CPI is the lie that is destroying Canada’s middle class (article I ghost wrote for a client)

 

 

In Canada, our government’s policies have helped create financial distress for almost half of our country’s working middle-class. A survey done in September of 2017 by the Canadian Payroll Association found 47 per cent of respondents saying it would be difficult to meet their financial obligations if their paycheques were delayed by even one week. This has obvious impacts, including the hostility both the federal and provincial governments are receiving to any new taxes, such as the carbon tax.

After some research, I conclude that wage suppression is the reason most Canadians are struggling. The Consumer Price Index (CPI) has been modified over the last four decades. This modified CPI is used to justify a whole gamut of policies, including keeping wage increases low and giving governments bragging rights about how low annual inflation is.

But modifying the CPI does nothing to change the fact that the cost of food, gas and housing has skyrocketed over the last 20 years while Canadians’ take-home pay has stagnated. It also gives government free reign to indulge in bracket creep so those families that are making five or even six figures a year are taxed as if they are doing really well, whereas in reality, many are struggling, especially if they live in areas like Victoria or the Lower Mainland.

A consumer price index measures changes in the price level of a market basket of consumer goods and services purchased by households. Essentially, the manner in which the CPI was calculated was changed in 1980 and again in 1990. So, if we had measured CPI the same way as we did prior to 1980, look at the difference:

So instead of a CPI of roughly between zero and 10 percent over the last almost 40 years, we instead see a CPI that was actually between five and 10 percent per year. That is why even those fortunate enough to get cost of living adjustments have been finding their after-tax dollars getting stretched thinner and thinner.

But wait! It gets even more painful for Canada’s working class. The way the CPI was calculated in 1990 was then further adjusted to again show very modest increases in the CPI for each year since. But again, look at the difference if we overlay CPI based on the 1980 adjusted methodology with the 1990 adjusted methodology and apply it to the CPI rates since 2000:

The upshot is that in 2018, while the official CPI was at two per cent, the 1990 version of the CPI showed us last year at six per cent while the 1980 version of CPI showed us at 10 percent.

That means in order to maintain your standard of living in 2019 from what you are making in 2018, you need a 10 per cent wage increase not a two per cent wage increase.

By “modifying” the manner in which the CPI was calculated, it was underreported by about four per cent a year from 1980 to 1990 and by about eight per cent per year thereafter.

Rather than piling on more taxes and reaping the benefits of income tax bracket creep, the federal government needs to recognize the serious damage done to our nation’s middle and working classes and with it the damage done to the social and economic fabric of our society.

We need a major wage readjustment in which workers are paid a living wage and young people can actually afford to have kids and raise a family. After all, without young people, our nation literally has no future. Above all, the media and government need to stop treating the CPI as if it were an accurate standin for the real inflation rate in our country.

Phil Venoit,
President, BC Building Trades
Red Seal electrician

 

It was a tremendous honour to be part of the AOE Canada team that won the Victoria Chamber of Commerce 2014 Innovation Award last night thank you!  For more Accumulated Ocean Energy please visit our website at http://www.aoecanada.ca/

Domestic Shipbuilding Industry Critical to Canada’s Sovereignty

By the time many of you read this column the federal election will have happened, and in all likelihood the Harper government will have won either a stronger minority or even a majority government.

In the run up to the federal election, the Conservative government announced a $1.1 billion upgrade of our navy’s frigates. Five of these frigates will be modernized at Washington Marine Group’s Victoria Shipyards.

This is good news for British Columbia and for Washington Marine Group, which has seen potential contracts to build a new generation of BC Ferries go to a German shipyard and contracts for Canadian navy supply ships and coast guard vessels cancelled.

It is worth noting that the unionized workers at Washington Marine Group earn less than their counterparts at shipyards in Europe and there is real concern that without more domestic shipbuilding contracts these skills will be lost

As a sovereign nation it is vitally important that we maintain a domestic shipbuilding industry. As the Arctic sea ice melts it is opening up Canada’s fabled North West passage and with it jurisdictional disputes with countries such as Denmark, Russia and the United States. Thus it would be foolish in the extreme for Canada to be reliant on the European Union, the United States and/or Russia to build the ships that we will require to assert our nation’s sovereignty.

Thus it is vitally important that the 12 ship Canadian Coastguard contract be put back on the table and the work divided up equitably amongst Canada’s remaining west and east coast shipyards. The recently announced construction of a new icebreaker, to be named after former Prime Minister John Diefenbaker, should also be built in Canada.

There is also the issue of the multi-role ships that were meant to replace our navy’s aging supply vessels, be able to transport armed forces equipment personnel and serve as an assault vessel which could be used as an offshore base of operations. Requiring a ship to cover off such a diverse array or roles would be like trying to design an airplane that can simultaneously be a troop transport, a bomber and a fighter. Odds are it’s going to do all three jobs poorly.

Durable naval supply ships are something Canadian shipyards have built in the past and must continue to do so. Similarly vessels capable of transporting Canadian Armed Forces personnel can also be readily constructed by our domestic shipyard workers.

Failure to proceed with this work is not only undermining our nation’s sovereignty, it is also creating a significant human resources problem for Canada’s shipyards. What happens to the apprentices and journeypersons that the Victoria shipyard and unions have been training over the past five years? Without sufficient naval contract work they will likely end up leaving the industry.

Although the frigate refit program will provide $351 million in work to the Washington Marine Group, this work does not begin until 2010. If we are to retain these workers they need construction work now. The other problem is that you cannot build or maintain a first class shipyard only doing refit work.

That is why the proposed construction of 12 new ships for the Canadian Coastguard is so vitally important. As he gets back to work after a hard fought election campaign, Prime Minister Harper needs to make this issue one of his government’s top priorities.

Michael Geoghegan is a government relations consultant based in Victoria, B.C. He can be contacted via his website at www.mgcltd.ca

Commission on MLA compensation listens to yours truly

For any of you who may doubt my ability to affect the course of political events here in BC, take the time to compare the submission I made with the Full report by the Independent Commission to Review MLA Compensation (.pdf) regarding MLA pay and pensions. It is very gratifying indeed to know that they were listening so closely.

For those of you who listen to Capital Gang on CFAX 1070 on Thursday morning you would have heard me also correctly predict last week that Harry Lali would break ranks with NDP leader Carole James on this MLA pay raise issue.

Of course Harry was quickly bullied back into towing the party line, but it is refreshing to see a little bit of honesty surface admist all the hypocrisy.

Wipeout scenario predicted two full years in advance

In May of 1999 the forerunner of Michael Geoghegan Consulting, (Barlee Geoghegan & Associates) released a polling analysis predicting that the BC NDP would win 0 to 4 seats in the next provincial election.

The study had been authored by Bernard von Schulmann. Since Bernard is a federal Conservative, there were some within the BC NDP who accused the study and the author of having a right wing bias. So for the follow up study we got none other than former BC Green Party leader Stuart Parker to author it.

This second polling analysis, which was released in May of 2000, again predicted that the BC NDP would win 0 to 4 seats. Then in May of 2001 the BC NDP finally called an election and, as per our prediction, they won only two seats. Both of them ones we had identified as being amongst the four the NDP were the most likely to hang onto.

The wipeout scenario just won't go away

The `wipeout' scenario just won't go away Vancouver Sun Vaughn Palmer

VICTORIA - It has now been two years since a consulting firm led by a disaffected former New Democratic Party cabinet minister first raised the ``wipeout'' scenario -- the possibility that the governing party could lose every seat in the coming provincial election.

At first the notion seemed unlikely, even un-British Columbian. The NDP, and its predecessor the Cooperative Commonwealth Federation, had been a presence in the legislature since 1933, never winning fewer than seven seats through 19 consecutive elections.

But the report from Barlee, Geoghegan and Associates -- Bill Barlee is the former cabinet minister, Mike Geoghegan is his former aide -- was based on a detailed analysis of voting patterns and opinion polls.

And since their study was first made public in the dying days of the Glen Clark administration, the wipeout scenario has been raised again and again.

The latest portent is an opinion poll commissioned by The Vancouver Sun and BCTV and conducted over this past weekend by Compas Inc.

The survey found that, among decided voters, 66 per cent were going to vote Liberal, just 17 per cent for the NDP. The gap of almost 50 points indicates the likelihood of a Liberal sweep as well as an NDP wipeout.

For a long time, the Opposition Liberals refused to entertain the wipeout scenario publicly, perhaps fearing they would jinx themselves.

Party leader Gordon Campbell routinely predicted that the NDP would begin moving up in the polls and into a position to win at least some seats in the next election.

But in a speech Saturday to a gathering of the party's candidates for the election, Mr. Campbell put aside all inhibitions. ``Every single one of you is going to be elected,'' he declared.

His ambition is not without foundation. True, a political party can win seats in the legislature with less than 20 per cent of the vote.

In the last provincial election, the Reform party won two seats with nine per cent, and six per cent provincewide was still enough to give one seat to Gordon Wilson's Progressive Democratic Alliance -- his own.

But those were special cases, where the votes were concentrated in a few pockets of support. For a more broadly based party like the NDP, a 17-per-cent share would most likely be spread too thinly to provide a winning margin in even one constituency.

Most analysts say the NDP needs to climb into the mid-20s in the popular vote before it can begin taking seats.

While I continue to expect the New Democrats will come back enough to win some seats in the election, I can't point to any evidence to show it is happening. Nor do the other parties pose much of threat to a Liberal sweep at this stage. The Greens were at seven per cent in the Compas survey, the Unity party had three per cent and the Marijuana party was at two per cent.

All of which raises the possibility of an Opposition-free legislature. I think that would be a bad thing because an effective Opposition is an important aspect of the British parliamentary system.

But it did happen in New Brunswick in 1987, when Frank McKenna's Liberals defeated Richard Hatfield's Conservatives 58-0. Premier McKenna tried to provide a semblance of Opposition. He allowed the leaders of the other recognized parties to appear before legislative committees and later to pose questions to cabinet ministers from a post at the entrance to the parliamentary chamber.

But that was no substitute for an elected Opposition inside the chamber, and at the next general election New Brunswickers provided the real thing.

It's amusing to speculate whether it would take the full four years to produce a full-fledged Opposition in B.C. in the event the Liberals were to take every seat. It takes only four seats to gain official party status in the B.C. legislature, with the attendant salaries, staff and privileges. And unlike New Bruns-wick, this province has a recall law.

If shut out in the next election, the New Democrats might try to organize the recall of a few Liberals and then re-establish themselves in the house via the resulting byelections. Alternatively, the Liberals might take matters into their own hands.

The party is a coalition, after all, and its 79 MLAs would not likely agree on every issue. Any four of them might break with their colleagues after a time, form a new party and -- presto! -- restyle themselves as the province's new but no-less-official Opposition.

vpalmer@direct.ca

The silence of the left edges ever nearer for the NDP

The silence of the left edges ever nearer for the NDP:

Every dismal polling result brings the New Democrats closer to the Barlee scenario: A near wipeout in the next election.

Vancouver Sun Column: Vaughn Palmer

VICTORIA - With every dismal polling result, the New Democrats edge closer to the Barlee scenario -- the ruinous election defeat that was first sketched out a year ago in a report from a consulting firm headed by former cabinet minister Bill Barlee.

"The New Democratic Party is looking at four safe seats and five to six seats in which they will make a race of it but will not likely win,'' warned the report from Barlee, Geoghegan and Associates, adding: "A complete shutout is not an impossibility.''

The scenario was based on an analysis of opinion polls as applied to the province's new 79-seat electoral map. BGA commissioned the analysis from political consultant Bernard Shulmann in the spring of 1999 and distributed the findings to NDP supporters and the news media in an effort to raise alarm bells about the future of Mr. Barlee's long-time political party.

"Unless something miraculous happens between now and the next election, the only likely result will be a Liberal landslide,'' the report said.

"It could also usher in an era of B.C. politics being a debate between the centre-right and the far right, with the left being silenced.'' Mr. Barlee's silence of the left was dismissed at the time and it should seem even less likely today, given that the NDP has a new leader, Ujjal Dosanjh, who scored a 64-per-cent approval rating in an opinion poll conducted last week by the Angus Reid Group. But it should be noted that the Barlee scenario was predicated on the assumption that Mr. Clark would leave office.

Analyst Schulmann (who has since gone to work for a candidate seeking a Liberal nomination) also assumed that once the New Democrats changed leaders they would do better in the opinion polls than they have been.

His assumption: Liberals 50 per cent, NDP 28, Reform 17 and Green 5. The current numbers from Angus Reid: Liberals 57, NDP 16, Reform 15, Green 6. Grim as it was, the Barlee scenario was based on a better position than the one the New Democrats find themselves in. The governing party had a blip up to 24 points following the February leadership convention. But that evaporated in recent weeks and the party hasn't seen 28 per cent for more than two years, an awfully long time to be down and out in politics. Looking at the implications in terms of individual New Democrats, the Barlee scenario gauged the safest seats to be the ones held by cabinet ministers Dan Miller, Gordon Wilson and Jenny Kwan, and by backbencher Moe Sihota.

Then come the half-dozen or so possibles drawn from a take-your-pick selection of the seats held by ministers Joy MacPhail, Sue Hammell, Joan Smallwood, Penny Priddy, Dale Lovick, Jan Pullinger and Gretchen Brewin; backbenchers Glen Clark, Steve Orcherton, Ed Conroy and Rick Kasper; and then minister, now premier, Ujjal Dosanjh.

That's assuming all those incumbents would run, and several of them may not. If so, say the experts, all bets would be off because it is harder for a newcomer to hold on to a seat in the face of a change of government.

A nightmare scenario for the New Democrats, obviously, but some of the Liberals view it with trepidation, too. They want to win decisively, of course. Yet there's an awareness that a landslide would create its own problems in terms of expectations and sheer hubris.

And some of the wiser Liberals will concede that a strong Opposition makes for better government.

A big caucus is hard to manage, too. A premier dispenses perhaps 15 major jobs, mostly cabinet posts, and 15 minor ones, including parliamentary secretaries and chairs of committees.

Thirty jobs is plenty for a caucus of 50; less so for 60 or 70. Another concern with some Liberals is the balance of power within their own caucus, which is, after all, a coalition of Liberals, Conservatives, Reformers and Social Crediters.

The liberal Liberals worry that a landslide for their party could create a government in which a majority of members are actually federal Reformers, placing the "liberals'' in a minority. Hence the strange situation of some Liberals joining the New Democrats in hoping the Barlee scenario does not come to pass.

The more sober observers in both parties expect that the New Democrats will move toward a more competitive position as the election approaches. That is my expectation, too. But it's hard to cite any evidence of a recovery and time is running out.

vpalmer@direct.ca