Enbridge Gas wants to build a pipeline through one of Hamilton’s most important natural areas in order to feed a huge increase in the use of Ontario’s gas-fired power plants and to supply the U.S. Northeast with fracked gas.
Building a four-foot wide pipeline through an ecologically sensitive wetland to allow greater use of polluting gas plants is a bad idea that needs to be stopped in its tracks. Using Ontario to supply fracked gas to U.S. States because other U.S. States will not allow such a pipeline to be built through their territories is an equally bad idea.
Instead of setting the stage for a 400-600% increase in gas-plant use – and resulting greenhouse gas emissions – Enbridge should help its customers save money by expanding its highly cost-effective conservation programs.
On average, Enbridge’s 2019 energy efficiency programs will reduce its customers’ energy bills by $4.72 for every dollar spent by the utility. Its most cost-effective programs in the commercial sector are forecast to reduce bills by $16.43 for every dollar spent. And every cubic metre of gas not burned thanks to these efficiency programs represents greenhouse gases kept out of our atmosphere.
Meanwhile, Enbridge is projecting that building its pipeline will actually increase gas rates in Ontario by $120 million.
While Enbridge thinks the way to deal with the closure of the old and unsafe Pickering Nuclear station and the shutdown of other aging reactors is to burn more gas, the better solution is to increase our use of renewable energy, including importing low-cost water power from Quebec. And continuing to improve efficiency in the electricity sector remains the lowest costway to keep our lights on and will help green energy go further in meeting our energy needs.
There were times when I was taking home about $3,500 a week.” That was in the oil sands, during the boom before 2014. Lliam Hildebrand was a young welder who had come to the Athabasca oil sands for work.
Before that, the Victoria, BC, native spent his first eight years after high school in heavy machinery repair and steel fabrication, often on oil field equipment such as flare stacks and rig platforms. He says serving the oil field’s needs was “the bread and butter” of his work, with an occasional job building renewable-energy equipment such as parts for a biofuel facility.
“I really loved that job,” he says, but opportunities in the North called and he spent the next half dozen years in the oil sands, doing similar work, primarily during spring and autumn, when sites get set up and stripped down. He found it exciting, interesting—and lucrative.
Then came the downturn. As international market forces sent the price of Western Canada Select plummeting from close to $100 per barrel to at times less than $20, oil sands operations struggled to survive, especially as the break-even price for many operations was as high as $80 per barrel. The opportunities that brought thousands like Lliam north evaporated.
“It was crazy,” he says. “Every single day in the lunchroom we were having conversations about who was getting laid off… and when would we be laid off?”
Worldwide, the price crash saw more than 440,000 petroleum jobs disappear. Bloomberg UBS predicts that between a third and as many as half of those 440,000 jobs will never return. In Canada 46,000 oil and gas workers were laid off, mostly in Alberta. Pipeline purgatory and the spectre of fossil fuels’ decline dominate public and political rhetoric on the subject.
What hasn’t been at the forefront is talk of an escape plan for tens of thousands of oil workers. In the past, when industries from carriage makers to cod fishers suddenly crumbled, workers were abandoned. Now the hope is for a “just transition.” The concept of just transition holds that when an industry or sector declines, particularly if that decline is mandated by government policy, the workforce is entitled to planned support to move people to new gainful employment, ideally in their own community.
In theory it’s a grand concept and one of the best ways to gain support for climate change policies from the affected workforce. In practice, “just transitions” have had mixed results.
Alberta and Canada had a practice run in coal. Canada’s coal phase-out got its start in 2012 when the Harper government imposed emissions limits for coal-fired power plants that effectively guaranteed their shutdown. Technological solutions that would sufficiently lower emissions at these generators weren’t cost-effective, especially in the face of coal’s declining competitiveness worldwide.
Alberta followed suit in late 2015 when the Notley government announced similar limitations as part of its Climate Leadership Plan and soon after mandated that at least 30 per cent of Alberta’s electricity grid be powered by renewable energy by 2030. At the time, coal fed over half of the province’s electricity needs, and its production here was greater than all other provinces’ combined. Coal directly supported roughly 3,150 jobs in Alberta, mostly in mining and processing rather than plant operations. Coal workers include engineers, welders, mechanics, electricians, heavy equipment operators and maintenance staff. The economies of some 20 communities were tied tightly to the industry.
Pipeline purgatory and the spectre of fossil fuels’ decline dominate public and political rhetoric.
Hanna is one of those coal towns, and perhaps the poster child for the phase-out thanks to its vocal mayor, Chris Warwick, and the town’s concerted efforts to meet the phase-out head on.
Hanna’s population is 2,500, 210 of whom work in the nearby Sheerness coal mine and power plant. The mine operations prop up the town’s economy, inflating incomes above what would be expected in a remote farming community, allowing business and public services to thrive where they likely wouldn’t otherwise.
While Warwick’s efforts have focused on the town’s economic transition, councillor Connie Deadlock devotes her time to the workforce. “There have been a lot of conversations about just transition from the provincial and federal governments, as well as everyone else,” she says. The mine and the power plant are still operating, but the town is already affected by the inevitable changes, and residents are anxious.
“Not only do we have to worry about the direct job losses, there is no other industry, so many people and families will have to relocate,” Deadlock says. “Housing prices have already been declining, our schools are affected, our businesses, and the list goes on and on.”
She says that because the power plant will convert to run on natural gas, not everyone will lose their jobs, but the new operation will require far fewer employees.
Immediately after the phase-out announcement in 2015, Hanna’s leaders scrambled to find a way not only to keep the town alive but to maintain its quality of life. They contracted Calgary’s Urban Systems to make an analysis of the town’s predicament and attributes and outline a path forward. The resulting Cactus Corridor Economic Opportunities Report has good news and bad for the little town.
“Be realistic,” it recommends. “Living in a community/region can make one unrealistic about its potential.” Also, expect some decline, because “it’s unlikely high wage primary industry jobs can be replaced. If workers in these industries want to stay in the community, they may have to accept a reduction in income and work with less status.” Don’t rely on ongoing subsidies or bailouts, it adds; don’t look for a panacea; establish a sense of urgency.
Coupled with the phase-out, Hanna, like many coal communities, is also rural. It is already subject to the pressures of rural decline, making it even harder to replace coal in its economy.
Hanna does have some business opportunities. Urban Systems points out it has some of the best solar power potential in the country, and likely good wind power possibilities too. As a farming community, it is surrounded by arable land and a fair water supply.
Government hasn’t abandoned Hanna and other coal towns, either. In addition to setting an end date for coal, the NDP government had the foresight to consider the transition—especially important given the phase-out only had 50 per cent public support province-wide. The government wanted widespread support as it made major changes to the way Alberta dealt with climate change issues.
The provincial government gave Hanna $450,000 to set up community action teams and help establish an economic plan. Unfortunately, Hanna was left off the list when the government committed funding at the end of 2018 for the municipal training centres many people say are integral to a successful labour transition.
“Our community has so many ideas for business and expansion, but no funds to bring them to fruition,” says Deadlock. “The employees at the mine don’t feel they will benefit very much from any programs that are offered. There needs to be some significant changes.”
Disconnect between what workers say they need and what the transition programs actually offer is a pervasive problem in Canada’s just transition efforts for the coal industry. “The most requested thing is for the government to offer training and other programs while people are still employed, [but] none of the programs are a benefit while still working,” says Deadlock. “Employees feel that if they could do some upgrading, training or education while still working and having an income, they would have a better chance.”
In response to how initial transition programs were designed, Jamie Kirkpatrick of Blue Green Canada says, “I think that was stupid.” Blue Green is a collaboration of labour unions and civil and environmental groups that has spent the past 10 years advocating for workers affected by environmental issues. It has primarily focused on the fate of Canada’s coal workers as coal-fired electricity comes to an end. Kirkpatrick says requiring workers to lose their jobs before they can begin retraining for a new career sets them back from the start. He and Deadlock agree the reason transition programs often don’t resonate with labour is because many of the plans were made without on-the-ground consultation.
“You actually learn more talking to people who are going to be affected by this than telling them what’s going to happen,” Kirkpatrick says.
Governments issuing decrees rather than including affected groups in the decision-making has been a major sticking point among workers and labour unions throughout the phase-out, seriously eroding any support the decision may have garnered from those most immediately affected by it. MORE
Cement maker Lafarge gets approval to burn old tires instead of coal. The approval allows about 20 tonnes of tires day to be burned as fuel for Lafarge’s cement plant in Brookfield, N.S.
Following some recent key milestones for the tire-derived fuels industries, it appears that TDF is now positioned for significant growth across Canada in the coming years. It hasn’t been easy in light of long-standing environmental concerns and pressures for circular economy solutions for end-of-life tires but TDF may well be poised to gain ready acceptance as part of Canada’s resource recovery strategy.
Nova Scotia Legal Challenge Unsuccessful
The watershed moment for TDF in Canada arguably came in 2018. The Province of Nova Scotia first approved TDF as a supplemental energy source for a cement plant facility in Brookfield, Nova Scotia in 2017 on a 12-month pilot project basis.
In so doing, the ministry relied, in part, on a detailed environment study conducted for the proponent by Dalhousie University which compared the greenhouse gas emissions from TDF-supplemented fuels favourably against existing the coal sources. The report was funded by the Natural Sciences and Engineering Council of Canada, giving it further clout.
Local residents challenged the ministry’s approval on environmental and procedural grounds – both of which were rejected in a March 2018 decision. This allowed the proponent to commission the pilot project by August 2019, with a daily consumption rate of 20 metric tonnes of whole tires.
Brookfield Emissions Results Likely Critical to Industry Aspirations
The last hurdle to a full scale commercial TDF-fuel additive kiln at Brookfield will, of course, be the resulting emissions, concerns about which have long-plagued the industry. Both the proponent and an independent group from Dalhousie will be collecting and reporting on a wide range of emissions data to the ministry, with a first planned public release of certain emissions information set for early in 2020.
It is difficult to overstate the importance that these results will have on the TDF industry across Canada. There remains substantial opposition to TDF-usage in any application, including cement, and a failure to meet the emissions conditions for the pilot project approval will likely mean a further moratorium on project development, further placing the TDF industry behind other resource recovery technologies and processes.
Ontario Permits Waste Rubber Fuel Source in 2019
The battleground over TDF is far from new in Ontario. In 2011, a group of community interests, including none other than Gord Downie, successfully opposed the use of TDF at a cement production facility in Bath, Ontario. The proponent subsequently revised its alternate fuel sourcing plans to include two low carbon fuel categories (LCFs), which have since been subject to emissions testing for a number of years.
Of these categories, “LCF 3” includes:
“Non-recyclable rubber, rubber recycling by-products (including polyester/nylon fibre from tire recycling facilities) and non-recyclable plastics.”
An amended environmental approval was granted to the proponent in August 2019 to augment the alternative feedstock to include the principal LCF 3 materials, thereby allowing rubber waste material (with its superb BTU values) to be included with lower carbon and less energy-rich materials, including various biomass sources. A graduated approach, which does not preclude moving to TDF as the market conditions evolve.
TDF Established Practice Elsewhere
It is also worth noting that the current disputes over TDF come against a backdrop of established TDF usage in heavy industry elsewhere, including in the cement industries of the United States and Europe.
Further, the provinces of Quebec and British Columbia have long permitted TDF in cement production facilities, though none has been approved recently (in the circular economy era). Finally, there are other materials whose fuel usage is also contentious, such as roofing shingles, telephone poles, used oils and plastics, which have also been approved for cement production in Canada. TDF does not, in fact, have a unique environmental legacy.
TDF may remain a lightning rod for industries such as cement production, but recent developments suggest that rapid expansion of TDF usage may be near, particularly following a successful pilot project. It may also be that the coming regulated circular economy regimes across Canada will, ironically, contribute to TDF growth with privatized and non-prescriptive EPR obligations that may allow producers to economically benefit from TDF resource recovery.
The Gidimt’en camp is located south of Smithers in northern British Columbia. Photo by Michael Toledano.
One year after a police raid in northern British Columbia attracted international attention, tensions between Wet’suwet’en land defenders and Coastal GasLink are rising once again.
The company’s recent victory in winning a court decision granting it a permanent injunction against Indigenous protest camps was short-lived.
On Saturday, Wet’suwet’en Hereditary Chiefs evicted the company from their territory.
“Coastal GasLink [CGL] has violated the Wet’suwet’en law of trespass, and has bulldozed through our territories, destroyed our archaeological sites, and occupied our land with industrial man-camps,” a statement from the chiefs said. “Private security firms and RCMP have continually interfered with the constitutionally protected rights of Wet’suwet’en people to access our lands for hunting, trapping, and ceremony.”
The company confirmed Sunday that it had received the eviction notice.
“We have reached out to better understand their reasons and are hopeful we can find a mutually agreeable path forward,” it said in a statement.
The company said trees had been felled across a road, making it impassable. “While it is unclear who felled these trees, this action is a clear violation of the Interlocutory Injunction as it prevents our crews from accessing work areas.”
Molly Wickham (Sledyo’), one of the land defenders, said last month she feared the then-impending court decision would bring more conflict.
As Wickham stirred a simmering moose stew on a wood stove in the cook tent at Gidimt’en camp, she worried the judgement might bring a repeat of last year’s RCMP raid.
On Jan. 7, 2019, RCMP officers forced their way past a barricade at the camp on the Morice West Forest Service Road. Police were enforcing an injunction obtained by CGL, which is building a $6.2-billion pipeline to take natural gas to a planned liquefied natural gas project in Kitimat.
Wickham and her family had recently moved to Gidimt’en, a new camp about 60 kilometres south of Smithers. They were occupying the territory where their ancestors had lived since time immemorial.
“Then the RCMP came and destroyed everything,” she said. “It’s unnerving that might be our reality again.”
The camp and its structures have been rebuilt in the past year. Shipping pallets have been used to create palisades that hide the presence of police patrols that have continued throughout 2019.
While the injunction order is not yet public, it’s expected to reflect the proposals from CGL. In addition to banning protesters from interfering with the pipeline company’s access to the area, the document allows CGL to remove cabins that are “impeding or preventing access to the worksites” with 72-hours’ posted notice.
Wickham said that CGL had expressed interest in using the roadside pullout where the Gidimt’en camp is located as a staging area for construction crews and equipment.
Known as Gidimt’en Access Point, the camp is the second constructed along this remote forestry road. The Unist’ot’en Healing Centre, built a decade earlier, is 20 kilometres farther west along the Morice Forest Service Road.
The story of the camp goes back to Dec. 14, 2018, when the B.C. Supreme Court first granted an interim injunction allowing CGL to access the territory.
Three days later, with unanimous support from hereditary chiefs of the five Wet’suwet’en clans, the Gidimt’en joined the Unist’ot’en in occupying the land. On Dec. 21, the company’s injunction was amended to include all protest camps in the area.
By Jan. 6, everyone was on edge. There were reports of dozens of RCMP vehicles mobilizing in the nearby communities of Smithers and Houston. The buildup of forces was quickly condemned by the Union of BC Indian Chiefs and the BC Civil Liberties Association.
It was the grader that tipped off Wickham. In the wake of a wet and heavy snowfall, the maintenance vehicle had scraped the road’s surface smooth all the way to Gidimt’en camp. Then it turned around.
“They weren’t keeping the roads nicely maintained for us,” she said. The children that had so recently played in camp were taken to stay with family.
“I don’t think anybody slept that night,” Wickham said.
By mid-morning on Jan. 7, the police had arrived. Beyond the barricade, at least two-dozen RCMP and industry vehicles lined the road. Two snipers were in place.
Amidst screaming and the sound of helicopters circling overhead, Wickham leaned her back against the gate and sank to the ground. She thought she might throw up.
“It was really clear that they didn’t care,” she said.
What Wickham didn’t know then was that the RCMP were prepared to use lethal force in the operation to remove the barricades preventing CGL from accessing the pipeline route. The RCMP’s plans were revealed last month by a report in the Guardian.
In the late afternoon, officers breached the gate and arrested 14 people, taking them to Houston for processing and then on to Prince George, where they were held overnight.
In the following days, thousands of people marched in rallies across Canada and around the world supporting the Wet’suwet’en. While media attention on the conflict may have waned over the past year, the RCMP presence on the Morice forest road has not.
Here’s an overview of what’s unfolded over the past year.
On Jan. 10, 2019 three days after police breached the gate, the Unist’ot’en allowed workers to enter the camp peacefully after hereditary chiefs reached an agreement with RCMP. Posted on the camp’s website was a message: “This is not over.”
“The agreement we made allows Coastal GasLink to temporarily work behind the Unist’ot’en gate. This will continue to be a waste of their time and resources as they will not be building a pipeline in our traditional territory,” it reads.
The same day, RCMP announced there would be a continued police presence on the Morice forest road and a remote detachment known as a Community-Industry Safety Office that would remain in place “as long as is deemed necessary.” Last week an RCMP spokesperson declined to say how many officers are stationed at the detachment and described police resources as “scalable based on circumstances.”
On Jan. 28, with RCMP standing by, workers for CGL used heavy machinery to tear down structures at the Gidimt’en camp.
On March 16, John Horgan became the first B.C. premier to attend a feast on Wet’suwet’en territory in Witset (formerly Moricetown). The premier promised to implement the United Nations Declaration on the Rights of Indigenous Peoples.
“This fall, we’ll be tabling legislation to give meaning to [Indigenous] rights that were given by the United Nations but not yet picked up in Canada or in British Columbia,” he told more than 100 people gathered, including Minister of Indigenous Relations and Reconciliation Scott Fraser, Minister of Forests Doug Donaldson and then-federal MPs Nathan Cullen and Murray Rankin.
On April 15, civil charges against all 14 people arrested on Jan. 7 were dropped. Two criminal assault charges (one not laid until October) remain and are expected to be before the court this month.
On April 24, at United Nations headquarters in New York City, Unist’ot’en spokesperson Freda Huson (Howilhkat) and Chief Na’Moks of the Tsayu clan addressed the UN Permanent Forum on Indigenous Issues and described human rights violations in B.C.
“Indigenous legal orders and Indigenous systems of governance must be recognized and respected and not trampled upon in the interests of corporate development,” Na’Moks told the UN.
On July 22, Wickham filed civil charges in B.C. Supreme Court against CGL and its contractors for special damages, aggravated damages, punitive damages and costs with interest for the Jan. 28 demolition of camp structures. The claims are still before the court.
“These avenues of compensation do not even begin to approach the cost of the violence of these companies invading traditional Wet’suwet’en territory. The spiritual and emotional traumas these companies have inflicted on the Wet’suwet’en are tremendous and grave,” the Gidimt’en said in a news release.
On Aug. 1, CGL revealed that archaeological impact assessments had not been completed for two areas, totalling 32,400 square metres, prior to the start of construction.
On Oct. 4, Wet’suwet’en hereditary chiefs issued a statement demanding CGL cease work after several cultural sites were destroyed. “Since February 2019, CGL has destroyed numerous archaeological heritage sites in Wet’suwet’en territory. In addition to potential village sites, portions of the ancient Kweese War Trail, accompanying culturally modified trees, and potential burial sites have been altered and destroyed by CGL work crews.”
“The Wet’suwet’en Hereditary Chiefs believe that a stop-work order must be enacted immediately to prevent further loss of Wet’suwet’en heritage by the negligence of Coastal GasLink. The OW [Office of the Wet’suwet’en] takes the loss of Wet’suwet’en cultural heritage and archaeological sites very seriously, as should any company or government agency working within Wet’suwet’en territories.”
On Oct. 24, Fraser introduced Bill 41 the United Nations Declaration on the Rights of Indigenous Peoples Act, in the legislature. The bill passed unanimously on Nov. 28. It made B.C. the first province to recognize the declaration, which states that Indigenous peoples shall not be forcibly removed from their lands and have the right to determine what happens on their territories.
On Dec. 20, the Guardian published an explosive report revealing that RCMP officers were told to use “lethal overwatch” and to “use as much violence toward the gate as you want” during the Jan. 7 police action.
On Dec. 31, the B.C. Supreme Court ruled in favour of CGL’s temporary injunction, making it permanent until pipeline work is completed. Lawyer Michael Ross, who represented those opposing the injunction, says it’s too soon to say whether those named in the injunction will appeal. He added that the decision was disappointing in its lack of recognition for Indigenous law.
“I think, from my client’s point of view, this judge should have done more in recognition of their law, and could have done more,” Ross said. “We’ve seen other judges do better, even when they haven’t taken the Indigenous perspective… This is doubly disappointing.”
On Jan. 3, 2020 CGL was notified by Dark House, also known as the Unist’ot’en, that it intends to terminate an access agreement effective Jan. 10.
On Jan. 4, Wet’suwet’en Hereditary Chiefs issued an eviction notice to the company.
Scott Gilmore: Canada needs men and women in power who are afraid to lie to us, who would be embarrassed to be caught out, who blush and fear the consequences
Ford laughs as he speaks with the media at Queen’s Park on Nov. 28, 2019 (Nathan Denette/CP)
I have spent a significant part of my professional life working in places where things have gone wrong—in countries afflicted with war, poverty or corruption. In the early years, I found the work especially challenging. I was often flummoxed by circumstances, unable to solve basic problems because I simply did not understand the context.
For example, it took me a long time to realize that “truth” is not necessarily objective, and the concept of shame varies widely from country to country. When I was still a diplomat, I had a moment of epiphany one day in Rawalpindi, a cantonment town in northern Pakistan, in the dusty office of an army general. The meeting was not especially important (I was so junior I was often used as a “walking insult”—an intentional snub to foreign officials who would be offended that Canada sent someone so unimportant to meet with them). The topic was their clandestine support for the Taliban, and we were getting nowhere.
We sat in two large and worn wingback chairs, flags behind us, note-takers in front, and tea in hand. I was jet-lagged and irritable and confused. My confusion was because the general was contesting basic points of fact. I would say something irrefutable, well-documented and widely reported, and he would respond with a flat denial. “No. That didn’t happen.” I would try a different angle, hoping to find some point of truth upon which we could both stand. But my search was fruitless. He denied reality with an air of patient kindness—as though he were helping a pleasant but slow cadet. And, the facts he presented were so clearly false that I could only respond in stammering bewilderment.
As we left, I asked my colleague, who was based in Pakistan, what had just happened. He shrugged and explained shame was not a universal constant and suggested I needed to adjust my expectations accordingly.
I would later have similar experiences in other countries, usually in places where accountability was scarce. I eventually understood that if a person does not need to worry about consequences, they also do not need to worry about how others see them. Since my general knew Canada was powerless to do anything about Pakistan’s support for the Taliban, he didn’t care what I thought of his answers.
Being Catholic, this connection between consequences and shame should have been obvious. The priests in my life warned me impure thoughts would send me straight to hell, planting the seeds for a lifetime of guilt and shame.
I am writing about this, as we begin a new decade, because I have the impression the last 10 years saw a distinct decline of shame in Canadian politics. It’s hard for me to count or calculate; this is not something tracked by Statistics Canada. But it distinctly feels like our politicians are growing more shameless by the day.
The examples are endless, whether it’s the current government lying about the SNC-Lavalin scandal, the previous one lying about the F-35 contract, Conservatives lying about climate change, the NDP lying about the economy, or the supporters and surrogates of all parties swarming social media and news panels refuting the irrefutable, denying reality and presenting their own set of facts without a fig leaf of shame or apparent regret. And it’s not just at the federal level. Whether it’s Doug Ford on deficits or carbon taxes, or Jason Kenney on equalization or his government’s war room, provincial leaders seem to do and say things every day that can only be described as “shameless.” Perhaps the most common and most egregious example of this is when any of our politicians speak about an opponent: without hesitation they describe the other and their policies as disastrous or corrupt, when it’s quite clear neither of these are true.
If this is getting worse, I suspect there are two causes. First, our politicians are increasingly living in protective cocoons that filter out dissenting voices. Due to a proliferation of news sources, they are able to surround themselves in radio stations, news sites and social media followers who support them. If they’re being called liars, they can’t hear it. And if you can’t hear it, does it even matter?
Second, journalism is shrinking and becoming less and less capable of holding liars to account, while those who protect politicians with spin are multiplying. In 1991 there were two public relations professionals for every one journalist in Canada. The ratio is now more than four to one. And, an increasingly ineffectual media means fewer consequences for politicians.
Regardless of why shame is apparently declining, I hope the trend is reversed. The ideals of peace, order and good government are built on a base of shame. We need men and women in power who are afraid to lie to us, who would be embarrassed to be caught out, who blush and fear the consequences.
Of course, this depends on you and I, the voters. After the decade that was, it would be easy for us to simply adjust our expectations—acknowledge the death of shame, and pick our team. But it would be nice to think it was possible for us to do the opposite, to realize we can all hold politicians to account, and understand that when they lie to any of us, they are lying to all of us. If we did that, imagine the problems we might be able to solve. SOURCE
As a long-time proponent of basic income, and as someone who has been involved in pilots in four continents, the past year has been a roller coaster, perhaps summarised as two steps forward, one step back, with marks for progress as six out of 10. It will take acts of courage to move forward decisively in 2019, but more doors are opening.
There has been a ferment of activity. Perhaps what has happened in Canada and the United States captures the contrasting fortunes best, though events in Europe and elsewhere are encouraging too. A highlight was the 18th international congress of BIEN (Basic Income Earth Network) in Tampere, Finland, which brought hundreds of academics and activists from around the world to discuss developments. There were also several significant books, and the World Bank endorsed basic income as a development tool in its World Development Report.
The debate in Canada and the USA has gone in two directions – the introduction of basic income as an alternative to existing social policies, paid from direct taxation, and the development of capital funds with dividends. The first have been implicit in pilots and demonstration projects.
At the outset of the year, basic income pilots were underway in three communities of Ontario (Hamilton, Lindsay and Thunder Bay), covering 4,000 individuals. Though, like most other experiments, these were not tests of a full basic income, they had many features of a proper basic income. Early reports were uniformly favourable, and polls showed it was popular, so much so that the Conservatives contesting the Provincial election said the pilots would be continued if they were elected.
However, on taking office, Doug Ford terminated the pilots and ordered that data collected for the evaluation be surrendered. Undaunted, videos circulated on social media reporting on how participants had been responding.
There was also an unexpected postscript. In December, the Canadian prime minister, Justin Trudeau, and the social development minister, Jean-Yves Duclos, said in interviews that a guaranteed national minimum income could be an option as they sought ways to support Canadians to adapt to an unsteady, shifting labour market. Duclos predicted it would come.
In the USA, Barack Obama, in a reflective speech in South Africa, mused that basic income would figure prominently in the years ahead, and prominent corporate folk endorsed it again, including Mark Zuckerberg and Elon Musk. But mainly it was a year of positioning by potential Democrat presidential candidates, with contenders offering proposals with elements of basic income. One, Andrew Yang, has made it his core policy proposal.
There was an encouraging buzz around the pronouncements of the young mayor of Stockton in California, who has taken a different route, launching a demonstration project whereby – thanks to a grant of $1 million from Facebook co-founder Chris Hughes – 100 individuals from low-income areas will be provided with a monthly basic income of $500 for 18 months. The project was held up by the process of sending invitations to 1,000 randomly chosen individuals from which the 100 are to be selected. But it should go ahead in February 2019.
In Chicago, a large group of legislators has proposed a pilot, and at the end of the year the proposal was awaiting the approval of the mayor. If it takes off, it will be the largest such pilot in the USA. Also encouraging is the pilot launched in four American cities, in which 1,000 low-income mothers will receive an unconditional $333 a month for 40 months from their child’s birth, in a project named Baby’s First Years, because the focus is on the link between basic income security and brain development. In another pilot, also best described as a demonstration project, the Magnolia Mother’s Trust started to provide 15 low-income African-American women in Mississippi with $1,000 a month, unconditionally, in December 2018.
Although it took place in 2017, another development that crystallised in 2018 that could become a harbinger of responses to natural and social disasters was the response by Dolly Parton, the country music star, to the wildfire devastation of her hometown of Gatlinburg, Tennessee. She put millions of dollars into My People’s Fund, from which $1,000 per month was to be paid to about 900 families for six months. So many other donations were made that this was increased to $5,000 in the final month. An analysis showed that the money not only enabled people to acquire housing, but led to increased work, not less.
Meanwhile, leading Democrats were tumbling out proposals. Senator Cory Booker introduced a bill proposing that lower-income children receive $1,000 each year, paid into special savings accounts, with the amount rising to $2,000 if their families are poor, paid by higher capital gains and estate taxes. The accounts would be blocked until they reached age 18, when they would be permitted to use the money for “asset building” purchases. This deviates from a basic income, being paternalistic, not trusting people with the ability to decide what was best for themselves, would require costly bureaucratic monitoring, and would raise the problem of “weakness of will”, as is the case with all capital grant schemes. But it reflects the realisation that the distribution system has broken down.
Senator Kamala Harris put forward a bill to subsidise rent through a refundable tax credit on federal income taxes, which was quickly seen as more likely to enrich landlords than give basic income security to low-income tenants, critics pointing out that a basic income would do more to help those tenants. Harris proposed the LIFT (Livable Incomes for Families Today) the Middle Class Act, offering $250 a month for singles, $500 for couples, phasing that out as earnings rose. A drawback is that somebody earning nothing would receive nothing, while somebody would need to earn at least $3,000 to receive the full benefit.
Representative Bonnie Watson Coleman proposed a bill designed to overcome one regressive failing of the Earned Income Tax Credit scheme that currently eats up $65 billion a year. It would extend EITC benefits to family caregivers and students. Like tax credits elsewhere, the EITC has rested on an arbitrary conceptualisation of what is work and what is not. Recognising that is at least a step in the direction of a basic income. Tax credits are regressive, depressing wages and subsidising low-wage employers.
Meanwhile, there have been developments around the second route to basic income, around social or common dividends. Again, there has been one setback. The starting idea is that natural resources are part of the commons; they belong to everybody, the commoners. If anybody or a corporation exploits them for commercial gain, they owe a “rent” to the commoners.
This view goes back through the centuries, epitomised by the thinking of philosophers such as John Locke and the founding fathers of the United States, such as Thomas Jefferson and Thomas Paine, and through the writings of Henry George and later economists. This has led to renewed interest in land value tax, eco taxes or levies and digital levies. But the main examples in practice have been based on royalties on oil.
The leading scheme where royalties are channelled into a permanent capital fund from which equal dividends are paid is the Alaska Permanent Fund. Set up in 1976 and paying annual dividends to every Alaskan resident since 1982, this has proved remarkably popular. Until 2011, the value of the dividends rose steadily. But successive Republican governors had imprudently cut income tax to zero. So, when oil prices fell, government debt rose, leading to the most recent governor raiding the fund to pay government operating costs, leading to a collapse in the annual dividends. This was rightly seen as a tax hitting low-income people, and led to a dive in the governor’s popularity and withdrawal from his re-election campaign in October 2018. The revival of Alaska dividends will depend on who succeeds him.
But the idea of capital funds is gaining ground. The major development in 2018 was rising support for taxes on greenhouse gas emissions. The global scientific community is unanimous that climate change is a giant threatening humanity and nature, and that radical action is required to tackle it. Among other measures, that requires big taxes or levies on C02. There are two problems: taxes are unpopular, and carbon tax is regressive.
In 2018, Canada moved to confront both problems, by combining a carbon tax with the promise of dividends to be paid to all, under the Greenhouse Gas Pollution Pricing Act, starting in 2019. The carbon tax is too modest to bring down emissions substantially, but the act has established a principle, although the oil industry is contesting it and, predictably, the right-wing Ontario premier Doug Ford has called it “the worst tax ever”.
The new tax will increase gasoline prices by 42 cents a gallon (11 cents a litre), or by 8%. But cleverly the act is intended to be revenue-neutral, with all revenue returned to the provinces from which it is generated, and with 90% given back to individuals as rebates, the remaining 10% going to organisations affected by the tax, such as schools and hospitals. The rebates will mean that about 70% of Canadian households will receive more back than they pay in tax. This is, in all but name and certainty of amount, a basic income, and it is progressive.
In November 2018, a bipartisan group in the US House of Representatives introduced a bill similar to the Canadian reform, proposing to tax emissions and redistribute the proceeds as dividends. It will be doomed as long as Donald Trump’s fellow climate-change deniers control the Senate. But it too offers a promising route into funding a basic income system. A similar plan has been promoted by former government officials backed by major corporations such as AT&T, P&G, Johnson & Johnson, GM and PepsiCo, and financially backed by ExxonMobil.
So, in North America the idea is taking hold that revenue can be raised from commercial uses of the commons, or natural resources, and from commercial deductions from the commons in the form of pollution. Observers should note related proposals. In Chicago, the innovative alderman Ameya Pawar floated a plan to ‘public-tize’ Chicago’s water system, giving shares to all city residents and paying them dividends that would be a sort of basic income. According to him, as Chicago has a lot of fresh water, it should be seen as a public resource just as oil is treated in Alaska.
Finally, the US debate has been accentuated by the proposal by newly elected New York representative Alexandria Ocasio-Cortez, backed by at least 40 members of Congress, for a Green New Deal, which includes a monthly basic income. No doubt the deal will prove controversial in its original form. But it surely points in the necessary direction.
While proposals were bubbling in North America, European debates became more prominent, and more politicians and political parties came out in favour. While US economist Joseph Stiglitz has dismissed basic income in the UK, saying “It is a cop-out. I do not believe it is what people want,” there is evidence to the contrary. A Populus survey in Britain found that 41% supported basic income, and only 17% were against, the remainder saying they did not know. A European-wide survey covering 23 countries found strong public support across the continent.
The most striking development came in Italy, leaving basic income proponents with mixed feelings. The populist party Movimento Cinque Stelle campaigned in the general election on a platform that included what it called a basic income, which proved remarkably attractive in southern Italy, and has been described by most analysts as the main reason for their success in becoming the largest party in parliament, and now part of the government. What M5S is offering is actually not a basic income, but the fact that it proved so popular was further evidence that some of its critics are out of touch.
Pilots have been spreading. In 2017, there was worldwide publicity around what was purported to be a government basic income pilot in Finland. In mid-2018, the BBC and the Guardian newspaper almost gleefully reported that it was being ended prematurely. This was reported in media around the world and repeated in blogs on social media. The story was wrong. The original intention, announced before the pilot begin in 2017, was that it would last for two years, up to the end of December 2018. This is precisely what happened.
Journalists had misinterpreted a statement by a new, right-wing finance minister that the pilot would not be extended because he was opposed to it. The government moved towards a workfare regime, requiring all unemployed to attend trimonthly interviews, and increased the waiting period for receipt of unemployment benefits and the period of eligibility. A utilitarian approach was in ascendancy, in which a more punitive regime closer to the UK’s Universal Credit system was being implemented, which led to thousands losing entitlement to social assistance. But this had nothing to do with what was happening in the basic income pilot.
The Finnish pilot is not testing proper basic income, but is a test of characteristics consistent with it. It provided €560 a month to 2,000 randomly selected registered unemployed from across the country, relaxing the rule that they must prove they are searching for jobs and allowing them to retain the benefit if they found one. Early reports from the evaluation by KELA, the official social insurance organisation, are encouraging. A report will be published in 2019.
In November 2018, the opposition party, Left Alliance, announced that its manifesto for the general election scheduled for 2019 would include a commitment to a basic income of €800 a month, phasing out means-tested social assistance, while leaving housing allowance unchanged. The basic income would be “taxed away” from high-income earners, and it would be phased in by consolidating various social security benefits.
In the Netherlands, partial basic income pilots were under way in Groningen, Tilburg, Utrecht and Wageningen. The experiments follow from legislation in 2015 that allowed local authorities to experiment with social policies. Initially, the pilots seemed closer to workfare, but local authorities have found ways to make them closer to a basic income, although they suffer from being limited to welfare claimants and being provided only to randomly selected individuals, not whole communities. As in Finland, they are best described as “trust experiments”, to see how people respond when not subject to behavioural conditionality.
Another experiment is underway in Barcelona, under the name B-Mincome, which has been running since October 2017 and is scheduled to last until late 2019. Again, its proponents see it as a basic income, but the money is being provided on a family basis, not individual. It is being provided to 1,000 participant families, with 500 others as a control group. When launched, it was stated that the main intention was “to analyse the most effective way of reducing inequality and breaking the poverty cycle”.
In Switzerland, much attention was stimulated by an initiative by a Swiss film-maker to launch a pilot in Rheinau, a village in the canton of Zurich. The idea was to induce 650 residents to volunteer to be recipients, from a village population of about double that, and to crowdfund a rather large basic income for one year, varying the amount by age group.
Those earning more than CHF2,500 would have to repay it as their income rose. As with the earlier Swiss referendum, the initiative suffered from putting the basic income at a high level, reaching as much as CHF2,500 for those aged over 25. At the end of the year, the crowdfunding was short. However, observers seem agreed that the initiative attracted much public support in the area.
In Germany, a basic income pilot – provocatively named HartzPlus – is set to start in May 2019 in Berlin, with a random sample of 250 recipients of state benefits and with another 250 as a control group, with a focus on evaluating the impact on labor market behaviour, health and social relations. It is set to last for three years and follows crowdfunded schemes that have proven popular in Germany, notably Mein Grundeinkommen (My Basic Income) that has been running a lottery with winners obtaining a monthly basic income of €1,000 for one year. Meanwhile, the chief executive of Germany’s Association of Towns and Municipalities (DStGB), lamenting the over-burdened bureaucratic welfare state and rising poverty, came out in favour of basic income.
In the UK, an initiative was launched in Scotland, where four areas (Fife, Edinburgh, Glasgow, and North Ayrshire) began preparing feasibility and design plans, aided by a grant of £250,000 from the Scottish government, and backed by a cross-party group of members of the Scottish parliament. The Green party has also come out strongly in favour of a basic income, and in mid-2018 the shadow chancellor of the exchequer committed Labour to proposing pilots in its next manifesto, and commissioned a report (by this author) on why and how those should be done.
In sum, the debate on basic income has moved into the mainstream in European policymaking, probably propelled by concern over the eight giants discussed in the companion piece to this progress report. Among the findings of relevance to crystallise in the past year on both sides of the Atlantic is that a large and growing proportion of those in income poverty are in households in which at least one person is in a job – 80% in the case of the USA, 60% in the UK, for example. But high private debt, insecurity, inequality, precarity, concern over the advancing robots and worries about populism are surely behind the growing interest.
Basic income elsewhere
Towards the end of the year, there was a buzz in the Indian media, around stories that Prime Minister Modi might include commitment to a basic income in the BJP manifesto for the general election in April 2019. Some MPs have come out in favour, and in several states local plans have been developed. These initiatives derive in part from the successful pilots conducted in West Delhi and Madhya Pradesh and a much-cited chapter in the minister of finance’s annual report in January 2017. It is widely accepted now that some sort of basic income for India is financially feasible.
There have been political moves in several other Asian countries. Thus, the head of the Malaysian prime minister’s Council of Eminent Persons proposed that the hugely expensive subsidy system BR1M should be replaced by a national fund from which dividends would be paid as monthly basic incomes. In China, a national network was established to promote basic income, which has highlighted the success of a basic income scheme in Huaidi in Shijiazhuang. And in South Korea, the “youth dividend” scheme launched by the mayor of Seongnam City gained considerable popularity and political interest across the country.
The biggest pilot took off in Kenya, where GiveDirectly launched its flagship scheme. This is set to last for 12 years, covering 21,000 adults, with monthly payments coming to about half the average income of low-income households. This obviously ambitious pilot is generating much interest. However, it will be years before evaluations of its impact will be available, and one should be concerned with research fatigue. What it has done is boost interest in basic income among policymakers everywhere.
Besides the World Bank’s sudden conversion, revealed in its World Development Report 2018, various IMF papers have recommended basic income, again reversing previous IMF positions. And World Bank reviews of the evidence from across developing countries have refuted (again) arguments that cash transfers lead to more spending on private bads, more dependency and less work, and negative community effects, while being fiscally unsustainable. If only those financial bodies had not opposed those of us pushing for basic income for so many years, we might be further ahead today than we are. But it would be churlish not to wish them success in their advocacy in the year ahead.
During the year, it became more widely appreciated that generous personal tax exemptions in the USA, and increasingly generous personal tax allowance in the UK, are a perverse form of basic income – an “upside-down income-support program – the rich get more than the middle class, and the middle class get more than the poor”, as one American commentator put it. This is in so much as they cost as much in public revenue as would a modest basic income but are regressive, since the gain in tax-free income is greater for higher-income taxpayers, and greater for those who have enough income to pay taxes than for those who have none.
What must be researched more in the year ahead are the feedback and multiplier effects. Basic incomes have been shown to boost work, productivity and incomes, which foster taxable income and lower social costs. But how great are those effects? All simulation models and cost estimates so far have ignored feedback effects. For instance, there is ample evidence that basic income security improves mental and physical health, which reduces spending on health services, improves productivity and reduces poverty. So, the net cost of a basic income would be less than the simple budgetary cost. But we do not have good estimates of how much savings would result.
My conclusion from this review is that we will make progress most by focusing on building permanent capital funds, from which dividends as basic income can be paid, gradually rising as the fund grows. A feature of linking basic income to assets, or the commons, is that people can see a connection between the two, and are less likely to see it as a pure handout. The secret may be not in the idea but in the framing. SOURCE
Because of a history of cost overruns with nuclear construction projects around the world, including Canada, this strategy comes with significant financial risks. In 2020, it’s critical to continuously re-evaluate whether proceeding with refurbishment makes economic sense.
In the first of these refurbishments, there is already evidence of cost overrunsand delays. The question of whether to refurbish them becomes even more urgent in light of the rapidly declining costs of wind and solar energy, which also deliver electricity without emitting carbon dioxide.
We’re researchers who have examined the economics of electricity generation in Ontario, and we’ve demonstrated that as the costs of batteries decline, the cost of supplying electricity using a combination of renewables and battery storage would be cheaper than using nuclear power. We argue that it’s critical to examine Ontario’s commitment to these refurbishment plans.
They included “the risk that the cost of refurbishing the reactors will be higher or lower than planned,” “the cost of operating the reactors will be higher or lower than planned,” the “risk of insufficient electricity grid demand for nuclear generation” and the risk “that the province’s commitment to nuclear refurbishment will preclude it from taking advantage of alternative, lower cost, low emissions grid-scale electricity generation options.”
The Financial Accountability Office talks about costs of refurbishing being higher or lower.
But the report documents that, historically, the cost for refurbishment has always been higher than initially budgeted. And there is preliminary evidence that the refurbishment of the Darlington nuclear plant will be more costly and take more time than projected.
The total annual demand for electricity in Ontario has also declined from 157 Terawatt-hours (TWh) in 2005, when the province began exploring refurbishing nuclear reactors, to 137.5 TWh in 2018.
To mitigate these risks, the province has some options to terminate refurbishments, called off-ramps. Because the costs of refurbishment will be greater than shifting gradually to a grid that incorporates a much larger fraction of renewables, it’s time to seriously consider these off-ramps.
Renewables are cheaper
The main reason to reconsider refurbishment is the declining costs of renewables and batteries. Globally, the costs of solar and wind energy have fallen dramatically over the past decade.
According to the International Renewable Energy Agency, the average installation cost of solar photovoltaics has declined to US$1,210 per kilowatt (kW) from US$4,621 per kW in 2010. The installation cost of onshore wind turbines has dropped to US$1,497 per kW from US$1,931 per kW.
In the United States, one of the largest renewable energy markets in the world and one for which reliable data is available, the Wall Street advisory firm Lazard recently recorded the average construction costs of solar photovoltaics and onshore wind turbines as US$1,000 per kW and US$1,300 per kW.
In comparison, a Lazard 2013 report recorded US$1,750 per kW for both solar photovoltaic and wind energy. This decline in cost is corroborated by other sources. Nuclear power, on the other hand, has risen to US$9,550 per kW in 2019 from US$6,792 per kW in 2013.
We also assumed that the electricity sector is completely decarbonized, and no fossil fuels are used in electricity generation (there would, of course, be emissions for all sources of electricity from the manufacturing processes involved).
With this constraint, our model showed that if the costs of batteries decline from current values to those projected for 2025 by McKinsey Corporation, then the cost of supplying electricity using a combination of renewables and battery storage would become cheaper than nuclear power. That’s especially true if there are cost overruns during refurbishment.
This cost could be further reduced if the availability of hydro power is increased. This is relevant because Ontario has been urged to import more hydro power from neighbouring Québec.
While we haven’t modelled this possibility, it’s clear that a greater ability to modify demand in response to available renewables, and a greater grid capacity that could transfer more electricity between Ontario and other Canadian provinces in addition to Québec, could further lower the overall cost of electricity.
Time for the off-ramps?
The chief implication of our analysis is that it’s getting close to the time to use the off-ramps and abandon the nuclear reactor refurbishment process. To be sure, the conditions for employing off-ramps are complicated and require careful legal analysis that we’re not qualified to evaluate. However, our work does suggest that because it’s more expensive to continue to operate nuclear reactors, investing in refurbishment is not economically justified.
None of this is intended to imply that the transition to an electricity system dominated by renewables will be quick or easy. The magnitude of the shift required is immense given the overwhelming dominance of nuclear power and natural gas in Ontario’s electricity supply.
Yet the economic and climate reality justifies starting such a transition. Investing in old energy generation facilities moves us away, not towards, such a transition and locks consumers into high electricity costs for decades. SOURCE