CANADIAN LABOUR:

A LIVING PENSION FOR EVERYONE:

The Canadian Labour Congress (CLC) is waging a campaign for the improvement of the Canadian pension system, to guarantee a decent standard of living for all Canadian retirees. Here, from the Canadian Union of Public Employees(CUPE) is a news report on this campaign and the times for the first cross country public training forums that will be held on the issue.

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Retirement security for everyone:
The Canadian Labour Congress (CLC) and its affiliates are waging a campaign on pensions, and CUPE is proud to be part of it on behalf of its active members and retirees.

A series of training sessions for this campaign will be held in several cities this fall and winter. The main thrust of the campaign involves lobbying provincial and federal governments to make bold new changes that will secure pensions for all workers.
The principal demands of the campaign are:
**Double benefits for the Canada Pension Plan (CPP).
**Increase low-income (GIS) pensions by 15%.
**Introduce a national system of pension insurance.

In making these proposals, we are championing the same progressive values that changed our health care system with the advent of Medicare more than forty years ago. We can make a similar choice for pensions today and create a system where no Canadian is left behind.
Forum Locations and Details
Newfoundland and Labrador
**St. John's Holiday Inn, Portugal Cove Road, Tuesday November 3, 2009, 9:00 am. In conjunction with Newfoundland & Labrador Federation of Labour Convention; open to the public.
New Brunswick
**Bathurst, USW Union Hall, Wednesday November 4, 2009, 7:00 pm. (Bilingual event).
**Saint-John, Courtney Bay Inn, Tuesday November 3, 2009, 7:00 pm. (Bilingual event).
British Columbia
**Justice Institute, New Westminster, November 5, 2009, 6:30 pm.

Forums will also be coming up in the next few months in Windsor, Sudbury, Toronto, Ottawa, and St. Catharine's (Ontario), in Brandon and Winnipeg (Manitoba), and in Edmonton and Calgary (Alberta).

To find out more about any of these events, or for questions, get in touch with the Canadian Labour Congress.

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Here is the summary of the Canadian Labour Congress campaign referred to above.

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Retirement Security for Everyone!:
Over the past year, Canada has been hit hard by the deepest economic downturn the world has seen since the 1930s. Hundreds of thousands of good-paying jobs have been lost and the retirement savings of countless Canadians put at risk by the financial meltdown and corporate bankruptcies.

Many today, even those with jobs are wondering if and when they can ever retire. They have good reason for concern.

Recent events have exposed major faults in our pension system. Our public pensions – Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) plus the Canada Pension Plan - provide a secure income in retirement. But even the maximum value of those pensions falls far short of what people need to maintain a decent standard of living after retirement.
The private portion of our pension system is in deep trouble
About one in five private sector workers belong to a private pension plan. Very few non-unionized workers, with the noted exception of managers and professionals, are covered by plans. Many of the plans which do exist are on shaky financial ground because of low interest rates and the recent collapse of stock markets. Some workers have discovered that when their plans get into financial trouble, there is little help available.
RRSPs have failed to deliver
RRSPs are often billed as the solution to our pension woes. They are supposed to fill the gap left for those not covered by private pension plans – but RRSPs have failed us. The average worker approaching retirement today has saved only enough to buy a monthly pension of about $250 per month.

RRSPs have not worked because many Canadians cannot save enough to overcome the built-in hurdles of high administrative fees (which in Canada are among the highest in the world) and highly variable and uncertain financial returns.
It's time for change
Decision-makers can hear the growing calls for pension reform in Canada, despite the strong and loud opposition from vested interests in the financial industry. Employers who sponsor pension plans also recognize that supporting decent pensions through public rather than private arrangements would lower their costs and help level the competitive playing field between them and businesses who have offered no pension plans for their workers.

People should not be left to fend for themselves in retirement. It's time for a change in emphasis toward public pensions and toward greater security for people who belong to existing employer plans.

That's why the Canadian Labour Congress is proposing three key reforms that would benefit all workers, improve retirement income security, and gear Canada's pension system to better fit the needs of a changing economy.
The CLC Plan: Retirement Security for Everyone
Double benefits for the Canada Pension Plan (CPP). We propose to phase-in a doubling of the proportion of average earnings replaced by CPP from 25% to 50% over seven to ten years, to $1,635 per month. This would be financed by a modest increase in worker and employer premiums (3% spread over several years).
The benefits of investing in a stronger Canada Pension Plan are clear:
**The CPP already covers 93% of working Canadians and offers an accurate sense of the income they can expect in retirement.
**The CPP is highly risk tolerant because of its size and it has the lowest administration fees of any pension plan in the country.
**The CPP is highly portable – no matter how many times they change jobs, workers will still be covered. Why shouldn’t we build on this successful model?

Increase low-income (GIS) pensions by 15%. This would give low-income seniors up to an additional $110 per month, enough to move virtually all seniors above the poverty line.

Introduce a national system of pension insurance. An insurance floor should be set for defined pension plan benefits through a system funded by contributions from pension plan sponsors. This would be a federal initiative covering federally-regulated pensions but Ottawa should enter into negotiations with the provinces to create a national system.
The Choice: “Move Forward Together” or “Fend For Yourself”
In making these proposals, we are championing the same progressive values which changed our health care system with the advent of Medicare more than forty years ago. We can make a similar choice for pensions today and create a system where no Canadian is left behind.

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All of this is well and good, but Molly suggests that it is hardly enough. One failing is that neither the private insurance plans nor the CPP allow for any input on the part of workers contributing to said plans nor of the retirees who are collecting the benefits. In other words workers and retirees are obliged to take both the good intentions and the competence of the managers, both private and public, on blind faith. The Congress of Union Retirees, representing numerous Canadian pensioners, have proposed "legislation to require participation of retirees in the governance of their pensions". Personally I think that there should be such democratic safeguards for both the private pensions and the CPP. The fate of many pensions plans in recent years and the continued alarms over the viability of public plans in many countries says that such important instruments of financial security should not be left to the supposed competence of the supposed experts.

There is also another option to both private and state administered plans such as the CPP. The viability of cooperative plans is hardly ever considered. This option is actually rarely even mentioned. The institutions to administer such plans, the network of credit unions that cover Canada is already at hand. Molly would suggest several aspects of such an alternative system, one that could be just as stable as the CPP. One is that participation would be voluntary, and that not just individuals (as with RRSPs now) but also workers covered by company pension plans that they may doubt the stability of could opt to have their pension contributions (and matching ones from their employers) deposited in such coop plans. I would also suggest that such plans be a joint effort of several credit unions, rather than individual institutions. This would help to assure stability, as would a fund guarantee for deposits in these plans. The question of stability would, of course, be paramount, and the investments that such funds could undertake would have to be restricted- unlike the situation in many RRSP plans today. To offset the possible spread between stability and return and make these plans more attractive I would also suggest that there be a tax credit attached to deposits in such funds. This would be similar to that already offered by many labour sponsored funds today. The coop funds would be similar to the labour sponsored funds in that they would be restricted to domestic investment, but they would be further restricted from providing "venture capital" ie less secure investment.

The advantages of such coop pension plans would be many. They could provide stability that would perhaps be equal to that of the CPP and certainly greater than most RRSP funds provide. It might even be attractive for people to eventually transfer their accounts from the CPP to such coop plans. Like the labour sponsored funds they would assure a supply of capital for Canadian (or provincial) enterprise. If for no other reason this should ensure them a tax credit, even if the percentage would obviously be less than the labour sponsored funds who invest in more risky enterprises. The mechanism of governance is at hand in the cooperative model of the credit unions, and if one wishes a democratic participation of workers and retirees in their pension funds the creation of this would be far more straightforward than with the private plans of, especially, the CPP.

There would be, of course, many difficulties, and the details would require a lot of thought and planning. The benefits, however, are such that this 'third way' should be considered rather than ignored.

INTERNATIONAL POLITICS:

MUTUALIZE THE BANKS ?-YES!:

A tip of the Molly hat to Larry Gambone of the Porkupine Blog for bring this to my attention. It seems that in Britain there is a move afoot to "remutualize" at least two of the failed banks. To say the least this is a positive development. Mutuals, known in this country as credit unions, are naturally more cautious than the free wheeling banks that led the world into the present economic crisis. They provide a natural barrier against the sort of speculation whose results we are seeing today. In addition, and perhaps most importantly, they provide a non-governmental source of credit that would be available to the many (and probably many more in the future) enterprises that are presently in dispute, often with workers' occupations of the facilities. Mutuals/credit unions could be a source of credit for such enterprises if their workers wish to turn them into producers' cooperatives. They would provide a third alternative different from either waiting for a private "white knight" or calling for nationalization of the workplace in question. The agreements taken up with such mutuals leave the actual workplace free to develop true workers' self-management, something that neither private buyouts nor nationalization does.

Yes, the British initiative is small, but I hope it comes about and that it is imitated on a larger scale worldwide. Here's the news from the pages of the British newspaper The Guardian.

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Turn failed banks back into mutuals, Labour told:
Rock and B&B should be restored to savers
Pressure is mounting for the government to explore ways to remutualise Northern Rock and Bradford & Bingley, nationalised after the shares crashed amid fears that they could collapse amid the world financial crisis. Both companies were mutuals before becoming stockmarket-listed banks in the 1990s.

Labour MPs are pushing for the government to expand the role of mutuals, which are owned by depositors and borrowers. They do not have shareholders who may be more interested in diverting profit to bolster dividends than getting customers a better deal.

Mutually owned building societies are widely viewed as more cautious than banks, which have been accused of irresponsible lending during the boom. Societies are barred from funding more than half their mortgages from the wholesale money markets, which have frozen up in the wake of the credit crunch.

One option would be to remutualise Northern Rock and B&B, both of which have been rescued by the taxpayer at a huge cost, although part of B&B was acquired by Spanish bank Santander. The principle of remutualisation is supported by the Co-operative party which sponsors 29 Labour MPs, including schools secretary Ed Balls.

The Co-op's general secretary Michael Stephenson said: "The government could consolidate Northern Rock and its holding into one institution; when all debts are paid back, the institution could be converted into a building society. Alternatively, government could give existing financial mutuals (such as Nationwide) the right of first refusal when it decides to put the institutions it nationalised up for sale."

John McFall, Labour chairman of the Treasury select committee and a Co-op sponsored MP, says: "If ever there was a time for an expanded mutual sector, it's now. We desperately need to restore faith in financial services in this country." Although he stopped short of calling for a firm commitment to remutualise the Rock and B&B, he told the Observer that the idea was "a fertile area for debate".

He was backed by Mark Lazarowicz, Labour MP for Edinburgh North and Leith, who says: "This is an issue that is worth airing at a time when confidence in the banks is at an all-time low."
Martin Weale, director of the National Institute of Social and Economic Research, said remutualising Northern Rock and B&B could be a relatively simple, albeit lengthy, process with money owed to the taxpayer repaid by borrowers who redeem their debts over time. New "membership" shares could be issued to depositor/members, he said.

It emerged this weekend that the Building Societies Association is to commission academic research into how the mutual sector could be expanded in Britain, after banks that ditched mutuality in favour of plc status have either been nationalised or taken over in "mercy killings" by rival institutions. They include HBOS, which has been merged with Lloyds TSB, and Alliance & Leicester, which was bought by Santander.

Stephenson said: "When the last Conservative government encouraged building societies to demutualise, it plundered generations of assets from mutual societies, replacing prudent mortgage providers with some of the worst culprits of casino capitalism."

CANADIAN POLITICS:

ECONOMIC ADVISE TO HARPER FROM THE WEST:

The nation is waiting, maybe without bated breath but at least waiting, for the new Conservative budget due to come out later this month. The Harper conservatives are in something of a bind. The seriousness of the economic situation, which they once denied for ideological reasons, has dawned even in their rusty craniums. No more of a "turn around by July" or "this is a good time to buy". Doing nothing is no longer an option, but what can they do ? Following the lead of the USA is the easy option. Take every bit of free money thrown at the corporations down south, divide it by 10 and you have "Canadian policy". Yet, simply bailing out corporations may turn out to be politically unacceptable. The governments of both the USA and Canada have to be at least seen to be doing something for ordinary people, whatever the substance of what they are actually doing. The latest polls put the Liberals ahead of the Conservatives in voting intentions. Perhaps not far enough ahead for Sneaky Stevie's Liberal doppelganger Infamous Iggy to actually dare to pull the plug, but it is a sign of caution for SS. No matter what he might feel like doing he has to make at least some sort of theatre of concern for the public rather than his corporate friends.

Molly has previously presented the program that the Canadian Labour Congress would like to see instituted. Here is another alternative economic plan, this time from a collection of 20 western Canadian economists, compiled by the Canada West Foundation. Like the CLC program this set of recommendations emphasizes help for ordinary people over help for the corporations. Once more, I do not necessarily agree with all of the proposals. Things that are conspicuously missing include:

***A job creation strategy based on subsidies, tax breaks and changes in legislation aimed at the expansion of the producers' cooperative sector, a sure fire way to create maximum employment (and purchasing power) for every dollar spent. Employment that is not dependent upon a weak international trade system. This is especially important in the concept of "infrastructure" as many of such projects would be best and most efficiently undertaken by local coops.

***Basing any bailouts for the auto industry (and others) on the provision of equity in the industry, both for the Canadian public and the workers in said industry. In terms of the workers such equity should give them an increased say in how the industry was run. The economic benefits of this are obvious- increased efficiency as the workers actually have a stake in the enterprise. It is my opinion that all future government support to any industry should be premised on such conditions. Should the industry fail despite infusions of government money the way would be open to reestablish it as a producers' cooperative with minimal disruption.

***An emphasis on the domestic economy rather than the international trade system. Enterprises whose customers are local are far less vulnerable to fluctuations in international financial systems.

***An emphasis on the system of credit unions, properly regulated to avoid speculation. Unlike the large banks such institutions are basically local and thus insulated from the vagaries of international finance. Legislation should favour such institutions over the banks, and it should properly restrict their operations to avoid speculation on the part of their managers, a class whose interests are often at variance with that of the members.

***A reinvigoration of the 'Labour Sponsored Funds' via increased tax breaks for same, and an interprovincial agreement to restrict their operations to local industry rather than speculation. A re-examination of the legislation governing same to ensure transparency and prevent influence peddling such as led to the collapse of the Manitoba Crocus Fund.

***A guarantee of assured funding to munipalities, not just provinces. The amendment of provincial legislation, once more by an interprovincial agreement, to assure that such funding was, once again, more transparent and open to democratic control by municipal electors.

***Amendment of labour legislation, hopefully with provincial agreement, to 1)raise minimum wages nationally, 2)make union organization easier and 3)improve workplace safety and health standards. This would provide increased purchasing power as assuredly as a tax cut would and it would actually improve competitiveness as business would be induced to concentrate on actual improvement in production rather than on trying to squeeze labour costs.

One could go on and on about such proposals, and I will probably do so in the future. What is important to note here is that there is an "undiscovered continent" beyond the classical social democratic nostrums for correcting economic crises. It is also important to note that pretty well all of such reforms would not be granted by the goodwill of any government, especially the present Conservative one. What is important, at this point, is to raise the possibility of such reforms. Whether they are implemented or not depends not on the machinations of political parties but on demand from below. Molly hopes she can do her little bit to stimulate such demand.

The following article which led to this overly long "introduction" is from the online news magazine Straight Goods.

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West urges Harper to act quickly:
Twenty-five Western economists send PM budget advice.
by Gillian Steward
If Stephen Harper is inclined to listen to anyone, other than himself, perhaps he should lend an ear to some western economists bursting with suggestions about how his government can best help Canadians weather the recession.

They want him to act quickly and be bold — no more dithering, no patchwork programs and no more fussing about whether to run a deficit.

"The first thing governments should do is stop talking about deficits and change the message to being willing to do 'whatever it takes' to save jobs," wrote William Kerr of the University of Saskatchewan in a report compiled by the Canada West Foundation, a Calgary-based think-tank.

"Getting more funds into the hands of individuals who most need support and will quickly spend the money should take priority over cutting personal or business taxes."

The 25 economists from the four western provinces want Harper to deliver a stimulus package that is national in design rather than targeted to particular regions, sectors or firms. But they also agreed, somewhat reluctantly, that the federal government will likely have to extend a helping hand to the auto sector.

"With the US government poised to introduce a package for the Big Three, Canada may have no choice but to do the same. The emphasis should be on structuring the package to include conditions that require it to be repaid, perhaps in the form of loans and/or loan guarantees," said Ken McKenzie of the University of Calgary.

Marlo Raynolds of the Pembina Institute suggested the government should support the auto sector with public funds only if the sector is willing to accept a fleet-wide fuel efficiency standard of at least 45 miles per gallon by 2020.

There was also a consensus that the feds should quickly inject money into the hands of consumers and businesses by strengthening Employment Insurance and other programs designed to act as a safety net during difficult times. The unemployed, pensioners, students and others more likely to spend than to save should be on the top of the list. Federal support for provincial social programs should also be increased as a short-term measure.

"Getting more funds into the hands of individuals who most need support and will quickly spend the money should take priority over cutting personal or business taxes," said Jonathan Kesselman of Simon Fraser University.

As for infrastructure projects, the group suggested that they be undertaken quickly and be evenly spread across the country. Among those on the top of the list: refurbishment of existing infrastructure, green public transit, transportation projects that facilitate trade such as a new Windsor-Detroit bridge and West Coast port facilities, affordable housing, and mental health and addiction facilities.

Tax cuts didn't get much play in this report mainly because participants couldn't reach a consensus on what kind of cuts would be the most effective. Some favoured temporary or permanent cuts to the GST while others preferred cuts to personal income taxes; others suggested reducing EI premiums for employers.

The economists agreed there wasn't much the federal government could do about the slump in commodity prices, which has hit the West hard. But they suggested an economic stimulus package should include measures to enhance credit financing in the energy sector, particularly for small to mid-sized producers. They would also like to see the reinstatement of the accelerated capital cost allowances for oil sands upgrader projects.

So there you have it, Mr Harper. Never let it be said there isn't a wealth of ideas being sent your way as you and your team craft that January budget.

Gillian Steward is a Calgary writer and journalist, and former managing editor of the Calgary Herald.