Category Archives: Grumblings

Winter is Coming

Game of Thrones

Nova Scotia’s electoral Game of Thrones is in full swing and while it may lack the dramatic flair of the HBO series, it has one thing in common, winter is coming. Unfortunately, the parties are either unaware of it or are seemingly oblivious to a stark reality.

All of the parties have launched their offensives by flinging open the doors to the treasury, each with new and creative ways to spend our tax dollars with the greatest political efficiency.

The number one priority for CFIB’s 5,200 members in Nova Scotia, consistently, is a reduction of the overall tax burden and the clearest path to this is through alignment of public sector wages and benefits to private sector norms and an overall reduction of the size of the public service. In other words, reduce the cost and the size of government.

For those who argue we have already been dealing with austerity budgets, here’s the reality. Since 2007 Nova Scotia government spending has risen from $7.3 billion to $10.5 billion, an increase of 43 per cent. Additionally, we’ve seen a whopping 22.5 per cent increase in our debt from $12.4 to $15.2 billion over the same time period. All this with an increase of only 16 per cent in the CPI (inflation) and our population flat-lining at 1.5 percent. This is not restraint and certainly not “austerity” by anyone’s definition.

Spending restraint is becoming more important than ever before. Perhaps because the weather is warming our politicians are floating sunny prognostications but there is an inevitable, relentless sociological cold front headed our way. Stretching our Game of Thrones metaphor, let’s call it “The Wall”.

According to Statistics Canada, that “wall” can be found in baseline population predictions. In 20 years, those over 65 years of age will make up fully 30 per cent of our population. A great majority of those will be out of the workforce and needing higher levels of healthcare. Keep in mind, in 2013, that same cohort made up only 17 per cent of Nova Scotia’s population.

By 2038, the forecasts indicate our median age will be nearly 50 and our overall population is expected to decline to under 934,000.

So who will carry additional tax load? If you’re a voter in your 20’s and 30’s, have a look in the mirror.

While efforts are being made to increase immigration, and claims are being made about having the largest population “ever”, the fact remains, unless we make some fundamental and dramatic changes to the way our government spends, we will be faced with some very, very difficult decisions indeed.

Absent in all of the spending promises in this election is a discussion of any long-term fiscal planning to deal with this issue. By long term, we don’t mean 4 years out, we mean 25 years out. Intergenerational forecasts which will set sustainable spending patterns.

Where are the real plans to deal with the inevitable decline in revenues from a shrinking and aging workforce? While some creative gains are being made through immigration, they are incidental and the problem is not getting people to Nova Scotia, it’s keeping them here. More than half of those who arrive leave within five years.

It’s not much wonder as we’ve been struggling with economic growth and carry the some of the highest tax burdens in the country. Our public service is nearly 5 points larger than the national average and their salaries and benefits are completely out of whack with private sector norms. Is anybody connecting the dots?

Meanwhile, the front pages are littered with political spending sprees.

Small business owners want politicians to have the courage to not just stop the bleeding, but begin to fix the problem through an actual reduction in the size of government, lowering the costs of doing business and a putting laser-like focus on better regulation and more efficient service delivery.

If not, we are sentencing our next generation to a cold, bleak future, on the other side of the wall.

This originally appeared in the Chronicle Herald, May 13, 2017

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We have all the evidence we need. It’s time for action to support small business

reports1

How many more studies until government finally takes the necessary steps to fix the drag on our regional economy?

There have been many reports generated to reinforce that which we already know. We know this because we’ve written many of them.

From CFIB’s work on inter-provincial trade barriers to multiple pre-budget submissions, red tape report cards, and other position statements, our members have consistently identified regulatory burden and taxation levels as the primary constraints on their business growth.

The latest, compelling piece of proof, comes from the government’s own joint office of regulatory affairs via Atlantic Provinces Economic Council (APEC). The new APEC project, Trade Barriers in Atlantic Canada: Opportunities for Regulatory Reform, reinforces what CFIB has been repeating for years; red tape and trade barriers are destructive to our economy.

The author, economist David Chaundy, says it’s some of the most significant work he’s ever done. In a career that has seen plenty of economic analysis of our region, that’s saying something. We were pleased here at CFIB to see APEC provide clear quantification of the problem. We believe this report, along with the other work we and other groups have presented, provides plenty of evidence to put regulatory reform (red tape) and interprovincial trade barriers squarely on the front burner in Atlantic Canada.

If governments in our region are serious about doing something meaningful to assist economic growth (as they should if we want to avoid plummeting head-first into a demographic abyss), it’s time everybody gets with the program.

Chaundy’s work identifies how the Atlantic provinces, more than any other region in the country, suffer economically under the weight of unnecessary regulation and inter-provincial trade barriers. It points to recent research which estimates the gains from removing all trade barriers in Canada could be as high as 3.3 per cent of GDP ($65 billion). This translates proportionately to even greater gains in the Atlantic region of 7.6 per cent of GDP or $8.5 billion.

trade-liberalization
From Trade Barriers in Atlantic Canada – APEC 2016

To put it in more relatable terms, this kind of cost reduction is the equivalent of an after-tax income increase of $2,000 for every person in Atlantic Canada.

Lowering interprovincial trade costs for Atlantic businesses will also improve their international competitiveness. With the signing of the Canada and European Union Comprehensive Economic and Trade Agreement (CETA), eliminating regional trade barriers have now become increasingly more urgent and more important.

Freeing up trade restrictions must become a central ingredient in the economic growth model being prioritized by each of the Atlantic provinces. It’s time for politicians to discard Donald Trump style parochial protectionism in favour of unfettered interprovincial free trade.

We have enough reports now all pointing in the same direction. As we noted at the time of its inception, the joint office of regulatory affairs can play a pivotal role in dismantling these trade barriers, removing red tape and setting our region on a path toward greater economic growth and prosperity.

There have been some good first steps, but each of the provinces now must re-double its efforts to tackle these important issues. With the body of evidence in front of them, the premiers must unify behind and forcefully advance this agenda.

Is Halifax “the new Seattle”? We have some work to do…

nova centreIt’s been 25 years since someone at Melody Maker declared Halifax “the new Seattle.” The reference was to the early 90’s burgeoning alternative music scene and what seemed to be a genuine surge in hip music, culture and attitude in the city.

Halifax is still a pretty cool place to live, all things considered, but it isn’t Seattle. However, there are signs we may be taking steps toward acting a bit more like the home of the Seahawks.

This week, Halifax Regional Council voted to do something to help businesses being pummelled because they are located next to large scale development projects. CFIB has been working for a couple of years to assist the city with the development of plans to mitigate the severe damage being done to businesses suffering in the shadow of construction disruption.

The construction site management technical guidelines approved this week are designed to help folks contending with future projects. The speed of the action taken indicates the mayor and councillors understand the severity of the problem.

A lack of appropriate guidelines, oversight and management capacity on the part of the city has wreaked predictable economic havoc.

What is puzzling is the city’s reluctance to publicly accept responsibility for any of the damage. CFIB acknowledges and supports the new guidelines as a positive step forward. Still, as Economy Shoe Shop owner Victor Syperek noted to the CBC this week, for many of the businesses adjacent the Nova Centre, it’s closing the barn door.

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Recently, some of these businesses have launched legal action to seek redress. In response, the city immediately distanced itself, saying the suit, which is rooted in a statutory claim of “injurious affection,” fell outside the interpretation of the law. Certainly the city is well within its rights to defend itself against a lawsuit, but there seem to be contradictory messages here.

On one hand, the rapid development of a construction management guideline recognizes the city did a lousy job protecting small businesses against a development it approved. On the other, the city claims it legally bears no responsibility for the impact. Hmmm.

So, back to Seattle. In contrast to the Halifax approach, in advance of recent major work along an important avenue populated by many small and micro-business, Seattle set up the 23rd Avenue Stabilization Fund with the intent of providing support to businesses which would inevitably be affected by major road reconstruction.

Businesses were invited to apply under clear criteria for support, ranging from deferrals of taxes, licensing and utility payments, to direct financial assistance. Direct and individualized support was provided by the city to assist business owners in gathering the necessary documentation. Communication from the city was clear, precise and issued well in advance of any activity. Consideration was given to access and promotion of business in the region.

Seattle also did a similar and wider scale project in the early 2000s called the Rainer Valley Development Fund during their light rail transit line construction, so it’s not the first time they’ve thought outside of the box and looked beyond state laws to find ways to compensate small business.

With this in mind, Halifax now has to look at not just construction regulation, but the complete picture; a more empathetic approach with creative solutions to let small business know it’s actually valued in this city.

It may not be Nirvana, but it’s certainly better than what we’ve seen.

This post originally published in the Chronicle Herald

Economic barbed wire

Barbed Wire

Steps are being taken by Atlantic Canadian political leaders to dismantle a virtual wall erected between provinces over more than a century.

In perhaps one of the most memorable moments of his presidency, in 1987 Ronald Reagan stood before the Brandenburg Gates in Berlin and implored Soviet Union leader Mikhail Gorbachev to “Tear down this wall!” The purpose of the speech was to compel the Soviets to submit their economy to accountability, transparency, and greater freedom. While there may be lingering questions about the impact of Reagan’s rhetorical flourish, there’s no doubt the subsequent destruction of the Berlin Wall was transformative for the European economy.
While not the magnitude of Reagan’s oratorical overture, steps are being taken by political leaders in Atlantic Canada to dismantle a virtual wall erected between provinces over more than a century by creating a new office to begin pulling apart the red tape that often acts like economic barbed wire between provinces. Mention of internal trade barriers is frequently met with confused stares. After all, there are no border guards on the Confederation Bridge or economic sanctions against the province of Nova Scotia. Our members tell us that these barriers take the more insidious form of unnecessary and burdensome regulation.
Whether due to political interference, parochial interests, or simply grown from the nature of our different bureaucratic cultures, red tape inhibits businesses that aim to work in other jurisdictions by creating a prohibitive and expensive maze of differing rules, requirements, regulations, and practices.

From a business perspective, why do New Brunswick and Nova Scotia have different requirements in fall arrest requirements when gravity appears to act with remarkable similarity in both provinces? Why would first-aid kits in each province require different contents or trucks require different wide-load signage? Some of the examples border on the ridiculous, but either by default, or in some cases by design, all of these differences add cost, drag productivity, and ultimately make things more expensive for consumers.

The recent signing of the Comprehensive Economic and Trade Agreement (CETA) with Europe further highlights the need to move on freer trade within Canada. In some cases, the new agreement means that European companies will have access to opportunities across Canada that companies in a neighbouring province or territory may not. With a more global business environment and greater opportunities for free trade, we can’t continue to ignore the impact that our own provincial differences have on our economic competitiveness.

In fact, a recent poll conducted for the Canadian Federation of Independent Business (CFIB) by Ipsos-Reid shows that the majority of working Canadians agree it’s time for premiers to work together to remove impediments to the flow of goods, services, and workers across provincial and territorial boundaries.

With that in mind, CFIB has been cheering some of the recent work being conducted by both the Council of Atlantic Premiers and the Council of the Federation to help tear down those walls. Earlier this year, Premiers Gallant and McNeil took the significant step of creating the Joint Office of Regulatory and Service Effectiveness between New Brunswick and Nova Scotia. More recently, Prince Edward Island’s Premier Wade MacLauchlan and Newfoundland and Labrador’s government are showing interest in the process.

All of the Atlantic provinces stated in January that they would create an Atlantic Red Tape Reduction Partnership that would help streamline business requirements to create a more competitive economic environment within the region. Our neighbours are important trading partners, and we encourage these bodies to set meaningful regulation reduction targets, reach them, and report publicly on their achievements.

Further to regional work, the Council of the Federation (Premiers) has also been the scene of some encouraging progress. While we’ll have to wait until next spring to see what progress is made with reforms to our main national trade agreement, the Agreement on Internal Trade, we did see a positive step with the premiers signing the Provincial–Territorial Apprentice Mobility Protocol at their recent meeting in St. John’s.

Most notable about this new mobility protocol is that it follows the principle of mutual recognition. Rather than a lengthy bureaucratic process of trying to harmonize each and every regulation across each jurisdiction, the premiers simply said, “If it’s good enough in Province A, it’s good enough for Province B.” This is the gold standard for modern trade agreements and is precisely the direction we want our governments to go when removing barriers.

While the stakes may not seem as high in Atlantic Canada as for the Soviets in 1987, reality shows that we’re facing many daunting economic challenges and unfavourable demographics. With the world of trade changing around us, it’s becoming increasingly important that we work together to break down barriers between our provinces to make the best use of our economic and human resources. If we don’t, we risk isolating ourselves behind our walls of red tape.

Jordi Morgan is the vice-president, Atlantic Canada, and Erin McGrath-Gaudet is the director, P.E.I. and intergovernmental affairs, for the Canadian Federation of Independent Business. CFIB represents the voices of 11,000 small and medium-size firms in Atlantic Canada, with 109,000 members across Canada.

This piece originally appeared in Progress 101 issue online, by subscription and on newstands across Canada

Nova Scotia business needs clarity from Minister on any new recycling fees

PPP
25 years ago, Swedish academic and environmental economist Thomas Lindhqvist coined the term “Extended Producer Responsibility” (EPR). The concept is fairly simple; shift the responsibility and cost for disposal and recycling of products from the general tax base onto producers. Initially, the concept was applied to automobiles, large appliances and electronics. In the simplest of terms, the thinking is, producers will change the design of their products to ensure they are more effectively recycled, creating less waste destined for landfills or other environmentally degrading destinations.

Under the EPR law, brand owners must take responsibility for the complete life cycle of their product from inception to disposal. Driven by the polluter-pays principle, EPR has provided the foundation for new administrative, informative or economic policy instruments being developed or already implemented in other countries and by provincial and municipal governments across Canada.

Nova Scotia was drawn into the EPR discussion after the signing of a memorandum of agreement in 2010 by provincial environment ministers. The plan was to have EPR in place in all 10 provinces by the fall of 2015. Quebec, British Columbia, Manitoba, Ontario and Saskatchewan have already implemented EPR but none of the Atlantic Provinces have rolled out their programs … yet.

Over the past couple of years, the Environment Department has been gathering information on how to adopt such a scheme in Nova Scotia. To date, no clear plan has emerged, however the Minister of the Environment, Andrew Younger has taken pains to say it’s coming, but not before better consultation and some form of economic impact analysis has been completed. None has yet been done.

The results of the previous EPR consultations were of concern, as CFIB felt they didn’t adequately represent the views of small business. So, this July, CFIB surveyed its members on the issue, based upon “the British Columbia model” that was deemed “best practice” by the department. The results stated 82 per cent of small business owners were not aware of a new EPR program, 99 per cent said they had not been consulted and 70 per cent said that they were not supportive of the ideas we presented from the BC Model. Interestingly, on October 23rd, at a meeting of the Union of Nova Scotia Municipalities, Minister Younger told municipal representatives when and if they move ahead with EPR, Nova Scotia’s program will look like the BC’s, which is not particularly comforting.

He also floated a couple of trial balloons about exemptions including a “one or two million” dollar “de minimus” (the revenue line under which business would not be captured by regulation), the single retail point exemption and the 1 tonne of paper or packaging threshold. None of these ideas had been brought up before the UNSM meeting. Prior to the Minister running these up the flagpole, the Department’s regulatory framework was working on the premise that everything and everybody would have been captured.

When these exemptions were applied in BC, it reduced the number of affected businesses under their EPR system from upwards of 80,000 to just about 3,000. If the Nova Scotia government is going to apply the same standards, it too will have to look at what is the acceptable casualty rate among small businesses.

So, why are we making such a fuss? In a portion of the EPR policy that deals with printed paper and packaging, producers or first importers are expected to weigh, measure, record and forecast all of the packaging they sell in their business. If a small business receives goods from outside Nova Scotia, it could be deemed the first importer of goods in Nova Scotia. Let’s take for example a small independent pharmacy, perhaps part of a small group of small town pharmacies operated by one owner. With annual revenue above 1 million dollars, 3 locations and “producing” more than 1 tonne of paper and packaging, this business would not be exempt from the EPR law as Minister Younger has envisioned it.

Next time you drop in for a prescription, have a look at the shelves and imagine categorizing all the packaging, measuring it, reporting it and paying a fee to have it recycled. When that’s done, wait for an end of year compliance report and hope that your forecast was accurate so you won’t be fined. Oh, and all of this will be handled by a third party “stewardship” body which is unaccountable to government. It’s not hard to start seeing how the regulatory burden, compliance and cost might become worrisome.

If a small town in rural Atlantic Canada wants a pharmacy under EPR, it might just end up looking like the bulk barn.

Bulk Barn

This new scheme would be piled on top of taxes businesses already pay for the disposal and recycling of materials now being handled through municipal waste management programs. Retailers and franchisees are being hardest hit with EPR, as many of these smaller firms have little or no control over the materials generated. Market forces or franchise agreements don’t allow for arbitrary price increases to offset these additional costs.

Nova Scotia is already dealing with some of the highest cumulative business and personal tax rates in the country. Adding more fees and red tape is certain to harm employment and economic growth and put inflationary pressure on consumer goods. The question must be asked, what problem is government trying to solve?

Currently, Nova Scotia leads the country in waste diversion and recycling. Attitudes are mixed on what EPR is even meant to achieve. Is it to increase the recyclability of products? Promote recycling? Reduce toxic substances? Or is it to simply shift the financial burden of recycling from municipalities to “producers”? It is worth noting the Minister is pleased with the recycling progress in Nova Scotia, but he adds, it’s very expensive. Nova Scotia pays an average of $657 per tonne to recycle, more than double what New Brunswick pays. (New Brunswick is watching Nova Scotia carefully to see how their program unfolds and there are those who speculate a similar scheme is probably not far behind in that province.)

Even if we accept the solution is to shift the burden of recycling over to industry, one also has to understand that small- and medium-size businesses downstream from manufacturers caught in this regulatory maze will be punished for something they have little or no control over. For that matter, at this point, it isn’t even particularly clear who qualifies as a producer. Is it the importer, the manufacturer or the retailer?

From the perspective of some municipalities, this is could be a gift from above. With accumulating fiscal pressure, having the responsibility of waste management paid for by business is a release valve. For others, having recycling taken away from them may remove an important source of revenue. One thing is certain, if the government is foolish enough to force further costs of recycling onto small businesses, consideration absolutely must be given on the taxation side of the ledger. Surely municipalities could not expect small business to simply pick up the tab for waste management and not provide commensurate tax relief.

Until the provincial government can provide more clarity on the direction it wishes to take on EPR, CFIB will continue to be wary of plans the Environment Minister is pushing. We look forward to assisting small- and medium-size business stay out of the way of the EPR trawler by providing input to government through their next consultation phase.

As we are also working with other partners in the Atlantic Red Tape Reduction Partnership we remain adamant Atlantic Canada cannot afford to be walking blindly into a new set of punitive regulations and costs for small business, especially in the current economic environment.

Break Down the Trade Barriers in Atlantic Canada

Photo: Atlantic Provinces Trucking Association
Photo: Atlantic Provinces Trucking Association

Erin McGrath-Gaudet and Jordi Morgan

230 years ago Benjamin Franklin said “No nation was ever ruined by trade.” He added “Even seemingly the most disadvantageous.” As the Atlantic Provinces struggle to kick start sputtering economic growth numbers, it’s critical our leaders apply a laser focus on our own regional interprovincial trade barriers.

While the federal government is making overtures on a national scale, the Atlantic region must begin to show the same common sense attitude we see in the West where premiers are calling for the creation of a domestic free trade zone. While the average Canadian is likely unaware of the barriers to the movement of goods, services and people that exist between provinces and territories, for small businesses looking at markets outside their provincial boundaries, nonsensical trade barriers represent unnecessary cost and lost opportunities.

There are many good reasons for us to be having this conversation now. Canada’s current Agreement on Internal Trade (AIT) is not keeping pace with the changing economic environment. There have been some attempts to create provincial agreements with varying degrees of success – the New West Partnership Agreement between British Columbia, Alberta and Saskatchewan being the most significant- but even its scope is limited.

The recent Comprehensive Economic and Trade Agreement (CETA) with Europe will further highlight the shortcoming of not having free trade within Canada as European companies will now have access to opportunities across Canada that companies in a neighboring province or territory won’t.

So what are some of these barriers?

In many cases, barriers arise from provinces and territories not recognizing each other’s regulations. This often means having to register with the appropriate authorities in each separate jurisdiction, ensuring you are complying correctly with regulations that are slightly different, and paying fees or charging taxes appropriately in different circumstances.

In some cases, governments can outright prohibit the movement of goods. A notable example of this is the prohibition of transporting alcoholic beverages across provincial or territorial borders. The federal government changed this in the case of wine but provinces have been slow to change their own legislation and regulations to permit “cross-border” shipping of wine for personal use.

Many of these barriers will be highlighted in a CFIB report to be released later this fall.

These barriers extend beyond “business” to impact workers directly. A CFIB report released last year highlighted barriers in the area of skilled trades. Of all the trades certified in Atlantic Canada, there is not a single example of apprenticeship requirements being the same in all four provinces. When a Red Seal is obtained, workers are recognized across the country but until a worker achieves that designation, their options for movement, even within the region, are quite limited. While some progress is being made, much more can be done.

Atlantic Canada is facing many significant economic challenges and given our unfavourable demographics, it’s becoming increasingly important that we work together to break down barriers between our provinces to make the best possible use of our economic and human resources.

It’s more important now than ever before to create an environment where Atlantic Canadian businesses have some competitive advantage to counter the environment of high taxes and overly complicated regulation and red tape. Making these moves will require much more effort on behalf of the Atlantic premiers on regional co-operation. As Benjamin Franklin also said, “If we do not hang together, we shall surely hang separately.”

Erin McGrath-Gaudet is Director of Intergovernmental Policy for the Canadian Federation of Independent Business. CFIB represents 11,000 small and medium size businesses in Atlantic Canada.

Minister Kenney solving Temporary Foreign Worker problems in Alberta by making things worse in Atlantic Canada

The Charlottetown Guardian theguardian.pe.ca
The Charlottetown Guardian theguardian.pe.ca

Last Friday the federal government announced massive changes to the Temporary Foreign Worker program. These changes were unnecessary and largely driven by a cynical union-led media campaign. CFIB has worked in cooperation with the federal government on many files but we regard this as a gross over-reaction to a few negative stories, many of which have been exaggerated heavily by big labour, seeking to organize small and medium-sized businesses, particularly quick service restaurants.

CFIB members strongly support stiff penalties for those caught abusing the program or mistreating any employee, Canadians or TFWs. These changes, however, convict all employers and prevent those who have followed all of the rules from even attempting to use what has become a valuable tool to solve urgent and serious labour shortages.

Employment Minister Jason Kenney has singled out the restaurant, hotel and retail sectors, effectively barring them from even applying to use the program for most positions in most parts of Canada. For both high and low wage positions, employers will now be facing a $1,000 fee for each TFW position. Oh, and if your application is rejected, don’t expect a refund. Massive amounts of red tape are being piled on including the requirement to report every interaction with every applicant, including why they weren’t hired.

What’s more, Minister Kenney made these changes while seemingly oblivious to the reality of the labour market in Atlantic Canada. During his media conference, the Minister noted his inability to comprehend why employers can’t find Canadian workers in areas of high unemployment in places “like Cape Breton.”
For starters, our population is aging and declining and young people are moving to his home province of Alberta in droves.

He says employers should use “market mechanisms” such as higher wages to attract new workers. Well, the employers he is referring to are already operating on razor thin margins because of those same market mechanisms and simply paying people higher wages is not an option. Maybe they can pony up $25 an hour in Fort McMurray to serve coffee, in Glace Bay…not so much. The solution he offered on CTV’s Question Period was if you can’t find enough Canadian workers, don’t start the business. The logical extension of this, if you are struggling to find employees, shut down. As an economic growth strategy, this seems a little counter-intuitive.

In the same interview Mr. Kenney noted he wants to return the TFWP to its original objective to be the “last, limited and temporary resort for employers who absolutely cannot find qualified Canadians to take jobs at the Canadian wage rate.” So now, in order to assist those who are at the end of their rope finding workers, he has made the program impossibly bureaucratic, financially out of reach and/or absolutely inaccessible to those who need it most, again, a little counter-intuitive.

Perhaps the Minister of Employment should take a week or two and walk in the shoes of those entrepreneurs who want to contribute to their communities, create employment and build a business in Atlantic Canada while competing with the oil patch and the federal EI system for workers. He might just get a clearer comprehension of those “market mechanisms”. Atlantic Canada is in need of sound immigration and employment policy, not punitive measures designed to solve problems in tight labour markets in Alberta.

Jordi Morgan is Vice President Atlantic of the Canadian Federation of Independent Business which represents 11,000 members in Atlantic Canada and 109,000 members across Canada. You can reach him at Jordi.morgan@cfib.ca, @CFIBAtlantic and find out more about CFIB at http://www.cfib.ca

The moratorium on temporary foreign workers is not “a good first step”, it’s wrong.

keep-calm-and-go-back-home-2

An ugly underpinning of the Canadian psyche is exposed as the result of the CBC’s story about a woman losing her job in Saskatchewan. Volumes of opinions, letters to editors, commentaries, status updates and tweets spewed forth, slamming the government for blindly allowing, or even encouraging, greedy employers to give all our jobs away to foreigners.

It’s been troubling to watch this explosion of dialogue over Canada’s Temporary Foreign Workers Program (TFWP). Since the exposure of a handful of alleged abuses in the west, rhetoric from union bosses and a fundamental misunderstanding of the program, and the problems it is designed to address, has played into some of the worst of our collective national attitudes.

Yes, there are situations where rules get broken and employers may abuse the program. Canadians should always have the first crack at jobs and any abuse must be dealt with severely but slamming the door indefinitely on an entire sector will have dire consequences for many small business owners, most of whom have done absolutely nothing wrong.

The Minister placing a moratorium on the food services sector is unfair and potentially devastating to hundreds of small enterprises. Had Minister Kenney shut down Employment Insurance for an entire sector because of the rumored abuse of a few, imagine the cataclysm. Arguably there is more evidence to suggest that such a move would be a reasonable course of action, but because in this instance the targets are small businesses owners, too bad, so sad.

The TFWP ballooned over the past several years because employers are finding it increasingly difficult to hire workers with either appropriate skills or a willingness to take on specialized shift work. Simply put, many Canadians either can’t do or don’t want those jobs. The TFWP isn’t the real problem. It’s a symptom of a deeper issue: the Canadian labour market is not meeting the needs of small businesses desperate for workers.

Last weekend in Cape Breton three small business owners told me they’ve literally been driven to find foreign workers because they have run out of options. Why? Even in Cape Breton, an area with an unemployment rate of 15.6%, businesses can’t find people willing to work some jobs. If they do manage to find a Canadian worker, often they’ll quit after being trained, are unproductive (or worse), or simply won’t show up.

Businesses in Goose Bay, Labrador are struggling to find employees for entry-level jobs because the Muskrat Falls project is scooping up both skilled and unskilled workers. Under this new moratorium small businesses like family owned restaurants that depend on the TFWP are at risk of shutting their doors because they can’t find staff. It’s a story being repeated everywhere in Atlantic Canada.

The myth of “cheap” labour

Big unions have been torquing this story to their advantage. The labour movement is being frustrated in their efforts to organize the hospitality sector. This manufactured outrage over the TFWP has provided them with the opportunity to sell this as a program that drives down wages and keeps young Canadians out of work.

There are many reasons to criticize this program, saying it provides cheap labour is not among them, nor does it keep young Canadians from working.

Using the TFWP is bureaucratic and expensive. Employers must first prove they can’t find a Canadian to do the job. They must also pay the industry average wage and often the TFW is paid more than a Canadian worker (something which CFIB views as unfair), they must not pay the TFW less than they pay their other workers nor is it possible to pay less than the minimum wage. The employer must pay return airfare for the worker to their home country, a $275 non-refundable application fee to government and, often, fees to a recruiting agency to help find the foreign worker which can range from $5,000 to $10,000. The entire process requires about a 2 inch thick binder of evidence and can take 5 months just to get approvals.

Believe it, if there was an alternative, employers would gladly use it. The hospitality industry, currently being punished with this moratorium, already hires Canadians 98% of the time, this firestorm of outrage is over 2% of workers.

Unfortunately, most of the employees perceived to be TFWs are actually new Canadian citizens or permanent residents. As a result of the skewing of this narrative, landed immigrants, permanent residents and others “from away” are being unfairly characterized and mistreated by people who see their presence as an economic threat.

The TFWP is not perfect but this does not mean the vast majority, those playing by the rules, should be punished so severely for the misbehavior of a few. What is even more worrisome is many new Canadians are being made to feel unwelcome and unsafe because of an organized campaign of half-truths.

To the federal government, do not shut down this program, fix it…and soon.

CFIB has many recommendation including using this program as a point of entry for permanent residency and rethinking the bias in the immigration system against people coming to Canada to fill entry level jobs. Undermining the efforts of small businesses and creating friction between Canadians and new or potential citizens is not helping.

For the record, CBC’s program Power and Politics straw poll on Monday, April 28th showed 98% of its viewers participating in its poll believed Temporary Foreign Workers were taking jobs from Canadians…all 2% of them. The spin cycle is in overdrive.

Ray Ivany and the Cold Hard Truth About Our Culture of… Whaaa?

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In March of 2002 Stephen Harper set off a firestorm of criticism after being quoted in the Saint John Telegraph Journal. When asked about the economic performance of the region, he responded by saying, “I think in Atlantic Canada, because of what happened in the decades following Confederation, there is a culture of defeat that we have to overcome. …Atlantic Canada’s culture of defeat will be hard to overcome as long as Atlantic Canada is actually physically trailing the rest of the country.”

The headline writer didn’t have to dig to deep to find gold. His political opponents of the day didn’t have to work to hard to extrapolate all the verbal batons with which to beat him over the head. I still believe had Mr. Harper not framed it just so, the federal political landscape might look a lot less Liberal and NDP is this neck of the woods. I knew as soon as I read that he said it there would be a significant personal political price he would pay in Atlantic Canada. There was.

Fortunately, Ray Ivany and his panel on Nova Scotia’s economic recovery aren’t worried about getting elected. If any politician had stood up and spoke as frankly as Ivany did yesterday, political opponents would be falling over themselves to discount the formidable truth of what was said. It was true 12 years ago. It’s still true today.

The panel’s findings are nothing new. Collectively we all realized or at least suspected the key points. People who are paying attention have known it for a long time. The Herald editorial call it a “unvarnished, awkward and often unflattering truth— about our collective selves.”

Essentially, the report says we have developed a culture of “No”. Call it what you will but Harper’s 2002 interpretations ain’t far off. We can argue about policies going back to Confederation that have entrenched this attitude but there is no denying it exists…in Now or Never, An Urgent Call to Action for Nova Scotians,  Ivany’s panel affirmed this in spades.

Among other points, it’s made clear we depend too heavily on government interventionism. Ivany takes pains to point out some new program or policy tweak is not going to turn this around.

Evidence of this may no clearer than our response to the shipbuilding procurement strategy. There is no denying that injecting 30 billion dollars into a local economy will have an impact…but let’s see it for what it is. It’s primarily federal public money backed up by provincial public money going into DND, another publicly funded entity. It’s redistribution not wealth creation.

Is this simply going to become another government teat on which we will become dependent or do we actually believe it will transmogrify into private sector wealth creation and development? To do that we had better understand that it’s through the private sector we will make that happen through export development and market expansion of defense technology. I can already hear the naysayers.

Government also has to look at its relationship to business and figure out how to get the hell out of the way. Our tax and regulatory load in this province is debilitating. All the payroll tax credits and government “incentives” in the world won’t alleviate the outright punitive measures that are in place to set up shop and run a business in Nova Scotia. Can you say the highest Workman’s Comp rates, convoluted apprenticeship regulations, the First Contract Arbitration legislation…? I could go on for days. While we’ve seen some nominal reduction of regulatory burden recently, it’s not nearly enough.

On my radio program I tried on many occasions to talk about immigration. From most of the calls I received, we don’t much like folks “from away”. This is bad. Very bad.

Ivany’s report talks about our demographic decline. We have a rapidly aging workforce and shocking levels of out-migration. These alarm bells have been ringing for a dozen years.

It’s not good enough to just tolerate higher levels of immigration, as a culture we must be embracing the benefits of immigration and promoting Nova Scotia as a place that wants and welcomes immigrants. The provincial government may not be able to solve this problems on its own, but having the highest personal, business and consumption taxes in the country doesn’t exactly say “céad míle fáilte”.

Perhaps the most refreshing component of yesterday’s illuminations was Ivany’s insistence that this was a message for the people of the province, not simply a message for government. While I accept his point, government however is how we collectively make decisions and it is, or ideally should be, a reflection of our collective will. Let’s hope government listens and embraces these ideas.

Ivany usefully called for long-term targets be legislated and that the legislation be enforced. I would take this a step further and demand short, medium and long-term targets be legislated and rigorous metrics be transparently applied to ensure governments are meeting those goals and reporting back to the public.

It’s true we may not be capable of running government like business but we can sure as hell take a few cues from successful enterprise and apply it to public policy.

Ivany’s comment about Nova Scotia taking a long hard collective look in the mirror is a great one. Often when criticism comes from outside, as Maritimers, we are too quick to become defensive. Ivany has said we need to take an honest look at ourselves, reset our attitudes and get on with the work of turning our beloved province around.

I guess it just must be said by someone who isn’t “from away.”

Horse Trading Ain’t What It Used To Be

maris horse

My sister fell in love with horses when she was a pre-teen. My daughter, pictured above inherited some of the same sensibilities.

We used to have a riding stable near the cottage where we spent our summers. “Wellings” had a small paddock and one of the rites of summer was heading down horseback ride, being led around a small ring and getting a picture taken. For me at 6 or 7 years old, it was a pleasant diversion, for my sister it was the discovery of something much deeper.

Without going into too much detail, my sister went on to develop a deep and lifelong love of horses. As exemplified by her photos included in this blog, she developed a keen understanding and spiritual connection with all things equine. It’s not Equus but a case certainly can be made that her intuitive understanding of horses is unique, to say the least. She’s pretty connected to most animals, but horses hold a very special place in her heart and soul.

It’s not hard to understand why she is very upset over Canada’s policy toward horse slaughter. And she’s not alone. A small army of people who love horses have been working diligently to draw attention to an extremely unpleasant, covert and possibly illegal practice taking place throughout the country. It’s an industry that is growing and may in fact leave Canada in the unenviable position of being one of the few nations in the world promoting horses for human consumption.

As our trade relationship with China and the EU grows, one only needs to look at the consumption rates for horse meat in some of these countries to see this economic “opportunity”. In 2005 China consumed over 420,000 metric tonnes of horse meat, Italy 54,000 tonnes. That ain’t chopped liver.

In 2013, the European Union was drawn into a scandal involving the use of horse meat in the food supply. Horse meat is sold in several European countries in specialty shops but te scandal emerged as undeclared horse meat DNA was turning up in beef burgers, canned meat, pasta, meatballs and other processed foods being sold by major grocery retailers and fast food outlets. Some levels were as high as 29%.

Horse meat is not harmful for human consumption, but the evidence pointed to some pretty unsettling conditions in the supply chain and raised important questions about the origin of the meat itself.

Canada is an exporter of horse meat, and there are serious questions about whether the meat is fit for human consumption and if Canada is stepping into some pretty ethically dark corners.

Canada’s horse meat industry has been under scrutiny by groups fighting horse slaughter for some very good reasons. There are few purpose bred horse meat operations in Canada. (Although, it’s growing and I’ll deal with that a little further down the page.) Most of the horse meat produced in this country originates in the leisure, racing or show horse worlds.

Ever wonder what happens to that beautiful mare your daughter loved so much growing up? Eventually when these pleasure horses get past their best-before date, they are sold to suppliers who are more than happy to transport them to an abattoir to be bolted, bled and hung until they are packed for export, or crated and shipped on the hoof for slaughter in other countries.

And this isn’t for pet food. US and Canadian horse meat is a lucrative business. In some cases matching prices for veal. While many cultures see horse meat as a taboo, there is growing acceptance in “foodie” culture about the use of horse meat. 83% of respondents to a survey in the UK  were supportive of Gordon Ramsay serving horse meat in his restaurants.

In the USA however, there has been strong opposition to horse slaughter for a several years. That has meant many horses were shipped to slaughter facilities in Canada for disposition. Condition for shipment have been lax and the Canadian Food Inspection Agency has done a universally lousy job of ensuring conditions at slaughter facilities were humane or for that matter even clean. Here’s an interview I did with Vickery Eckhoff from Forbes magazine about this issue in January 2012 on Maritime Morning.

It’s easy to explain away the contempt for this practice as the protestation of horse anthropomorphism or Pollyanna-ish sentimentalism. It’s true not all horses are National Velvet, but when it comes to a matter of public food policy there is a need for the federal government and its agencies to be transparent about food production and clear about the policies it is promoting.

Last week Agriculture Minister Gerry Ritz announced today an investment of nearly half a million dollars in Equine Canada to help develop key export markets with what they referred to as the long-term potential for the sale of Canadian-bred horses and horse genetics. They referred to “Their use for sport and leisure, tourism, breeding, food production and related industries.” If Equine Canada is now subsidized by the feds to promote selling Canadian horse meat in the EU, the government has a responsibility to tell all those folks showing up for the Atlantic Winter Fair where that nice bay hunter-jumper stallion is going after his retirement.

Without getting into the arguments about selling phenylbutazone laced horse meat to unsuspecting clients overseas, Canada should also look at the practice of selling purpose bred food horses too. Because of the recent US decisions on restrictions on horse slaughter and its impact on exporting leisure, racing and other horses to Canada for slaughter, we can assume domestic purpose-bred operations will ramp up. Recently the Canadian Horse Defense Coalition has complained about the practice of selling purpose bred draft hoses to Japan to be sliced up for sakuraniku, a sashimi style dish of lean, raw horse meat. It’s not so much the slaughter question here, it’s the transport of these animals in far less than humane conditions.

I’m not particularly squeamish about eating meat. As an apex predator I realize that if I want to eat meat, some other creature has to die. What I do want to know is that as a country, we are doing everything in our power to make sure animals destined for our dinner table are handled humanely en route to their fate.

I won’t eat horse meat for the same reason I have no desire to eat dogs, cats or primates.

As Herman Melville said so eloquently, “There is a touch of divinity even in brutes, and a special halo about a horse, that should forever exempt him from indignities.” 

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