The Dominion - Alex Hemingway

Budget Axe Falls on Retirement Supports

Miles — Fri, 04 May 2012 09:53:00 +0000

Feds continue burden-shifting onto the 99 per cent

VANCOUVER—The federal government recently raised the age threshold for Old Age Security benefits from 65 to 67. This new age requirement will come into effect in 2023. The Harper government says that the OAS in its current form is an untenable strain on resources as Canada’s population ages. But, as critics point out, the fiscal case presented for the cuts has been deeply flawed and misleading.

The federal government argues that the OAS cuts are necessary to stem “unsustainable” program expenditures that are rising from $39 billion in 2011 to $108 billion in 2030 (and Canadians are left to simply imagine how quickly costs will rise in later years).

The government's projections, however, do not adjust for inflation or economic growth. They were stated in nominal rather than proportional terms, creating a “sticker shock” effect. Put in more meaningful numbers, the cost of OAS will rise by 2.4 per cent to 3.2 per cent of the GDP between 2011 and 2030.

The government case also omits that these cost increases are projected to peak in 2031, then plateau and ultimately reverse, falling back to 2.4 per cent of GDP by 2060 (according to the government’s own actuarial report on OAS).

The more sober assessment of the OAS situation is supported by the non-partisan Parliamentary Budget Officer, Kevin Page, who said that the program was already on sustainable long-term fiscal footing, “even under the baseline assumption that there is some additional enrichment to elderly benefit payments.”

Even evaluated on the grounds of the modest budget savings they appear to offer, the OAS cuts are problematic.

The lost income resulting from the OAS cuts is substantial for individuals. The exact amount varies depending on the year of retirement. For example, a person who is 35 years old today stands to lose a total of $24,451 as a result of the changes.

“Canada’s public pensions are already too meager. And I fear, if they are raising the age, that it won’t be long before we see further cuts in these inadequate pensions,” said Gudrun Langolf, first vice president of B.C.’s Council of Senior Citizens’ Organizations.

Cuts to retirement income will push more seniors into low-income status, and degrade the quality of life of others, particularly at a time when employment-based pensions are increasingly scarce and also facing cuts.

Workplace pensions are rapidly being converted into “defined-contribution” plans. These plans offer weaker income security, largely because they channel retirement savings into individual investment accounts that are vulnerable to the short-term fluctuations of the market.

The burden of the OAS cuts, as is all too often the case, will be borne disproportionately by low-income seniors, as well workers in what the Canadian Centre for Policy Alternatives calls physically demanding or stressful occupations (for whom delayed retirement is especially burdensome).

As Michael Wolfson, the former Assistant Chief Statistician at Statistics Canada, has noted, the costs will also inevitably be carried by taxpayers through provincial governments, which will have to fill the income gap left by OAS cuts from their welfare budgets and through other forms of social assistance. Since OAS benefits are taxable, any potential fiscal savings from the cuts will be further offset by a drop in federal and provincial income tax revenue.

Some Canadians will manage to sock away more money in private retirement savings programs such as RRSPs, but ownership of these plans is already highly skewed towards the top of the income distribution. Participation rates in private retirement savings plans in 2008 were 86 per cent for the top fifth of income earners and 9 per cent for the bottom fifth, according to Statistics Canada.

Private retirement savings programs also carry far higher administrative costs than public pensions, reducing the overall efficiency of the retirement system, even while increasing income inequality in retirement.

The OAS particulars aside, Canadians might also ask why their future incomes must be targeted for belt tightening, while corporate tax rates continue to fall (to 15 per cent federally this year, down from 28 per cent in 2000). This is to say nothing of billions spent on the war in Afghanistan, over $600 million planned spending on building new prison cells, and an estimated $25 billion on new fighter jets.

Perhaps unsurprising in this context, the Organisation for Economic Cooperation and Development has taken particular note of Canada’s growing inequality, which has seen the incomes of the top 0.1 per cent more than double over the past 30 years, while their tax rates have fallen precipitously (and median Canadian wages have stagnated).

Cuts to OAS appear to be just one more turn of the vice-grip that places the burden of government austerity measures onto the backs of those who can least afford it. What remains to be seen is how communities and citizens will respond to this set of policies in an era of majority government and renewed activism in Canada.

Alex Hemingway is a Vancouver-based educator and PhD student in Political Science at UBC. He received master's degrees in Global Politics and Social Policy at the London School of Economics.

OAS umbrella

Occupy Pensions!

More Northern BC Schools Set to Close as Olympic Budget Balloons

dru — Fri, 05 Mar 2010 10:50:44 +0000

Billions spent on Games recuperated from rural education system

LONDON, UK—As British Columbia begins to contemplate the effects of a $6-billion Olympic spending spree, 14 schools have been slated to close this year in the Prince George School District, situated in the Central Interior of the province. In January, hundreds of residents gathered to hear the Board of Education announce the planned closures, as well as increased class sizes, which trustees say will be necessary to close a gaping $7-million budget deficit in the district. The blow comes at a time when local communities are already reeling from 15 school closures since 2002. Residents of BC's Central Interior continue to grapple with serious economic problems, including an unemployment rate of nearly 13 per cent in the city of Prince George.

Widespread opposition has taken hold among local teachers, administrators, parents and residents, who fear for the fate of their schools and communities. “It's unprecedented when you have the BC School Trustees Association, the BC Confederation of Parent Advisory Councils, BC CUPE [Canadian Union of Public Employees], as well as the BCTF [Teachers’ Federation], all submitting a joint letter to the Minister,” said Don Sabo, Chairperson of the Prince George and District Parent Advisory Council. “It's pretty big stuff that's happening here.”

Hundreds of parents and community members have flocked to public meetings held at each school slated for closure and late last month dozens braved the cold outside school district offices to demonstrate against the cuts. Another demonstration in opposition to the Olympics greeted the torch relay with placards bearing slogans such as "$6 billion could fund social housing, healthcare and education.”

The BC Government has responded to the criticism of the planned school closures by denying its own culpability and faulting declines in student enrolment.

Officials have suggested that the government, despite its funding responsibilities, cannot be held responsible for school closures. “I would urge people to present their concerns to the locally elected school board,” MLA Pat Bell told the Prince George Free Press, "because that’s where school closure decisions are made.”

Local stakeholders are unconvinced, however, not least because the provincial government is the sole funder of school districts in BC, which are prohibited by law from running deficits. “School boards are put in a very unfortunate situation,” said Matt Pearce, Vice-President of the Prince George and District Teachers’ Association. “They get the unenviable task of making the cuts and they don't control the revenue.”

“I think a lot of the blame, and rightly so, has been directed at the provincial government, particularly with the [cost] downloads they’ve made, often with little or no notice to school boards.”

“Downloads” refer to new responsibilities and expenses shifted to a lower level of government without accompanying funding to meet the costs.

An abrupt shift in the funding formula for schools brought mass closures to the district in 2002 and 2003. Many believe that the model fails to properly account for the extra costs of operating schools in northern and rural areas. A recent school district report noted: “The Ministry of Education changed its method of funding school districts from one that recognized a variety of unique factors to one where the prime driver for funding became simply the number of students enrolled.”

For their parts, the Education Minister and local MLAs have instead suggested that falling enrolment, not funding shortfalls, are behind the closures. The school district "lost nearly 4,500 students in the last 10 years," Prince George MLA Shirley Bond explained in a local newspaper.

However, community members argue that the 25 per cent drop since 2001 has already been met with 15 school closures. The 14 more slated to be shuttered this year would bring the total closures to nearly half of the schools in the district in just eight years, a toll obviously disproportionate to the enrolment decline, Don Sabo notes.

As well as the unfavourable funding formula already in place, the district faces unfunded new costs and programs downloaded by the provincial government this year. These include cuts to an annual capital and maintenance costs grant, an unfunded kindergarten program, hikes to provincial health premium for employees and non-rebated costs of BC's new Harmonized Sales Tax and carbon tax.

Perhaps the greatest concern is reserved for the fate of the seven rural schools slated to close. "Because they are small communities, when you shut down the school, you're shutting down the community," Sabo said. "It's a complete disruption of the social fabric."

The closures would also mean up to three or even four hours a day spent on the bus for many kids. Teachers and parents alike are concerned about the long rides and the time that commuting children will lose, including missed chances to participate in extracurricular activities.

Their concerns are corroborated by researchers like Mount Allison University Professor Michael Fox, whose study of rural communities in Quebec found that "[kids] with large average times on a bus report lower grades and poorer levels of fitness, fewer social activities and poor study habits."

For many, it is difficult to understand why school closures and larger class sizes to save a few million dollars are considered a belt-tightening necessity, while billions are readily spent on the Olympics, along with a $500-million new roof for BC Place Stadium in Vancouver. "Bills are coming in for the Olympics and [the provincial government has] to find money to pay for it from somewhere," Sabo said. "They're taking it from our kids' education and our kids' future."

For local community activist and columnist Peter Ewart, all of this raises a broader set of questions about the economy and government policy in the region. "First of all, talk about declining enrolment begs the question: why is this taking place? A big contributor has been the damage done by job cuts and mill closures in the forest industry," which, in turn, forces families to relocate.

"People have been saying for years that there needs to be a program to diversify forestry and other resource industries in the Interior of BC. Government should be putting demands on companies, for example by requiring that resources be processed in the province and near the communities they are extracted from."

"In other words," Ewart added, "we should be adding value to our own natural resources, thus creating jobs and sustaining communities."

As the Olympics draw to a close, not only parents and students, but whole neighbourhoods and communities in this region are waiting anxiously for the final budget numbers to be released from BC's Ministry of Education in mid-March; the budget will finalize the school district's deficit level and just how many more schools will be forced shut this year.

Alex Hemingway is a UK-based graduate student from Prince George, BC. He is currently studying Social Policy and Planning at the London School of Economics, where he also received a master's degree in Global Politics.

School Bus

BC school closures

War, Warlords, War Crimes

Wed, 26 Apr 2006 22:50:11 +0000

Afghanistan in context

photo: Corporal Robin Mugridge, Canadian Forces Image Gallery

When war is waged, multiple factors are suddenly brought into play. An accurate understanding of the ensuing events requires broad, contextual information. Context, however, is frequently denied, obscured and misrepresented by political leaders and wartime media coverage. In this respect, Afghanistan has been no exception. The analysis that follows seeks to provide some of the historical basics essential for an accurate, critical examination of the war in Afghanistan today.

Afghanistan 1979-2001

On Dec. 22, 1979, Soviet forces began to enter Afghanistan. In the decade of war and occupation that followed, over 15,000 Soviet troops and one million mujahideen fighters and Afghan civilians were killed. Yet it was the Islamic fundamentalist mujahideen, backed with billions of dollars in arms and funding by the West, who would ultimately prevail. By 1992, three years after the final withdrawal of its Soviet backers, the government of the Democratic Republic of Afghanistan fell.

An arduous civil war began, fought between rival warlords of the former mujahideen. The civil war was brutal, and the warlords became known for their rapes, purges, summary executions and repression of women, among other crimes. These actions were condemned worldwide. By 1996, however, the tide had turned against the warlords as another fundamentalist group, the Taliban, began its rise to power, taking control of the national capital of Kabul.

The ruling warlords were so cruel and violent that most Afghans welcomed their defeat at the hands of the Taliban, who were credited with bringing some semblance of stability and security to Afghanistan, as well as improving the economy, which had been crippled by the widespread practice among warlords of demanding payoffs from businesses.

While warlords continued to control many parts of the country for some time, by 2001 most of Afghanistan was under Taliban rule. While the Taliban were swept into power amid widespread disgust with the vicious crimes of their predecessors, they too became known as repressive and brutal. In recent years, they became notorious in the West for their repression of women and authoritarian rule.

Afghanistan after 9/11

On Sept. 11, 2001, 19 hijackers (15 Saudi Arabians, two Emirati, one Egyptian and one Lebanese – no Afghans) carried out the infamous terrorist attacks in the United States that killed nearly 3,000 people.

Following the attacks, focus turned to the alleged mastermind of the attacks, Osama bin Laden, who was based in Afghanistan. Amid calls for calm by victims' families and a mourning American public, government rumblings began about possible military attacks against Afghanistan. Aid agencies and the United Nations warned that the threat of bombing would put nearly 2.5 million Afghans at risk of starvation, but the US contended that military force might be necessary to capture those behind the 9/11 attacks.

At the time, British Prime Minister Tony Blair asserted that, "There is no alternative [to a military attack] unless the Taliban regime do what they have so far obviously failed to do and yield up bin Laden." Though largely ignored in the West, the Taliban had stated explicitly through their information minister, Qudrutullah Jamal, that "Anyone who is responsible for this act, Osama or not, we will not side with him." Speaking of bin Laden, they agreed to "give him up," on the condition that they be shown evidence of his involvement. The White House rejected this proposal out of hand, promising there would be "no negotiations, no discussions" with the Taliban.

In fact, there had previously been negotiations, well before the Sept. 11, 2001 attacks, and the Taliban offered to extradite bin Laden to a neutral third country. In addition, following 9/11, as Britain's Telegraph reported on Oct. 4, 2001, they offered to give up bin Laden to an international tribunal in Pakistan, even without being shown evidence.

With the offers to turn over perpetrators quietly dismissed, on Oct. 7, 2001, the American-led coalition began its assault on Afghanistan. The military forces of the US, Britain, Canada, and other countries co-ordinated with an Afghan group calling themselves the "Northern Alliance" to overthrow the Taliban.

Between 3,800 and 5,000 Afghan civilians were killed by the initial bombing campaign, and 20,000 to 50,000 eventually died as a result of the invasion (according to investigations by University of New Hampshire economist Marc Herold and British journalist Jonathan Steele). The country, particularly outside the capital of Kabul, transformed into the cauldron of violence and unrest it remains over four years later.

The Northern Alliance Warlords and Afghanistan today

The US-led coalition allied itself with the "Northern Alliance," and one might rightly wonder: who are they?

The answer to this question had been well known to the governments of the invading countries, but ordinary Afghans knew it even better. The Northern Alliance is comprised of the murderous warlords who were finally thrown out of power a few short years before the 2001 invasion. With US backing, they would come to play a disastrous role in shaping the course of events in post-war Afghanistan.

In December 2001, with the Taliban government defeated, an agreement was reached among Afghani exiles meeting in Bonn, Germany. Hamid Karzai, an Afghan returning from exile in the US, was installed to power and would soon be named interim president of Afghanistan.

Following the Bonn Agreement, Northern Alliance warlords were given prominent positions in the interim government, including in key departments such as defence, industry and agriculture.

The leading Afghani women's rights group, RAWA, which is unequivocally opposed to both the Northern Alliance and the Taliban, had expressed hope for reform under Karzai. However, they quickly became one of his administration's harshest critics, decrying its corruption and collusion with warlord extremists. While the interim government maintained relative stability in Kabul under the protection of multinational troops, the rest of the country fell squarely into the hands of the despised warlords.

To this day, the warlords wield prominent, even dominant influence in the US-backed Karzai government. Human Rights Watch observed that last December Karzai again directly appointed notorious human rights abusers to Afghanistan's upper parliamentary house, including former defence minister Mohammad Qasim Fahim. The group also concluded that an astounding 60 per cent of the deputies currently sitting in the lower house have been linked to human rights abuses.

photo: Sergeant Carole Morissette, Canadian Forces Image Gallery

Sadly, this reflects the reality of the human rights situation in Afghanistan today. Approximately 600 children under the age of five die every day in Afghanistan, according to UNICEF, "mostly due to preventable illnesses." While women technically have more rights than before, they are not able to exercise them due to lack of security. Afghans are regularly detained arbitrarily, tortured, and denied due process rights.

Infrastructure is in ruins and rebuilding efforts are made difficult by lack of funding and rampant corruption. Much of what is spent is wasted as contracts go to foreign firms whose bids are, in many cases, 10 times more expensive than their Afghan counterparts. Organizations inside and outside of Afghanistan cite insecurity as the top human rights issue in the country.

Who is responsible for all this insecurity? Groups like RAWA, all the major human rights organizations, and even Hamid Karzai agree that the US-backed warlords are a greater threat to security in Afghanistan than the Taliban.

US Operations in Afghanistan

Throughout its occupation of Afghanistan, under the auspices of Operation Enduring Freedom, in its quest to hunt down Taliban and Al Qaeda members, the US has continued to collaborate closely with the Northern Alliance warlords.

Over the repeated objections of groups like the Afghanistan Independent Human Rights Commission, RAWA, Human Rights Watch, and Amnesty International, the US-led military forces have undermined the rule of law in Afghanistan by backing the criminal warlords, arbitrarily detaining and denying due process rights to Afghans, and using "excessive force . . . in residential areas." Amnesty condemns what it calls "grave human rights violations" by US and coalition forces, including "killing of civilians and torture of prisoners."

This kind of conduct has "generated tremendous resentment against the international community" and "made a mockery of respect for justice," in the words of Human Rights Watch. Most critically, it is driving the crippling state of insecurity in Afghanistan.

Canada's role

In recent months, Canada has endorsed and contributed to this counterproductive, ostensibly "counterterrorist" role in Afghanistan by joining Operation Enduring Freedom. The Martin government made the plans to scale down our peacekeeping role in Kabul and join the US-led combat operations. These plans came to a head in February under the new Harper government when 2,200 Canadian troops began to arrive in Kandahar, ready to hunt down and "destroy" pockets of Taliban loyalists in the region.

The Canadian government is certainly aware that this type of mission is doing more harm than good, if they are listening at all to those they claim to be helping. The reality is not unknown to Canadian officials. In an astonishing display of self-contradiction, Major General Andrew Leslie – describing why Canada must be in Afghanistan for at least 20 years – explained that "Every time you kill an angry young man overseas, you're creating 15 more who will come after you."

Still, Canadians are told this is what we must do. While Canadian troops are abroad, we must stop questioning our leaders, whose noble aims ordinary citizens cannot fully comprehend. While our troops are in danger, we should "roll up our sleeves" and prepare ourselves for the "inevitable" deaths we must endure on the march for freedom.

Short-term solutions

The Afghanistan Independent Human Rights Commission has developed extensive action plans and recommendations on transitional justice, women's rights, children's rights, human rights monitoring, and education. Supporting their work is a potential starting point for making a positive impact in Afghanistan.

Human rights groups have stressed the need for security in Afghanistan if the country is to be reconstructed. However, the kind of security assistance they've called for is peacekeeping, not "counterinsurgency" operations, which engender "tremendous resentment" and create scores of "angry young men." According to rights groups and many other observers, what Afghanistan needs from the outside world right now is what Afghani and international rights groups have been calling for all along: an end to support for criminal warlords, an end to torture and other abuses, respect for basic due process rights and the rule of law, support for existing domestic peace initiatives, and the commitment of a sufficient, neutral international peacekeeping force. (Troops from countries that have invaded Afghanistan should be excluded, of course, and if there is any justice, costs would be covered by reparations from those governments.)

Most of these short-term solutions involve no active effort of "aid"; they simply require the US, Canada, and their allies to stop doing harm.

Their own society on their own terms

Afghanistan's woes didn't appear out of thin air. Nor did they begin with the rise of the Taliban, nor even with the rise of the mujahideen warlords. Afghanistan has suffered a long history of foreign aggression and interference by Britain, the Soviet Union, and now the United States (with Canada's help) – interventions rooted in geopolitical manoeuvring and strategic interests more than in any concern for the long-term well being of the Afghani people.

Over 40 years ago, the United Nations General Assembly passed Resolution 2131, declaring, "Armed intervention is synonymous with aggression." Article Six of the Resolution affirms "the right of self-determination and independence of peoples and nations, to be freely exercised without any foreign pressure, and with absolute respect for human rights and fundamental freedoms."

Like every nation, the people of Afghanistan are entitled to self-determination and freedom from aggression – the right to develop their own society on their terms.

Alex Hemingway asks why Canada has allied itself with warlords in Afghanistan and provides some context to the current conflict.