As the social safety net is shredded, new data show that billionaires and corporations are refusing to pay hundreds of billions of dollars of owed taxes every single year. It really puts all the hand-wringing about “looting” into perspective
The Internal Revenue Service building in Washington, DC. David Boeke / flickr
he next time you hear conservative politicians insist they want “law and order,” hate “looting,” and believe America can’t afford new government programs, show them two landmark reports that emerged in the last twenty-four hours. The data in those analyses tell the story of conservative politicians letting billionaires and corporations brazenly evade laws and effectively loot hundreds of billions of dollars from the public treasury — all while those same politicians plead poverty to justify cutting the social safety net during a lethal pandemic.The first report came from the nonpartisan Congressional Budget Office (CBO), which found that between 2011 and 2013, $381 billion in taxes went unpaid every single year. Couple that data with recent Harvard University research showing that the top 1 percent of income earners are responsible for 70 percent of the tax gap, and you see the full picture: The wealthiest sliver of the population is depriving the American public of about $266 billion of owed tax revenue every year.That tax gap didn’t just magically happen — it is the result of conservatives’ huge cuts to the Internal Revenue Service’s enforcement budget, which resulted in a particularly precipitous decline in audit rates for the superrich. In fact, the $266 billion figure could be an understatement, because the congressional budget analysts were estimating the tax gap that existed before those IRS budget cuts.
“With the money that these tax cheats owe, this year alone, we could fund tuition-free college for all, eliminate child hunger, ensure clean drinking water for every American household, build half a million affordable housing units, provide masks to all, produce the protective gear and medical supplies our health workers need to combat this pandemic, and fully fund the U.S. Postal Service,” said Senator Bernie Sanders, who requested the CBO study. “That is an absolute outrage, and this report should make us take a long, hard look at what our national priorities are all about.”
“Shifting Over $1 Trillion in Profits Every Year to Corporate Tax Havens”
Just after the congressional report was released, the Tax Justice Network released a separate study showing that newly released international data prove “that instead of declaring profits in the countries where they were generated, multinational firms operating around the world are shifting over $1 trillion in profits every year to corporate tax havens” — moves that deprive governments of $330 billion in tax revenue that is owed but that is not being paid.
The study noted that just four small countries — the UK, Netherlands, Switzerland, and Luxembourg — “are together responsible for half of the world’s corporate tax avoidance.”
The United States alone is losing about $60 billion of revenue a year because of these corporate tax evasion schemes, according to Reed College economist Kimberly Clausing.
In case you thought the tax haven shenanigans were just limited to corporations, jog your memory and recall the Panama Papers and Credit Suisse scandals that spotlighted how wealthy individuals have gotten in on the offshore schemes.
We Know How to Fix Things, But Our Political System Is Rigged
At a time when the social safety net is being shredded in the name of budget austerity, the ruling class refusing to pay owed taxes is a grotesque form of looting. So what is Washington doing in response to all this?
On the domestic front, Donald Trump began his presidency proposing more IRS budget cuts, but this year, the White House is pushing for an increase. At the same time, though, Trump’s Justice Department is prosecuting far fewer criminal cases referred by the IRS: over the last 5 years, such prosecutions have dropped by more than 66 percent, according to data compiled by Syracuse University researchers.
On the international front, Trump’s 2017 tax cut bill included several provisions that “encourage American-based corporations to shift profits offshore,” according to the Institute for Taxation and Economic Policy. The administration has also recently moved to roll back rules designed to crack down on so-called corporate inversions, whereby companies incorporate offshore in order to avoid tax liabilities. And thanks to Trump’s coronavirus legislation, firms that already pulled the inversion maneuver could now be rewarded with Federal Reserve bailouts, according to Bloomberg News.
The problem here isn’t that we lack the knowledge to fix things — the problem is our political system.
The lawmakers with the power to truly beef up enforcement and crack down on profit shifting operate inside a machine that runs on legalized bribery. Some of them are trying to do the right thing, but most of them are bankrolled, in part, by big donors and corporate interests that are enriched by lax tax enforcement and offshore tax evasion. Those bought-and-paid-for lawmakers will publicly insist they want “law and order” and oppose looting, but they’ll allow widespread looting and tax lawlessness to continue, while they pretend there’s no money to pay for anything.
Meanwhile, because advocacy groups, voting blocs, and political leaders tend to be organized around specific programs and issues (say, Medicare or public education), there remains no large mobilized constituency organized around the general goal of cracking down on tax cheating — even though such a crackdown could provide new resources for key programs and issues.
Maybe all of this can change. Maybe the rise of grassroots-funded elected officials can break the link between corruption and policies that encourage tax theft. And maybe one day we will see more explicit organizing, movement building, and public education around the tax issue — it has started to happen in the UK, where some celebrities have made tax fairness their cause, so maybe it can happen here.
But if it doesn’t happen, millions will continue fighting over a few budget crumbs while the 1 percent keeps taking bigger and bigger bites of the revenue pie.
Video: Sophie and Justin Trudeau appeared at this WE Day event at the UN in 2017.YOUTUBE SCREEN SHOT
An Ottawa-based watchdog group believes that two opposition MPs didn’t raise all possible violations of the ethics rules in their request for a conflict-of-interest investigation of Prime Minister Justin Trudeau.
So Democracy Watch has written to ethics commissioner Mario Dion requesting a second probe that will examine if anyone acting on Trudeau’s behalf participated in or attempted to influence a public servant’s decision regarding a sole-source $19.5-million contract to WE Charity.
In its letter to Dion, Democracy Watch has requested that he recuse himself from conducting the inquiry “because you were appointed by the Trudeau Cabinet, and also because of your statements showing bias against effective enforcement”.
“Your communications state that you are not going to investigate one of the most important allegations raised by this situation, namely: Did the Prime Minister and/or anyone acting on his behalf in the Office of the Prime Minister or the Office of the Privy Council, and/or a deputy minister, associate deputy minister, deputy head or associate deputy head in the Government of Canada acting on his behalf, participate in the decision or attempt to influence anyone’s decision to recommend a solesource contract be given to WE Charity?” wrote board member Duff Conacher on behalf of Democracy Watch.
The 14-page letter was released after the Globe and Mail published an article noting that the prime minister’s chief of staff, Katie Telford, did not recuse herself from discussions around the contract to WE Charity to administer the $900-million Canada Student Service Grant program.
“Democracy Watch’s position is that there is reason to believe that there was an attempt by the Prime Minister or someone acting on his behalf participate in the decision or to influence the recommendation to give WE Charity a sole-source contract and that, therefore, this part of the situation needs to be investigated,” Conacher wrote.
Democracy Watch has also asked for an ethics probe into Finance Minister Bill Morneau, who did not recuse himself from cabinet discussions about the contract to WE Charity even though it employs his daughter.
Over the years, Me to WE, a private company owned by WE Charity founders Craig and Marc Kielburger, has paid Trudeau’s mother $312,000 (minus a 20 percent commission to her agency) and brother $40,000 (minus a 20 percent agency commission) to speak at events, according to Canadaland.
Money flows back and forth between Me to WE and WE Charity, according to Charity Intelligence, which monitors registered charities.
Trudeau’s wife does a free podcast for the charity and has had travel expenses reimbursed when she’s spoken at the charity’s events. Conacher’s letter cites WE Charity’s description of her as “more than an ambassador of WE Well-being, she is its mentor, booster and champion”.
Conacher’s letter pointed out that section 7 “would be violated whether the Prime Minister’s spouse or Marc Kielburger or Craig Kielburger are determined to be the representatives of WE Charity, given the Prime Minister has a long-term relationship with all of them”.
The governing Liberals ‘will pay a heavy political price,’ if they don’t introduce a new wealth tax, said NDP finance critic Peter Julian.
NDP MP Peter Julian, left, and Leader Jagmeet Singh have again called for a tax on Canada’s wealthiest residents, with the government expected to run a $343-billion deficit this year. The Hill Times photograph by Andrew Meade
NDP finance critic Peter Julian is calling on the federal government to immediately introduce legislation to bring in a wealth tax, which a new report from the Parliamentary Budget Officer says could bring in $5.6-billion in new revenue.
Finance Minister Bill Morneau (Toronto Centre, Ont.) said on July 8 that the government was on track to run a $343-billion deficit this year alone, as the government continues to borrow and spend to keep households and businesses afloat amid the COVID-19 pandemic.
Both the federal Liberals and NPD have promised to levy new taxes on Canada’s wealthiest residents. The NDP has called for a tax on the wealthiest one per cent of Canadians, while Mr. Morneau’s mandate letter from the prime minister instructs him to introduce a new tax on luxury boats, cars, and personal aircraft, and to do an analysis to “ensure that wealthy Canadians do not benefit from unfair tax breaks.”
The governing Liberals were slow to introduce new legislation when the forty-third Parliament began, and the COVID-19 pandemic sidelined the legislative process in mid-March. The House is now in summer recess.
“We need to start taking action on the revenue side, so that we can continue to maintain services and support through the pandemic, and look to enhance public investments coming out of the pandemic,” Mr. Julian (New Westminster-Burnaby, B.C.) said in a July 10 interview.
On July 8 four non-profits released a statement of their own calling for a wealth tax.
“Canada should immediately bring in legislation to tax the extremely rich as a means to not only raise revenues, but curb worsening inequality,” read the statement signed by the Broadbent Institute, Canadians for Tax Fairness, Resource Movement, and Leadnow.
The July 8 economic update showed a federal debt over $1-trillion and a deficit of $343-billion. It also showed that the federal debt-to-GDP ratio, which the Liberals have often touted as a key financial marker, is expected to rise to 49 per cent in fiscal year 2020-21, up from 31 per cent the year prior. GDP is expected to shrink by 6.8 per cent this year before rebounding by 5.5 per cent next year.
Mr. Julian asked the PBO to estimate the potential revenues from a one per cent tax on families with a net wealth over $20-million. Released July 8, the PBO estimated that 13,800 Canadian economic families would be subject to the tax, and it would net $5.6-billion in revenue in fiscal year 2020-21. Administering the program would cost an estimated $113-million, or about two per cent of the total projected tax revenue.
Parliamentary Budget Officer Yves Giroux said his office will use the new HFD database for other analyses involving wealthy families in the future. The Hill Times photograph by Sam Garcia
A few weeks before the July 8 report, another PBO report was released that offered new and more comprehensive data on the wealthiest families in Canada. The PBO created a database using this new information, called the High-net-worth Family Database (HFD), that allows the office to “produce cost estimates and analysis of measures affecting Canadian families with wealth in the millions and billions of dollars.”
The PBO was forced to develop the new database after their election platform costing efforts were hampered by a lack of publicly available data on high-net-worth families. The HFD incorporates data from Statistics Canada’s Survey of Financial Security (SFS), the National Balance Sheets Accounts, and Canadian Business magazine’s Richest People List. The PBO said they will use the new HFD database for similar analyses going forward.
Previously, the PBO had used the SFS to analyze Canada’s wealthiest families. The June 17 PBO report showed that “Canada’s wealthiest families have significantly more wealth that recorded in the SFS.”
The SFS showed the top one per cent of Canadian families held 13.7 per cent of total wealth, whereas the HFD reported that number at 25.6 per cent. The report said the discrepancy is “likely due to sampling and non-sampling errors, especially higher survey non-response among high-net-worth families.”
The PBO measured family wealth in the report “in terms of marketable net worth: the amount of money left to a family if it liquidates all its financial and non-financial assets and paid off all its liabilities.”
The report took into account the likely behavioural changes that would result from a wealth tax. The PBO assumed that wealthy families would manage to reduce their wealth by 35 per cent, based on adjusted findings from the U.S. Internal Revenue Service.
For Aaron Wurdrick, head of the Canadians Taxpayers Federation, the likely behavioural response would make a prospective wealth tax extremely hard to implement, and likely render it counterproductive.
“Its not a simple matter of, we’ll raise taxes on the rich and they’ll pay it. The rich have a lot of resources and they tend to use them to minimize their tax burden,” Mr. Wurdrick said. “Because they stand to lose a lot, even with a small increase in tax, they will spend a lot of money to avoid paying more tax. So you’re kind of chasing your tail.”
Mr. Wurdrick said he fears wealthy families would rearrange their finances to reduce their tax burden, resulting in an overall reduction of federal revenues.
“I’m less concerned about the impact on the rich themselves. They’re going to be fine whether or not they have to pay a little more tax. But I am concerned about what happens to the rest of us if we lose that revenue. Because it’s a lot to make up. It only takes a few really rich people to rearrange their affairs or leave and that leaves a real big fiscal hole but the rest of us have to end up paying,” he said.
During Question Period on July 9, NDP Leader Jagmeet Singh (Burnaby South, B.C.) asked Prime Minister Justin Trudeau (Papineau, Que.) if the government would consider imposing a wealth tax similar to that which was outlined in the PBO report. Mr. Trudeau did not answer the question directly, but said “everyone must pay their fair share of taxes” and highlighted that the government raised taxes on wealthy Canadians when they were first elected in 2015.
Polls suggest that Canadians are largely supportive of Mr. Julian’s proposal for some kind of wealth tax. In May 2019, 67 per cent of Canadians supported or somewhat supported a wealth tax, according to an Abacus study commissioned by the advocacy group North 99. In late May 2020, Abacus did another poll commissioned by the Broadbent Institute that found 75 per cent of Canadians support a wealth tax. The poll found majority support in all parties, regions, and age groups. Just 13 per cent of Canadians said they oppose a wealth tax.
Finance Minister Bill Morneau has repeatedly said the government does not intend to raise taxes. The Hill Times photograph by Andrew Meade
In May, Mr. Morneau told CBC News that the government is “not thinking about raising taxes.” Mr. Morneau doubled down on that comment in June, when he appeared on CTV’s Power Play and said raising taxes is “not on the table.”
Mr. Julian said the current state of federal finances coupled with the broad support for some kind of wealth tax presents a good opportunity to implement such a policy, but said he doesn’t expect the government to move on it.
“I think they have a lot of friends in high places that are saying ‘don’t do this,’” Mr. Julian said.
“If the Liberals aren’t prepared to look at” a wealth tax, he said, “at some point in the next year or two, there will be an election. This is a minority government,” he said. “I think they will pay a heavy political price.”
When analyzing the Green New Deal, author and plant scientist Stan Cox says it has two distinct parts: “The ‘new deal’ part is pretty good, with its provisions for job and income guarantees, for economic justice and racial justice, and for Indigenous rights and workers’ rights,” he says. “The ‘green’ part of the Green New Deal, in contrast, is inadequate. It’s inadequate to the point of even being self-defeating.”
Rather than cutting greenhouse emissions “as much as is technologically feasible,” as the Green New Deal suggests, Cox calls for a direct mechanism to drive fossil fuels out of the economy entirely. This is the central theme in Cox’s new book: “The Green New Deal and Beyond: Ending the Climate Emergency While We Still Can.” In a teach-in co-hosted by Yes! Magazine, Cox discussed the current ecological crises and tangible steps toward sustainable and equitable resolution.
Cox was joined by his colleagues from The Land Institute in Salina, Kansas: writer and teacher Aubrey Streit Krug, who directs the Ecosphere Studies program; and Wes Jackson, founder and president emeritus of The Land Institute, and an early leader in the sustainable agriculture movement. Together they broke down the history, policy, and societal shifts they think will be necessary to make just and lasting change.
To understand why we, as a species, have not been successful at turning the current corner, Wes Jackson looks back at deep history—humans began with agriculture and discovered highly dense carbon along the way. “We end up with an industrial economy, and we become increasingly a species out of context.” To put people back in the ecological context in which they belong, Jackson says, we should embrace constraints rather than try to outsmart them.
To do so fairly will require concerted effort and collective action. It requires people to not just care about human communities and the more-than-human world, but to care for them, Aubrey Streit Krug says. “If we were able to begin to figure out how to value care work,” she says, “that would be part of a radical reorientation toward justice, and it would also be building the kind of social capacity we need to start and sustain change.”
What kind of world will the coronavirus crisis leave us with? Interviewed for a Guardian Live event, the activist and author insists that the climate, equality and fairness must be at the heart of the post-pandemic recovery
Katharine Viner: Hello, Naomi. How are you finding lockdown?
Naomi Klein: For those of us who were teaching our students by Zoom, as I was – home schooling, doing that juggle and figuring out how to bake – we had it really cushy. Now I am back in Canada for the summer with my family, in quarantine because in Canada, if you come from the US, you have to be in very strict quarantine. I have not left the house in almost two weeks. I am actually developing some phobias about leaving lockdown.
Katharine Viner: There is a great quote in one of your recent essays from a tech CEO, who says: “Humans are biohazards, machines are not.” It chilled me to the bone and made me fearful for the future. And you have written interestingly about the “Screen New Deal”.
Naomi Klein: Silicon Valley had this pre-existing agenda before Covid that imagined replacing so many of our personal bodily experiences by inserting technology in the middle of them.
So for the few spaces where tech is not already mediating our relationships, there was a plan – to replace in-person teaching with virtual learning, for instance, and in-person medicine with telehealth and in-person delivery with robots. All of this has been rebranded, post-Covid, as a touchless technology, as a way of replacing what has been diagnosed as the problem, which is the problem of touch.
And yet, on a personal level, what we miss most is touch. And so we need to expand the menu of options about how we live with Covid, because we do not have a vaccine; it is not about to arrive. Even if there is a breakthrough, it’s going to be many, many months, possibly years before it can be rolled out at the scale we would need it.
So how are we going to live with this thing? Are we going to accept pre-Covid “normal”, only much diminished, without the relationships that sustain us? Are we going to allow our kids to have all of their learning mediated by technology? Or are we going to invest in people?
Instead of pouring all of our money into a Screen New Deal and trying to solve problems in a way that diminishes our quality of life, why do we not go on a teacher-hiring spree? Why do we not have twice as many teachers with half-the-size classrooms and figure out a way to do outdoor education?
There are so many ways we can think about responding to this crisis that do not accept this idea that we have to return to the pre-Covid status quo, only worse, only with more surveillance, more screens and less human contact.
Katharine Viner: Do you see any governments talking like that?
Naomi Klein: I was heartened to hear Jacinda Ardern talk about a four-day working week as a solution to the fact that New Zealand is very dependent on tourism dollars, and yet New Zealand is probably the country that has dealt with the pandemic better than any others in terms of its fatality rates. It can’t fling its doors open to tourists in the way that it has in the past, so there’s this idea that maybe New Zealanders should work less, be paid the same and have more leisure time to be able to enjoy their own country safely.
How do we slow down? This is what I am thinking a lot about. It feels like every time we slam our foot on the accelerator marked “business as usual” or “back to normal”, the virus surges back and says: “Slow down.”
Katharine Viner: We all love those moments of slowing down, but the UK government is hellbent on getting back to normal, come what may. Everything opening, pubs opening, it is desperate to get us to go on holiday. There is an urgency not to change anything about how we live, just get back to how it was before.
Naomi Klein: And it is madness. It is a very small percentage of the population that wants to just fling the doors open. It is a majority that actually is much more concerned about returning to work before it is safe, sending their kids to school before it is safe. It’s sometimes framed as giving people what they want, but this is not what the polling shows.
There are similarities between the way Donald Trump has handled it and the way Boris Johnson has handled it. They are turning it into some test of masculinity, even in Johnson’s case after having the virus. Jair Bolsonaro was talking about how he was an athlete so he knows he will handle it [the Brazilian president revealed he has coronavirus shortly after this interview took place]; Trump was talking about his good genes.
See the full discussion here
Katharine Viner: I was interested in your views on why you think the civil rights protests, in light of George Floyd’s death, have happened now? It seems intriguing, in the midst of one crisis, that, around the world, there are these huge demonstrations against racism.
Naomi Klein: This is not the first uprising of its kind. But I think there were certain aspects of it that were unique because of Covid and the outsized impact of the pandemic for African Americans in cities like Chicago where, by some counts, 70% of the fatalities from Covid were African Americans.
Whether it’s because they are the ones performing those at-risk jobs, without protections, or because of the legacies of environmental pollution in their communities, stress, trauma , unsafe workplaces and discriminatory healthcare. Black communities are bearing a disproportionate burden of the fatalities from the virus, defying this idea that we were all in this together.
In the midst of this moment of profound trauma, those killings – of Ahmaud Arbery, of George Floyd, of Breonna Taylor – slice through that.
But then there is a question that a lot of people are asking , which is what are all these non-black people doing at the protests? That is what is new, certainly at this scale. Many of these demonstrations are truly multiracial; black-led multi-racial demonstrations. Why is this time different?
I have a few ideas. One has to do with the softness that the pandemic has introduced into our culture. When you slow down, you can feel things; when you’re in that constant rat race, it doesn’t leave much time for empathy. From its very beginning, the virus has forced us to think about interdependencies and relationships. The first thing you are thinking about is: everything I touch, what has somebody else touched? The food I am eating, the package that was just delivered, the food on the shelves. These are connections that capitalism teaches us not to think about.
I think that being forced to think in more interconnected ways may have softened more of us up to think about these racist atrocities, and not say they are somebody else’s issue.
Katharine Viner: There’s a great line in the new introduction to On Fire, your latest book, when you say: “whatever was bad before the disaster downgraded to unbearable” – it’s an unbearable situation the way black men are treated by the police.
Naomi Klein: There is always this discourse whenever disasters hit: “Climate change doesn’t discriminate, the pandemic doesn’t discriminate. We are all in this together.” But that is not true. That is not how disasters act. They act as magnifiers and they act as intensifiers. If you had a job in an Amazon warehouse that was making you sick before, or if you were in a long-term care facility that was already treating you as if your life was of no value, that was bad before – but all of that gets magnified to unbearable now. And if you were disposable before, you’re sacrificial now.
And we are only talking about the violence that we can see. What we have to talk more about is the violence that’s hidden, and that’s domestic violence. To put it bluntly, when men are stressed, women get it in the face and so do kids. These lockdowns are so stressful because families don’t have any reprieve from each other and even the best family needs a little bit of space. Then you add layoffs, economic stress. It’s a very bad situation for women right now.
Katharine Viner: I know you spent a lot of the last year working on the Green New Deal and the Bernie Sanders campaign. How does it all look now? Do you feel more or less positive about the potential?
Naomi Klein: On some level, it is harder. You mentioned Bernie and certainly my preferred outcome would be a presidential candidate who is running a campaign with the Green New Deal at its centre. I do believe we will only win this with an interplay of mass-movement pressure from the outside, but also a receptivity from the inside. I think that we had that chance with Bernie.
It is harder with Joe Biden, but not impossible. At the end of On Fire, I gave 10 reasons in favour of a Green New Deal and why it is good climate policy. One of those reasons is that it is recession-proof. We have this really bad track record in the climate movement of winning gains when the economy is doing relatively well, because the kind of climate solutions we get from governments tend to be these neoliberal, market-based solutions, like climate taxes or renewable energy policies that are perceived to make energy costs more expensive, or carbon taxing that makes the price of petrol more expensive. As soon as you have an economic downturn, the support for these policies reliably evaporates. We saw that after the 2008 financial crisis. Climate has got a reputation as being a bourgeois thing – the issue that you care about if you don’t have to worry about putting food on the table.
What is important about a Green New Deal is that it is modelled after one of the greatest economic stimulus programmes of all time, during the greatest economic crisis of all time, and that is FDR’s New Deal during the Great Depression. Because of this, the biggest pushback that I got when I released On Fire a little less than a year ago was: “But we don’t do things like this when the economy is doing well.”
The only times that we can point to – and this is a hard truth – when our societies have moved fast and changed big and catalytically are moments of great depression or war. Yet we now know we can change quickly. We have seen it. We have dramatically changed our lives. And we found out that our governments have trillions of dollars that they could have marshalled this whole time.
All of that is potentially radicalising. I do feel we have a chance. I would not describe myself as optimistic, because this is a future we have to fight for. But if we just look at moments in history when we have won big changes, they are moments like this.
Naomi Klein is the inaugural Gloria Steinem chair of media, culture and feminist studies at Rutgers University. The paperback of her 2019 book On Fire:The Burning Case for a Green New Deal, is published by Penguin on 24 September
Katharine Viner is editor-in-chief of the Guardian, a position she has held since June 2015. She joined the Guardian as a writer in 1997. She was appointed deputy editor of the Guardian in 2008; launched the award-winning Guardian Australia in 2013; and was also editor of Guardian US, based in New York.
The Trudeau government has made mistakes, learned, and adjusted while trying to ward off the COVID-19 pandemic. Other world leaders have stuck their heads in the sand, and their citizens have paid with their lives.
Prime Minister Justin Trudeau’s government has already borrowed hundreds of billions of dollars to send to Canadians and businesses harmed by public lockdowns during the COVID-19 pandemic. No one knows how long the virus will remain a threat to public safety. The Hill Times photograph by Andrew Meade
HALIFAX—The King of Quip once said that the cynic knows the price of everything and the value of nothing.
Oscar Wilde could have been writing about how some people are reacting to the staggering sums run up in Canada’s fight against COVID-19. The Trudeau government is on track to post a deficit of $343.2-billion, and Finance Minister Bill Morneau said that spending could go even higher. By the end of the fiscal year next March, the government could spend $469-billion more than it planned to when it last set spending targets in December, 2019.
Those are unimaginably huge numbers that have understandably raised more than a few eyebrows. Fitch Ratings, one of the Big Three U.S. credit rating agencies, downgraded the country’s rating from AAA to AA+. But Canada’s debt ceiling still enjoys a triple-A rating with Fitch, as does it short-term debt.
That hasn’t stopped elements of the political opposition from howling about irresponsible spending and a lack of government transparency. Some people are legitimately terrified about the long-term impact on the economy, about rising deficit and debt numbers, and the country’s weakened fiscal position.
No one likes the prospect of a 10 percent unemployment rate that may linger on for years. No one likes to see borders closed, or airline routes cancelled, or no tourists. But part of the hue and cry over the raw costs of fighting the pandemic, dizzying as they are, is politics, plain and simple. And myopic politics at that.
Most of what some are calling a fiscal “bloodbath” has been spent on two programs: the Canadian Emergency Response Benefit (CERB), and the Canadian Emergency Wage Subsidy (CEWS). CERB is the program that gives $2,000 per month to Canadians who have lost their jobs as a result of the pandemic. CEWS gives beleaguered employers 75 percent of employee wage costs.
The government expects both programs to cost more than its original estimates. In the case of CERB, which has been extended to October 4th, the costs have more than tripled from an original estimate of $25-billion. Not good, cause for concern, and a clear sign that tweaks for both subsidies are needed. Finance Minister Morneau has all but assured Canadians that those tweaks are imminent.
The trouble with critiquing Trudeau’s response to COVID-19 based strictly on the financial costs goes to the heart of Wilde’s witty observation. The Conservatives, and some business leaders, may know the price of fighting the pandemic, but not its value. They criticize Morneau for being foggy on the timing of reining in expenditures, and vigorously re-starting the economy, as if he is withholding information.
Guess what? Planning during an unprecedented pandemic is one part facts and nine parts grasping at straws. The nature of an emergency, let alone a catastrophic one, is that you learn on the job. You see the problems more clearly only by being immersed in, and sometimes, overwhelmed by them. That means you make mistakes and adjust. You have your good days, and you have your bad ones. That’s why it’s so easy to criticize anyone in the charge of an emergency that descends like an invisible avalanche.
There are a lot of bad days until the tide turns.
Minister Morneau doesn’t have all the answers because no one does. He doesn’t know how much more it will cost to fight COVID-19; whether the virus will mutate; how bad a second wave expected in the autumn might be; and whether a vaccine will be developed sooner than later. No government can responsibly shift its priority from fighting the pandemic to economic recovery until more of these things are known. Patience, prudence, and science are the watchwords of the day. Not very sexy to be sure, but the wiser path.
The more people obsess about the sheer cost of these enormous emergency expenditures, made under extraordinary circumstances, the greater the pressure will be on the government to re-open the economy while this deadly virus is abroad in the land, without a vaccine. In other words, before the country is ready.
They have tried that in the United States with a quack president who believes that the answer to Covid-19 is the stock market, an injection of bleach, and opening all the schools as infections surge in more than thirty states.
Places like Arizona, Texas, and Florida are reaping the benefits of following “Cadet Bone Spur” over the cliff of COVID Denial: exploding infection rates; hospital intensive care units approaching overload; and front line workers burnt out trying to keep their patients alive without either the protective gear or resources to do so. And even with all that, some of the governors still refuse to mandate something as simple as wearing a protective mask. Instead, they preach rugged individualism.
Other countries too have taken a course far different from the one chosen by the Trudeau government. Sweden opted to do next to nothing to fight COVID-19 and kept its economy open. There was never a lockdown. The Swedish government reasoned that once enough people were infected with the virus, a so-called “herd immunity” would be achieved.
Instead, Sweden ended up with a COVID-19 death rate worse than its Nordic neighbours. The final irony of the Swedish approach? In the end, there was no economic benefit from trying to pretend it could be business as usual in the middle of a pandemic.
Finally, there is the experience of Brazil, where President Bolsonaro seems obsessed with out-Trumping the president of the United States. Bolsonaro’s approach to fighting COVID-19 has been to compare it to a small cold and laugh it off. Bolsonaro’s gaudy show of denial and misplaced machismo included downing hydroxychloroquine on social media and urging Brazilians to follow his example.
Hydroxychloroquine is the same anti-malarial drug touted by Trump in March. Since then, it has been banned as a treatment for COVID-19 by the European Union, and the U.S. Food and Drug Administration. For all his bluster and bull, Bolsonaro himself has caught the “small cold” and is now trying to recover from COVID-19. Meanwhile, 1.7 million of his citizens are now infected and nearly 70,000 have died.
Bolsonaro, Trump, and governors in states like Texas and Florida knew the price of fighting the pandemic, and in defence of the market economy, decided not to pay it. So thousands of their citizens have—with their lives.
Canada has been far from perfect in its handling of the pandemic. Slow off the mark on testing, the virus got a foothold across the country, especially in Ontario and Quebec. The country was woefully short on medical equipment. As for long term care homes, elderly Canadians were shockingly exposed to the fatal virus, leaving this country with one of the worst death rates in the world amongst seniors.
But the Trudeau government has erred and corrected, learned and adjusted, ultimately realizing that no economy could be healthy or open without healthy citizens. Which is to say, Ottawa saw beyond the price of fighting COVID-19 to the absolute value of doing so.
As Wilde so keenly understood, sometimes cynicism is part of the problem.
Plan advocates for companies to hire more Black students for internships and foster leadership pipeline
A coalition of Canadian business leaders has announced a strategic partnership for a program to support Black professionals in Toronto’s financial district and elsewhere. (Tijana Martin/The Canadian Press)
A coalition of Canadian business leaders has announced a strategic partnership for a program to support Black professionals in Toronto’s financial district, Bay Street and elsewhere.
The Canadian Council of Business Leaders Against Anti-Black Systemic Racism and the Canadian Association of Urban Financial Professionals announced the plan, dubbed the BlackNorth Initiative, on Monday.
The plan advocates for companies to work with the coalition to hire more Black students for their internship/co-op programs and to ensure business succession planning strategies include a Black talent strategy to help build a pipeline of employees for future leadership positions.
It is also asking that businesses disaggregate their employee race data and publish it annually, including data on executive representation and/or employee mobility statistics for each Black, Indigenous and person of colour group.
The push to deal with systemic racism has gained strength in recent months in the wake of demonstrations held across Canada and the United States.
A summit is planned for July 20 where business leaders will be asked to sign a CEO pledge and say what they are doing to fight anti-Black systemic racism.
The Canadian Association of Urban Financial Professionals has more than 600 Black professionals as members who work across Bay Street.
“The BlackNorth Initiative and CAUFP are fully aligned regarding the critical need to begin dismantling systemic racism in corporate Canada,” said Wes Hall, founder and chairman of the Canadian Council of Business Leaders Against Anti-Black Systemic Racism.
“Corporations must do more to create and nurture Black talent pipelines to ensure proper representation at the highest levels. This is a natural partnership in a shared mission that will lead to measurable results.”
Des Mckenzie examines ‘the Canada no one wants to believe exists’
Des Mckenzie examines ‘the Canada no one wants to believe exists’ in Poetic License. 3:31
As the world around us grows more and more uncertain, four Black poets speak their truth in the fourth season of the CBC Arts series Poetic License. Watch previous performances now and read Des Mckenzie’s poem below.
The poem you are about to watch was a difficult one for spoken word artist Des Mckenzie to write. As the 2019 Canadian Festival of Spoken Word National Champion, she is no stranger to using powerful words to unpack difficult subject matter. However, with the social inequalities enhanced by the global pandemic woven into the inescapable web of racism targeting the Black community both weighing heavily on her soul — where does one even begin?
“In the wake of all the devastating news over the last month, people are now realizing that racism in Canada isn’t as covert as we’ve been gaslighted to think. The longer white Canadians believe that racism only lives in the extreme of Black people being murdered, the longer they won’t be able to address the issue from all corners of our everyday lives. Racism affects people in the workplace, in schools, even the places geared toward serving us.”
“I wanted to make people feel uncomfortable with this poem and analyze even the most comfortable parts of their lives because there’s no doubt that racism has found a way to live there too. ‘Covert’ or not, it needs to end, and that starts with identifying the very role you play in perpetuating anti-Blackness in this country.”
Watch Des Mckenzie perform ‘The Original Pandemic’ in the video above and read the poem below.
The Original Pandemic
In times like these
a Black person’s grief
comes with no moment of silence
no time to process
the five stages of grieving are accelerated,
When you Act as mourners, coroners, SIU, funeral home, tombstone
I asked my father how he feels today
and he says sick and tired
But he says it like it’s just another day
Like it’s all same, different time and place
He’s numb to this accelerated cycle of grief…
When you have to repeat yourself again and again, how can they blame us when our voices raise,
When tones change
After asking the same questions
After each investigation, dashed under rugs, floorboards, buried
beneath flowers dewy with sap
“Canada’s not that bad” written on stems
Canadians are known for saying sorry but never meaning it
Forcing forgiveness from their victims
What the world and what the Canada no one wants to believe exists
has taught us
is that peace can look a lot of different ways
to Black people it’s just being able to exist
skin undressed from caution tape
when to others,
Peace can be simply be delivered
In days at home
Riding the bus
peace can be delivered
By simply calling the cops…
But not for us.
Not here, not now, not ever actually.
No wonder there are protests in a pandemic
When danger rolls off backs the same way Black Lives Matter rolls off tongues when it’s convenient
Anti-Black racism a threat to lives long before the pandemic we’re living through
So what do you do the stop the spread?
You catch it at its source
Festering at the tip of every microaggression, unconscious bias, everyone you’ve argued to say the n-word, spoke over the Black girl in the boardroom, asked for more evidence when there’s video proof every time you stay silent
You start by listening
Removing your body from comfort,
Look at this country’s broken reflection
And see yourself in the mirror shards
Take each limb apart to expose what’s been planted in you
Till you are broken
No more saying let’s make it better for the next generation
Like the one right now is a write-off
Let them learn what it feels like to sit in complacency as comfortably as you do
This time, white tears won’t wash away the trending topics fast like they normally do
It’s your turn to be angry,
It’s your turn to Repeat yourself
it’s your turn Scream through all the white noise
Until your voices raise
Till you know what it really means to be sick and tired
An Ottawa city councillor says while it’s not feasible to defund the Ottawa Police Service, it is possible to increase funding toward social programs that address the root causes of crime.
To that end, Rideau-Rockcliffe Coun. Rawlson King is calling on the federal government to put $15 million toward social service programming in the city.
“We need senior levels of government to provide the correct amount of funding to social services so that we can actually address the root causes of crime and the root causes of marginalization of neighbourhoods,” King said.
It’s not straightforward to say we can take money from one envelope and put it into another.– Coun. Rawlson King
King said $5 million could go toward community health and resource centres, which provide health services integrated with employment help, food banks and other social supports.
He said those kinds of services help empower people to make the right choices for themselves and their neighbourhoods.
“When you have challenges, especially hunger, those are root causes of crime. If you don’t have proper opportunities, educational opportunities, recreational opportunities, to enhance your position in life, you’re going to make the wrong choices,” he said.
King said as little as $5,000 could support an after-school program aimed at keeping young people on the right track, the kind of modest yet effective initiative he’s seen struggle to maintain funding.
While defunding the police has become a popular rallying cry, King said it’s impractical in the local and provincial context because city councils in Ontario are restricted in how they can direct local police services, and adequate police funding is written into the law.
“Structurally, it’s not possible to defund the police in the manner that it is in the United States,” King said. “It’s not straightforward to say we can take money from one envelope and put it into another.”
In their response, staff said municipalities have limited control over the size and mandate of their police services, which fall under provincial jurisdiction. Ottawa’s police services board controls the budget, and the Ontario Civilian Police Commission can overrule any cuts that are deemed detrimental to police fulfilling their legal requirements.
Building on success
Kelli Tonner, co-chair of the Coalition of Community Health and Resource Centres of Ottawa, said the centres are eager to be part of the conversation about improving social services and fighting anti-Black racism.
She said King’s funding proposal would provide an opportunity to build on existing initiatives, such as the counselling teams that are called into communities after violent incidents.
“They could be incidents of gun violence, trauma, suicide — situations where the community as a whole is impacted,” Tonner said.
“The idea is that perhaps with additional investments we could look at reorganizing how we work, and perhaps send out teams of crisis intake and counsellor workers to try to address things before they happen.”
She said health centres can build relationships in the community to help de-escalate situations involving mental health issues. Tonner said right now, community needs have outpaced the dedicated funding for health and resource centres.
Beyond short-term fixes
Suzanne Obiorah, director of primary care and regional programs at Ottawa’s Somerset West Community Health Centre, said organizations like hers often rely on short-term funding.
“We can’t address systemic issues with short-term funding,” Obiorah said. “The issues that exist in the community … they don’t go away when the funding envelope dries up.”
Suzanne Obiorah, with Somerset West Community Health Centre, says short-term funding often doesn’t cover the creation of long-term programs to help residents deal with complex issues. 1:22
In 2016, the Canadian Community Health Survey conducted by Statistics Canada found that Black Canadians were 60 per cent less likely than white Canadians to seek mental health treatment because of stigma, fear or poor interactions with health-care providers.
Obiorah said programs at the centre help break down those kinds of barriers by having the community participate in their design.
Recently, her centre started a support line specifically for Ottawa’s African, Caribbean and Black community. The line, staffed three hours a day, aims to address issues related to COVID-19 that have emerged.
More stable funding would allow for longer hours of operation and could even turn it into a permanent resource, she said.
Having a ‘seat at the table’ — the PM’s Youth Council —has taught me that real change happens outside the room
Real change happens when people outside the room organize themselves and disrupt the status quo, writes Alfred Burgesson. (Michael Charles Cole/CBC)
I am a young Canadian Black man and I feel fortunate and privileged to have grown up in this country. I was born in Ghana and my family immigrated to Canada when I was young in pursuit of a better quality of life.
Trudeau apologized for putting me — a racialized member of the Prime Minister’s Youth Council — in what he characterized as an “awkward position.”
The prime minister also told me that he was embarrassed and concerned about how his family, peers and the public would view his actions and his character. He acknowledged that many of us, including people within the government, have blind spots because of their privilege and world view.
I respect him for this gesture and recognized the courage it took to make the call.
I was more concerned, however, about how our leader would assure Canadians and the rest of the world that what happened, however many years ago, was not cool then — and is not cool now.
During our conversation in September, my recommendations to the prime minister were specific and straightforward. I urged Trudeau to lead by example and to mandate that all elected officials and decision makers in government receive anti-racism education and training. He agreed with me. He promised changes.
But these attempts at change by the man at the head of the ‘national table’ stand in stark contrast to the impressive acts of solidarity by the Black Lives Matter movement. People traumatized by images of death and pain have come together in acts of courage and determination across Canada.
I am disheartened by people in power — but I am encouraged by the power of the people.
On June 8, my Youth Council colleagues and I penned a letter calling on the prime minister and his cabinet to endorse and implement our anti-racism calls to action. These calls to action are relevant to all levels of government and any elected official.
Mandatory anti-racism training and education for elected officials and publicly funded institutions.
Measurable targets and evidence of training.
A commitment to diversifying leadership so that it is reflective of Canadian society.
The collection of race-based wellbeing and/or quality-of-life data to ensure investment in social determinants of health and areas of society where racialized and vulnerable populations need it most.
A move to defund police and re-invest in Black and Indigenous communities.
I took to Twitter recently to share more thoughts regarding training:
While “training” isn’t the only answer for our elected officials and publicly funded institutions, it is absolutely necessary that people in powerful leadership positions be educated about the racist and oppressive nature of the systems they’re operating in. #RacismInCanada
To the members of the PM’s Youth Council who shared their perspectives on – and experiences with – systemic racism, thank you. Conversations like the one we had yesterday are key to bringing about change, and I continue to be inspired by your leadership on this and other issues.
That’s why I’ve launched CollectiveAction.ca to facilitate public engagement and stimulate action via customized messages directed to elected officials. Add your voice to the calls to action and engage your local elected representative wherever you are today.
It’s not enough to talk about change in front of a camera or on a stage, or with a social media post. We must tear down and dismantle systems that perpetuate injustice and begin to change the way we govern society fundamentally.
Elected officials from the prime minister down must be held accountable while being given specific direction on what we — the people who put power into their hands— want that change to be.
The time for talk is over. It’s time for collective action.
Alfred Burgesson is a member of the Prime Minister’s Youth Council from Halifax, Nova Scotia. He is the creator of collectiveaction.ca — a platform encouraging an inclusive and participatory democracy.