Public Policies Keep 16% of Canadians Poor

Judith Maxwell (2008-01-28), former head of the Economic Council of Canada and Canadian Policy Research Networks, claimed that the high concentration of at-risk Canadians live in highly disadvantaged neighbourhoods of poverty by postal code. In 2008 the Canadian national poverty rate remained at c. 16% where we’ve been stuck for eight years. Maxwell claims that religions, some social-minded businesses and countless volunteers who constitute civil society are revitalizing desperately poor neighbourhoods, tackling homelessness and letting governments know that the current policies prevent people from escaping poverty.

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Maxwell, Judith. 2008-01-28. “Forget policy makers, civic leaders are spearheading the fight to end poverty.” Globe and Mail.

Debate: Does Global Inequality Fade as Global Economy Grows? Hong Kong tops

Sala-i-Martin, Xavier. 2006.”Global Inequality Fades as the Global Economy Grows.” 2007 Index of Economic Freedom.

The report of 13th annual Heritage Foundation/Wall Street Journal Index of Economic Freedom 2007 was cited in the January 23, 2007 online version of The Economist under Business This Week. Economic Freedom of 161 countries is measured and ranked from 0 to 100 with 0 demarcating countries with the least freedom. The index designed for public policymakers and investors uses ten variables, such as tax rates, ability to do business, property rights, corruption, labour freedom and property rights. Some countries such as Iraq were excluded from the survey. Using a new formula this year liberty worldwide is on the rise compared to the entire period investigated (c.1995-2006) although slightly less in 2006(60.6%) as compared to 2005 figures. What is problematic about this index is the way in which market liberalism is confounded with a more inclusive concept of liberty.
This annual index cites Adam Smith‘s The Wealth of Nations in 1776 as its foundational theoretical framework and measures ten variables, such as the ability to do business, property rights, corruption and labour freedom. The average score (0 equals repressed, 100 equals free) was 60.6%, down slightly from last year but the second-highest since the survey began. North Korea remained rooted at the bottom (several countries, including Iraq, were not ranked).

According to Index of Economic Freedom 2007 Hong Kong, United States, Britain, Chile, Japan, Germany, Israel and Thailand are the best countries in the world to do business. North Korea, Zimbabwe, Nigeria, Russia, China, Turkey, Brazil and Italy are the worst places for free market trade.

Since the 18th century Smith’s theories have been used to explain capitalism asa means of promulgating peace since war interrupts trade between nations. In a recent article (2006) in Le monde diplomatique,sociologist Professor Alain Bihr, reveals how this concept of capitalism and freedom of the market as generator of peace, embedded in concepts of classical liberal economy, forgets the nature of production (Bihr 2006 citing Smith 1904 [1776]). Smith’s theories continue to inform investigations of the study of liberal thought and the history of capitalism, such as the Index of Economic Freedom.

Adam Smith’s arguments are used as a rebuttal to the United Nations Development Programme’s Human Development Report (1999) which decries the widening gap between the poorest and richest countries. In 1997 the upper quintile controlled 74 times the income of the lowest quintile, whereas in 1960 the figure was 30 times the income. (The extremes of wealth and poverty in Canada are discussed in )

What is too often ignored in liberal market theories is Adam Smith’s final concluding chapter in which he clearly indicates what must be done with surplus wealth in order to prevent the extremes of wealth and poverty. There is a responsibility on the part of the super rich to not simply accumulate their wealth as is the case of the ultra rich but to redistribute their wealth with an eye to hospitality.

When neither commerce nor manufactures furnish anything for which the owner can exchange the greater part of those materials which are over and above his own consumption, he can do nothing with the surplus but feed and clothe nearly as many people as it will feed and clothe. A hospitality in which there is no luxury, and a liberality in which there is no ostentation, occasion, in this situation of things, the principal expences of the rich and the great. But these, I have likewise endeavoured to show in the same book, are expences by which people are not very apt to ruin themselves. There is not, perhaps, any selfish pleasure so frivolous of which the pursuit has not sometimes ruined even sensible men. A passion for cock-fighting has ruined many. But the instances, I believe, are not very numerous of people who have been ruined by a hospitality or liberality of this kind, though the hospitality of luxury and the liberality of ostentation have ruined many (Smith 1902 [1776]: V.3.1).

In a future world individuals may well be entrusted with doing this voluntarily. But we are far from this state of equilibrium where the market balances itself. The Index of Economic Freedom cannot therefore be relied upon as a stand-alone tool measuring freedom. Concepts of hospitality and liberty need to be measured with the more sophisticated critical tools of the 21st century not with limited readings of brilliant texts of the 17the century.

In 2001 Peter Robinson invited Bruce Bartlett, Senior Fellow, National Center for Policy Analysis and Peter Orszag, Senior Fellow, Brookings Institution to debate questions concerning income inequality such as:

“How much does the gap between rich and poor matter? In 1979, for every dollar the poorest fifth of the American population earned, the richest fifth earned nine. By 1997, that gap had increased to fifteen to one. Is this growing income inequality a serious problem? Is the size of the gap between rich and poor less important than the poor’s absolute level of income? In other words, should we focus on reducing the income gap or on fighting poverty?” See the transcript or listen to the multimedia of Robinson, Peter. 2001. “Rich Man, Poor Man: Income Inequality.” Uncommon Knowledge. Filmed July 18, 2001 hosted by the Hoover Institution and funded by John M. Olin Foundation and the Starr Foundation, all pro-business think tanks.

Footnotes

While Canada now has a $4.8 trillion net worth, the lower quintile of the population have seen their net worth diminish while the net worth of the Ultra rich has increased.

Selected webliography

Bihr, Alain. 2006.“Aux origines du capitalisme: L’erreur fondamentale d’Adam Smith.” Le monde diplomatique online.November.
Flynn-Burhoe. 2007. “Rich Man Poor Man: Hospitality, Liberty and Measuring the Measurements.” Google Docs and Spreadsheets. January 24, 2007.

Heritage Foundation/Wall Street Journal Index of Economic Freedom 2007.

Robinson, Peter. 2001. “Rich Man, Poor Man: Income Inequality.” Uncommon Knowledge. Filmed July 18, 2001 hosted by the Hoover Institution.

Sala-i-Martin, Xavier. 2006.”Global Inequality Fades as the Global Economy Grows.” 2007 Index of Economic Freedom.

Smith, Adam. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations. London: Methuen and Co., Ltd., ed. Edwin Cannan,1904. Fifth edition. complete online version

OECD and Health Care: Canada’s $4.8 trillion national net worth

Canada’s health care system is similar to most members of the Organisation for Economic Co-operation and Development (OECD). The only OECD members who do not have a public health system on par with other members are the USA and Mexico. In spite of that the United States continues to pay a higher percentage of its GNP to its health care system than Canada [1].

Canadians view its medicare system as “a moral enterprise, not a business venture (Romanow 2002:21)” and they overwhelmingly support the tenets of the Canada Health Act which states that need not money determines access to health care. “Canada’s Medicare system since its inception in 1966 has become one of the “most fully socialized health care systems.” In the 1960s medical systems in Canada and the US were similar. Medicare was a$100 billion enterprise in 2002, one of our Canada’s’s largest expenditures (Romanow2002:20). However, this amounts to a smaller percentage of Canada’s national net worth which was $4.8 trillion as of December 2006 (StatisticsCanada 2006) than that of in 1992. Commissioner Ray Romanow’s mandate in 2001 was to “review medicare and engage Canadians in a national dialogue on its future”(Romanow 2002:6). This was accomplished through an 18-month investigation resulting in a report that was evidence-based and values-driven making recommendations to strengthen and improve medicare’s quality and sustainability making it more truly national, more comprehensive, responsive and accountable (Romanow2002:6).” In the 1970s pharmaceutical costs accounted for a small percentage of total medicare costs. By 2002 they were among the highest costs in the systemand they continue to rise. The report did not confirm claims that user fees, medical savings accounts, de-listing services, greater privatization, a parallelprivate system, as proposed by the leaner goverment lobbyists, were the cure for the medicare system (Romanow2002:21).

More surgeries, treatments and tests are being performed, but demands often outstrip their ability to deliver the necessary services on a timely basis. As a participant in the Commission’s “Policy Dialogue on Access”at Dalhousie University put it, long waiting times are not caused by the system performing fewer diagnostic and surgical procedures but because medical advances now allow us to deliver more of these services and to a wider range of people (Romanow 2002:192)

Public and private sector care providers (including fee-for-service doctors) have been part of our health care system since the inception of medicare in Canada.

Whereas in the 1970s medicare costs consisted mainly of physican fees and hospital expenditures (Romanow2002), currently the cost of pharmaceutical expenditures is the most rapidly increasing part of medicare (Lexchin 2007). In his recent Canadian Centre for Policy Alternatives report Lexchin (2007) reveals how the cost of pharmaceuticals accounted for $18.5 billion in 2004 and $20.6 billion in 2005. Spending on physicians was c. $18 billion in 2005. It is crucial to note that shareholders in pharmaceuticals enjoyed substantially greater returns than shareholders (20.1% in 2003; 23.5% in 1996) in other forms of manufacturing (10.8% in 2003 and 12.2 % in 1996) in Canada.[2] Canada, Mexico and the United States do not have as comprehensive public plans for pharmaceuticals as do other OECD countries where the greatest expenditures on pharmaceuticals come from the public purse. OECD governments have more control over amounts spent on pharmaceuticals.

A List of Acronyms

CCPACanadian Centre for Policy Alternatives

CIHI Canadian Institute for Health Information

OECD Organisation for EconomicCo-operation and Development

PMPRB Patented Medicine Prices Review Board a part of Health Canada, sets an upper limit on how much companies can charge
for new patented medications.

Footnotes

---

[1] The US spent more on administrative costs. They also spent more per person $2548 (US) compared to $1886 (US) in Canada. See http://www3.who.int/whosis/core/core_select_process.cfm

[2] Given that pension plans returns are based on the strength of investment portfolios we find ourselves in 2006 with a moral dilemma. How do we ensure the future of pension plans with a healthy investment portfolio while calling for ethical management of that same portfolio?

Selected Bibliography

Lexchin, Joel. 2007.”CanadianDrug Prices and Expenditures: Some statistical observations and policyimplications.” Ottawa, ON:CanadianCentre for Policy Alternatives. ISBN 978-0-88627-520-4.

OECD health data 2004.

Romanow, Ray. 2002.Buildingon Values: The Future of Health Care in Canada –Final Report. ISBN0-662-33043-9.

Globalization and the Rise of Inequality

The extremes of wealth and poverty threaten globalisation. North American companies lose jobs to the Chinese Special Economic Zone (SEZ) where factories often employ rural women to work in 19th century conditions to keep their costs low. Meanwhile the total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average.

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Globalization “refers to the current transformation of the world economy the reduction of national barriers to trade and investment, the expansion of telecommunications and information systems, the growth of off-shore financial markets, the increasing role of multinational enterprises, the explosion of mergers and acquisitions, global inter-firm networking arrangements and alliances, regional economic integration and the development of a single unified global market. The phenomenon of globalization is accompanied by increasing international mobility,  the migration of workers, the growth of tourism and the increasing ease of international travel (Leary 1998:265).”

Selected Bibliography and Webliography

Leary, Virginia A. 1998. “Globalization and Human Rights.” In Symonides, Janusz (Ed.) Human Rights: New Dimensions and Challenges: Manual on Human Rights. Aldershot, UK: Ashgate Dartmouth Publishing Company Ltd. / UNESCO Publishing. pp. 265-276.

2007. “Rich man, poor man.” The Economist. Jan 18th 2007. Accessed January 18, 2007.

Making the grade: the role of the Fraser Institute in deciding your school’s future

Philip H. Winne, Nesbit, John C., Gress, Carmen L. Z. 2006. “Cautions about Rating BC’s Schools.” Faculty of Education. Simon Fraser University. 2006-10-31 15:44

The Issue: This is the second year The Vancouver Sun has published a special section on the academic effectiveness of BC’s elementary schools as rated by the Fraser Institute. We’re told the Institute’s ratings of elementary schools, as well as the report it released in April rating econdary schools, are widely discussed. Reportedly, families consult them when buying homes in hope of boosting educational opportunities for their children. Although it doesn’t happen in BC, in the U.S., some jurisdictions use ratings like these, along with other information, to decide how much funding schools receive.

It’s worth keeping in mind the Institute’s rating of a school is not the same thing as what students know or how competent teachers are or how effective schools are. Focusing on students, there’s more to what they know than any one rating can reveal. As well, there is evidence that ratings like these are related to socioeconomic status and wealth. For example, see Selcuk Sirin’s award winning article, “Socioeconomic status and academic achievement: A Meta-analytic review of research 1990-2000”, published in the Review of Educational Research in 2005, and the 2006 Statistics Canada study, “Income and the Outcomes of Children,” by Shelley Phipps and Lynn Lethbridge, respectively. When important decisions are at stake, it’s important to understand what these kinds of ratings are and what limits they have.

The Institute poses a very worthwhile question: “In general, how is the school doing academically?” To answer it, they calculate a rating from 0 to 10 points for each elementary and secondary school that enrolls at least 15 students. Our answer to this question would take a book.

Flynn-Burhoe, Maureen. 2007.“Think Tanks: Corporate Director Board Interlocks: Fraser Institute.”

U.S. vs Polar Bears Inuit take on US for Inaction on Climate Change 2005/07/26

Flynn-Burhoe, Maureen. 2007. “Nanuq of the North II: Animal Rights vs Human Rights.” Speechless. Uploaded January 3, 2007.

Finally in December 2006 Bush blinks, but why now? The Bush administration took advantage of the way in which all eyes turn towards Santa’s North Pole, where big-eyed talking polar bears, reindeer and seals live in harmony, to announce that they would save these creatures from Nanook of the North. Is this for the environment or for votes? See story.

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Nanook (nanuq Inuktitut for polar bear) was the name of the Eskimo hunter captured on film in the first documentary ever produced, Robert Flaherty’s (1922?) Nanook of the North, — still shown in film studies survey courses. Nanook the Stone Age-20the century hunter became an international legend as a lively, humourous and skillful hunter of polar bears, seals and white fox who tried to bite into the vinyl record Flaherty had brought with him. (The real “Nanook” died of tuberculosis as did countless Inuit from small communities ravaged by one of the worst epidemic’s of tuberculosis on the planet.)

On August 13, 1942 in Walt Disney studios’ canonical animated film Bambi it was revealed that many animals with cute eyes could actually talk and therefore shared human values. Nanook and his kind became the arch enemy of three generations of urban North Americans and Europeans. Hunters were bad. Cute-eyed animals that could talk were good. Today many animals’ lives have been saved from these allegedly cruel hunters by the billion dollar cute-eyed-talking-animals-industry.

The White House has once again come to the rescue of these vulnerable at-risk animals. (There was an entire West Wing episode in which a gift of moose meat was rejected by all staff since it came from a big-eyed-talking-animal. See Ejesiak and Flynn-Burhoe (2005) for more on how the urban debates pitting animal rights against human rights impacted on the Inuit.) Who would ever have suspected that the Bush administration cared so much about the environment that they would urge an end to the polar bear hunt, already a rare phenomenon to many Inuit since their own quotas protected them?

When I lived in the north the danger for polar bears did not reside in the hearts of hunters. Nanuq the polar bear who could not talk was starving. He hung out around hamlets like Churchill, Baker Lake or Iqaluit, looking for garbage since this natural habitat was unpredicatable as the climate changed. Some people even insisted that there was no danger from the polar bear who had wandered into town since he was ’skinny.’ That did not reassure me! I would have preferred to know that he was fat, fluffly and well-fed. Polar bears die from exhaustion trying to swim along their regular hunting routes as ice floes they used to be able to depend on melted into thin air literally. They die, not because there are not enough seals but because they need platform ice in the right seasons. That platform ice is disappearing. They die with ugly massive tumours in them developed from eating char, seals and other Arctic prey whose bodies are riddled with southern toxins that have invaded the pristine, vulnerable northern ecosystem. Nanuq is dying a slow painful death. Nanuq is drowning. Although he doesn’t sing he is a canary for us all.

Climate change and southern industrial toxins affect the fragile ecosystem of the Arctic first. The Inuit claimed in 2003,“Global warming is killing us too, say Inuit .”This is why Sheila Watt-Cloutier laid a law suit against the administration of the United States of America. Now the handful of Job-like Inuit who managed to survive the seal hunt fiasco of the 1980s and are still able hunt polar bear, will have yet another barrier put between them and the ecosystem they managed and protected for millennia. When I see Baroque art and read of the Enlightenment, I think Hudson’s Bay and the whalers in the north. It wasn’t the Inuit who caused the mighty leviathan to become endangered. Just how enlightened are we, the great grandchildren of the settlers today? Who is taking care of our Other grandparents?

Since the first wave of Inuit activists flooded the Canadian research landscape fueled by their frustrations with academic Fawlty Towers they morphed intergenerational keen observation of details, habits of memory, oral traditions and determination with astute use of artefacts and archives to produce focused and forceful research. When Sheila Watt-Cloutier representing the Inuit Circumpolar Conference (ICC) was acknowledged with two awards in one year for work done to protect the environment, I wondered how many cheered her on.

I don’t cheer so much anymore. I am too overwhelmed, too hopeless to speak. I myself feel toxic, perhaps another pollutant from the south — my name is despair. I don’t want to dampen the enthusiasm of those activists who still have courage to continue. For myself, I feel like the last light of the whale-oil-lit kudlik is Flicktering and there is a blizzard outside.

Footnotes:

From wikipedia entry Sheila Watt-Cloutier

In 2002, Watt-Cloutier was elected[1][4] International Chair of ICC, a position she would hold until 2006[1]. Most recently, her work has emphasized the human face of the impacts of global climate change in the Arctic. In addition to maintaining an active speaking and media outreach schedule, she has launched the world’s first international legal action on climate change. On December 7, 2005, based on the findings of the Arctic Climate Impact Assessment, which projects that Inuit hunting culture may not survive the loss of sea ice and other changes projected over the coming decades, she filed a petition, along with 62 Inuit Hunters and Elders from communities across Canada and Alaska, to the Inter-American Commission on Human Rights, alleging that unchecked emissions of greenhouse gases from the United States have violated Inuit cultural and environmental human rights as guaranteed by the 1948 American Declaration of the Rights and Duties of Man.[5]

Digitage elements:

Caspar David Friedrich’s (1824) The Sea of Ice
Tujjaat Resolution Island, abandoned, DEW line station DINA Northern Contaminated Sites Program (CSP) web site
My photo of ice floes in Charlottetown harbour, March 2000
A section of my acrylic painting entitled Nukara (2000)

Selected Bibliography

Eilperin, Juliet. (2006). ““U.S. Wants Polar Bears Listed as Threatened.” Washington Post Staff Writer. Wednesday, December 27, 2006; Page A01

Gertz, Emily. 2005. The Snow Must Go On. Inuit fight climate change with human-rights claim against U.S. Grist: Environmental News and Commentary. 26 Jul 2005.

The Guardian. 2003. ““Inuit to launch human rights case against the Bush Administration.”

DEW line contaminated sites in Nunavut.

www.guardian.co.uk/international/story/0,3604,1104241,00….

www.grist.org/news/maindish/2005/07/26/gertz-inuit/index….

This will be updated from EndNote. If you require a specific reference please leave a comment on this page.

Creative Commons Canadian Copyright 2.5 BY-NC-SA.

Wealth Disparities Will Intensify as UHNW Get Richer 2012

2012-01-21 “Steve Kaplan of the University of Chicago thinks finance explains much of the rise in inequality. Updating a series developed by Thomas Piketty and Emmanuel Saez, Mr Kaplan notes that the share of income going to the 1% reached an 80-year high of 23.5% in 2007, only to sink to 17.6% in 2009 as the financial markets deflated. The trend is even more pronounced for the top 0.1%, whose share of total income rose to 12.3% in 2007 but sank to a still disproportionate 8.1% in 2009 (The Economist 2012-01-21).”

2012-01-16 While the gap between rich and poor in Canada continued to increase, Canada, along with Denmark, Norway and other Scandinavian countries, is a world leader in economic mobility. Americans have less economic mobility than their peers in Canada. … “Canadians shouldn’t be complacent. Ottawa and most of the provinces are running large budget deficits, and education and health care are already targets as governments hunt for savings (McKenna 2012-01-16).”

2011-12-02 New York Gov. Andrew M. Cuomo and legislative leaders, consider raising income taxes on wealth while cutting them for the middle class as they seek ways to shore up a state budget strained by the weak economy. He was partly influenced by the Occupy movement (Kaplan 2011-12-02).

2010-03 “On average Canada is up to three times more mobile than the United States. Or another way of putting it, up to three times as much inequality is passed across the generations in the United States than in Canada. Furthermore, these differences arise from differences in the extremes of the earnings distribution: there is notably less mobility at the very top and the very bottom of the American income ladder.” . . Education is a provincial responsibility in Canada but financial resources are not linked to property taxes but to the province-wide income tax unlike the United States. Poorer neighbourhoods fare better with the Canadian method. However, as income inequality rises opportunities for upward mobility for future generations may be in jeopardy as wealthy Canadians form American-style exclusionary institutions and as cities like Toronto become increasingly polarized. In Toronto, Vancouver and Calgary neighbourhoods are becoming more sharply divided along income and ethnic lines (Corak, Curtis and Phipps 2010-03).

2006-12-16 Wealth disparities are a serious concern and will intensify in 2007 according to TD economists Drummond and Tulk. The net worth of the lowest quintile fell to a negative net worth from zero while national net worth grew 2.8% in the last quarter of 2006. Less than 10% of families who hold at least 53% of total Cdn. net worth ($4.8 trillion). read more | digg story

This is a draft is being written on line back and forth between articles, EndNote, zotero and the slow world. It is currently being updated.

2011

OECD Record inequality between rich and poor

According to TD Bank Financial Group Economists Drummond and Tulk (2006) wealth disparities will intensify. They paint a dismal picture for Canadians excluded from the top quintile. Prospects are bright for Canada’s 22 billionaires and others in that elusive group of Ultra High Net Worth (UHNW) ie c. .004 % of Canadian families (Stenner et al., 2006), who hold more than $10,000,000 in assets. In sharp contrast to Canadians in the four lower quintiles, the UHNW benefited with large increases in wealth since 1984. Unlike real estate held by the lower quintile, these rare families saw their luxury homes, properties, businesses and collections rise in price. With these additional assets they were able to invest, many in tax-free RRSPs, so their net worth grew. “If investment returns rise the trend towards growing wealth disparities will likely intensify. This could be compounded by sluggish wage gains in the low end and the financial challenge of immigrants – the main source of growth in the younger, less affluent population (Drummond and Tulk, 2006).”

Considerable wealth was accumulated in Canada between 1999 and 2005. In 2005 net worth increased by 41.7% to nearly $1.5 trillion (US?). The most recent Statistics Canada report revealed today that the Canadian national net worth reached $4.8 trillion by the end of the third quarter. While in terms of an economist’s algorithm this translates into an average of $146,700 per person. In reality only the a tiny number of Canadian households benefited. “The gain in net worth resulted from an increase in national wealth (economy-wide non-financial assets) as well as a sharp drop in net foreign debt. National net worth grew 2.8% in the third quarter, the largest increase in more than two years (Statistics Canada 2006)”.

Drummond and Turk are concerned that in spite of the dramatic growth in Net Worth, there is a significant portion of the population with little or negative Net Worth (debts/assets ratio) in 2005. Although Drummond and Turk cite the World Institute for Development Economics Research as their source in regards to situating the seemingly overwhelming disparity between the 10% of households that are extremely wealthy and the lower quintiles. (I believe they refer to reports by Senior Researcher of the World Institute for Development Economics Research (WIDER) of the United Nations University, Mark McGillvray(2005) whose research is available only on the deep Internet — an exclusive members-only club.) For the first time however, 165 of the UNHW families accepted to be interviewed by the Stenner Group. The True Wealth Report (Stenner 2006) reveals that the most popular past times of UNHW are traveling (particularly to London, Paris, Vienna, New York and Vancouver staying in ), playing golf and taking part in other sports, collecting art and antiques, drive BMW’s, Volvo’s or Porsches. They claim their philanthropy is tied to both their religious faith and strategic money management (Stenner et al., 2006) (Morissette and Zhan, 2006). According to Stats Can economists in their recent report who refer to research by Western University Economist James B. Davies and Shorrocks, Economist with the United Nations World University, it is to measure the actual holdings of the uber-wealthy. Forty-eight percent of Canadian wealth might be held by less than 1% of the Canadian population(Davies and Shorrocks, 2000, Davies, 2003). Western University Economist and co-author of publications with Shorrocks, editor for the United Nations World University publications and Financial Post journalist (Chevreau, 2003) both cited Shillington’s C.D. Howe Insitute report (2003), revealing an unintended disincentive for the those who earn under $50,000/annual to save. “Shillington (2003) has used Statistics Canada’s 1999 Survey of Financial Security to illuminate what he calls the “futile saving” problem. He looks, first, at the savings of “near-seniors”, those households where the older spouse is aged 55 – 64. He finds that 21% of these households have no retirement saving, and in total 53% have retirement savings of less than $100,000. On the grounds that savings of $100,000 would not permit the purchase of an annuity of more than about $10,000 Shillington believes that the majority of these people will be GIS recipients in retirement. Their savings are thus “futile”, since they will be at least half confiscated by the GIS taxback.17 Turning to actual GIS recipients, Shillington reports that about 23 percent have an RRSP, with an average value of $43,000; 29 percent have an RPP, with an average value of $65,000; and about 40% have either an RRSP or RPP. In Shillington’s view this represents the result of a gigantic fraud, however unintentional.

Governments and financial institutions have advertised the importance of saving for retirement very heavily, and the annual campaign to get RRSP contributions is a vigorous one. The voices warning low-income people that this is in no sense an “investment” are tiny ones (Davies 2003:28).” Shillington concluded that, poor seniors dependent on the federal Guaranteed Income Supplement (GIS) and its means-tested provincial and municipal counterparts should not bother with RRSPs. To do so means losing GIS benefits, rent subsidies, drug benefits, provincial aid programs like Ontario’s GAINs and similar welfare programs.” Once RRSPs create income from Registered Retirement Income Funds after 69, $1 in income reduces GIS benefits by 50¢. Since half of GIS recipients pay income tax, they face an effective marginal tax rate of 75% on extra income. In some cases involving dividend gross-ups, the effective top-rate savings may pass 100%, Mr. Shillington said. For them, “RRSPs are a terrible investment. They are victims of a fraud, however unintentional.” Saving $100,000 in RRSPs may be futile if that is your target. However, it does not mean younger people with $100,000 already saved should stop, as long as they are on the way to accumulating several hundred thousand dollars by the end of their working lives. “RRSPs can be dangerous to your financial health” is the subtitle of Free Parking, a self-published book by “reformed financial planner” Alan Dickson. “I totally agree with the report,” Mr. Dickson said. Citing 2001 Statistics Canada data, Mr. Shillington said of $1-trillion in retirement assets, $600-billion is in employer pensions, $340-billion in RRSPs and $70-billion in RRIFs (Chevreau, 2003).

“National net worth reached $4.8 trillion by the end of the third quarter, or $146,700 per person. The gain in net worth resulted from an increase in national wealth (economy-wide non-financial assets) as well as a sharp drop in net foreign debt. National net worth grew 2.8% in the third quarter, the largest increase in more than two years (Statistics Canada 2006)”. Clever people like Derek Foster who know how to work the system trigger angry responses against publicly-financed assistance for the lowest quintile. (Heinzl, 2005) Foster (born c. 1961) began making astute investments while still in university. He learned from finance gurus Peter Lynch and Warren Buffett. In 2005 he continued to earn enough from his total investments (which total six digits) in Starbucks, Colgate-Palmolive, Rothmans Inc., Royal Bank of Canada, Corby Distilleries Ltd., Manulife Financial Corp., George Weston Ltd., Pembina Pipeline Income Fund, Canadian Oil Sands Trust and a dozen or so others, that he and his family of four can live modestly without ever having to work again. Their low income c. $30, 000/annual actually allows them to enjoy certain publicly-financial benefits designed for low-income earners with no assets (Heinzl, 2005). Others include Dianne Nahirny’s Stop Working, Start Living (http://www.smartmakeovers.com) and Alan Dickson’s Free Parking and Advance to Go (http://www.freemoneypress.com)(McGillivray, 2005)

With more than a billion people living on less than one dollar per day, some evidence of increasing gaps in living conditions within and between countries and the clear evidence of substantial declines in life expectancy or other health outcomes in some parts of the world, the related topics of inequality, poverty and well-being are core international issues. More is known about inequality, poverty and well-being than ever before as a result of conceptual and methodological advances and better data. Yet many debates persist and numerous important questions remain unanswered. This book examines inequality, poverty and well-being concepts and corresponding empirical measures. Attempting to push future research in new and important directions, the book has a strong analytical orientation, consisting of a mix of conceptual and empirical analyses that constitute new and innovative contributions to the research literature.Mark McGillivray is a senior researcher with the World Institute for Development Economics Research (WIDER) of the United Nations University.

Selected webliography

Carroll, James. 2011-01-03. “Now the rich get richer quicker.” Boston Globe.

CBC. Billionaires of the World.

Chevreau, Jonathan (2003) RRSPs a bad option for low-income earners Financial Post.

Corak, Miles; Curtis, Lori; Phipps, Shelley. 2010-03. “Economic Mobility, Family Background, and the Well-Being of Children in the United States and Canada.” IZA DP No. 4814. Discussion Paper No. 4814. Forschungsinstitut zur Zukunft der Arbeit/Institute for the Study of Labor.

Davies, James B. (2003) Social and Economic Risks to Seniors in Ontario. Ontario Panel on the Role of Government (OPRG). Toronto.

Davies, James B. & Shorrocks, Anthony F. (2000) “The Distribution of Wealth.” In Atkinson, A.B. and Bourguignon, F. (Eds.) Handbook of Income Distribution.

Drummond, Don & Tulk, David (2006) Lifestyles of the Rich and Unequal: an Investigation into Wealth Inequality in Canada. TD Bank Financial Group.

The Economist. 2012-01-21. “Income inequality: Who exactly are the 1%?”

Frank, Robert H. 2010-10-16. “Income Inequality: Too Big to Ignore.” New York Times.

Heinzl, John (2005) The ‘Youngest Retiree’ Tells How To Punch Out Of The Workplace. Globe and Mail.

Kaplan, Thomas. 2011-12-02. “Income Taxes for Wealthy May Increase in Albany Deal.” New York Times.

Krugman, Paul. 2010-09-19. “The Angry Rich.” New York Times.

McGillivray, Mark (2005) Inequality, Poverty and Well-being, Helsinki, Finland, Palgrave Macmillan.

Mcgran, Kevin (1998) Anti-poverty activists take case to the United Nations. The Canadian Press. Toronto, ON.

McKenna, Barrie. 2012-01-16. “In Canada, unlike the U.S., the American dream lives on.” Globe and Mail.

Mcquaig, Linda (1995) Shooting the Hippo: Death by Deficit and Other Canadian Myths, Toronto, Viking

Mcquaig, Linda (1998) The Cult of Impotence: Selling the Myth of Powerlessness in the Global Economy, Toronto, Penguin Books

Morissette, René & Zhan, Xuelin (2006) Revisiting Wealth Inequality. Perspectives on Labour and Income. Ottawa, ON, Statistics Canada.

Shillington, Richard (2003) New Poverty Traps: Means-Testing and Modest-Income Seniors. C. D. Howe Institute. Backgrounder. 65.

Statistics Canada. (2006). “National balance sheet accounts: Third Quarter”. Press Release. Ottawa, ON. December 15, 2006.

Stenner, Thane, Bower, Rod, Currie, John & O’connor, Rory (2006) True Wealth Report: Values and Views of Ultra-Affluent Individuals, Vancouver, BC, T. Stenner Group ™.

Flynn-Burhoe. 2007. “Wealth Disparities Will Intensify as UHNW Get Richer.” http://docs.google.com Flynn-Burhoe. 2007. “Wealth Disparities Will Intensify as UHNW Get Richer.” Papergirls Blog. December 16, 2006. Creative Commons License 2.5 BY-NC-SA

Nishnawbe Aski Nation’s editorial in $55B diamond industry’s Rapaport News

Moratorium on what some call Canadian ‘Blood Diamonds’? De Beers Canada benefit from government stalling tactics on land claims to extract valuable raw resources leaving behind environmental devastation. Many of the 45,000 Cree and Ojibwa in NAN region live in fourth world conditions in post-RCAP Canada. How many more NAN youth will choose suicide? Let’s not forget Nishnawbe Aski Nation’s Kash’s still unsolved water problem.
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Neither Left nor Right, just wrong: Canadian Public Policy stalling tactics

Benign colonialism for dummies: how to impress OECD while Canada’s First People live in Brazil-like favela. Canadian Public Policy research has been usefully challenged by seasoned journalist Atkinson Fellow Marie Wadden’s recent series which continues her research begun in 1978 in response to the hidden horrors of Canada’s Innu town, Davis Inlet. The True North strong and free has been limping for a long time.

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Neither Left nor Right, just wrong

Decades later, Wadden concerned about the elusive solutions for problems of addiction in Canadian Aboriginal continues her research by visiting remote communities to find stories that will unsettle Canadian complacent apathy, compassion fatigue and worldly-wise jaded perspectives. We just do not want to give up the adventure stories that inspired our youth of Arctic explorers in frozen, isolated, hinterland Hudson Bay posts. Perhaps her shocking series will shake our stubborn pryde in our grandfathers’ mythologies while shamefully neglecting tragic tales from our Other grandparents.
Her passion for the subject earned her the 2005 Atkinson Fellowship in Public Policy and led her to a year-long, cross-country trek to look at the causes, effects and potential solutions to the addiction crisis among Aboriginals. Her series of stories — Tragedy or Triumph; Canadian Public Policy and Aboriginal Addictions — is appearing in the Star and online at thestar.com/atkinson. Wadden began her career at CBC television in Newfoundland 27 years ago and has won numerous journalism awards. The St. John’s resident is the 17th winner of the Atkinson Fellowship and the first from east of Montreal. The fellowship, sponsored by The Atkinson Charitable Foundation, the Toronto Star and the Beland Honderich family, aims to further liberal journalism in the tradition of Joseph E. Atkinson, the Star’s founder. The Atkinson Series, Tragedy or Triumph, Canadian Public Policy and Aboriginal Addictions

Seven years in a Third World military dictatorship did not prepare me for the harsh reality of the everyday lives of Canadian Inuit and First Nations. I felt shame, powerlessness and confusion stemming from years of work as insider in cultural institutions devoted to Inuit studies. It took me ten years to build heightened levels of trust so all the stories pored out. The more I learned and accepted without offering bandaid solutions, patent excuses, weak explanations or high-haded social theories, the more stories seemed to come to me. It was as if I had a pair of antennas, an open channel to a stream of unending stories each one corraborating the other. The more I learned the more I questioned so I paralleled the kitchen table accounts with deep research into footnotes of published materials, Hansards, and cross-disciplinary work. I asked more specific questions of Inuit elders and the knowers in communities. (The knowers were often Inuit women of any age who had been chosen to learn more because of their superior abilities to learn languages. Their emotional maturity, discretion and wisdom was daunting. Often stories were shared in whispers. I would never get permission to share them. Potent stories of individual personal strength, survival could not be shared because the surviving members of the perpetrators of violence and injustice were still alive. In small isolated hamlets there are systems of power in everyday life that are as imposing as those on parliament hill. This explains why a convicted sex offender can be chosen to represent a community (where family violence is extremely high — off the charts in terms of the Canadian average) in the political arena. In Third World countries there is always the hope that education and maturity, in civil society and democracy, might provide improved access to human rights for citizens. My despair, my overwhelming sense of hopelessness, became consuming as I realized that this tragedy was taking place in one of the more advanced democracies with a relatively informed civil society. I began to meticulously develop a detailed timeline of the social histories of First Nations, Inuit (and African-Canadians). I would take the stories shared by friends and students and cross-reference them with dates provided by classical ethnographers, anthropologists, art historians, museologists, geographers, geologists, administrators and Hudson Bay Company reports. I reread the entire series of Inuit Studies, Inuit Art Quarterly and realized that it was not bad research on my part that made me so shamefully unaware. The very cultural institutions on whom we depend for insight into our shared communal memories, these institutions have failed us miserably. They continue to perpetrate distorted histories insisting covertly on presenting a benign colonialism. Examine the brilliant RCAP, the most in-depth (and expensive) report, undertaken using a progressive research methodology called Participatory Action Research (PAR). It’s on-line and available for anyone! Read the section on how our institutions of public curricula were specifically called upon to reexamine distorted histories in collaboration with Inuit and First Nations communties. The do as I did and examine what these institutions have done since then. A tourist visiting Canada’s cultural institutions, either virtually or in glass, steel and stone buildings, such as the National Gallery of Canada or the Museum of Civilization, or exploring Cybermuse, will not learn of the depth of despair of First Nations and Inuit communties. They will leave perhaps learning something of the heroic status of the Hudson’s Bay Company, Inuit art cooperatives, the benefits to Inuit of entering the international art market, the exquisite aesthetics of Inuit clothing from the pre-1950s, Inuit legends shortened and deformed for consumer tastes. They will learn about the dynamic Inuit culture as if the best of the culture sank with the Nascopie. Explorers and Hudson Bay Company employees are heroized when their work should now be reviewed through the lens of the informed, intelligent generation born in the 1930s and 1940s. Remove the overt desire to portray colonialism in Canada’s north as benign, to continue to cherish histories of post WWII heroism of southerners who conquered the hinterland to benefit all Canadians. Challenge the assumptions that learning English, the market system and the northern form of Canadian democracy was beneficial in the long-run. Unsettle the assumption that the errors were in the past and we should all move on. The litany of mistakes outlined in this brilliant, moving, informed series can be complemented by a thorough reading of one of Canads’ most-difficult-to-read stories, Mistakes. Let’s ask the communal archives of memory for the answers to the questions about what really happened to Inuit-Scottish, Inuit-Danish and Inuit-Icelandic children abandoned in the 1930s, 1940, 1950s, 1960s by their fathers who returned south and built profitable careers on their heroism, adventures in Canada’s north while ignoring pleas from their former partners, and even own children abandoned to the care of small vulnerable hamlets. We no longer accept that the genetic pool of the Scottish, British, American, Danish and Icelandic improved Inuit and First Nations do we? How can we continue in 2006 to lionize those who felt pryde in their improvement of the gene pool? Is there no way that we can honour our blue eyed grandfathers without simply forgetting. We need serious, committed memory work on the level of what has been done in Post WWII Europe. The situations are in no way the same. But the revamping of our institutions of communal memory is just taking too long. In Post WWII Europe it became evident over the decades that it could not be ignored by national cultural institutions. In Canada it has been politically shrewd to use delaying tactics in our museums just as we have in land claims issues, and the dozens of other recommendations of the RCAP. Read the most recent articles by Canada’s anthropologist and you will find apologies for these institions arguing that great progress has been made. After al we do have an Algonquin canoe floating silently in the Group of Seven section of the National Gallery of Canada. Silently is the word. Speak to renowned Algonquin elder William Commanda and put his voice through a loud speaker in those galleries. Listen to him describe the starvation when tourism trade grew as southerners flocked north to enjoy the Canadian Shield. Hear his gentle, firm voice as he describes in elaborate detail how he built canoes to stave off starvation as the First Nations communities were denied access to their fishing camps which had become the land of the tourists. He speaks without rage. His voice is still powerfully spiritual. He calls for a freeing of the rivers from the damage of the dams. In the room devoted to Canadian art of the 1950s install a Stan Douglas type piece where the voices of Inuit and First Nations whose lives were irrevocably changed by the one of the worst incidence of TB on the planet speak of their grandfathers, camp leaders, fathers, the hunters, trappers and fishers buried in unmarked graves near Moose Factory’s sanitorium.

In the National Gallery of Canada’s Inuit Art section (in the basement) remind visitors that the artists whose works continue to be revered, have suffered starvation in Canada in the 1940s and 1950s, have succumbed to alcoholism, and drugs, that they have met violent deaths through suicides, murders, or in preventable house fires. How many Canadians know the other stories connected to Inuit women artists who made history when they were honoured with the Order of Canada, Canada’s highest award or the Royal Canadian Academy? One died alone in a hospital near Montreal in the 1980s, so depressed because of her linguistic isolation (she could only speak Inuktitut) that she gave away her ulu, the woman’s knife so affectionately mentioned in articles about Inuit art. Another was confused at one time when nortern officials refused food to her family during the peoriod of starvation in the 1950s. What about Canada’s most widely admired Inuit artist whose works are honoured internationally who was now ill, forced to live on city streets and was so badly beaten by police he carried a lump on his forehead for weeks. They and/or their families still live in houses where the entire contents of their fridges are a plastic bottle of ketchup and mustard. The have developed diabetes. A few have become violent and abusive. So many Inuit artists are in the Baffin Correction Centre at any given time that local people suggest a visit as part of the itinerary for Iqaluit, Nunavut’s art scene. Then let’s see some footage of the renowned Inuit elder and activist, as he describes through his son, artist and interpretor, his trip to New York or his interpretation of one of his carvings. Let’s hear him sing with tears in his eyes, the song he wrote for the homeless man on the streets of New York. Where is the strong articulate voice of Sheila Watt-Cloutier in any contemporary site claiming to represent to Inuit culture? If you do not know this name you should. She has made history. What about Paul Okalik, Peter Erniq. These are names all Canadians should know. Let’s begin with something simple: honest, inclusive timelines. Let’s contextualize stories about Inuit culture. Stop funding Inuit studies unless there is a critical component that examines issues, not as tidy sanitized disciplines that claim to be protecting Inuit art and culture from the sordid truths of everyday life. Inuit art and culture are dynamic, alive, robust. The Inuit art and culture market will survive but perhaps not by continuing to enrich southerers or those who live decades in the north, return to the south and continue to become enriched on their insider knowledge. If Inuit benefited fully from their own art production in a sustainable, equitable fashion there would be far less need of so much government intervention. There is more percapita talent in the tiny hamlet of Clyde River waiting for a venue than there is many southern cities. There is also far more youth suicide, violence against women and despair.

Footnotes:

The private Atkinson Foundation, founded in 1942 by former publisher of The Toronto Star, promotes social and economic justice in the tradition Joseph E. Atkinson. This includes the work of Armine Yalnizyan, (2000), “Inequality Rises As More Families Slide To The Bottom Of The Income Scale: Tax cuts don’t address economic reality says new report,” Centre of Social Justice, January 27, 2000 http://www.atkinsonfoundation.ca/publications/The_Great_Divide_Armine_
Yallnizyan.htm

Finally Canadian university students use the law to assert their rights

Students sue for more Teaching Assistants (TAs). Professor-as-stars-on-stage perform to ‘classes’ of 1200 students who pay c.$400 to 650 each a term per course! Not enough Teaching Assistants since PhD students (TA stable) are now forced into subsidizing universities as their sessional lecturers. No wonder PhD students have high rates of attrition.

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At any rate, universities have the best lawyers and their backs are covered. It is ill-advised for a solitary student to take on a huge administration. These undergrad students however are unsettling something else. They are using their status as clients which was conferred upon them by the business model that our cultural and educational institutions have adopted since the 1990s deficit-panic. These are not just irate PhDs. These are a broad-based clientele pool. Bad images carried in the media have an economic impact. Wait until Macleans add this variable in their analysis of universities. “How many times have students submitted law suits against your institution in the last academic year?” How many times was in carried in mass media? Whose lawyers won?” In the end, does it matter? Once the legal question is raised in cyberspace, bright student lawyers fresh out of a frustrating BA experience might enjoy the challenge and find an original legal angle to protect students from their own universities. These are the new generation of students brought up feeling entitled. They are students-as-clients. Maybe they can fare better than previous generations whose education suffered, student debts soared during the 1990s. Maybe this generation will find legal ways to assert their rights so they can sustainably survive their university studies and even manage to have a life after university where their debt load does not get in the way of relationships, marriage, decisions to have children, own their own homes, etc. Any one born in the 1940s or 1950s who went to university in the late 1960s and 1970s in Canada got their BAs if not MAs with the government of Canada’s generous student loan program. These are the people now administering, teaching in our cultural and educational institutions. They are also in policy research, public policy decision-makers.

My own PhD became unsustainable as there was never enough time to at the same time fulfill the overwhelming obligations that come with sessional lecturing, my own PhD research, writing, conference presentations, publications while learning to navigate through the unexpected twists and turns in the politics of academia. I had enrolled as part-time student who intended to remain part-time. For two years I benefited from an Ontario Graduate Scholarship. But after following the ill-pondered advice of my Department’s Graduate Student Advisor, I took on a huge challenge, an exciting opportunity in Iqaluit, Nunavut which ended up stretching out over 18 months. I lived there in Canada’s coldest climate for weeks on end, sometimes for up to four months at a time. It was a huge sacrifice in terms of my family in the south, but it was fulfilling as well. The advisor had convinced me that I should remain enrolled as a full-time student so I would not lose my scholarship.

Within weeks of returning from Nunavut my laptop with 18 months of images files, audio files, research, teaching materials and data was confiscated. I had to plead to be given a week to purchase a new PC and transfer files carefully to make sure nothing was lost. I tried to burn CDs of everything I had done but I know some really valuable email correspondence with students was gone.

The real shock came later when I was informed that I had lost my Ontario Graduate Scholarship. Apparently while I was in the North working on Carleton University’s pilot project, I had not kept up with my Comprehensive exams in the time frame they anticipated for a scholarship student. At my meeting with the new Graduate Studies Coordinator I was informed that I was no longer a desirable candidate for funding.

A month later I completed my second Comprehensive Exam with distinction. Nothing changed in terms of funding so I was obligated to take on yet another new course to design, teach, present, administer, evaluate and mark. I had 65 students and was promised a qualified TA. Three weeks into the course the TA I was assigned returned from her European trip to announce she would rather take on a TA contract with a 1st year course instead of working with my course which was student-centred, media-intense, technology-intense, theory-intense. By the end of September it was clear that there were no TAs available for my class. I had to work late into the night to keep up with the work as this was my first time teaching this course. I loved the material, the students, the class discussions, the creativity. But it takes work to succeed in engaging students especially when the content is complex.

Through all of the sessional teaching work I was still paying the university $6000 a year as full-time student! As a sessional lecturer I was being paid $1000-$1200 a month per course. From that they took back $500-$600 a month for tuition fees. The ddpartment administrator failed to sign our contracts on time that year so none of the PhD student/ sessional lecturers were paid at the end of September. I did not have enough money to buy the textbooks I had assigned for the students! I later found out that this particular university had a $50,000 a year fund devoted to providing teaching materials for PhD/sessional lecturers which the Department Adminstrator knew nothing about! Months later when I was struggling to save my flailing PhD, I met with the Human Resources lawyer who explained to me (with a digital recorder in operation visibly in the middle of the table) that they did not widely publicize the existence of the fund since there wouldn’t be enough money if everyone applied. This blue-eyed, handsome young lawyer listened with such sympathy to my story I thought he would be part of some solution. Instead when I contacted him six weeks later, he said (in not exactly in these words), “Sorry, this is not my problem. There is nothing I can do.”

Years later I am on leave from my PhD. I am using Web 2.0 to share more of the research which I know is useful. In the process of struggle to save my PhD I worked with a graduate student in conflict resolution, I consulted with Deans and Assistant Deans, with the ombudsman, with former professors, with Union representatives both in the university and in the public service, student unions. I wrote to the President of the University. Former students wrote to the President of the University. I was given several small considerations including hardship scholarships of several thousand dollars over a couple of years. But it was too late and never enough. The administrative work involved in each request was humiliating and time-consuming. I had been working to support myself while completing courses graduate studies in high standing since 1992. I completed an MA part-time in less time than some of my full-time classmates. Yet after ten years of this, my PhD was in jeopardy because I had accepted advice to remain registered as a full-time student while successfully completing a presigious challenging pilot project in a difficult post. Effectively the university has turned me into a ghost. My emails are not returned. I think they are afraid of a law suit. Perhaps not. It is quite possible that they have simply forgotten me. I no longer exist.

One of the students from that course ended up getting his MA from Harvard because that one course in Sociology with a focus on human rights, allowed him to finish the one missing course from his BA. He was able to stay in Nunavut thereby keeping his high profile Nunavut government position. The Inuit and Northern students, friends and aquaintances, the entire Nunavut experience, completely unsettled everything I had learned at Carleton University, the University of Ottawa, the National Gallery of Canada, reading decades of the Inuit Studies magazine, the Department of Indian and Northern Affairs, National Archives of Canada.