Growing inequality scars Great White North

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Last year, Canada surpassed the United States to become the country with the most rapid growth of inequality. The U.S. still has the largest income gap, but Canada is quickly catching up.

Who controls Canada’s wealth? The richest 20 per cent (the top quintile) of the population commands 67.4 per cent of the country’s wealth. Those in the bot­ tom quintile own almost nothing; in fact, they are in negative territory.

Wealth distribution among the other segments of the population is as follows:

the near-top 20 per cent control 21 per cent; the middle quintile hold 9 per cent;

and the near-bottom quintile account for only 2.2 per cent. Thus, 88 per cent of Employees of the Ontario Public Service are getting ready to hit the bricks. Nego­ tiations for a collective agreement for the 35,000 workers, members of the Ontario Public Service Employees’ Union, are stalled. The old agreement expired on Dec. 31. Management is pitching take-away de­ mands, the likes of which have not been seen since the days of Conservative Premier Mike Harris.

The union began mobilizing its members in late 2014. The bargaining team received a 90% strike mandate—unusual for a public sector union. The early vote was a gamble by the union leadership. The high level of support resulted from the major cuts brought to the table by the employer. These include a 4 year wage freeze (on top of the 2 year wage freeze from the last round of bargaining), the continuation of two-tier compensation with a 12-step wage grid that begins 5% below the current rate, and ma­ jor attacks on health benefits, long-term dis­ ability, and seniority rights.

In addition, the employer unilaterally im­ posed a 50% premium increase for postretirement health benefits; workers have to pay thousands of dollars every year after retirement.

Union activists continue to push for “no concessions bargaining” to buck the trend of losses that has taken place for decades. Toronto area activists led the effort to pri­ oritize “No concessions bargaining” prior to demand setting. Already the Corrections division of the OPS has clearly stated it will not accept any concessions. OPSEU Presi­ dent Warren ‘Smokey’ Thomas has publicly repeated his commitment to this position. Mobilization efforts come on the heels of bargaining by AMAPCEO, which took its first ever strike vote. OPSEU, ALOC, AMAPCEO, and PEGO have engaged in a united front of solidarity against cuts. This is a tactic employed locally by some activ­ ists, including this writer, in the previous Canada’s wealth is in the hands of only 40 per cent of the people—with overwhelm­ ing economic control concentrated at the tiny summit of the social pyramid. Based on an on-line poll of 3000 peo­ ple, the social democratic Broadbent In­ stitute reported that 80 per cent of those polled favour higher federal income tax rates for the richest Canadians. Almost the same proportion want to see higher corporate taxes.

But the tax trend has been going in the opposite direction. Canada’s general cor­ porate tax rate has dropped from around 22 per cent to 15 per cent under the Con­ servative Stephen Harper government. To make matters worse, the Conserva­ tives have reduced spending on social programmes, and capped transfers to the provinces (thus taking a bite out of health care, education, and social assistance). They’ve restricted eligibility of employ­ ment insurance (less than 40 per cent of the jobless now qualify), and introduced a series of tax breaks that mainly benefit the affluent.

What are the results? According to a report by the charity United Way, in­ come inequality in Toronto ballooned by 31 per cent between 1980 and 2005. On average, the gap across Canada grew by 14 per cent. Previous research by United Way and McMaster University revealed that almost half of all workers in the Greater Toronto Area are in precarious employment.

One might think that these facts, com­ bined with the popular appetite for change, would make growing inequality a prime target in the political arena. But the big business-backed Liberal Party will not bite the hands that feed it. And Tom Mulcair, leader of the labour-based New Democratic Party, still intones the right-wing populist mantra “no new taxes.”

The demand for equality has always run counter to the logic of the capitalist mode of production. Thus the movement for economic democracy starts in the streets and work places, travels through the main working class organizations, and can be fully realized only by the socialist transformation of society. — B.W.