Murray Dobbin's Blog

The suggestion that we need to raise taxes in this country has become so taboo in the nation’s politics that even talking about it is seen as tantamount to political suicide. The right and its benefactors, the wealthy and large corporations, have had the field to themselves for a long time. Their framing of taxes as a “burden” and their promises of tax “relief” (borrowed from the Republicans in the U.S.) has become so imbedded in the public consciousness the spontaneous reply to the question of whether we should raise taxes is usually “no.”

Unless.

Unless you actually get to have an adult conversation about taxes with people one-on-one and reestablish the connection between taxes and a civilized society. That’s what the B.C. office of the Canadian Centre for Policy Alternatives [disclosure: I am on the board] did this summer, and the results confirm in fascinating detail what other polls have shown. When connected directly with public services and the public good clear majorities of people support increased taxes, not just on the wealthy and corporations, but even on themselves. Break through the narrow anti-tax propaganda and connect with people’s communitarian values and you find a surprising willingness to pay more.

The CCPA study (an online poll of 1,023 conducted by Environics Research and nine group interviews in three B.C. communities) reinforced what most polls now show. Sixty-seven per cent of respondents think major corporations pay less tax than they should and 78 per cent say people in the top 20 per cent of incomes (that’s $85,000 and above) are asked to pay too little. The higher up the income scale the greater the agreement — with 90 per cent saying people who make over $250,000 should pay more. (Remember, this was a B.C. survey but results in most provinces would be similar given the outcomes of other surveys.)

At the root of the results of the survey is a deep understanding of why Canada is (still) one of the best countries in the world to live in. Asked to agree or disagree with the following statement: “Taxes are the price we pay for the quality of life we have in Canada,” 60 per cent said yes and just 20 per cent said no.

That is where the study gets really interesting — when it digs down into people’s attitudes towards what kind of country they want and what they might be willing to pay for it. The results are not without their contradictions. Seventy-one per cent when asked about their own tax level said it was too high. This reflects the dominant framing of the issue by the media and right-wing political parties.

But then the survey listed 11 policy objectives (all but one traditionally identified as progressive) and asked people whether or not they would be willing to pay between 0.5 and three per cent more of their income to achieve them. Sixty-eight per cent said they were willing to pay a higher share of their own income in order to support four or more of the 11 policies, and 38 per cent were willing to pay for eight or more. Only 12 per cent said they would not be willing to pay more for any of the policy objectives while 20 per cent said they would pay for all 11. On average, respondents were willing to pay for six of the 11 policy options.

Sixty-nine per cent would pay for more access to home and community based health care services for seniors; 61 per cent to eliminate Medical Service Plan premiums; 58 per cent to protect B.C.’s forests and endangered species and 53 per cent to increase welfare rates. Forty-seven per cent would pay extra to reduce tuition fees for postsecondary education by 50 per cent.

The survey revealed just how pervasive the connection between taxes and quality of life is, even amongst conservative voters. While people voted in large numbers for the B.C. Liberals while they were slashing taxes (resulting in a loss over $3 billion in yearly revenue), many of them would actually pay more for what by any measure are progressive social goals.

The differences between supporters of different political parties were a lot less significant than most would have assumed. According to the study, on average B.C. Liberal voters were willing to pay more for 5.4 of the 11 policies, B.C. Conservative voters for 5.5, NDP voters for 6.5, and Green voters for 6.8.

That wasn’t the only surprise in the survey. It is well known that young people 18 to 29 demonstrate the lowest voter turn-out rates of any age group. You might conclude from this that they think government is irrelevant to them. Yet they were nearly twice as likely to agree to an increase in taxes as those over 60. It’s not clear why there is such a difference, but it might have something to do with the dramatic increase in tuition fees over the past decade. Students know that paying a few hundred dollars a year more in taxes (which might lead to a decrease in tuition fees) is preferable to accumulating $50,000 in student loans.

What do the results of this survey — and similar results from other polls — mean for Canadian political culture? It means that if we do not soon have a national (and rational) debate about taxes in this country, we might just as well accept that our collective vision of the country is one of continued gradual decline in our education system, Medicare, infrastructure, science and host other measures that together tell us just how civilized we are.

We can wake up to the reality of what jettisoning billions of dollars in yearly revenue through virtually useless tax cuts actually means for our quality of life. Or we can quietly become California North. You remember California. It used to boast amongst the best social services and education in the U.S. (its education results were consistently in first place). Liberal governors used progressive taxes to build the best public college system in the country, generous social assistance, and a system of aqueducts to bring water from the wet north to the dry south.

Then in 1978 came Proposition 13, a populist referendum on taxes which established a threshold of two-thirds in the state legislature for any tax increase. The result decades later: crumbling infrastructure, one of the highest student-teacher ratios in the country, and a near-declaration of bankruptcy in 2009. Republican Governor Arnold Schwarzenegger threatened in 2010 to completely eliminate the state’s social welfare program.

But ironically it is liberal Democratic Governor Jerry Brown who is doing the most draconian cuts of all — slashing education, welfare, Medi-Cal, the state’s health insurance program for the poor (by $1 billion) and cutting hundreds of millions from the state’s child care system and financial support to family members who support disabled individuals and the elderly.

To be sure the 2012 cuts also have a lot to do with the recession, but had Proposition 13 not put an arbitrary cap on government’s ability to raise revenue, things would not be nearly so disastrous. What is so stunning about California is that the whole population seems to have drunk the anti-tax Kool-Aid even as their lives get measurably worse every passing year. Political cowardice on the part of the Democrats means there has been literally no push-back against the self-destructive populism at the root of the Proposition 13 syndrome.

The lesson here for Canada’s (New) Democrats is brutally simple. (There is no lesson for the Liberals; they’re the tax-cut champs). If the NDP, both provincially and federally, does not find the courage to start a national debate about taxes they simply can forget about ever establishing a social democratic government worthy of the name. Just what kind of government will B.C.’s NDP leader, the genuinely progressive Adrian Dix, run if he wins next May? The Liberals’ tax cuts have left a $3-billion hole in yearly revenue and so far Dix has been disappointingly cautious about tax increases.

Thomas Mulcair, if he actually wins the next election, will take over a country in dire fiscal straits — with a $50-billion hole in annual revenue caused by Liberal and Conservative tax cuts. People worry about Mulcair’s commitment to social democratic policies. They needn’t bother. If he doesn’t address the need for more revenue through higher taxes that question will be irrelevant. His role will be pre-determined: managing a severely diminished national government created by Stephen Harper.

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A couple of polls showing the NDP losing support to the Liberals pose some pretty fundamental questions for the party and its small ‘l’ liberal leader Thomas Mulcair. Does the party follow the narrow political path of the two big business parties or does it reinvent itself as a movement party and tap into the deep dissatisfaction of Canadians about the state of politics and governance in this country?

The Harper Conservatives have mastered the techniques of the permanent election campaign – placing enormous pressure on the opposition parties to follow suit or find a way to counter them. Will the NDP try to replicate it (as the Liberals would like to) or will they, true to their radical roots, reinvent their approach and design a completely different “permanent campaign” model? The Conservatives have framed electioneering for the foreseeable future – if the NDP doesn’t respond with something new and imaginative it will lose.

Harper’s permanent campaigning involves narrow-casting – focusing not just on federal swing ridings but on polls in those ridings and on ethnic other key demographic groups. They do fundraising 363 days a year. Tom Flanagan, once Harper’s closest advisor, wrote: “They have produced a campaign equivalent of Colin Powell’s doctrine of ‘overwhelming force,’ applying all possible resources to the battleground ridings where the election will be won or lost.” It is extremely anti-democratic and in perfect keeping with Harper’s continuous assault on democracy on many other fronts – prorogations, sabotaging parliamentary committees, slandering and belittling independent watch-dogs, vetting all messaging from his office, and using the party’s millions to attack opposition leaders rather than their policies. It shares with his attack ads the same basic strategy: the use of fear and manipulation to keep his core supporters on side and to suppress any instinct other Canadians might have to engage in the political process.

But it is instructive to recognize that despite its sophistication, relentless application, and seemingly unlimited resources, Harper’s strategy barely keeps him in power. Given the metrics of a four party system Harper can keep winning majorities with 40% of the vote. And that’s basically all Harper wants – he doesn’t aim to capture a portion of the 60% who vote against him; he aims to convince as many of those opposition-party voters as possible to stay away from the ballot box. He doesn’t want to do anything to provoke them.

Finance Minister Flaherty acknowledged as much last week when he changed gears on the Conservative’s official view of balanced budgets. Announcing a later date for the balancing act, Flaherty stated: “…balanced budgets are not an end in themselves. They are a means to an end, and that end is a better, more prosperous future for all Canadians.” He has never said that before – but he knows that cutting spending by billions more would threaten Conservatives’ re-election chances.

But instead of listening carefully to this embedded message about who Canadians really are, Thomas Mulcair and the NDP decided instead to listen to the polls showing the Liberals (read Justin “He doesn’t really want the job” Trudeau) gaining ground at their expense. The result? A complete about-face on so-called “free trade” deals. Instead of highlighting three incredibly destructive investment agreements currently in the news they panicked – ending their commitment to get out of NAFTA, calling on the WTO to re-launch global trade talks and urging Harper to sign deals with India, Brazil and South Africa.

Here was a chance for the NDP to stake out ground that distinguished them from all other parties. Mulcair (who unfortunately does support “free trade”) could have used these deals (FIPA, CETA (the EU deal) and the Trans Pacific Partnership) to lambast their potential destructive impact on the country and argue against more such agreements. None of them have anything to do with trade – they are all about corporate rights, just like NAFTA and the WTO.

He could have used the fact that progressive public policy in both Quebec and Ontario are currently under attack by countries using investment agreements. The WTO has indicated that it will soon declare that the local content rules in Ontario’s Green Energy Act are an illegal barrier to investment – effectively killing that initiative. And Quebec’s moratorium on fracking is being challenged by Energy firm Lone Pine Resources Inc. which is demanding more than $250-million in compensation under NAFTA.

That Mulcair would back off the NDP’s historic position on these odious corporate rights deals demonstrates how vulnerable the party is to feeling obliged to move in the direction of being a second Liberal Party. Ironically, it is their historic 100 plus seats that has made them more cautious (reminiscent of their increased caution in 1988 when they were running second in the polls.) But the more they back off who they are, the more people will go to the real thing. And it’s not mostly about policies – it’s mostly about trust. Harper has managed to create a new political and government culture in which the default position of most citizens is distrust. If Mulcair wants Canadians to trust the NDP he has to take the party forward and not backwards.

He can’t do that by replicating Harper’s permanent campaign or the Liberals’ opportunism. He can only do it over the long term by reinventing the party at the riding level as a social movement party – active on issues year round, making it easier for people to engage in politics, educating its own members in the art of motivating people and tapping into Canadians’ essentially progressive values.

Those values have changed little over the years. It is Canadians’ expectations of government that have changed. The NDP’s future success depends on increasing people’s expectations of what is possible – not further decreasing them.

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There is a class of people and corporations in this country whose illicit financial practices have an enormous negative impact on the country and its citizens. Yet the law and order regime of Stephen Harper barely plays lip service to the issue of tax evasion through tax havens. While Harper cuts billions from government programs in the name of deficit reduction, he refuses to go after billions of dollars in revenue lost to tax evasion and avoidance every year. The practice has been going on for at least forty years and has grown to breathtaking levels world-wide.

Globally it is estimated that between $21 trillion and $32 trillion is hidden away in these secrecy jurisdictions. Total global financial wealth is estimated at between $200 and $210 trillion so the hidden wealth is a significant proportion of the total. Apply even a small percentage tax to this amount (greater than the US GDP and at least 12 times that of Canada’s) and you get an idea of how much revenue is lost to governments around the world.

James Henry, an authority on the issue with the US-based Tax Justice Network, says the US has determined that minimally, that country loses $100 billion a through tax evasion. A rough extrapolation for Canada suggests that we lose at least $10 billion yearly to this practice. The Tax Justice Network estimates that $280 billion in revenue is lost globally.

For the first time ever industrialized countries like the US and Germany are beginning to take the issue seriously as they face accumulated deficits that look nearly impossible to pay off – and citizens who are increasingly unwilling to pay the price for the other financial crimes that nearly brought down the global economy. Suddenly, turning a blind eye to the greed of their economic elites means threatening their own political futures. The game has changed.

Not satisfied with the largesse gained through the sweeping tax cuts and deregulation of the last fifteen years, the world’s largest corporations and wealthiest individuals use these jurisdictions (there are more than 70 countries offering these services) park their money where there is minimal regulation, little or no taxation on the non-resident wealth, and guaranteed secrecy which is actually enshrined in the countries’ laws. There is no easy way of knowing of which corporations have accounts and no systematic effort to share information with other countries.

Many of the world’s largest banks – such as City Bank, UBS and J.P. Morgan, as well as most of the big Canadian banks – have divisions whose exclusive function is to facilitate this grand theft. If the word conspiracy doesn’t come to mind, it should. The fact that they have remained protected for so long demonstrates just how beholden our political class is to their economic elite – the 1%. Or should we say the .14 % – the actual proportion of global citizens who claim all those trillions.

Toby Sanger, senior economist with CUPE, crunched the Statistics Canada numbers and found that more and more Canadian investment is going off-shore to avoid taxes: it was 10 per cent in 1987 and 24 per cent in 2011. According to Sanger’s analysis Barbados alone has seen its secret Canadian accounts grow 60% in the four years up to 2011 – from $33.4 billion in 2007 to $53.3 billion. The Cayman Islands squirrels away $25.8 billion, Ireland over $23 billion and Bermuda and Luxembourg (up 318%), $13 billion each.

Canadian banks have a huge presence in the Caribbean, the home of many of the most notorious tax havens. While they claim their hands are clean when it comes to helping people hide their money, a Université du Québec à Montréal study estimated that between 1991 and 2003 the Big Five Canadian banks managed to avoid $16 billion in provincial and federal taxes through the use of offshore subsidiaries.

It should be noted that as outrageous as this situation is for Canada’s government revenue, tax havens are especially devastating for developing countries. Washington-based Global Financial Integrity (GFI) calculated that seventeen times as much money leaks out of Africa to tax havens than comes in as development aid. Between 1970 and 2008 Africa received $50 billion in aid but lost at least $854 billion in illicit capital outflows. The numbers suggest that if these secrecy jurisdictions where shut down, there would be no need for aid.

Our wealthy citizens – corporate and otherwise – using these secret accounts are in fine company. The UN Office of Drugs and Crime says more than US$1.5 trillion of criminal money is laundered yearly through these same tax havens.

Let’s call a spade a spade: the systematic use of tax havens is nothing less than grand theft. It is, moreover, theft from the community and from the millions of citizens who suffer two abuses – the erosion of services caused by the bleeding of revenue and the added burden of having to make up the lost revenue for those services that remain. Living in Canada is not a right it is a privilege and part of that privilege, for better or worse, is the opportunity to become fabulously wealthy while at the same time enjoying the benefits of one of the most civilized countries in the world. That our most wealthy citizens not only see it as their right to get rich but their right as well to rip off the country that privileges them is reprehensible.

And what do these tax evaders steal? They steal affordable education from students, home-care workers from the elderly, conservation officers from our pristine environment, affordable housing from the homeless and child care from the children of low income families. They deliberately and with stunning arrogance diminish the country they claim to call their own.

While the Conservative government says it is serious about recovering the lost billions it is doing very little in practice (Remember, Harper one stated “Actually, there is no tax I like.”) Of the 106 Canadians named by a whistle blower in Lichenstein with assets totaling over $100 million only $5.4 million in taxes has been recovered (the US has recovered $50 billion through its efforts) and no Canadian has been charged or convicted. There is no word on what is happening to the 1750 Canadians unmasked by a joint CBC News and Globe and Mail investigation of Swiss based HSBC in 2010.

If the Harper government is serious about the issue we will know by their actions not their lip service. We will know when the government forces corporations to publish what they pay in taxes on a country by country basis, when they actively push for strong action at the G20, and when they promote the automatic exchange of tax information with other countries.

But the best indication that they are serious will be when they increase funding to the tax audit program of the Canada Revenue Agency (CRA) instead of cutting its budget as it did in July – cuts that will actually reduce the amount of investigation and enforcement at a time that tax evasion is increasing. The Harper government knows what the results of increasing the number of auditors would be. In 2005 the federal government increased the capacity of the CRA to combat aggressive international tax planning by $30 million and raised an additional $2.5 billion in revenue. For a regime that talks about running government like a business, 8300% is a pretty good return on investment.

What are they waiting for?

Murray Dobbin is President of Canadians for Tax Fairness

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There has been much written about the erosion of democracy in Canada under the Liberals but even more egregiously under the Harper Conservatives (and PLEASE don’t call these libertarians “Tories”). There is a very long list of grievances from the abuse of prorogation, to deliberate sabotaging of Parliamentary Committees, to election robo-calls, to the gagging of public employees.

But there is a more sinister anti-democratic undercurrent at play here and reading the media coverage of the Venezuelan presidential elections brought it home in spades. That coverage – in which reporters and pundits could barely bring themselves to recognize Chavez’s historic victory and his trouncing of the opposition – oozed contempt for Chavez and the 55% of Venezuelans who voted for socialism. They couldn’t stand it: beside themselves with outrage over the result even though the voting process was impeccable and beyond criticism – indeed far more tamper proof than the American farce that passes for democracy.

In its story on the election results the Globe and Mail, like many of the world’s capitalist press, referred to Chavez as a “strongman” a term normally used to describe dictators, this despite at least half a dozen democratic election and referendum wins. Ignoring the people’s choice, the G&M summed up the results: “…renewed ability to do economic damage.”

John Graham, a former Canadian ambassador to Venezuela, volunteered an absurd scenario which had Chavez “…engaging in fraud by rearranging enough votes through blatant manipulation or creating disturbances and power outages in opposition strongholds, so that citizens can’t vote or are inhibited from voting.” He apparently forgot that it was key members of the current opposition who attempted a coup against Chavez in 2002.

British coverage of the election and its results were just as bizarre and shameful – especially coming from the BBC (describing an opposition rally as ‘Venezuela rallies for opposition’s Henrique Capriles’ [my emphasis]), and the Guardian newspaper which estimated a Chavez rally of over a million people as having attracted “tens of thousands.”

The neo-liberal media was even more outrageous when the 2002 coup took place. The New York Times pronounced that Chavez’s departure meant “Venezuelan democracy is no longer threatened by a would-be dictator” – neglecting to mention that the only dictator on the scene was the man who had just taken over. The editorial board of the Chicago Tribune (for whom, apparently, irony is a mystery) declared: “It’s not every day that a democracy benefits from the military’s intervention to force out an elected president.”

At the root of this disgust with Chavez’s repeated election victories is the consensus amongst the big media players and their commentators that democracy is fine so long as it produces the correct – that is, free market – results. Otherwise it is highly problematic and even dangerous.

The embarrassing commentary and spin on the election (following a virtual flood of wishful thinking about a Chavez defeat) reminded me of the comments made by then US Secretary of State Henry Kissinger just months before the he fomented a violent and ultimately fascist coup against the similarly democratically elected government of Salvador Allende in 1971. Kissinger commented on the election of Allende thusly: “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its people.” Until that coup, Chile had the longest functioning democracy in Latin America.

There you have it – democracy if necessary but not necessarily democracy.

This will hardly come as a surprise to students of so-called liberal democracy, a fine little oxymoron which tries to merge capitalism (and its inherently grotesque inequality) and democracy (which is supposed to be the essence of equality) into one system. It has never been a comfortable fit. Our system of democracy has always been assigned the job of managing capitalism in the interests of capitalism so when any upstart rabble rouser actually refers to him or herself as a socialist – and wins – the alarm bells go off and continue ringing until the threat is disposed of. With Chavez the bells have been ringing in the ears of the US empire for fourteen years.

Globalization has done a thorough job of emasculating democracy almost everywhere and it is backed by a handy-dandy ideology. The late Milton Freidman was one of the most famous purveyors of this perverse rationalization of the use of coups and interventions to teach the rabble who’s in charge. Friedman once stated: “I believe a relatively free economy is a necessary condition for a democratic society. But I also believe there is evidence that a democratic society, once established, destroys a free economy.” He went on to say that “…it was the pursuit of wealth that was the ultimate social value, while the pursuit of justice would lead to total ruin.”

So, if your fondest political dreams include a truly equal society brought forward by our current democracy give your head a shake. They would never let it happen.

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You would think that federal Liberals would by now have immunized themselves against the affliction that almost did them in: the kind of delusional giddiness at the prospect of a political saviour. It is so embarrassing watching Liberals talk about Trudeau 2.0 – as if beating a Conservative Senator in the boxing ring somehow qualifies for him taking on Stephen Harper’s storm troopers. Hope springs eternal, yes, but even that aphorism has limits.

Any euphoria accompanying Trudeau’s leadership bid is rooted in a convenient amnesia about just what the Liberal party is and what it has stood for over the past eighteen years under Jean Chretien and Paul Martin. While Justin might make people feel good, his party effectively paved the way for what Stephen Harper is now doing to the country – establishing the new political paradigm by which big business runs the country.

To be sure, Harper, with his unvarnished libertarianism is unique in Canadian political history in the degree to which he wants to dismantle the activist state and democratic governance. But the Liberals are so complicit in this grand project the notion that we should turn to them for salvation is laughable. It was Paul Martin who, more than any other finance minister including Flaherty, gutted the federal state and boasted that he had taken federal spending (as a percentage of GDP) back to levels not seen since 1950.

Paul Martin’s legacy consists of two principal items: slashing 40% of the federal contribution to social programs while ending the universality principle and then implementing a five year, $100 billion tax cut for corporations and the wealthy that ensured those cuts would never be reversed.

Where was Justin then? Did he write an op ed denouncing this vicious attack on what previous Liberal and NDP parties had created? Did he call up Paul Martin and ask him what the hell he thought he was doing? If he did, now would be a good time to tell us about it.

Trudeau could get a lot of mileage from criticizing what his party has done to the country and pledging to reverse its course – to re-establish the principles of governance that his father actually believed in. That, of course, is the real litmus test of any new aspiring leader– especially someone young like Trudeau promising renewal. Is he willing to sacrifice a bit of the loyalty that is expected of him to be truthful to voters? The answer: only if he really believes that mistakes were made.

There is no indication that Trudeau thinks any mistakes were made. He is in his attitudes, ideology and patrician background a full patch member of the Liberal gang. The only thing likely to be renewed is classic Liberal opportunism: run from the left and hope to govern from the right. The 1993 Red Book of Liberal promises turned out to be a book of lies. Trudeau will have to work hard to convince people he play the same game.

Trudeau’s opening leadership speech was very short on any policy detail but there are a number of key issues that we should keep an eye on as his campaign evolves. It is these issues – though not an exclusive list – that will determine where on the political spectrum he wants to establish his “renewed” party. In short, what he will do to take back the middle from the NDP? What will distinguish him from conventional Liberal hackery?

Key issue number one would be his attitude towards some kind of formal or informal arrangement with the NDP to rid the country of Stephen Harper. This is the one issue he decisively answered in launching his bid: there will be no “formal co-operation”, period.

Key issue number two is the Enbridge pipeline. If Trudeau wants to recapture the seats his party lost to the NDP in BC this issue will be critical and here, too, he hinted at his position though it is contradictory. He told a media scrum in Richmond that Enbridge would have to come up with a better plan if it wanted to go ahead. But he criticized the NDP’s economic policies for “attacking success” – that is, the tar sands. He has also said that he wants to start his rebuilding in Alberta. He can either do that or reclaim lost BC seats – not both.

Key issue number three is taxes and the revenue needed to actually run a country and pay for the social programs Canadians in overwhelming numbers say they want. Here, too, Trudeau could catch the NDP flat-footed and pledge to add a couple of tax brackets for the stinking rich and the not-quite-so-stinky, and add back a couple of the seven percentage points lopped off the corporate rate by Harper. If you think that’s likely you may have forgotten who runs the Liberal Party.

Key issue number four, is climate change, Kyoto and some kind of carbon tax or cap and trade plan. This is, of course, especially important for the young people Trudeau hopes to attract to the party (he apparently has 153,000 twitter followers). If he does not have a clear policy on this issue which more than any other energizes young people, he hasn’t a chance of engaging them.

Key issue number five is the question of industrial policy. Unfettered laissez fair economics has been a disaster for Ontario and Quebec – the famous Dutch disease issue that the NDP has used effectively. If Trudeau cozies up to the Alberta oil industry and lets Ontario and Quebec manufacturing swing in the wind, he can kiss any hope of being prime minister good-bye. A new industrial policy? Not if the financial sector has anything to say about it.

And speaking of the financial sector, what will the hip Mr Trudeau do when the housing bubble truly bursts and tens of thousands of people face foreclosure? Does he have a plan? Will he – and this would make him unique in the country’s history – actually confront the banks and make them pay for their grossly irresponsible lending practices (including thousands of liars’ loans)? Again, we would have to imagine a man totally inexperienced in the exercise of real power confronting the people who have dominated his party, and the country, for decades.

Lastly, will Trudeau pledge to reverse the most egregious actions by the Harper government regarding a whole raft of executive outrages – cuts to the CBC, the environment department, public science and more? That alone would be a winner – taking the sting of voters’ despair out of future Harper outrages.

The Liberals could actually outflank the NDP on the centre-left on several of these policy areas but the centre in the Liberal party has moved to the right even since the days of Chretien. Many of the 25% of people who identify as Liberal supporters have long ago decided they can never vote for the NDP. How many of these voters is Trudeau willing to alienate in order to scoop up recent NDP converts?

Then there is the question of the state of the party after Martin’s extremely destructive leadership campaign. Martin’s vicious campaign left the party traumatized, weak and deeply divided. Whoever takes the reins had better have a very clear idea of what they want or – like Michael Ignatieff – they will be pulled back and forth by different factions in the party and present an easy target for Harper’s well-honed machine.

That doesn’t bode well for Trudeau who, with four years experience in the House, has shown little initiative in terms of where he wants the party or the country to go. It’s not just the public Trudeau has to impress – it’s the power brokers in his party who will quickly fill policy and strategic gaps created by any weakness or uncertainty in their leader.

It’s not a question of whether or not Justin Trudeau is just a pretty boy – he won’t be. He’ll be a pretty boy whose policy prescriptions and political persona will be judged carefully by those who agonize over Stephen Harper’s death grip on the country. If he wins, and he likely will, it will be a short honeymoon.

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Stephen Harper’s no-longer-secret agenda to implement a revolution from the right and dismantle Canada has one major impediment that must really stick in his craw. He is constrained in what he can do by the constitutional division of powers which gives the provinces so much political authority. The really big social items on the political agenda – health, education, social services – are matters of provincial jurisdiction. To be sure he can severely damage all of these by destroying the decades old principle of universality and slash federal funding. But he can’t get rid of them. The provinces also have a mandate on protecting the environment and regarding labour rights, most working Canadians are in sectors that come under provincial jurisdiction. Lastly, the third level of government is also a creature of the provinces. While municipalities depend on the federal government for financial help, Ottawa has no political authority over them.

These constraints may help to explain why Harper is so enthusiastic about the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). CETA, if Harper can persuade the provinces to accede to its provisions, does what Harper can’t do by himself. Like other trade agreements this one systematically weakens the democratic decision-making authority of all levels of government. As such, it is Harper’s Trojan horse: in the guise of expanding “trade” with the EU, he makes progress in his goal of emasculating democratic governance.

The frantic rush to get CETA signed has opened up a new front in the stop-Harper movement – the Council of Canadians and others are focusing on a major vulnerability of the deal: its potential impact on provincial and municipal authority to make their own decisions. Two of the most egregious impacts have to do with Medicare and government purchasing. The Europeans are demanding that all government procurement be part of the deal – meaning that any effort by any government to give preference to local or provincial firms would be deemed a violation of the agreement.

Like other “trade” agreements this one is in fact a corporate rights agreement, giving the world’s largest transnational companies ever-greater power to trump democratic authority. The deal would make the privatization of local services – water, electricity and transit – much easier. Privatization incursions into Medicare, education and even social services would increase as well.

The procurement provisions – giving EU corporations unobstructed access to the public spending of municipalities, schools boards, hospitals, universities and crown corporations – is especially threatening given the critical role such public spending plays in a time of virtually zero private investment. The strategic use of public spending for economic development and support for local businesses or sectors (such as green energy) would also be effectively banned. Others worry that if the EU gets its procurement deal the US will want similar treatment – an even greater threat given its proximity to Canada.

A report released just last week by the Canadian Centre for Policy Alternatives reveals the impact on manufacturing jobs. The report’s author John Jacobs calculates that some 70,000 Ontario jobs would disappear, most of them in them manufacturing sector. “CETA locks trade partners into their current pattern, which is imbalanced. It would box Ontario into exporting non-renewable resources such as gold, nickel and uranium – privileging EU’s current dominance of value-added exports to Ontario and leaving the province in a virtual straightjacket while bleeding jobs.” Investor-state provisions, like those in NAFTA, would expose all governments to increased litigation producing the chill effect which has seen virtually no new environmental legislation in the country since NAFTA came into effect in 1994.

On the Medicare front CETA would immediately add $3 billion to the provinces’ drug plans as EU pharmaceutical companies are seeking to extend their patent rights by several years, delaying the introduction of cheaper generic drugs. This would also increase the cost for private company plans.

An interesting twist to the negotiating position of the EU and Canada seems to reinforce the notion that Harper sees CETA more as a means to dismantle the activist state than as a means of enhancing trade and investment. The EU has negotiated a blanket exemption to protect their water, energy, and public services – including health care – while the Harper government has left those same elements completely vulnerable to privatization.

One of the most alarming aspects of the deal is the government’s secretive effort to use CETA to push the Anti-Counterfeiting Trade Agreement (ACTA).Ostensibly aimed at patent-busting piracy it is a draconian treaty that effectively criminalizes the normal use of the internet – making internet providers legally responsible for what their users do on line. It goes beyond the internet and could also be used to stop generic drugs from competing with brand names and stop farmers from using certain seeds. While it is not well known here, there has been a huge fight in the EU to stop it. In July, the European Parliament voted against the treaty. European Parliament President Martin Schulz stated “concern about its impact on consumers’ privacy and civil liberties, on innovation and the free flow of information” caused the defeat.

The Harper government has already signed ACTA as has the US and Japan, two of the EU’s biggest trading partners, and is still trying to get it included in CETA. That has attracted the fierce anger of internet activists in Europe – and they could make passing CETA much more difficult.

Stephen Harper is hardly the first prime minister to fraudulently use trade agreements to accomplish the neo-liberal objective of hobbling government. Mulroney ushered in this Trojan horse strategy with the FTA and NAFTA. Jean Chrétien used Paul Martin to take great advantage of the new “free trade era” to implement his labour flexibility policies – the most deliberate, and devastating attack on workers’ power and standard of living ever undertaken by a modern government.

And just as with those regimes, the Harper cabal has to be fought vigorously on this front while there is still time. Once these deals are signed it is next to impossible to get out of them. Fighting CETA at the national level, however, may be fruitless. Parliament is effectively dead – its institutions assaulted and eroded at every turn by a prime minister openly contemptuous of democracy and willing to bend or break any rule to achieve his ends.

The key to defeating CETA now lies with the junior levels of government, the provinces and municipalities. The Council of Canadians campaign
has been most successful at the municipal level where they have persuaded some eighty municipalities to either call for a complete exclusion (40 governments) or passed resolutions expressing concern. Most of these are in BC and Ontario and include some of the largest ones like Toronto, Hamilton, Mississauga and Victoria. Harper is worried about the growing opposition – so worried that last April he dispatched eighteen ministers on a propaganda blitz to sell a deal that supposed to have been kept as secret as possible. As the list grows longer EU negotiators may well wonder if the Canadian government can deliver even if it does sign.

The provinces are a harder nut to crack. Their governments – whether Liberal, Conservative or NDP – have all been far too willing to follow the policy advice of their trade bureaucrats most of whom are more aggressive neo-liberals than most corporate CEOs. (The one exception was the Glen Clark government in BC which opposed and held public hearings into the MAI – the Multilateral Agreement on Investment.)

The Ontario government, despite dozens of municipal resolutions, has shown little concern and even the Ontario NDP while sympathetic, doesn’t see the issue as one that can gain them any traction with voters. The NDP governments of Nova Scotia and Manitoba continue to be captive of their trade departments partly because they have never faced a trade challenge under NAFTA.

With the PQ now in (precarious) power in Quebec the provincial front may change. According to the Council’s trade campaigner Stuart Trew, the PQ in opposition was seeking greater transparency and a carve-out for crown corporations (Hydro Quebec and their liquor board). But now that it is the government some believe it will throw a wrench into the works. The Globe recently observed that the PQ’s intention of favouring Quebec companies in public tendering for major procurement items like subways and power plants “…strikes at the heart of the deal, [and]could be a big obstacle.”

The new government is also reportedly planning to create a new department of foreign affairs and international trade with the goal of signing its own trade deals – befitting its view that Quebec is a nation with the right and obligation to deal with other nations as such. Beyond its nationalist and social democratic philosophy, the PQ will be fighting the Harper government on several fronts and it may be tempted to hold it to ransom on CETA if it doesn’t make progress on other issues.

Having one of the countries largest provinces balk at the deal will at the very least make negotiations (allegedly “final” negotiations take place in mid-October) more difficult. Quebec’s opposition might also get the attention of other provinces. One of the biggest worries for Harper is that constitutionally there is little he can do if the provinces don’t go along. According to Trew: “Harper can just sign the deal and it would apply to the provinces but the provinces just don’t have to cooperate. There is nothing in law that could force the provinces to comply. They just voluntarily bring themselves in line with whatever they promised Ottawa.” In other words, they could break their promises with impunity.

That means the country’s third largest province, BC, could be very close to reversing its promises. There will an election in May next year and virtually everyone expects the NDP’s Adrian Dix to become premier. Dix is on record opposing CETA for all the reasons its critics have identified: “[it] will block our access to less expensive generic drugs, restrict municipalities from purchasing services and goods from local businesses, and put at risk public control of the water supply.”

So CETA, which looked like a sure things when Harper got his majority, now looks increasingly iffy. While the October talks will be final, it will take many months for the EU to get all its member states to pass and implement it. Major provincial governments balking and more and more municipalities seeking exclusion could create a lot of skepticism and undermine support. If more provinces demand dropping the protection of drug patents, Harper might be forced to withdraw that provision – a possible deal-breaker for the EU. Another potential deal killer could be the tar sands. If the EU decides to declare tar sands oil “dirty” (a decision is expected in the spring) and bans its importation, Harper himself might walk away from the deal.

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