Ontario Perspectives 2014: Plus the impact of the Provincial Election

Grant PetersonStarred Page By Grant Peterson, 24th May 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/21flcb08/
Posted in Wikinut>Writing>Society & Issues

Looking at the future prospects for any part of the world requires a thorough analysis and bringing out the findings, even-though they are hard to perceive. Ontario, one of the industrial heartlands of North America is a mess and need more than a quick fix. This is a socialist analysis of the change that is required.

Canada and Ontario

Canada may have been spared the full wrath of the financial crisis, unlike the USA and Europe, but it would be wrong to assume that the Canadian economy is healthy and booming, despite the assurances of Prime Minister Stephen Harper, the economy is far from healthy and when the Ontario economy is examined it is clear that as a major contributor to the Canadian economy it is clear why the problems exist. At one time the province of Ontario was perhaps the wealthiest of all the Canadian provinces it had thriving industry, technology and financial sector, yet since the recession of 2008 has changed all of that. This once thriving province has been turned into an industrial wasteland almost overnight, with factory after factory closing and is now considered a "have not" province. The truth is that the economic well-being of Canada is closely linked to the economic conditions in Ontario and it should be clear today that capitalism has failed the people of Canada and offers no prospects for the future and with all the layers of government providing all types of subsidies and tax breaks in the belief that this will spur on investment and create jobs, yet these policies are failing to create new or guarantee existing jobs.

Indeed many corporations have closed shop even after receiving government assistance, subsidies, tax breaks, and cutting jobs and spending and where there has been employment it has been at a minimum wage. Truth is some employers are cynically using the recession as an opportunity to cut both jobs and pay, some pay-cuts being as large as 50 percent even though they have been making more profit than ever before.

One of the core ideas of capitalism is that companies feel justified in taking massive profits because they believe that they take all of the risks in developing the business and as a general recognition of the investment of the capitalist class, yet it is clear today that they are neither developing business nor investing in the future of their industry there is no desire to risk anything, today capitalist investment is sluggish or nonexistent stashing money away in the bank is far more profitable than investing in business as the Bank of Canada estimates that in excess of half a trillion dollars is sitting idle in corporate bank accounts. Today it is the workers that take all the risks every time they take a day's leave they risk their job, every time they purchase something significant, such as a home or a new car they risk being made redundant a few weeks later from a capitalist class that does not care.

Capitalism is international in nature and will move its base of operations wherever it suits them, irrespective of the support they have been given by any of the levels of government, such as Caterpillar who closed their London Ontario Electro-Motive Diesel plant and Electrolux, who despite Quebec government funding and guarantees simply moved their plant to Tennessee where legislation allows them to employ workers at lower wages and benefits. Add to this the woes of the technology sector where Ontario's Nortel Networks which at one time made 30% of data communications equipment used by major corporations which crashed so spectacularly a few years ago at the cost of tens of thousands of jobs worldwide and add to this the uncertain fate of BlackBerry (formerly Research in Motion) once the world leader in Smartphone technology, one of the owners being more interested in acquiring an NHL franchise than in developing that business.

A recent Ontario government task force has shown that despite a decade of investment friendly policies business refuses to invest in jobs or even other productivity tools, such as automation, they simply collect the government subsidies and put them in the bank, not even the capitalist class themselves have faith own in their system; if they do not wish to run these businesses then it is time to turn them over to the working people of the province who have a vested interested in their own futures. These facilities can be incredibly productive and should targeted at meeting the needs of society not the profits of the capitalist class. The Bank of Canada has low expectations for economic growth with GDP to rise 2% in 2014, they do not see the Canadian economy “returning to normal” until late 2015, “at the very earliest” yet in reality the current recession may well be an ongoing state for the foreseeable future, perhaps lasting as long as a quarter century and Ontario's prospects seem to be amongst the poorest in Canada. Even if we accept the bank's growth rates as correct, there is no guarantee that there will be any jobs available for a new generation of workers.

Following a wave of factory closures over the last five years workers have instinctively occupied their workplaces, but have had no leadership from the labor movement to assist in making worker's ownership a reality. If nothing else is clear then it is that in Ontario capitalism is irreparably broken and needs to be replaced.

Paralyzed Leadership

Truth is none of the political parties in Ontario has any idea how to resolve the mess the province currently finds itself in, both of the capitalist parties - Liberal and Conservative are incapable of offering any real solutions and that should give an opportunity to the NDP, but that party's leadership, when it should have the perfect opportunity to rise to the fore, are clueless about how to do anything but prop up a Liberal regime that is well past its "sell by" date, NDP are failing to give any form of leadership against the corrupt capitalist system and they have been unable to respond to the needs of working people or stand in support of their rights in Queens Park. How do they plan to solve the economic crisis that Ontario finds itself in right now? This should be the major question the NDP should be addressing at the current time.

Even though polls are frequently misleading a recent poll by Abacus Data found that none of the party leaders ranked greater than 30% in terms of "leadership capability" and each was ranked below 20% in terms of "sound judgement". In other words the voters of Ontario have little faith in their ability to solve any of the problems Ontario faces.

There is unprecedented cynicism, gloom, and anger across Ontario as people search for a way out of this mess and sadly at the same time there is also paralysis of leadership both from the perspective of the capitalist class and that of the labor movement and the NDP, the result of which means that the underlying contradictions within society will continue to build. The capitalist class's failure to invest is crippling the industrial heartland of Canada and currently the leaders of the labor movement have concluded that their role is to negotiate with a bankrupt capitalist class yet the truth is there is a need for a fundamental shift in society and the only resolution of Ontario's problems lies with sweeping away the capitalist regime and replacing it with common ownership of the means of production.

If the capitalist class is not willing to invest in its own future then this should be a clear indicator of their failing leadership and warns of further crises to come. The working people of Ontario have been feeling the weight of the problems on their shoulders, there is no optimism about the current state of the economy, real wages are stagnant and many workers, especially the youth and long term unemployed, are finding it next to impossible to get their foot in the door.

Jobs, Conditions and Unemployment

Working people from Ontario are significantly worse off than before the financial crash and an increasing number are in very precarious situations even if they have been employed for all their life, most people feel that they are days away from a redundancy notice, have major debts and massive mortgages, in addition more than one-third of workers are now living paycheque-to-paycheque. A report by the CD Howe Institute indicates the percentage of the Canadian population currently employed is actually lower in 2013 at 62% than what it was in 2007, prior to the onset of the most recent financial crisis when 63.7% were employed, officially unemployment is nationally 7% yet is slightly higher at 9% in Ontario. A recent report available on the CBC website suggests that 39% of unemployed have given up on job search, no surprise when thousands of people apply for each job offered.

Working people do not have to see these figures to know them to be true, they simply look around their own workplaces and count the number of people who are no longer there and have not been replaced, add to this the fact that workers are working longer hours than they did a decade ago and often taking on parts of the duties for jobs that are no longer filled.

Look at the part-time workers and you will find most were actually seeking a full-time role yet they have been forced to take part-time positions (and often more than one) because full-time posts were simply not available, add to this that most are working at, or below, minimum pay, but for these part-time hires unemployment nationally would exceed 10%. The majority of hires in the last 5 years are at lower wages or salaries than were available before the recession hit and even those in work have had wages capped or reduced and as a result price rises, in particular the impact of the price of gas, means people have less money but greater expenses.

Large sectors of unemployed people are finding it increasingly hard to find any work at all, indeed they risk becoming a permanent sector at the fringe of society, just under 20% of the unemployed have been unable to work for more than six months, and a full 7% have been unemployed for over a year, yet as soon as their EI expires they will no longer be officially counted in the statistics, driven to more desperate measures in order to find work. Tim Hudak's million jobs plan is nothing but hot air and vapour and will not bring any extra jobs, let alone ones offering real/long-term prospects.

In Ontario, youth unemployment now sits at 17%, the second-highest rate of any zone in North America and in southwestern Ontario, what should be the industrial heartland of the Canadian economy, youth unemployment is as high as 25% in cities like London, Oshawa, or Windsor without any possible future many of these young people simply face a life of drugs and crime.

Due to stagnating wages, the attack on pensions, more and more older workers are attempting to continue working far beyond the traditional retirement age, yet this is also a double-edged sword because many oldest workers are first on the firing line when job cuts happen yet the majority do not have the savings necessary to live out their retirement comfortably.

The House Market

Perhaps the biggest contradiction facing the Ontario economy (and particularly that of the Greater Toronto Area) at the present moment is the disconnect between a stagnant economy, stagnant wages, and an overheated housing market that continues expanding. The Canadian housing market has caught the attention of commentators around the world, the New York Times, the Economist, and the International Monetary Fund (IMF) have commented on the irrationality of the Canadian housing market at the current time, rocketing prices have encouraged many homeowners to borrow increasing levels of debt against the values of their homes and right now average Canadian family now owes more than 160% of their annual income, this level is higher than consumer debt was in the USA prior to the 2008 financial crash that prompted millions of people to declare bankruptcy, Canadian banks may have survived that time but now face an uncertain future.

Part of the danger is that when the prices do crash as they surely will many of the so called million dollar homes in Toronto, where some homes are overvalued by as much as 66%, will leave home owners unable to sell. A banking collapse could also impact those home owners that are paying their mortgages on time every month. The other danger for the average homeowner is that things are so finely balanced currently and loss of employment will almost certainly lead to loss of the house.

Austerity, Austerity, and yet more Austerity

The average person does not need to see a mass of statistics to know that their personal situation is getting worse whatever they do they will have felt the pinch as corporate belts are tightened tighter and tighter, they see no light at the end of the tunnel and most have taken pay cuts in preference to losing their job, all in the expectation that things will improve within a couple of years and that the sacrifice would be repaid, yet where is the expected payout after five years of cuts and austerity? The truth is austerity measures are likely to become more severe the longer this recession lasts and reality is this economy is unlikely to abate for at least another 5 years perhaps even longer because it is clear to see capitalist leaders have no idea how to end the recession.

Truth is even though the crash of the financial sector was not nearly as deep in Canada as it was in the US and Europe government institutions have propped up Bay Street to the tune of billions of dollars because they cannot afford to have this sector collapse, yet right now Bay Street is doing nothing for Ontario's economy, it is not investing, Hudak's "million jobs" plan is merely a front for a way to slash public sector pay and shift jobs to the private sector, reducing corporate tax will also not bring jobs. We have seen the extent to which the Liberals have wasted money without bringing any jobs or any prospect of ending the recession. The NDP have the ideal opportunity to step into the void and fight for the rights of working people, yet they have no clear vision of the current state of the Ontario economy and how socialist change is necessary.

People everywhere are disgusted by corruption that exists at all levels of government, from the Federal Senate expenses scandal to the closure of the Gas plants in the province, add to this the cozy relationship between politicians, irrespective of their political allegiance, and industry leaders and bankers, they have lost all credibility because voter turnout is likely to be the lowest for a long time with cynicism setting in across the province. A study by the OECD shows that only 52% of Canadians have any trust in government, a decrease of 15 percentage points since 2008 and this mistrust will continue to build particularly in Ontario.

Political Outlook

Ontario society is extremely combustible and there is today a void of leadership both within the capitalist class and those who should be opposing them with socialist principles, till now there hasn’t been any outlet for this discontent but the pressure is building, pockets of resistance like the "Occupy" movement, "Idle No More" and others are voicing opposition to capitalism, yet these movements trend to be more anarchist in nature and are born out of frustration, yet have no ideological foundation or philosophy, which is required in order to defeat the capitalist class.

The leadership of the labor movement and the NDP are oblivious to the present void of leadership in the capitalist class and the tremendous potential that exists at the current time. Sadly unions are continuing to offer concessions and compromises because they are afraid of further job losses yet the truth is such a stance emboldens the capitalist class who to ramp up their attacks, and doubly serves to demoralize working people who should be on the ascendency.

In Toronto, the failures of NDP's former mayor David Miller brought the alternative a drugged and drunk Rob Ford, the buffoon who is the laughing stock of the world and most people feel anyone could do better. In early 2013 thousands of teachers were prepared to take wildcat strike action to confront a weak and discredited Liberal government that had taken away collective bargaining and the right to strike yet instead of utilizing the solidarity of teachers across the province union leaders reached a last-minute deal with the Liberal government despite the fact that teachers could have been victorious in their actions. Now is not the time for weak leadership it calls for decisive and bold action one of the problems faced by trade unions is the fact that they focus on the need for reformation of workers pay and are not able to focus on the bigger picture, the socialist transformation of society.

More and more people, of all ages, are openly questioning the logic of the capitalist system, including many who have, until this recession, been fervent supporters of capitalism and now is the time when socialist ideas and principles can gain support provincially, nationally, and internationally. Any fightback in Ontario is inevitably linked to the national struggle across Canada, and here there is a need for a clear socialist alternative that is focused on changing society rather than simply tinkering with capitalism.

Other Work

Ontario Election
How not to create a Million jobs Hudak threatens 100,000 Public Sector Jobs

General Analysis Perspectives
For further a general review on the needs for true democracy take a look at my recent pamphlet "The Growth of Global Capitalism, Imperialism and Need for True Democracy"

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Comments

author avatar Ptrikha
25th May 2014 (#)

Quite an enlightening piece of the current situation in Ontario in Canada. Any likely reforms there?

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author avatar Fern Mc Costigan
27th May 2014 (#)

Interesting post full of a lot of information, thanks for sharing!

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