The Will Rogers Of Politics

Despite all of the green virtue-signaling that comes from Ottawa on a regular basis, those who follow such things know that it is largely empty rhetoric that hides some very, very inconvenient truths. On the one hand, there never seems to be sufficient funds to implement meaningful programs that would improve people's lives (think full dentacare, pharmacare and affordable housing). On the other, there is no dearth of money to subsidize the fossil fuel industry, to the tune of many billions per year.

Despite that largesse, Big Oil seems unable to afford to clean up its own messes, despite additional government inducements to do so. The following video is well-worth viewing to see how environmental destruction by the industry continues apace.

The Canadian government is a world leader in pretending to be a world leader in environmentalism. Watch this ad from the brightest minds in Ottawa, who have cooked up a new climate solution: flushing a trillion litres of oil sands waste into Alberta’s largest river.

In true Will Rogers fashion, the Trudeau government clearly has never met a corporate entity it didn't like.

Guest Post: A Response To Be Careful What You Wish For

As I indicated in my last post, I have been having problems with readers' comments. I have not been receiving them. I have found a workaround the situation; although I am still not being notified of them, I went into the dashboard and looked under Comments Awaiting Moderation, where I found several. The following is one of them, a response from BM to my post, Be Careful What You Wish For:

Walmart has been pulling off the same manoeuvre for years. Come into an area just outside town to get cheap real estate, ruin local businesses with cheap prices, employ people at minimum wage so that municipalities and state/provincial governments end up effectively having to provide top-ups - and the ruin is complete. Of everybody and everything.

Amazon merely does it on an even lower cost base. Get stupid local governments to bid (can you imagine the utter stupidity of anyone actually "paying" for an Amazom warehouse?), then running a military operation of having people running around filling orders with no breaks for no money. There are many descriptions online of the hell it is, from the UK and US. Gernany has no Walmarts because they insisted on work standards that Sam's boys could not tolerate - don't know about Amazon.

Still your average modern twit sails blindly to their doom blissfully unaware that hailing Uber sends money to California instead of local taxi drivers. Money gaily sent off to a central collection house instead of being spent locally,the only rationale being it's a bit cheaper for you personally upfront. Gradually, all these centralized businesses hollow out local economies. Then you pay for more welfare as taxi firms go bust. Enjoy your cheap ride! Disruptors, these firms call themselves. Spot on.

The whole thing is an extension of the offshoring of jobs to China. Now the offshoring is to send money to some app developer in a place far away who is feted as a business hero.

And so we blindly march to the destruction of our societies apparently saving a loonie at a time, until eventually nobody can afford anything because we all work crap jobs. The rich get incredibly richer and the plebs stand around wondering what hit them.

And people slave to develop apps that will let them hit the hackpot, screw everyone else.

Nobody ever claimed the average dude or dudette wandering down the street glued to their phone actually had reasoning power, after all. They might have a PhD, but they're still terminally stupid, because they simply do not bother to think, and say "hang on a minute!". No, saving a nickel now means they regard themselves as smart.

And Bezos laughs at hundreds of millions of dummies, collects their data as well as money, and becomes a de facto emperor.

I buy local, I use the post office. I would not pay a dime for an Amazon warehouse in land or subsidies. Let the predator pay his own way.

Careful What You Wish For

With so many cities, including Toronto, vying to become Amazon's second headquarters, they might be mindful of some basic truths about Jeff Bezos and his business practices:

Amazon founder Jeff Bezos' wealth increases by $275 million every single day. Meanwhile, Amazon workers have to rely on food stamps and public assistance just to survive. This is what a rigged economy is all about. pic.twitter.com/Ty7ECxvOkl

— Bernie Sanders (@SenSanders) May 22, 2018

Now what was that thing Jesus said about rich men, camels and eyes of needles?

More Harper Acquiescence To The Corporate Agenda

As much as it is said that the Harper regime is planning to buy votes for the 2015 election by giving income-splitting to families, the reality is that Canadians are increasingly being called upon to aid and abet its agenda of 'starving the beast' while at the same time subsidizing corporate profits.

As reported in The Globe and Mail, our Finance Department has quietly shelved plans to crack down on so-called “treaty shopping” by multinationals. The surprise move suspends a long campaign by Ottawa to stop what it says is rampant “abuse” of international tax treaties by companies seeking to duck Canadian taxes.

Treaty-shopping was most recently in the news when Burger King engineered a merger with Tim Hortons so it could pay a much lower corporate tax rate that Canada offers. Despite the fact that the late Finance Minister Jim Flaherty wanted to curb the practice, 'Uncle' Joe Oliver is embracing it:

Facing intense lobbying from resources companies and their tax advisers, Mr. Oliver apparently bought the argument that curbing treaty shopping would put a chill on foreign investment in places such as the Alberta oil sands, leaving Canada at a competitive disadvantage.

In other words, the argument goes, the rapacious appetite for massive corporate profits, along with the refusal to accept any responsibility to the country that makes those profits possible, is the business imperative that must be yielded to:

In a prebudget submission to the House of Commons Finance committee, Deloitte & Touche LLP had this to say:

“To attract foreign capital, Canadian projects generally must support higher potential yields than comparative investments located in the home country of a capital source,” Deloitte tax policy leader Albert Baker said in the submission. “This is a particular issue for the energy and resource sector.”

The flip side is that not squeezing corporations means individual Canadians must bear a disproportionate share of the country’s tax load. Unlike companies, ... hard-working Canadians can’t use complex offshore tax structures.

The message therefore seems to be that all other Canadian taxpayers – you and I – should subsidize the inflated profits of offshore oil sands investors.

So much for the rhetoric and propaganda the Harper regime fosters about its concern for 'working families.'

Tar Sands Refinery Cries "Uncle" on Climate Change - Seeks Taxpayer Bailout

The Delaware City Refining Company doesn't just refine oil, it refines bitumen from the Tar Sands. The company, however, is intensely aware of the dangers of climate change, so much so in fact that it's seeking tax dollars to protect its refinery from "tidal encroachment" - another way of saying sea level rise.

The Delaware City Refinery is one of the first refineries to shift its crude oil supply to rail and is refining tar sands -- one of the most carbon-intensive fuels known to man.

To add insult to injury, the sea level rise preparations the Delaware City Refining Company is proposing could negatively affect the community by directing more storm surge toward the town of Delaware City, the small coastal community near where the refinery is located. But who could be surprised by an oil company with such a poor sense of irony acting with no regard for the people around it?

MoS, the Disaffected Lib

A Timely Reminder Of Tim Hudak's Magical Thinking

While we should be back from our trip tomorrow in time to catch the Ontario election news coverage, this seems an opportune time to remind readers of the kind of magical thinking so favoured by extreme right enthusiasts such as young Tim Hudak. Tim, as you may recall, has made even lower corporate taxes a major part of his plan to create one million jobs, despite the fact that Ontario's rates are among the lowest in North American, and despite the fact that no apparent empirical data supports the equation that lower business taxes create jobs.

Here is a letter from today's Star that I think makes the point rather nicely:

Leaders make one last push as campaign winds down, June 10

The Fortune 500 companies in the U.S. recorded $1.08 trillion in profits last year. That was an increase of 31.7 per cent over the year before. During that time, these same companies increased employment increases of 0.7 per cent.

A similar picture exists on Canada. In 2001 corporate tax rates were 22 per cent. Today they stand at 15 per cent. We’ve lost $6.1 billion in government revenue while corporate profits have skyrocketed to $625 billion.

Tim Hudak talks about creating one million jobs through a lower tax rate. During the Mike Harris years in Ontario this philosophy did not work out very well. The provincial debt during the Harris years went from $90.7 billion in 1994-95 to $130.6 billion is 2002-03. This, while cutting many jobs and services and giving the province the legacy of Walkerton among other atrocities.

Former Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney tried to convince Canadian corporations to spend some of the “dead money” they have been sitting on after accumulating such large profits over the years. To date, the corporations have not responded.

For years, right-wing government leaders from Margaret Thatcher to Ronald Reagan to Mike Harris have been selling the supply-side economic lie. It didn’t work for them and it won’t work for Tim Hudak. A first-year economics student could tell you the reason for this. The rich don’t tend to spend additions to their revenue. The poor do. The rich accululate this money as the corporations in Canada have been doing for years.

In the Conservative attack on Kathleen Wynne on the radio, they end by asking, “Can you afford to vote for Kathleen Wynne?” I am wondering if I can afford not to.

Carl Nelson, Huntsville

On Corporate Welfare

David Lewis, the one-time head of the federal NDP and father of Stephen Lewis, used the phrase corporate welfare bums in his 1972 federal election campaign to describe the various subsidies handed out to the corporate world. It was a withering jab at the world of business, so proud to trumpet the merits of unfettered capitalism while not too proud to take every bit of free money that government has to offer it.

Today, that concept has never been more relevant. Probably the most egregious example of corporate welfare will become apparent in the coming months as the rest of Canada ponies up to pay for the environmental devastation wrought in Alberta that is, in my mind, the direct result of climate change, change which the corporate world continues to deny, evident in its ongoing concerted effort to oppose any measures that might ameliorate its most devastating effects. Corporate Canada will be asked for nothing by the Harper regime, which will continue to lower its tax rates as soon as the deficit is eliminated.

The futility of corporate welfare is, I think, very nicely addressed in the lead letter appearing in this morning's Star as Morgan Duchesney of Ottawa points out the folly of lowering corporate tax rates and getting nothing in return:

Re: The Great Recession still lingers, June 22

Stephen Poloz, the newly minted governor of the Bank of Canada, is working hard to distance himself from former governor Mark Carney’s “dead money” warnings to corporate Canada. Does that mean that Poloz also approves lowering tax rates for non-investing Canadian corporations that happily ship jobs to low-wage destinations like China?

As former CEO of Export Development Canada, Poloz is an expert proponent of corporate welfare. As corporate Canada continues to avoid research and development investment while stridently demanding lower taxes, the regime of public subsidy for private profit continues unabated under the Harper government’s well-advertised Economic Action Plan. Such behaviour exemplifies the eternal mythology of the so-called free market.

Private sector investment could reasonably be left to corporate Canada if our industrial titans were not so addicted to public subsidy. Ongoing multi-billion-dollar tax breaks and outright grants to the energy sector are good examples of this public-risk- for-private-profit model. In spite of the cost to working people, stiff corporate resistance to investment remains strong, although this hesitation is categorized as “thrift” by the generous Poloz. There is every indication that the Harper government plans to reward Canadian corporations with further tax cuts in spite of their continued reluctance to invest their profits in necessary research and development.

Of course, our political leadership has little desire to take a hard line on the business elite, who are, after all, their funding source and future employers. The tired excuse about not wanting to punish “job creators and innovators” is a bit threadbare in light of abysmal levels of corporate investment in Canada.
If Canadian corporations are operating overseas while shifting profits to low-tax jurisdictions, exactly who is benefiting and just how “Canadian” are these companies if they employ foreigners and only benefit arms-length stockholders?

A New Warning About CETA

While much has already been written about the economic threats to Canada inherent in the Canada-European Comprehensive Economic and Trade Agreement currently being negotiated in secret by the Harper regime, a new development in those negotiations has come to light that will cost all of us dearly.

In a piece entitled Harper government caves in to Big Pharma, Michael McBane reports the following:

Ottawa is prepared to give the Europeans, and the pharmaceutical industry, at least part of what they asked for on drug patents – a move that could cost Canadians up to $1 billion a year.

As McBane points out, thanks to a deal brokered by Brian Mulroney in the 1980's, Canada already pays 15 to 20 per cent more than the international average for new brand name drugs; at the time, the justification was the promise by the pharmaceuticals to invest 10 per cent of R&D (Research and Development)-to-sales in Canada, a figure that has never been realized. In fact, it currently stands at only 5.6 per cent of R&D-to-sales.

Yet despite pharma's betrayal of its undertaking, Canada is once more preparing to give away more of the shop through CETA; reports indicate

Canada will extend monopoly drug patents from 20 to 21 years. This patent extension will come without any conditions. In other words, we get nothing in return for this major concession. No jobs, no research, no innovation, no benefits whatsoever – only higher drug bills.

Prime Minister Harper is found of promoting the message that Canada is open for business. What he doesn't tell us is that it is the business of plundering and pillaging, hardly the basis for a domestic economic revival.

Inconvenient Truths for the Corporate Sector

Given that recent reports have helped to puncture the myth of job-creation benefits arising from corporate tax cuts and corporate welfare, I was pleased to read Martin Regg Cohn's article in this morning's Star.

Entitled NDP leverages vote results to pressure big business to create jobs, the article discusses the current popularity of the provincial NDP in Ontario. Leader Andrea Horvath used her leverage in the last budget to both secure a tax hike on the income enjoyed by the wealthiest Ontarians and prevent another scheduled corporate tax reduction; the party also blocked Premier Dalton McGuinty's ruthless bid for a majority government in this month's by-election in Kitchener-Waterloo through the victory of NDP candidate Catherine Fife.

As Cohn reminds us, she also won McGuinty's pledge to look seriously at a job-creation tax credit that would reward companies for increasing their payrolls. Horwath argued her $250 million program, modelled on a similar U.S. plan, would deliver better value for taxpayers' money that is now doled out to corporations with no strings attached.

That pledge is about to come to fruition through McGuinty's new Jobs and Prosperity Council, chaired by Royal Bank CEO Gordon Nixon, hardly likely to be favorably disposed to such a notion. As Cohn makes clear, Nixon embodies the corporate welfare and tax leakage that the NDP condemns: Canada's banks benefited handsomely from a series of Liberal corporate tax cuts, reaping record profits without creating the kind of high-value jobs that merit taxpayer subsidies. He has, however, promised to hear Horwath out on her proposal

Let us hope that a clash of ideologies does not prevent some productive recommendations from emerging. I suspect that ignoring increasing public awareness of the injustice of unproductive tax cuts could prove politically costly to the beleaguered McGuinty.