By Tom Parkin
Over the past 12 months, the average Canadian wage has been falling, once inflation is included.
Economy growth is weak. The cost of housing is rising – skyrocketing, in some regions. Part-time and temporary work is growing.
It’s a stressful time – what’s there to be so happy about?
You’d think you’d get some empathy from the leader of a country full of economically stressed people. You’d think you might get an occasional flash of outrage, sadness, frustration or even – dare we say it – anger. But in Canada, with Justin Trudeau, it’s the exact opposite. We get smiles, stock photo-ops and a refusal to answer tough questions in the Commons. It’s a strategy of misdirection.
And if you can’t get some empathy, you’re not getting any policy. There’s no effort to strengthen minimum wages or employment standards. Trudeau broke his promise to fix unfair tax rules for stock options. And there’s no signal that Canadian will push for stronger human, labour and environmental rights in the many trade deals Trudeau’s pursuing.
Behind the smiles, what Canadians are getting are massive reverse Robin Hood schemes.
We’ve all heard about Trudeau’s $4 billion middle class tax cut. The problem is, the middle class gets almost no benefit from it. The biggest benefit goes to people with after-deductions taxable income of between $90,000 and $200,000. People earning under $45,000 get zilch. Some people are happy about that.
But Trudeau’s biggest reverse Robin Hood plan is his private Infrastructure Bank. A bill to create this bank is making its way through Parliament now. And absolutely some people are happy about that.
During the election, Trudeau promised to use historically low interest rates – currently about 2% -- to launch a boom of infrastructure construction. But once in government, the Liberals set up an advisory panel of finance capitalists – let’s not mince words – and asked them to come up with a plan for financing infrastructure. Smiles everywhere.
No big shocker – the advisory panel recommended that instead of paying 2% interest to borrow money by issuing bonds, the government should pay them 7 to 9% for doing the same thing. They recommended creating a privately-funded monopoly that would finance infrastructure projects – the Infrastructure Bank.
And the kicker is that the Liberals’ advisory panel also recommended the government chip-in $20 billion to get their bank running. The Liberals are looking at raising this money by privatizing airports and sea ports. Toronto’s Pearson Airport alone could fetch $5 billion, according to a recent report.
If you’re an economist, it’s called rent-seeking. It’s a practice that uses monopolies to extract wealth. It contributes nothing. It just takes. And the Infrastructure Bank is rent-seeking on steroids.
The rents extracted though the Infrastructure Bank would be massive. Economist Toby Sanger has calculated that Infrastructure Bank financing will add about $5 billion a year to project cost – the roads, bridges, subways, arenas, etc. Smiles all around.
And that $5 billion is paid by you – money you contribute in taxes and thought would go to health care, education and care for others. It gets diverted away to the richest. It is a reverse Robin Hood scheme.
It’s no accident that Trudeau is out of touch and out of tune with the Canadian people. It’s a strategy. The real question is if there is a political leader who can capture the true mood of Canadians and end these reverse Robin Hood schemes.