbers of workers out of employment. Ironically, in recent times, the political leaders of this campaign in BC have eaten crow twice for reversing course.

When Christy Clark became Premier, she pledged to raise the minimum wage from $8 an hour, one of the lowest in the country and not raised in over a decade, to $10.25, more in line with other major provinces. For years, the Liberals claimed that raising the minimum wage would destroy jobs in low margin industries like restaurants. Their claims were backed up by economists and local business groups that said the economy would grind to a halt if the government dared raise the floor on wages.

Yet, Clark moved forward, and increased the minimum wage, through three escalating steps over the course of two years. The economy has not crashed and burned, McDonald’s and White Spot are still employing people, and the world went on.

Situation number two. The HST was able to head to a provincial referendum and the Clark government decided to sweeten the deal if British Columbians decided to keep the tax – if a majority supported it, the HST would be lowered to 10%. How would the government make up the lost revenues? Well, it would just increase the corporate tax rate.

Yet, this completely contradicts the rhetoric from the Liberals for a decade that corporate taxes were driving away investment from the province. Corporate taxes were demonized as inefficient; nothing more than a hidden cost passed onto the consumer. Of course, the HST was voted down, and thus the corporate tax rate was never increased, but for a government that vehemently decried the tax for years to suddenly flip flop shows the real holes in its ideological economics.

What these two examples prove to me is that, despite all the cries that the sky would fall if we raised taxes, in reality the effects are minimal. While a huge spike or drop in taxation no doubt would either hinder or help investment, changes around the margins don’t make a significant difference to business. They adapt and life goes on.

Why I’m officially a card-carrying federal Liberal

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Tonight, I put a $10 charge on my credit card and became an official member of the federal Liberals. Having resisted committing myself to any of the federal parties since my youth, this is a big step for me and not one that I took lightly. I consider myself a reasonable person, not particularly interested in ideology or partisan politics, but rather evidence-based decision making. Indeed, I can find policies that I support in all four of the federal parties. So why have I finally become, for the next year at least, a Liberal? Here’s three reasons:

Historically, I’ve always been drawn to the Liberals. Jean Chretien was my Prime Minster; I grew up with him and fondly recall watching him win his third majority in 2000. It wasn’t that I knew anything about the man or his party, but he was just the norm as a kid. As I grew up, I learnt more about the Liberals’ key role in shaping this country – whether with medicare, the flag, or the Charter of Rights and Freedoms.

Even in the dying days of the Liberals, the party made me proud to be Canadian. Chretien opted not to invade Iraq, and nearly de-criminalized marijuana. Paul Martin brought the country same-sex marriage and the $5 billion Kelowna Accord to move forward with Aboriginals.

While I now understand the counter arguments and the downsides to Liberal dominance, most visible under Trudeau with Quebec and Alberta, the fact remains that the Liberal brand is a powerful one. Many positive achievements of the country – those ideas that are unique Canadian – are intricately tied to the Liberal party. That will not simply be washed away. The Liberal brand is resilient and can undoubtedly rise again to move the country forward, but only if it shows it has the vision to lead Canada in the 21st century.

Which leads me to my second reason, which is renewal. Just nine months ago, many questioned whether the party would survive, and yet, thanks to the dedication of active Canadians, the Liberals are moving steadily towards a complete transformation. As has been noted before, the Liberals have been presented with a tremendous opportunity to take risks, stand up for controversial policies, and re-imagine their role and place in Canadian politics. They’ve been presented with a freedom not experienced in generations.

Being involved in that process of renewal is incredibly exciting. As Andrew Coyne once said, the Liberals need to return to their roots – not the Trudeau or Pearson era, but back to the days when they were George Brown’s Reformers. The Liberals were once the anti-establishment, fighting for true democracy in the face of the Tories’ Family Compact. Bringing that spirit back to the party, and forging ahead with a new vision and agenda for tomorrow, is both inspiring and deeply engaging. I want to be a part of it and make an impact.

However, up until the other day, these were more possibilities than realities. Yet, with the election of Mike Crawley as party president, the Liberals have committed to real change. Had Mike not been elected, I doubt I would have decided to join. He has presented a riveting vision for the Liberals, frequently stating he wants to create the first truly modern political party. His plan to combine technology with political engagement opportunities is revolutionary, not just for the Liberals or for Canada, but the future of democracy everywhere. I want to help make that vision a successful reality.

In summary, I believe in the brand, I believe in the opportunity, and I believe in the vision of the modern political party that the Liberals can become. I’m excited, engaged, and ready to get down to work – well, at least for the next year.

Ethical oil? There’s no such thing.

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One of the strongest cases made to support the expansion of the Alberta oil sands is the proposition that our oil is ethical when compared to reserves from the Middle East. From a geopolitical perspective, the purchase of oil from Canadian markets over Arab markets makes sense, but such a conclusion is simplistic at best.

According to Merriam Webster, ‘ethical’ is defined as that which “conforms to accepted standards of conduct.” This definition inherently recognizes that ethics are not static – they are created, endorsed, and re-shaped over time by society. What may be ethical or accepted behaviour in one place may not be shared by another. These standards of conduct shift due to accepted understandings of what is right or wrong, based on our knowledge at a particular time.

For example, it was not long ago that slavery was accepted as ethical behaviour. The notion that human beings could be bought or sold and had no rights of their own to freedom was simply taken as a norm. It was not until this notion was challenged and acceptability changed that slavery was abolished and outlawed. Individuals heard arguments for and against slavery, and ultimately decided that it was in fact unethical.

In the case of oil, modern society has gone through its own process of debate and, I dare say, enlightenment. During the industrial revolution, the use of fossil fuels to power our machines was not questioned. The immediate effects of pollution were dealt with by the rich, and later the middle class, by leaving the inner city for healthier, suburban spaces. Technology was also created to help reduce and mitigate this pollution.

The lesser known, more latent effects of that fossiel fuel usage is, of course, climate change. While on the radar for nearly three decades by scientists, a generally global consensus that, one, it is occurring, and two, it is man-made, has only emerged in roughly the past five years.

Five years ago, the source of your oil was of ethical concern. A country like Canada or Norway, with better records on human rights, would be a more ethical purchase than oil from Russia, Latin America, or the Middle East. But based on our new global consensus on the negative effects of fossil fuel usage, the purchase of any oil, no matter where it comes from, is no longer ethical.

When we are aware of the harmful and long lasting, perhaps irreversible, effects of climate change on people around the world, any corporation, person, or country that continues to purchase and burn oil is acting unethically.

Now there are those who will argue that anyone who currently relies on oil, or fossil fuels, for any part of their lifestyle, are therefore acting unethically. Often this argument is thrown at environmentalists, deeming them to be hypocritical for taking a flight or driving a car. Of course, under the new paradigm this is indeed unethical, but the burden placed on the individual is far too great, when said person has such a limited control on their options for survival. We would not accuse a middle-class individual for choosing to be fat if their neighbourhood is surrounded by fast-food restaurants and grocery stores filled with processed foods. Their choices are constricted by the larger societal processes, leaving much of the responsibility to corporations and governments.

When renewable and clean energy sources are available as freely and priced at the same rate as fossil fuels, and individuals have a legitimate option available, if they continue to purchase the non-renewables, they ought to be deemed as acting unethically. If they switch to the clean energy option, they are choosing to adopt ethical behaviour.

With this in mind, when a corporation – Enbridge – and a government – Alberta and Canada – actively seek to expand the oil sands for export to energy hungry nations, they are choosing to be irresponsible global citizens and are acting against the best interests of society. The ethical option would be to take our existing wealth to invest in clean energy sources, a move that would drive down their costs and put them on a level playing field with fossil fuels.

We are living in a new era where we deeply recognize and understand the negative impacts of fossil fuels. Corporations and governments that refuse to shift their behaviour in this new environment fail to grasp that our ethics have evolved, our norms have changed, and that such choices are no longer acceptable.