Rachel Mendleson

Generation Y And Home Ownership: A Generation Of Renters, But Not By Choice

2012-11-21T09:18:00-05:00

Sociologists couldn’t do better than Bram Warshafsky, 23, as a model for the attitude shift toward home ownership that they have long predicted for his generation.

Raised in a four-bedroom house in an upper-middle-class neighbourhood in midtown Toronto, Warshafsky, the second of four boys, appreciated having enough space in the backyard to play catch. But after he finished his commerce degree at Queen’s University in 2010, moved back in with his parents and landed a job with Johnson & Johnson’s marketing division, he couldn’t justify a jump into the real estate market. He has since become what he describes as a “passionate renter.”

Sitting at the dining room table in the two-bedroom condo that he and a friend have rented near the central Bloor-Yonge intersection since January, Warshafsky, a tall, lanky young man with an easy smile and a confident handshake, insists that this is not a temporary state of mind. With no student debt and a salary that puts him in the top-fifth of income earners, he could save for a down payment. But he has heard the predictions that house prices are headed for a correction, and quite frankly, he has better things to do than fret about the housing market.

“I work really hard Monday to Friday, so on Saturday and Sunday I’d rather spend my time being active, catching up with friends and family,” he said between sips of green tea on a wet evening in October. “In my downtime, I’d rather just watch reruns of Seinfeld than try to understand whether a deal is a good deal, and where the market’s going.”

It’s hard for him to imagine how he’ll feel when he settles down, but he doesn’t see a problem with raising kids in a rented condo, where won’t have to worry about fixing the oven or mowing the lawn. His parents’ friends probably would be impressed if he bought a condo or a house. But that will never be a strong enough incentive to give up living in a convenient location with a spacious balcony overlooking the city lights (“Great for parties,” he said) and the freedom to pick up and move if a better opportunity comes along.

Loosely defined as those aged 18 to 30, the millennial generation (or “Gen Y” as it is also called), is expected to embody a fundamental shift in consumer buying patterns and attitudes. The first cohort of digital natives, they are billed by some sociologists as the most financially savvy, highly educated generation in history, who prioritize connectivity over property; experiences over goods. Whereas their predecessors were buried under mountains of mortgage debt, this group supposedly has what it takes to withstand the allure of home ownership unless it is truly right for them.

But if Warshafsky seems emblematic of millennials, that is only partly true. While there are cultural reasons that this group postpones major life decisions, a growing body of evidence suggests that when it comes to home ownership, economic realities are more powerful determinants.

Although Canada fared better in the downturn than many other industrialized nations, young people were hardest hit. Youth employment remains 250,000 jobs below the prerecession high, and in 2012, summer jobs were at the lowest level since 1977, “making it almost impossible to save for tuition, pay down debt or afford housing,” the latest Vital Signs report observed.

Average house prices, meanwhile, have surged, more than doubling in a decade to nearly $363,000 in 2011, according to the Canadian Real Estate Association. The market is expected to cool in the coming months, but the recent decrease in the maximum amortization time on government-backed mortgages to 25 years will be most profoundly felt by first-time buyers.

Add that to record levels of student debt, and for many young people, affordability is the barrier to home ownership.

But the dream of owning a home is still very much alive, according to a poll done exclusively for HuffPost Canada.

Of respondents who were renting, or living with family or friends, 85 per cent said home ownership was “very” or “somewhat” important to them and 76 per cent said they wanted to own a house or condo before the age of 31.

Asked what stood in their way, respondents overwhelmingly cited high housing prices, with 76 per cent ranking it first or second among a list of possible barriers that included high down payments, personal debt, ability to get a mortgage and market instability.

The Abacus Data poll, conducted between Oct. 23 and 25, surveyed 1,004 Canadian millennials between the ages of 18 and 30. (READ a detailed breakdown of the real estate numbers.)

“What we’re seeing, it’s really pure economics,” said CIBC World Markets deputy chief economist Benjamin Tal, who predicts that more young people will be be forced to rent in the coming years.

“The change [in affordability] is so dramatic, you can’t really attribute it to a change in … the psyche,” he said. “Those changes are very slow. It’s not all of a sudden people wake up and say, ‘Oh, we want to be free.’ It doesn’t work that way.”

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If a generation of renters — or “Gen Rent” as they have recently been dubbed — has emerged, only a small minority are the unencumbered, enlightened young adults that academics envisioned. For many others, their attitudes toward home ownership are tinged with frustration and the realization that it will take them much longer to climb the rungs of adulthood that seemed so easy for their boomer parents. It’s part of the legacy of an uneven recovery that is poised to dramatically redefine traditional views of the middle class.

THE CANADIAN PICTURE

A lack of up-to-date, national statistics makes it difficult to gauge how the recession affected home ownership rates among young adults across Canada. But we do know that before the downturn, the dream of owning a home had reached a fever pitch.

Despite the fact that spending on shelter increased significantly more for owner households than it did for renters from 2001 to 2006, more than two-thirds of Canadians owned their home in 2006, according to census data. More than half of those aged 25 to 34 and 21 per cent of those under 25 owned their own homes, the highest rates in decades for these groups.

Meanwhile, more than three quarters of those aged 25 to 39 in 2006 ranked home ownership as “very important,” according to the related General Social Survey (GSS).

“Whether it is because buying a home is seen as a good investment, a form of forced savings or as a source of satisfaction in being truly ‘at home,’ becoming a homeowner is important for the vast majority of young adults,” said analyst Martin Turcotte, who described home ownership as “one of the main transitions to adult life.”

But while more young people jumped into the real estate market in 2006, others were shut out. Pinpointing household income as “the major determining factor” of home ownership, the GSS noted that increased income inequality between different sets of couples could be creating “growing inequality of their chances of owning their own home.” (Known as “educational homogamy,” the increasing tendency of both partners to have similar levels of education is one of the many factors contributing to Canada’s growing rich-poor divide.)

Having a temporary job, living in a city with particularly high house prices (such as Vancouver or Toronto) or being a recent immigrant were other factors that diminished the probability of home ownership.

The downturn has brought these divisions, simmering at the height of the boom, to a vigorous boil.

While several big mortgage lenders told The Huffington Post that they have seen an increase in first-time homebuyers in the past year, particularly in the condo market, Farhaneh Haque, director of mortgage advice for TD Bank, said “more and more” boomers are inquiring about how to help their children with down payments.

And despite the fact that bidding wars for single detached homes continue to light up the Toronto housing market, more than half of young adults lived with their parents in 2010, Statistics Canada data show, up from 31 per cent in 1998.

“A bigger minority than in the past are at the upper end, and they’re the ones that have the money to bid up prices,” said David Hulchanski, the Dr. Chow Yei Ching Chair in Housing at the University of Toronto.

“The vast majority today are at the bottom end, and they are not going to be able to buy a halfway decent house in big cities like Toronto, period.”

Although there are many Canadians who are perfectly content to rent, a lack of regulation protecting renters and a preponderance of poor quality, aging units means it can be difficult (and pricey) to secure a place that feels like home.

The result, Hulchanski said, is a significant gap between the expectations and capabilities of a generation of young adults.

“We have Canadians who view themselves as middle class. They are middle class in values, attitudes,” he said. “They want that lifestyle, but they’re not middle income.”

THE RITUAL

Every couple of months, when Courtney Lockhart’s husband goes out with his buddies on a Friday or Saturday night, she pours herself a glass of wine, settles into the couch and pulls up the Ottawa real estate listings on her laptop. The ritual begins with the practical. She goes in turn to the Royal LePage, Century 21 and MLS sites for Ottawa and fills out the necessary search fields. Two bedrooms. One bathroom. Maximum price: $250,000.

Lockhart, 27, used to tell everyone who would listen that they were going to stay in this apartment, a spacious place in an older high-rise in Ottawa’s west end, until they moved into their dream house.

But after getting her B.A. in 2008, she was stuck for three years at her “student job,” doing market research at a call centre. The pay was OK, but she rarely got full-time hours, and she and her husband, a grocery store receiver she married last year, began to rely on credit cards.

By the time she landed a “real” job as an administrator at an insurance company last August, their student loans and credit-card debt had reached $20,000.

Curled up next to her cat, a blond-haired Angora named Buster, Lockhart mentally crosses her fingers and waits for the search results to filter through. But they are always the same: run-down places, condos full of white particle board, properties that don’t even look like the sellers bothered to clean them before taking the pictures. Still, she takes notes, jotting down prices and locations, specifics that might better prepare her for what to expect.

After about half an hour, she clears the search fields. This time, she plugs in what she really wants. Three bedrooms. Two bathrooms. Good neighbourhood. Maximum price: $400,000. Immediately, she feels lighter, like she’s flipping through the pages of a fashion magazine.

She is drawn to “sitcom houses,” properties she thinks could have been used in the establishing shots for TV shows like “Full House” or “Family Matters.” She can’t get her head around how she and her husband will ever save up for a down payment on a place big enough to host family dinners and raise kids.

“I keep saying, ‘In five years we’ll buy a house.’ But the five years keeps moving,” she said. “It’s frustrating. I don’t like feeling like I’m not accomplishing anything.”

AMBITIONS ON HOLD

Nowhere is the goal of home ownership more thoroughly ingrained than in the United States, where, even in the aftermath of the housing crisis, young people remain focused on that traditional marker of adulthood. According to a report published this summer by the Joint Center for Housing Studies at Harvard University, even in areas hardest hit by the housing crash, 95 per cent of 20-somethings said they expect to own a home at some point in the future.

“The housing bust in the U.S. has not really diminished people’s desire to own a home,” researcher Christopher Herbert told HuffPost.

“We didn’t see any substantial difference between young folks and other generations. I think there’s a tendency to want to see a big turn, but a lot of these cultural norms are really powerful,” he said.

Yet as the recession puts those ambitions on hold, with the proportion of 29- to 34-year-olds who took out first-time mortgages between 2009 and 2011 down by almost half from a decade earlier, Herbert maintained that the development is positive.

“People in the U.S. during the boom were buying homes too quickly. People who were in their mid-20s were saying, ‘I’d better get in now because house prices are going up and my friends are making a mint,’” he said. “What we’re seeing now is more of a return to normalcy.”

The forces shaping housing decisions in Canada, where prices have climbed fairly steadily, are different, but experts on this side of the border agree that there is a silver lining to the evolution of “Gen Rent.”

INFOGRAPHIC: Expand

Moshe Milevsky, an associate professor of finance at York University’s Schulich School of Business, has made the case for years that young people in Canada are better off renting than buying — an argument he said is especially applicable to well-educated millennials.

As he explained, young people already have a risky, undiversified asset on their balance sheet for which they have borrowed heavily: their university and college degrees.

“I don’t think it makes sense to double up on that riskiness and go out and buy another concentrated, undiversified, highly leveraged asset called a house,” he said.

Just how soon attitudes and cultural values will catch up to financial realities remains to be seen. In the meantime, Warshafsky has some advice for those struggling to break into the housing market.

“I think in my parents’ generation, you couldn’t make a bad real estate investment. But a lot has changed. Now the market is just so uncertain,” he said. “Just wait. See what happens.”

— Abacus Data has focused research on the Canadian Millennial. Read more here.

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Youth Underemployment, Not Unemployment, Is The Bigger Problem In Canada: Report

2012-10-30T12:49:06-04:00

There’s plenty of hand-wringing over high youth unemployment in the wake of the recession, but according to a new study, the plight of the young and jobless is not as alarming as another, more pressing concern: underemployment.

Released on Tuesday by the Certified General Association of Canada (CGA), the paper drills into Statistics Canada data to challenge conventional thinking about youth unemployment and to draw attention to what the association sees as a larger issue of the underuse of skills by young and mature workers alike.

“Unemployment is important, but underemployment is where the opportunity is for the future,” Rock Lefebvre, vice-president of research and standards, told The Huffington Post. “We’ve got to find a way to put these highly skilled individuals in the optimal jobs, where they are the most satisfied and actualized while truly contributing to the productivity and competitiveness of Canada on a global stage.”

The youth unemployment rate — which at more than 14 per cent in 2011, was more than double the overall rate — remains a concern, Lefebvre said. But when considered in the context of previous recessions, joblessness among those aged 15 to 24 is “not as terrible as we might think,” he said.

Although youth unemployment peaked at 15.2 per cent during the recent recession, the study notes that it was “noticeably below” the highs experienced in the downturns of the early 1980s and early 1990s, when the jobless rate among youth climbed to 19.2 per cent and 17.2 per cent respectively. It also found that the quality of youth employment has improved during the recovery and that periods of joblessness are short-lived. The average duration of joblessness was 11 weeks for those aged 15 to 24 — half as long as for more mature workers, who were three times as likely to experience long-term unemployment (defined as lasting for one year or more) in 2011.

“The assumption that youth [are] disadvantaged in the labour market may not be always correct,” the study concludes.

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Some observers have expressed worry about the potential erosion of skills among highly educated youth who cannot find jobs upon graduation from post-secondary studies. The CGA study, however, interprets as a positive development the fact that “unemployment is a transitory state between school and the labour market” for more than two-thirds of jobless youth, rather than being the result of involuntary layoffs. By contrast, 30 years ago, only 55.5 per cent of jobless youth were between school and the labour force.

The more serious issue is defined as either the under-use of skills (when a job is below a worker’s skill level) or the under-use of labour (when a worker has a part-time job but wants full-time hours), according to the study.

As the level of educational achievement among youth has outpaced improvement in job quality, the gap between unemployment rates among those with different levels of schooling has narrowed, “significantly reducing the labour market premium on higher education,” the study notes. Meanwhile, the number of youth who can find only part-time work and the proportion of those who have stopped looking for a job because “they believed that suitable employment was not available” has increased substantially in recent years, the paper states.

While youth may experience some aspects of underemployment more acutely than more mature workers, those from across the age spectrum suffer the effects of the growing disconnect between educational achievement and job quality, which can have wide-reaching implications.

Workers who are underemployed may suffer “erosion or loss of skills, knowledge and abilities, diminished current and life-long income, job dissatisfaction and emotional distress which ... may lead to deteriorating health,” the study observes. There can also be consequences for the economy on the whole, as underemployment “diminishes the potential level of the nation’s well-being.”

To address these concerns, the CGA report recommends more research into the causes of underemployment, “improving the mix of jobs supported by the Canadian economy” and helping youth to make more informed choices.

“The real issue is in the matching of aspirations of our young people with the jobs that are actually available,” Lefebvre said.

Canada's Economic Diversity Takes A Hit: Oil, Gas And Mining Now Nearly As Big As All Of Manufacturing

2012-10-16T05:00:17-04:00

A new report from Bank of Montreal predicts that oil-rich Alberta will lead the country in economic growth this year, yet another confirmation of Canada’s growing dependence on natural resources to fuel its economy.

Most Canadians understand how the country’s industrial mix has shifted over the last decade to become increasingly weighted toward oil, gas and mining, for better or worse.

But data compiled by The Huffington Post reveal just how dramatic that economic pivot has been. With the help of a Statistics Canada analyst, HuffPost found that the dollar value of these three sectors has jumped an estimated 170 per cent in the last 10 years, to $163 billion from $60 billion in current dollar values — the steepest climb of any industry group.

(Calculations were based on Statistics Canada GDP data, which have been finalized through 2008. More recent figures are estimates, and are therefore subject to revision.)

The contribution of these industries to overall GDP in 2011 was less than finance, insurance and real estate at 19 per cent, and manufacturing at 11 per cent, but recent growth has been more impressive. As a share of GDP, finance, insurance and real estate held steady during the past decade, while manufacturing’s slice of the pie was eroded by almost half.

This chart shows the gradual decline of manufacturing and the ascent of mining, oil and gas extraction in the Canadian economy, to the point that, in 2011, the two were nearly level in the percentage of Canada's GDP.

The rate at which Canada’s economic reliance on primary industries such as agriculture, bitumen and valuable minerals dug out of the ground has grown in recent years is also remarkable when compared to other industrialized nations, said Peter Jarrett, senior economist for the OECD.

Using a slightly broader definition to allow for international comparison of specific industrial categories, OECD figures show that, in 2008, nearly 15 per cent of Canada’s GDP was derived from primary resource extraction — the second-highest share among 34 OECD countries. Norway was the clear leader, with almost 28 per cent of its GDP coming from these sources, while Turkey (13.7), Mexico (13.2 per cent) and Australia (12.7 per cent), followed closely behind.

In most of these other countries, however, the reliance on primary resource extraction has remained relatively flat or fallen from 1990 to 2008, while Canada’s dependency on it has risen “fairly continuously,” Jarrett said.

“There’s clearly been an up trend. That’s mainly because of [commodity] prices,” he said.

While this growth is often broadly attributed to a wide variety of natural resources, as Natural Resources Minister Joe Oliver emphasized in a speech last month, the StatsCan numbers show that it has been almost exclusively contained to oil, gas and mining. Forestry and logging, crop and animal production and fishing, hunting and trapping accounted for barely one per cent of GDP each in 2011. While the value of crop and animal production grew about 44 per cent from 2000 to 2011, the forestry and fishing categories posted declines.

HOW CANADA'S INDUSTRIES FARED, 2000-2011
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The boom in this specific resource category — and shift away from sectors such as manufacturing — reflects a combination of interconnected factors, such as growing demand for raw materials from developing countries, high commodity prices, the rising value of the Canadian dollar and a decline in the U.S. economy.

Some observers have argued that policy decisions at the federal government have amplified the shift. But Michael Burt, the director for industrial economic trends at the Conference Board of Canada said, “I’m not sure there [was] a master plan for that to happen.”

“Economic growth in the U.S. has been modest for five or six years now, and that’s not been the case with China and other developing countries. So it makes sense that our businesses are going where export opportunities are,” he said.

“Canada is one of the few countries with significant oil resources, no foreign controls. That’s a big part of it: We have the resources and we’re open to the development of them.”

Yet this shift has carried consequences.

While our recent exploitation of the commodities boom has made Canadians more affluent, Jarrett said it has the potential to be regionally divisive, concentrating wealth in resource-rich provinces, as evidenced by the BMO report.

“The nation clearly is better off, but it depends a lot on the details in the institutional framework whether or not any particular province is worse off or better off,” he said.

Another implication is increased economic volatility, which could be felt in the coming years as concerns mount over slowing growth in China, with some predicting a hard landing on the horizon for the developing Asian country.

Although only about four per cent of Canada’s exports are currently bound for China, BMO’s deputy chief economist Doug Porter said that “just looking at the pure trade numbers does not give the full sense of just how sensitive the Canadian economy has become to how the Chinese economy fares.”

“The real channel through which China affects Canada is the fate of commodity prices,” he told HuffPost after a speaking engagement in Toronto last month.

While there are still other countries that are more vulnerable than Canada to China’s economic trajectory, he said, “the Chinese economy has a much bigger say in how the Canadian economy fares than it would have five or 10 years ago, there’s no question about that.”

Despite this risk, Porter, who is not forecasting a hard landing in China, said there is no real alternative to staying the course.

“If anything, [Bank of Canada] Governor Mark Carney has urged Canadian business to reorient themselves away from the U.S. and actually go to where the growth is, and I think that’s appropriate advice,” he said.

Income Inequality In Canada: Ed Broadbent Wants To Give Tories 'A Good Shake'

2012-10-09T05:16:46-04:00

Ed Broadbent has a novel idea for convincing Prime Minister Stephen Harper and other Conservative politicians to care about income inequality.

“I would like to take them all and give them a good shake, and take them back to talk to their parents or grandparents,” he said.

As he envisions it, these heart-to-hearts would remind them of the fact that politicians of all stripes — including Conservatives — had a hand in helping to create Canada’s social welfare state.

“My lifetime was mostly spent with governments of all persuasions that at least claimed that they were trying to reduce inequality. Now we have governments that proudly are indifferent to it,” he said.

Raising the profile of Canada’s growing rich-poor divide is top of mind for the former NDP leader and founder of the left-leaning Broadbent Institute, which is dedicated in large part to tackling rising income inequality.

Speaking to The Huffington Post Canada in advance of the release of the think-tank’s latest report on the growing gap, Towards A More Equal Canada, Broadbent explained why income inequality “affects us all.”

The elder statesman also weighed in on the performance of new NDP leader Thomas Mulcair (a candidate he did not endorse in the recent leadership race), and what Trudeaumania 2.0 could mean for the NDP.

What do you hope to achieve with this report?

The major goal is to help stimulate debate right across the political spectrum in terms of [getting all of the] parties to pay attention to the problem, and across the communities, in towns and villages to get engagement in what is a very serious social issue for the country.

We’re getting worse more quickly than other rich countries when it comes to inequality. If you look at incomes, from 1982 to 2004, the bottom 60 per cent of Canadians working, when you allow for inflation, had no increase. And the precise middle, the median income, had [an increase of] $1,000, from $42,000 to $43,000. The rest [of the income gains] went to the top 20 per cent, and the top one per cent almost had their income doubled from $380,000 to $684,000.

GALLERY: FINDINGS OF THE BROADBENT INSTITUTE'S RESEARCH ON INCOME INEQUALITY

So there’s a growing change in what Canada is all about. It’s totally different from the Canada I grew up in. Sure, we had inequality, and no one ever expects perfect equality, but my lifetime was mostly spent with governments of all persuasions that at least claimed that they were trying to reduce inequality. Now we have governments that proudly are indifferent to it.

With that in mind, what are the major obstacles to raising the profile of income inequality issues?

One is that the average Canadian has to understand that inequality affects us all, and not just the poor. Most ordinary people are feeling the pinch because they’ve had no real income increase in 20 years, but they often think of inequality in terms of poverty. But the key thing, the major democratic significance of inequality, is that we’re all affected, even middle-income Canadians, even upper-income Canadians.

The data is overwhelmingly clear that the more equal the society, the lower the level of teenage pregnancy, the lower the level of crime overall. There’s more political participation and civil participation by citizens. Kids are more more likely to become what they want to be than they are in unequal societies.

Another, to put it candidly, is the ideology of politicians. We have had in the Western world a kind of market-driven ideology. If you let the markets go, [and that] was overwhelmingly reinforced by tax changes that benefit the rich, we [would] all benefit. Many of our politicians, particularly Mr. Harper and the Conservatives, remain locked in that mentality. It hasn’t worked. It brought on a global crisis. It’s led us to the worst inequality since the 1920s. So they have to be persuaded. We have to have a serious debate about re-balancing markets and governmental forces on the other side.

Persuading the Conservatives seems like it will be a pretty big challenge. How will you overcome it?

Well, I’d like to take them all and give them a good shake, and take them back to talk to their parents or grandparents. I’m half-serious about this. Because it was [during] my parents’ generation and that of the grandparents of Mr. Harper — he’s a little younger than I am — that we had the creation of our more socially balanced state. Mr. Diefenbaker brought in hospitalization [insurance] for example, he was a Conservative. Mr. Pearson brought in the broader foundation of the welfare state in the 1960s, with universal health care with the Canada pension.

Of course, my party, the CCF [Co-operative Commonwealth Federation] and the NDP played a leading role in all that, but previous politicians did see the need for this balance. They didn’t want the markets to totally dominate our lives.

I wish I had the answer to how I could persuade other politicians. The Occupy movement ... has called attention to the problem. A lot of it will come from activist organizations, trying to mobilize around the issue. I think more of that needs to be done.

What are the specific Tory policies working against what you’re trying to achieve?

The reductions of income tax. Not only reductions of income tax, but disproportionate benefits to upper-income [individuals] that take away the money that’s needed for post-secondary education, for health care, for Canada pensions. Two of the economists that we [include] in our report show that these kinds of programs that go to everyone that need more expansion right now are, from a cost-benefit analysis, the best thing that middle-class Canadians will ever get.

The other thing that’s happened here, and you see it almost every day from Mr. Harper and in Ontario now, is attacks on unions. Again, the data is very clear, the OECD reports the higher level of unions that you have in a society, the higher level of equality that you have overall. Companies that want to keep unionized employees out frequently raise the wages and salaries of their own employees.

Increasing government support for social programs means convincing Canadians that taxes isn’t a dirty word. How do you plan to accomplish that?

We did a poll a few months ago, and we found that Canadians are upset with the degree of inequality. They believe it should be dealt with. But we asked a hard question, not just “Are you in favour of increasing taxes on the rich.” [It] was “Would you be willing to pay somewhat more in taxes yourself if this led to the improvement of social programs and reducing the degree of inequality.” And the answer, overwhelmingly, is yes.

If we compare ourselves to the U.S., which is a very anti-tax country, the majority of Canadians still see [the benefits], because we have universal health care. We have Canada pension. We have an employment insurance program.

[But] I don’t underestimate it. It’s still a challenge for politicians to go out there and say, “We need to increase taxes.”

You didn’t endorse Thomas Mulcair as the new leader of the NDP. How do you think he’s doing so far?

I think he’s just doing splendidly. He’s been fighting on the very issue we’re talking about, particularly in the case of jobs. Our report [puts] a lot of emphasis on creating jobs that are higher paying paying jobs, not just minimum wage jobs. [Mulcair has] done that.

I strongly endorse Tom. Yes, I supported another candidate [NDP president Brian Topp], but that’s part of the democratic process, and once you have a leader in place, whether or not you supported a leader, we’re in the same party, we share the same broad values. There have been past cases going back many years when I haven’t always been on the side of the newly elected leader, but I have rapidly joined the rest of the team and supported him or her.

What’s your take on Justin Trudeau’s decision to run for the Liberal Party leadership? How concerned are you about him splitting the centrist left vote, and reducing some of the gains the NDP made in the last election?

I suspect [I’m] right there with the majority of Canadians. Mr. Trudeau seems like a personable young man, but he hasn’t demonstrated yet, in the number of years he’s been in politics, a degree of expertise in any particular field.

This is not to say he won’t do that, that he won’t have policies that will be attractive to the people of Canada. All I would say right now [is that] we have a young man with a famous name. [His father was] a man who did some exceptionally good things for Canada, but I would also say some exceptional things that weren’t so good for Canada. [Justin] has won a couple of elections like most MPs have in their own area. But he has not as yet established solid credentials for why he should be prime minister. It’s early yet, so we’ll just have to see.

FINDINGS OF THE BROADBENT INSTITUTE'S RESEARCH ON INCOME INEQUALITY

Affordable Housing Canada: Housing Boom, Government Cutbacks Create 'Rent Squeeze'

2012-10-04T08:49:31-04:00

Rosie Da Silva feels like she has been “living on quicksand” for the past year, her future in the hands of politicians and bureaucrats with the power to uproot her on a whim.

The instability set in last fall, when in the midst of an austerity push at Toronto City Hall, Toronto Community Housing Corp. (TCHC), Canada’s largest social housing provider, proposed selling 872 of the single-family homes it operates to help it address its daunting $751-million repair backlog. Endorsed by Mayor Rob Ford, the unprecedented idea has threatened to put on the chopping block 619 occupied houses scattered in neighbourhoods across Toronto, where prices have skyrocketed in recent years.

Among those houses is Da Silva’s three-bedroom semi-detached in a leafy, residential block in Toronto’s east end, where the 66-year-old receptionist has lived with her family since 1981.

After receiving word of the news, she said, “People were furious. They were really angry.”

Toronto resident Rosie Da Silva faces an uncertain future as the city's affordable housing stock heads for the auction block. (Rosie Da Silva photo)

Da Silva, who has developed strong relationships with her neighbours and has added handmade flower boxes to her front porch, is worried about losing everything she has built.

“We have been in a state of readiness, anticipating a possible move. So how does that feel?” she said.

Their anger did not go unnoticed.

In March, following a tenant-led campaign to prevent the mass sell-off, council voted to create a working group to find alternative solutions to TCHC’s funding problem. On Tuesday, the group’s recommendations, which include maintaining 564 of the occupied homes as affordable housing while supporting those who wish to transition to ownership, will be presented to the mayor’s executive committee. (The working group recommends that TCHC proceed with the sale of 55 stand-alone properties valued at more than $600,000.)

“It’s a far cry from where we were in October of last year,” Da Silva said. “I’m hoping that it gets through.”

The drama unfolding in Toronto is part of a larger trend playing out in many major Canadian cities, where a growing body of evidence suggests that it has become harder for low-income households to put a roof over their heads.

STORY CONTINUES BELOW SLIDESHOW

According to Michael Shapcott, Director, Affordable Housing and Social Innovation at the Wellesley Institute, the shift to building condo towers rather than apartments, limited government funding and a boom in house prices that has far outpaced average income growth has created a “severe shortage of affordable housing.”

Shapcott points to the waiting list for subsidized rental units in Toronto (the bulk of which are TCHC-operated) as proof of this rising demand: In August, the queue surpassed 86,000 households to set a new record.

Shapcott said there have been “steady federal cuts in affordable housing investments” following the federal Liberals’ dismantling of Canada’s social-housing strategy in the 1990s, and the termination of permanent federal funding for new affordable housing.

This state of austerity has been “business as usual” with the exception of the 2009 federal stimulus budget, which included $2 billion over two years for affordable housing, “the biggest chunk of new affordable housing money we’ve seen in two decades,” said Shapcott.

Based on the latest corporate plan by the Canadian Mortgage and Housing Corporation, a recent Wellesley Institute report noted that the number of households assisted under federal housing programs will drop to 525,000 by 2016, a decline of almost 100,000 since 2008, before the recession hit.

“What it means in practical terms is that very little new affordable housing is being built, and people in existing social housing and private housing are increasingly facing run-down, decrepit facilities that are bad for their health and bad for the community,” Shapcott said.

The shortage of affordable housing is particularly acute when it comes to family units, as developers favour one-bedroom condos over larger apartments, according to Dallas Alderson, director of policy and programs at the Canadian Housing and Renewal Association (CHRA).

Despite the fact that one-third of households in Toronto and Vancouver were renters in 2006, rentals accounted for less than seven per cent of all residential housing starts in Toronto in 2010, and just over five per cent in Vancouver, Alderson said. (Some condo units not counted as rental starts in these cities will be rented, however.)

On a national level, she said the vacancy rate was just 2.2 per cent In October 2011, down from 2.6 per cent the previous year.

“Developers are much more interested in developing ownership properties,” she said. “Rental stock has been not keeping up with demand.”

As availability has declined in Canada’s major urban centres, so has affordability. While the average rent for a two bedroom apartment in Calgary increased by five per cent from 2009 to 2010, the median income shrank by 3.7 per cent, she said. The CHRA observed similar patterns in Winnipeg, Regina and Vancouver. The “rent squeeze” is also on Halifax, where Open File reported earlier this year that rents are growing faster than wages and assistance.

Tsur Somerville, director of the Centre for Urban Economics and Real Estate at the University of British Columbia, said rising income inequality in Canada and zoning restrictions in urban areas have also increased the competition for housing as a wealthy minority is better equipped to snap up real estate.

(As The Huffington Post reported last year, several U.S. studies have shown that a growing gap between rich and poor can erode affordability, particularly in tight housing markets, because, as one Duke University economist put it, “When the rich get richer, they bid up the price of things that everybody else wants, too.”)

“For poor households, the way the last two decades have evolved in housing markets has created challenges for them, and strains on their budgets,” Somerville said.

But in the context of the TCHC, he said the proposal to sell single family houses to pay for capital repairs “is not necessarily a bad idea.”

While these dwellings may be preferable to tenants and foster more eclectic neighbourhoods, he said they are a “relatively inefficient way of providing single-family housing,” particularly at a time when the repairs are so badly needed.

“There is this worship at the altar of neighbourhood diversity that sometimes gets a little bit excessive,” he said.

“Throughout history, the rich have not lived with the poor.”

As cities across Canada pursue different strategies for addressing the affordable-housing dilemma, most observers agree that funding is the primary barrier to addressing the issue.

“Ontario needs a long-term funding commitment from the federal government that is fair to Ontarians and will help meet the needs of our communities that depend on sustainable funding,” said Kelly Baker, spokeswoman for Minister Kathleen Wynne, whose portfolio includes municipal affairs and housing.

To that end, some see Bill C-400, a private members bill introduced last winter by NDP MP Marie-Claude Morin, as a glimmer of hope on the horizon. Slated to be debated in the House of Commons this month, the bill aims to “ensure secure, adequate, accessible and affordable housing for Canadians.”

Whether the idea wins approval from the majority of MPs, which are now more heavily weighted toward the governing Conservatives, remains to be seen. As a general rule, private members’ bills only rarely pass. But Shapcott said “the attempt to bring some visibility to these issues at the national level” is a step forward for Canada, which is the only G8 country without a national housing strategy.

In Toronto, meanwhile, TCHC president and CEO Gene Jones said the working group report to be presented on Tuesday has “clearly framed” the challenges facing the organization.

“We need more money for repairs, we need new sustainable sources of money, and we need it soon,” he said in an email. “Doing nothing is not an option, and so we welcome these suggestions for new revenue and look forward to continuing to work with the city to address the capital repair backlog.”

He said the tenants who live in the 55 stand-alone properties recommended for sale by the working group have been notified. Affected tenants would be given at least five months notice if city council and the province approved this recommendation, he said.

“We will work closely with all affected households to accommodate them within an appropriate stand-alone unit in our portfolio or connect them with affordable homeownership opportunities,” he said.

As for Da Silva, whose home is not in that group, she has not seriously investigated other housing options. As one of the few TCHC tenants who pays market rent, she said she would be left to figure it out on her own if the mass sell-off proceeds. She assumes she would have to pay significantly more, for much less.

But she is optimistic about the report’s recommendations, which were drafted in consultation with tenants. In particular, she is excited about the proposals for new models of affordable housing in Toronto, such as non-profit management and community co-operative land trusts, which would take decisions about specific properties “away from the whims and fancies of people who have a different philosophy.”

“This is about more than me,” she said. “It’s about keeping these homes, in perpetuity, as affordable housing.”

Trade School Toronto Aims To Spur Barter Economy As Youth Seek Alternatives In Post-Recession World

2012-09-28T10:12:44-04:00

Toronto student Marina Wilson, 13, will trade the secret behind her business of making fashion accessories out of duct tape for craft supplies. In exchange for baked goods, a 29-year-old economist at Deloitte will teach a lesson on basic economic issues.

Those are just some of the barter-for-knowledge exchanges set to take place during the inaugural session of Trade School Toronto, which kicks off on Saturday.

The first of its kind in Canada, the five-day program is an indication of the growing popularity of a post-recession “alternative economy,” particularly among Millennials, according to organizer Michelle van Looy.

“In this generation, there’s that shift, where capitalism has to look different for us,” said van Looy, director of That’s Women’s Work Arts Network, a Toronto-based non-profit that aims to provide local artists with affordable exhibition opportunities.

Millennials or ‘Gen Y’ — the generation loosely defined as those aged 18 to 30 — are grappling with high student loan debt and the residual effects of an economic downturn that left them with poor job prospects.

“People are relying more and more on each other. It’s like, ‘OK, I can’t afford to go out and buy a brand new coat. But I can teach a class and the coat comes.’ So your capitalistic needs are being met by the community,” van Looy said.

Billed as a way to break down financial barriers and celebrate “the social nature of exchange,” Trade School Toronto was inspired by a barter-for-knowledge group in New York City. Similar organizations have since sprouted in 20 countries around the world.

About 160 people have registered for Trade School Toronto sessions, which range from self-hypnosis and bike maintenance to personal finance and beginner needle felting, where participants will create a brooch or ornament using a felting needle and unspun wool.

Scheduled to run through October 3, Trade School Toronto will be held in a variety of spaces around the city. Van Looy said that she and fellow organizers Judy Verseghy, Cassandra Witteman, Nico Koenig, Elizabeth Fraser and Eric Rosenberg, all of whom work in the non-profit sector, secured event space through a combination of “begging, borrowing and offering to barter.”

“It’s such an opportunity for people who can’t afford to go to classes,” said Marina’s mother Monica Kelly, who found out about the event through Facebook.

Kelly, 40, who homeschools her daughter, has signed up to teach lessons in vegan cooking and crocheting. (She has also asked to be compensated in craft supplies.)

Marina said she hopes the Trade School will allow her to grow the business she recently founded, Marina Rocks, where she has been selling wallets and other duct tape accessories in her spare time for the past six months.

“It will be fun and get my name out there. I like to be out with other people, teaching,” said Marina, whose class is dubbed “Make Something Cool out of Duct Tape.”

According to van Looy, Trade School Toronto students and teachers range in age from teenagers to seniors.

But the interest in knowledge-exchanges reflects a resurgence in bartering in recent years, particularly among young adults, who face a labour market that remains as grim as it did in the depths of the recession.

As Bloomberg News recently observed, clothing swap parties and online apparel swaps have become more common among younger U.S. consumers who prefer to trade clothes rather than buy them full-price. Meanwhile, in Halifax, Maclean’s reports that a growing number of out-of-work university grads make ends meet by monetizing their hobbies in an underground economy that includes basement speakeasies and neighbourhood farm stands.

As Shannon Simmons, 27, puts it: “Our baby boomer parents set us up for wanting things we can’t afford. We grew up in these lavish houses. We went to nice schools, and now we hit the real world and we’re like, ‘Crap.’”

Simmons became a minor media celebrity when she quit her job with a top wealth management firm in 2010 to launch The Barter Babes project. Over the course of a year, hundreds of women traded goods and services for financial advice from the Toronto resident, who has since incorporated bartering into her monthly budget — and includes it in the advice she gives to clients.

“Barter has grown in popularity by the demand of this demographic who wants to get what they want,” said Simmons, who is leading Toronto Trade School’s personal finance class in exchange for bike repair, knit hats and scarves and some outdoor patio furniture.

For a generation that thrives on validation and a sense of purposefulness, Trade School Toronto also holds another appeal, especially in the wake of the recession, when “work and money can be … really isolating,” said van Looy.

“You take whatever job you can get and you’re happy for it even if it’s not a good job. So this is the idea because you get to come teach what you know, teach what you love,” she said.

“It’s an opportunity for people to really use their skills in a way they wouldn’t be able to in the mainstream workforce.”

It’s an idea that also appears to be gaining traction elsewhere in Canada.

When this program of Trade School Toronto is over, van Looy said that she and her fellow organizers plan to lend their expertise to a group in Vancouver, who have expressed interest in starting a similar organization there.

As for Toronto, she said, “We hope to have regular classes in regular spaces. It would be awesome if it could be something that goes on for years.”

Margaret Wente Plagiarism Allegations: Globe And Mail Takes Unspecified 'Displinary Action' Against Columnist

2012-09-25T10:51:07-04:00

After days of mounting pressure from readers and industry experts, The Globe and Mail, one of Canada’s largest newspapers, has clarified its response to plagiarism allegations swirling around star columnist Margaret Wente.

The paper took unspecified “disciplinary action” against the veteran journalist for a 2009 column that did not properly attribute source quotes, according to a story published on The Globe’s website late Monday.

“The journalism in this instance did not meet the standards of The Globe and Mail,” editor-in-chief John Stackhouse is quoted as saying in the story, penned by Globe media reporter Steve Ladurantaye. (Stackhouse did not respond to an interview request.)

The plagiarism allegations surfaced last Tuesday on the blog Media Culpa, where University of Ottawa professor Carol Wainio highlighted the similarities between Wente’s 2009 column and the previously published work of Ottawa Citizen columnist Dan Gardner and U.S. academic Robert Paarlberg, among others.

The Globe’s initial reaction to the charges, written on Friday by public editor Sylvia Stead, set off a flurry of condemnation in blogs, comments and on social media.

Ladurantaye acknowledged that Stead’s response “didn’t answer many of the questions raised in the blog or address any disciplinary action taken by the paper.”

STORY CONTINUES BELOW GALLERY

“Even in the spirit of column writing, which allows for some latitude in attribution and expression, this work was not in accordance with our code of conduct, and is unacceptable,” Stackhouse said on Monday.

He reiterated these sentiments in a memo to staff, which was also published on The Globe’s website.

Ladurantaye reports that Stackhouse “would not provide any details about the disciplinary measures taken,” but that Wente will “continue to write for the paper.”

This much was clear on Monday night, when Wente defended herself online in a column intended for Tuesday’s paper.

Wente said some of the passages in her offending 2009 column came to closely resemble those that had appeared in other publications by other writers because of “extremely careless” note-taking and evolving standards around attribution.

“Journalistic practice around quotations and attribution has become far more cautious in the past few years, and mine has, too,” she said. “If I were writing that column again today, I would quote and attribute more carefully.”

But she disputed the charge that she is a “serial plagiarist,” and she took aim at the blogger who brought her transgressions to light.

Wente described Wainio’s website, Media Culpa, as an “an obsessive list of accusations involving alleged plagiarism, factual errors, attribution lapses and much else.”

“She has more than once accused me of stealing the work of other writers with whom I happen to share an opinion,” the columnist wrote.

Wente’s column — and The Globe’s latest response to the allegations she is facing — comes after a chorus of criticism within journalism circles over the paper’s handling of the controversy, and the role of public editor Sylvia Stead.

Stackhouse said on Monday that Stead will now report directly to the publisher to give her more “autonomy.”

She previously reported to the editor-in-chief, prompting some observers to accuse her of being too close to the newsroom to advocate effectively for the rights of readers.

“Reporting to the publisher is a better and more usual arrangement for most newspaper ombuds, so this is a positive step,” Jeffrey Dvorkin, director of the Organization of News Ombudsmen, told The Huffington Post. “Sounds like The Globe did the right thing.”

Wente did not respond to an interview request. Stead responded by email and directed HuffPost to The Globe's website.

The paper’s first response to the charges against Wente were published in Stead's “Inside The Globe” blog. The post appeared online but not in the paper version.

Stead explained that she had conducted an investigation that involved reading almost all of the alleged source material (she said was still in the process of obtaining a Food Chemical News Report from 2008), after which she concluded that “there appears to be some truth to the concerns but not on every count.”

Stead quoted an apology from Wente and indicated that The Globe had added an editor’s note to the offending column, indicating that it contained paraphrasing that had not always been clearly attributed.

But rather than quell concerns, Stead’s column — and her characterization of Wainio as “an anonymous blogger” — did precisely the opposite, triggering scathing rebukes from readers and high-placed columnists.

By Monday afternoon, Colby Cosh of Maclean’s, The National Post’s Chris Selley and John Miller, former Chair of the School of Journalism at Ryerson, had each lambasted Stead and The Globe for not taking the allegations more seriously.

Several observers accused the paper of badly misjudging the ability of social media and the blogosphere to raise the profile of plagiarism charges, particularly in the aftermath of the suspension of CNN’s Fareed Zakaria and firing of Wired’s Jonah Lehrer following plagiarism allegations.

In a blog post on Tuesday, Stead acknowledged that her initial response to the allegations against Wente was not adequate, and outlined "lessons learned and advice to staff."

"In my haste to respond, my earlier blog post was not well considered. I didn’t have all the information I required to make a proper assessment last week and should have taken more time and probed more," she said.

"I erred in not being more forthright in saying that the work in this complaint was unacceptable and failed to meet Globe and Mail standards. It was not acceptable."

In an interview with HuffPost on Monday, Gardner said he had been made aware of the similarities between his 2008 column and the one Wente penned in 2009 before last week’s Media Culpa blog was published.

Gardner declined to comment on the controversy, describing his role as an unwilling participant. He said he has no plans to take action against The Globe, preferring to allow the record in cases such as this to “speak for itself.”

“As we saw in the case of Jonah Lehrer and Fareed Zakaria, we’re living in a world in which bullshit will be exposed,” he said. “We have to adapt to that fact.”

Ontario Migrant Workers Face Systemic Exploitation, Metcalf Foundation Study Says

2012-09-17T08:01:00-04:00

They pick our fruit, care for our children and wash dishes in our restaurants.

But without an adequate legal framework in place to protect their rights, a new study warns, the growing number of lower-skilled migrant workers employed in Ontario face systemic exploitation and “permanent insecurity.”

Released Monday by the Toronto-based Metcalf Foundation, the report examines the laws surrounding the recruitment and employment of lower-skilled migrant workers in Canada’s most populous province to show how they are particularly vulnerable to abuse and confront “tremendous barriers” to claiming the rights they do have. It also outlines a series of concrete recommendations geared at enhancing the protections for the workers.

“This is a made-in-Canada problem,” study author Fay Faraday, a lawyer and adjunct professor at Osgoode Hall Law School in Toronto, told The Huffington Post.

“The risks that these workers face, the conditions that shape their work, need to be taken seriously, because we are creating real human suffering with this process,” she said.

Based in part on interviews with lower-skilled migrant workers and community groups that represent them, the study is another voice in a debate that has intensified since a deadly van crash near Stratford, Ont., in February that killed 10 migrant farm workers from Jamaica and Peru. Workers’ rights advocates have said exhaustion from working long shifts could have been a factor in the accident.

The report notes that the number of lower-skilled migrant workers employed in Canada — which includes live-in caregivers, seasonal agricultural workers and other low-wage employees — has more than tripled in the past decade, growing from fewer than 25,000 in 2000 to nearly 88,000 in 2010.

The numbers of more-skilled migrant workers have also increased significantly during this period, but they have more rights. Professional, managerial and skilled migrants may be eligible for permanent residence in Ontario and can bring their spouses and dependents with them, benefits that are not afforded to most classes of lower-skilled migrant workers.

The only exception to this rule in Ontario is live-in caregivers, who can apply for permanent residency upon completion of two full years of work within a four-year period. According to the report, more than half of all live-in caregivers admitted to Canada each year land in Ontario. From 2001 to 2008, the total number of live-in caregivers in the province ballooned from about 4,000 to 21,000, an increase of almost 400 per cent.

While these workers may have a path to residency, they are also vulnerable to abuses in a system in which enforcement “relies largely on migrant workers to come forward to make formal complaints,” the report contends.

When she arrived in Toronto from Uganda in 2008, Lilliane, one of several migrant workers profiled in the study, said her employer seized her work permit and passport. Made to share a bedroom with one of the children she was caring for, she said she had no private space or time off and was forced to work longer hours — for much less compensation — than she had been promised.

“When I went to the hairdresser my employer told me I was not allowed to be out of the house on
my own and that she would call Immigration and Immigration would give me two weeks’ notice to leave,” she said. “I was treated like rubbish but my employer knew I had nowhere else to go.”

By the time she quit after two years of work, she said she had been paid a total of only $2,100.

“These proﬁles are not selected to illustrate ‘worst case’ scenarios,” the report notes. “The exploitation is not isolated and anecdotal. It is endemic. It is systemic. And the depths of the violations are degrading.”

It makes more than 20 recommendations intended both to improve the system and to help migrant workers defend their rights. They include:

extending legislation to guard against the charging of recruitment fees;

making sure migrant workers are not paid less than the prevailing wage;

amending provincial rules to allow migrant workers in all sectors to unionize and bargain collectively;

establishing an independent Office of the Migrant Worker Advocate to provide information and advice to migrant workers free of charge.

The report also recommends that all migrant workers should be able to seek permanent residency.

“Migrant workers are not inherently vulnerable,” Faraday said. “We’ve created a system that leaves them open to exploitation, but we can fix that.”

Canadian Auto Workers Strike? CAW's Battle With Big 3 Marks Pivotal Moment For Unions In Canada

2012-09-14T05:32:32-04:00

One of the most intense rounds of auto-sector contracts talks in recent memory could become a defining moment in the struggle of Canada’s labour movement to regain its footing amid flagging membership, a decline in public support and a tougher corporate stance.

If the Canadian Auto Workers union (CAW) cannot reach an agreement with Ford, Chrysler and General Motors by 11:59 p.m. ET on Monday, more than 20,000 hourly auto workers could walk off the job in what would be the first CAW strike at an auto plant since 1996.

At stake are jobs, corporate earnings and the reputation of the CAW. After a recession that brought the industry to its knees and forced the CAW to adopt a more conciliatory approach, the union is reasserting itself and pushing back hard against demands it calls “unprecedented.”

But with Detroit automakers posting higher profits than ever before, and the potential merger of two of Canada’s biggest private-sector unions hanging in the balance, the outcome of these negotiations will be viewed by some as a larger statement on the post-recessionary relevance of Big Labour.

“If they [the CAW] make these concessions, it’s a real disaster,” said Sam Gindin, who has held high-ranking positions within both the Canadian arm of the United Auto Workers (UAW) and the CAW, and who now serves as the Packer Chair in Social Justice at York University.

“It would be significant because they’re a key union, and it sends a signal everywhere.”

PHOTOS: THE DEADLIEST COUNTRIES TO BE A UNION MEMBER

Yet in the current climate of economic uncertainty, where cheaper U.S. production costs threaten to make it more difficult to keep auto jobs in Canada, defiance could come at a price.

“There is a risk that as these [Canadian] plants get older, the Big Three won’t refurbish them, they’ll simply open up a new plant somewhere else,” said Mike Moffatt, a labour expert at Western University’s Ivey School of Business.

“The CAW could still lose here even if they win.”

Since its inception in the mid-1980s, when the CAW split from the U.S.-based UAW, the union’s tough approach to bargaining with the Detroit automakers has been a fundamental pillar of its DNA. While its American counterpart has tended to be more conciliatory, the CAW — bolstered by a weak Canadian dollar — has traditionally pushed back against significant concessions.

But this position has been compromised in recent years by cheaper foreign alternatives, the rising value of the loonie and a deep recession that crippled Detroit automakers. There have been tens of thousands of job losses and dozens of plant closings. In 1990, the CAW represented more than 65,000 Big Three workers (excluding auto parts); today the union represents about 25,000, a decline of more than half. (The CAW now represents a total of 195,000 workers across all industries.)

All these factors have chipped away at the willingness of the CAW’s top brass to make good on strike threats while bargaining with The Big Three, said Stephanie Ross, a labour expert at York University in Toronto.

Over the past decade, the CAW veered away from militancy toward more co-operation with management in the bargaining process and on the shop floor “to contain the damage that has been in some way accepted as inevitable,” she said.

“Turning away from militancy has created some really important internal tensions in the union — a sense that it’s not the union that it once was, and a sense of dismay or defeat amongst the membership,” Ross said.

According to Gindin, the union’s response to the recent lockout at Caterpillar’s Electro-Motive Diesel plant in London, Ont., is evidence of its diminished might.

“You saw a lot of trying to mobilize a community against a multinational that wants to cut your wages in half, but they didn’t take over the plant,” he said.

“In the past, the CAW would have taken over that plant. They would have said, ‘We don’t know if we’ll win if we take it over, but we know we will lose if we don’t, and it’s worth the risk’,” he said.

CAW national president Ken Lewenza disputes this assertion, insisting that there was nothing to be gained by occupying the locomotive assembly plant when workers were locked out in January. Some 481 CAW members had refused to accept a 50-per-cent pay cut while the company enjoyed record profits.

“We had the public attention anyway,” Lewenza said.

Although the CAW has occupied plants in recent years to win severance for its members, Lewenza said this wasn’t necessary in the case of Electro-Motive because the company proposal was in line with what the union had requested.

As he sees it, “the terminology of militancy is over-exaggerated” in relation to the CAW, which has avoided auto strikes throughout its history, with the exception of the 1996 walkout at General Motors.

“We’ll utilize militancy when it’s necessary, not just to say, ‘We’re militant.’ Common sense has got to prevail,” he said.

For most of the past decade, Lewenza said the CAW has tried to save jobs in companies that were losing significant dollars, particularly during the recession, when Chrysler and GM plunged into bankruptcy and government bailouts were required to keep the assembly lines moving.

“Each one of those negotiations was, ‘How do we reduce the employment levels of these corporations and minimize the pain on our members?’,” he said.

Yet there’s no question that the CAW top brass have taken their sparring gloves off the shelf for this round of negotiations, which occurs as The Big Three enjoy some of their most robust profits on record. (Story continues below)

In addition to what it calls “unprecedented” demands from the companies, the CAW must contend with a membership pushed to the brink by layoffs and plant closings. The union is also attempting to prove its worth to the Communications, Energy and Paperworkers Union of Canada (CEP), whose membership will vote in October on whether to join the CAW to create the largest private-sector union in the country. (The United Food and Commercial Workers Canada currently occupies that position with more than 250,000 members.)

According to former CAW national president Buzz Hargrove, the impending vote makes this a pivotal moment for his union, whose membership approved the merger in August.

“A lot of people in the CAW and the CEP outside of auto are watching this. This is some form of test of the ability of the union to fight when the companies are doing well,” Hargrove told The Huffington Post.

“It’s one thing to concede the arguments when the companies are in trouble, but it’s another thing when they’re making record profits.”

Ross concurs.

“They’re trying to project a particular kind of union — a union that can effectively fight for its members. It is an attempt to reinvigorate what we knew of the CAW from its first 10 to 15 years,” she said.

The battle has been fierce. Breaking from a decades-long tradition of identifying a “target” company and using that deal to broker agreements with the two remaining firms, the CAW continues to press all three companies at the same time, even with the deadline just days away.

According to the union, the concessions the companies want include the elimination of the “30-and-out pension”; the creation of a two-tier workforce mirroring the UAW agreement; the replacement of the defined-benefit pension plan with a defined-contribution plan, which ties retirement funds to stock market performance, and an end to the Cost of Living Adjustment (COLA).

“We have been far from overzealous, and yet the proposals on the table from all three companies are something I’ve never seen in the history of collective bargaining,” Lewenza told HuffPost. “They’re the worst during the very best times of the corporations.”

Armed with exceptionally strong strike mandates from its members, the CAW has promised to reject those demands, making clear it is prepared to strike at all three firms if an agreement is not reached by the Sept. 17 deadline.

“The threat of a strike has certainly captured the attention of the media and company executives alike. Over the last few days, meetings have picked up and are now taking place more frequently. Much to our disappointment though, these meetings have not yielded many results,” the union said in a leaflet distributed to its members in Canadian auto plants on Wednesday.

“We’re still hopeful that we can avoid a strike by reaching a new agreement with at least one of the companies. Collectively though, we must be ready for any outcome.”

Labour costs remain the primary sticking point for the companies.

In an email on Wednesday, GM Canada spokeswoman Faye Roberts told HuffPost that the company “continues to have open and constructive dialogue with our CAW partners.”

“We are optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our competitive position,” she said.

Ford Canada spokeswoman Lauren More said the firm is also working “collaboratively with the CAW to find solutions that meet our mutual interest,” and it remains “open to discussing any proposal that will improve labour cost competitiveness.”

“Right now, labour costs are higher in Canada than at any other Ford operation in the world,” she said.

Chrysler did not respond to questions from HuffPost. But reports indicate that while GM and Ford have adopted a more conciliatory tone, Chrysler — which has one-quarter of its North American production in Canada — isn’t budging.

Chrysler CEO Sergio Marchionne told The Globe and Mail last week that the hourly wage differential must be eliminated if the company is to keep on investing in its Canadian operations.

“Nobody in their right mind would continue to create an unlevel playing field in its own organization,” he said. “It’s impossible. We have other plants, other options.”

Several days remain until the strike deadline, and anything can happen. News reports suggest that the union has met a key demand of the auto makers by laying out a proposal to cut wages for new employees.

According to Tony Faria, an auto industry expert at the University of Windsor, a prolonged work stoppage, particularly if it hit Chrysler, whose U.S. and Canadian operations are deeply integrated, would result in the loss of jobs and production in Canada.

“If you get Sergio Marchionne mad enough, that’s the end of the casting plant in Toronto. Because it’s going to be one thing if the CAW closes Canadian plants, but having their actions affect [Chrysler’s] U.S. plants, he’s not going to put up with that,” he said.

As Moffatt sees it, however, the pressure on the CAW is such that “if the decision is between taking a terrible deal and going on strike, I think they will go on strike.”

“This union is just tired of getting its teeth kicked in. I think there is some willingness to stand up and fight,” he said.

Brian Childerhose, who expects to be laid off along with his wife later this year, when GM eliminates the third shift at its consolidated plant in Oshawa, Ont., before closing the facility in 2013, certainly feels this way.

The 34-year-old union representative said there is a “mixed bag of emotions” on the shop floor about the possibility of a strike but that even among those workers who will be bumped into positions at GM’s nearby flex plant, the consensus is that “enough is enough.”

“We need to take a stand at some point. We can’t just keep giving up concessions and everything our fathers and our grandfathers fought for in this union,” he said.

Canada Youth Unemployment Rate Continues To Rise To 'Unacceptable' Levels

2012-09-08T06:00:25-04:00

It has been yet another summer of discontent for Canada’s youth.

While the economy added 34,000 jobs in August, the latest data from Statistics Canada show that employment among Canada’s youth fell by 22,000 — a continuation of a trend that appears to be leaving young people on the sidelines of the recovery.

Compared to last year, employment among those aged 15 to 24 was down by 72,000, a 2.9 per cent drop.

The picture is no brighter for students, whose employment rates were “among the lowest on record,” Statscan said.

From May to August, the average employment rate for students aged 15 to 24 was 47.9 per cent. That’s less than last summer, when the employment rate was 49.1 per cent, as well as the summer of 2009, in the depths of the recession, when student employment stood at 48.6 per cent.

While some economists praised the overall rebound in employment last month, Ken Lewenza, national president of the Canadian Auto Workers union, said he is particularly concerned about rising youth unemployment, which increased to 14.8 per cent, up 0.5 percentage points over the previous month.

“Add in those underemployed and those who have given up looking, and the true youth unemployment rate sits closer to 20 per cent. That’s one in five. That’s unacceptable,” Lewenza said in a statement.

TD Bank economist Francis Fong also drew attention to the issue in a memo to investors on Friday, noting that “[Total] employment among younger workers reached its lowest point since 2002.”

Although part-time employment across all age groups increased by nearly 48,000 in August, reversing several months of decline, full-time employment fell by 12,000 — losses, which, as Fong observed, “were felt almost entirely by Canadian youth.”

As The Huffington Post reported earlier this year, youth participation in the labour force has declined significantly since September, 2008, an indication that many of those who can’t find jobs have either gone back to school, or stopped looking altogether.

U.S. 'Fiscal Cliff' Could Take Canada's Economy Down With It, Economist Warns

2012-09-06T06:08:28-04:00

Engaged in a game of chicken with a teenage rival, Buzz Gunderson drives full throttle toward a steep cliff, intending to stay in the car only long enough to outlast his challenger, played by James Dean. But when he tries to jump to safety, his jacket gets caught on the door; his horrified peers watch as car and driver careen over the edge.

That iconic scene from the 1955 film Rebel Without A Cause could serve as an apt analogy to the potential outcome on both sides of the border if U.S. legislators don’t get their act together soon to deal with their “fiscal cliff,” says TD Bank chief economist Craig Alexander.

“That’s what we’re worrying about — an accident,” said Alexander. “Because rationality says that Washington will find a way to ensure that we don’t drive over a cliff.”

He is not alone in voicing concerns about the ability of a deeply divided U.S. Congress to come together and steer clear of the “fiscal cliff” — a combination of tax hikes and spending cuts that is threatening to shave 3.5 percentage points off of U.S. growth, and send the economy tumbling back into recession.

With Washington buried in a presidential election campaign that will end less than two months before the new year, when these measures start to come into effect, the OECD has warned that the “fiscal cliff” represents one of the major risks to global recovery.

“It is urgent that the political parties agree on detailed medium-term consolidation plans that will avoid this outcome and reduce uncertainty regarding the fiscal outlook,” the OECD cautioned.

In an interview with The Huffington Post, Alexander explained how the U.S. got on such a dangerous course and why the outcome matters so much to Canada’s economy — which, as he puts it, is “sitting in the back seat of the car.”

What is the fiscal cliff?

The fiscal cliff really has two main components. The first component is a series of tax measures that were put in place in past years to help boost the economy in the U.S. that are going to expire. The big ones are the Bush-era tax cuts, the payroll tax cut, extended unemployment insurance benefits and a variety of other measures.

The second part is that there are some automatic spending cuts that are associated with the outcome of the “debt ceiling” problems of 2011. There was an awful lot of difficulty in negotiating the terms under which the U.S. government would agree to raising their debt ceiling. In the end, the debt ceiling was in fact lifted but a [bipartisan] committee was formed to find fiscal savings over the next 10 years to pay for the increase in the debt ceiling.

If the committee couldn’t jointly find the savings, it would trigger automatic spending cuts beginning in 2013 and then running each year for the next nine years. We’re talking about $100 billion a year. The hope was this committee would come to an agreement about where the savings would come from. The committee didn’t come to an agreement, so the automatic spending cuts were triggered.

The total impact in terms of the blow to the economy if all of this is allowed to happen is that it would shave 3.5 percentage points off of U.S. economic growth. This is an economy that’s struggling to grow at two per cent. In other words, the arithmetic tells you that if the fiscal cliff is hit, it could drive the economy back into a recession.

What would that mean for Canada’s economy?

The simple answer is that close to 40 per cent of Canada’s economy is trade and more than 70 per cent of that trade is with the U.S. So where the U.S. economy goes, so too does Canada.

There’s an old adage that every time the U.S. economy sneezes Canada catches pneumonia. Usually when the U.S. economy has a bad recession it’s worse in Canada. This time around [in the 2009 recession] it didn’t happen, but nevertheless the Canadian economy did have a recession partly because the U.S. went into one.

If the U.S. economy is badly impaired by fiscal austerity, the impact will be felt in Canada very quickly, pretty much within a quarter. That’s how interconnected we are.

So the fiscal cliff is a very big issue for the Canadian economy. If the U.S. goes off the cliff, unless there’s big second-round effects, odds are it will be a mild contraction, but it’ll be a big setback. For Canada, if the U.S. goes back into recession, it probably means the Canadian economy stalls.

If no resolution is achieved, how soon will the U.S. reach the cliff?

This is where it gets a little complicated. The cliff hits at the start of the new calendar year, although there’s already some of the measures in the fiscal cliff that take a bite this year because some of them are on a fiscal year basis. It’s too late to avoid some of those effects but the bulk of the fiscal cliff is really an issue that kicks in at the start of the new year.

But Congress doesn’t have to resolve the whole cliff issue immediately after the election. What they can do is simply pass legislation to extend these programs for four months. All they have to do is agree to kick the can down the road until after the new year when there will be time to deal with it. Because we’re dealing with legislation, they can pass legislation that supersedes the other legislation in order to give them breathing room.

So how likely is it that the U.S. will actually drive over the edge?

Since everyone in Washington knows what the fiscal cliff is, and everyone knows what the numbers are, it’s clear that it can’t be allowed to happen. There is going to be some action taken to ensure the fiscal cliff isn’t going to hit the economy. Rationality tells you that. Just as there was really no chance the U.S. government would default on their debt just because they couldn’t raise the debt ceiling. Congress will find some way of putting off the fiscal cliff.

The problem is, we don’t actually know how it’s going to play out. Odds are, we will get some degree of fiscal consolidation. The only question is, how much? What are the fiscal programs that will be extended and which are the fiscal programs that won’t be extended?

In my forecast, I’m assuming there’s a fiscal drag in the coming year of 1.5 percentage points. The private sector is going to pick up, but there’s going to be some fiscal drag and that fiscal drag will push the economy back to a rate of two per cent.

I think of a cliff as an unexpected and sudden drop-off. Considering the advance warning afforded to policymakers in Washington, a cliff seems like the wrong analogy here.

I don’t think that’s true. If you’re driving down the road and there’s a cliff, you can see the cliff coming a long way out. The assumption is you’re going to turn away.

Think of the old movie Rebel Without A Cause. At the end of the movie, you have two kids and they’re driving cars toward a cliff. It’s a game of chicken. The one thing you know they’re going to do is turn away, because you can see the cliff a long way out. Well, one kid turns away, the other one waits too long. He starts to turn, realizes he’s gotten too close, tries to jump out, gets caught, and he and the car go over the cliff.

That’s what we’re worrying about — an accident. Because rationality says that Washington will find a way to ensure that we don’t drive over a cliff.

The fiscal cliff and debt ceiling debates have been pretty dramatic.

It’s a sign of the times. Traditionally, when you have a recession, the economy contracts for about a year but then you have really strong economic growth once the recovery starts. Consumers start spending in a really strong way because there’s pent-up demand. Businesses invest heavily and when the private sector is booming it allows the government to then rebalance fiscal policy. Governments always have to go through a fiscal rebalancing, because governments provide stimulus to help get the economy back on its feet. Afterwards governments have to reverse course because you can’t run deficits indefinitely.

This time around, it’s been exceptional in that the economic contraction [in the U.S.] was more than two times worse than a normal recession and then the economic recovery has been half of normal.

That means the government has to rebalance fiscal policy, but it has to do it at a time when the economy is weak. The economy is so weak that if the government suddenly turns off the taps, the economy will go back into recession.

Assuming the U.S. avoids disaster, how could the fiscal cliff be avoided or pushed further ahead, and what effect would those outcomes have on the economy?

If [the U.S. ends up] kicking the can just far enough to give Congress time to deal with the issue, I don’t think that would be viewed as a big negative. That would be viewed as what had to be done given how soon after the election the fiscal cliff was going to hit.

But if we don’t actually see any progress made in terms of taking on the fiscal challenges, then it becomes a very big negative. The government finances are unsustainable. The deficit is too large. A portion of that deficit is not related to the business cycle, it’s actually related to structural issues that the U.S. economy is facing.

Fed chairman Ben Bernanke has given several speeches where he has emphasized that the ball is in the court of the politicians now. There’s an inherent limit to what the central bank can do, and that progress on the fiscal front is absolutely essential. The fiscal uncertainty is weighing heavily on the economy. It’s influencing the willingness of business to invest and hire.

But if you want the upside scenario, if Congress reached a strong bipartisan deal that would address the medium-to long-term fiscal challenges, it could actually have an enormously positive fiscal impact on both the U.S. and Canadian economies. If that plan was credible and financial markets believed that it could be achieved, then you could bolster business confidence. You could bolster business investment. You could create a lot of economic growth and jobs. It would be unambiguously positive for the economic outlook.

It doesn’t sound like you’re banking on the upside scenario.

Well, if history is a guide, it doesn’t look likely.

What the debt ceiling fiasco showed was the fact that the parties were not capable of coming up with a compromise. In the end, America chose not to default on its debt, which was the only rational outcome. Then they chose to set up a committee to come up with the compromise they couldn’t reach before the deadline. But then the committee couldn’t come up with an agreement.

So there’s a general sense that the political environment was too toxic, and we couldn’t get progress on this issue. The hope is that once the upcoming election is over, the political situation will be less intense, and as a consequence, compromise can then be made.

The Game Of Chicken

Quebec Election 2012: Economic Turmoil Around World Makes Sovereignty Threat A (Relatively) Minor Problem

2012-09-04T07:39:44-04:00

With the Parti Quebecois poised to regain power for the first time in almost a decade — be it with a minority or majority government — some members of Quebec’s business community are bracing for the worst.

Chief among their concerns is the political uncertainty that attends the renewed threat of separation and a social democratic platform that promises, among other changes, increased government involvement in the economy and tax hikes for the rich.

But other experts point to much stronger global economic headwinds and tepid sovereigntist sentiment as factors that would mitigate the turmoil wrought by past separatist governments.

Bruce Hicks, a political science professor at Concordia University, said the euro debt crisis and a still-shaky U.S. recovery have dried up investment and constrained economic growth in Quebec in recent years. A change in government would be just more “noise,” he said.

“Because there’s so many unknowns, the PQ victory just becomes more noise in a noisy field, and nobody will be able to discern what’s causing what, and that provides its own stability in a way,” he said.

“The PQ government victory in itself doesn’t really have a consequence just because it’s so noisy out there right now.”

Still, business leaders are skittish about the Parti Quebecois’ ascendency under Leader Pauline Marois and her promise to pursue more interventionist economic policies.

Among them is a plan to set aside $10 billion from the Caisse de dépôt et placement du Québec for a strategic fund aimed at preventing foreign takeovers of Quebec companies. Quebec’s largest pension fund manager, the Caisse operates at arm’s-length from the provincial government.

(The upstart Coalition Avenir Quebec, which is polling in second place, but only slightly ahead of incumbent Jean Charest’s Liberal Party, also wants to use the Caisse to generate more business investment.)

Marois’ pledge to hike taxes on high-income earners in order to pay for 15,000 additional seven-dollar-a-day daycare spaces has also been met with consternation.

University of Montreal economist Michel Poitevin said misgivings about the proposed tax hike are justified.

“When we hire a new professor, they are well aware of tax rates in Ontario, British Columbia, Massachusetts and Quebec,” he said. “If they have different offers, they’re certainly going to look at their after-tax income before deciding where to go.”

But according to Laval University economist Stephen Gordon, Quebec simply doesn’t have enough very high-income earners for this taxation change to make much of a difference to the province’s bottom line.

As he sees it, concerns about these proposals and others are somewhat overblown, particularly given Quebec’s debt problem, which could quickly suck the air out of any big spending promises.

“Looking at the platform, there might be things that aren’t particularly wise, but you’re not going to find things that are completely catastrophic,” he said. “A lot of it really is populist stuff to get elected.”

While Quebec sovereignty remains the PQ’s raison d'être, Marois has been vague throughout the campaign about her strategy, stating simply that a referendum would be held “at the moment deemed appropriate.”

A new CROP survey says support for Quebec independence has dropped eight percentage points during the campaign to 28 per cent. Support for Canadian federalism stands at 62 per cent, while the number of undecideds has increased to 10 per cent.

The survey places support for independence far lower than it was three decades ago, when 40 per cent of Quebecers voted Yes in a 1980 referendum. The decline is even more pronounced when compared to the peak of the early 1990s — when support for sovereignty was double the number in the CROP poll.

Yet the economic shockwaves that resulted from previous PQ government policies and referenda are still fresh in many people’s minds.

In the mid-1970s, the rise of the sovereigntist movement under René Lévesque and the fight over Quebec’s language laws triggered an exodus of head offices from Montreal — and the departure of some 100,000 Anglophones from the province.

And although the “Yes” side was narrowly defeated in the 1995 Quebec referendum, the debate prompted significant economic upheaval, recalls McGill University economist William Watson.

Quebec’s unemployment rate in 1995 was 11.5 per cent, two percentage points higher than in the rest of Canada, Watson told The Huffington Post. Meanwhile, the value of the house he’d just purchased with his wife in Montreal dropped by 35 per cent, despite the federalist victory.

“Over the last 15 years we’ve made substantial progress,” he said, pointing to an uptick in construction activity in Montreal and a decline in unemployment, which stood at 7.6 per cent in July, slightly higher than the national average.

(Despite these gains, Quebec has struggled in the wake of the recent recession: the province’s economy grew just 1.7 per cent in 2011, a full percentage point below the national average.)

“The message ... is that once you stop fixating on separation and the constitution, quite good economic results are possible,” he said.

“How much will a PQ victory put that in danger? If I’m thinking of investing somewhere in North America, or continuing investing in Quebec, it surely can’t help that the constitutional setup is going to be put under challenge.”

The precarious state of the world economy makes it a poor time to “volunteer for more uncertainty and risk,” he add.

Yves-Thomas Dorval, president of the Quebec Employers Council, told The Globe and Mail recently that “as CEOs see an increasingly uncertain business environment, they are putting off investments."

But the big difference, countered Laval’s Gordon, is that the likelihood of a referendum being called and won is negligible this time around.

“It’s very instructive to compare it to [the mid-’70s or the mid-’90s],” he said. “We’re nowhere in that kind of league as far as the sovereignty risk goes.”

With separation on the back-burner, the PQ is left to pursue less economically risky planks in its platform, he said.

“We have a vaguely leftist government promising the sort of things that vaguely leftist governments promise,” he said. “There’s nothing new there.”

With files from The Canadian Press

CORRECTION: This story originally stated that the PQ is "poised to regain power for the first time in more than a decade." The Liberals wrested power from the PQ in 2003, or nine years ago. The story has been edited to reflect this.

Excellon Mine Blockade Breached By Mexican Security Forces, Company Regains Access (UPDATED)

2012-08-29T14:41:32-04:00

Following a seven-week-standoff with landowners in Durango State, Mexico, security forces have moved to disperse a blockade at a mine owned by Toronto-based Excellon Resources, a local human rights group reports.

According to the group ProDESC, a caravan of buses carrying about 100 Mexican soldiers and both federal and state police officers breached the blockade outside the silver mine on Wednesday morning.

UPDATE: Canadian mining firm Excellon Resources confirmed on Thursday that it has regained access to its La Platosa silver mine in Mexico following a seven-week blockade by local landowners.

But Toronto-based Excellon indicated it would put plans to resume production on hold “for an indefinite period” if demonstrators interfere with efforts of a local women's group to assist the company in resuming the flow of transportation in and out of the mine.

In a press release on Thursday, the company said that a group of women from the nearby town of Bermejillo, whose livelihoods have been affected by the blockade, have been escorting buses carrying workers in and out of the mine during shift changes since the blockade was breached.

Using an alternative access, the company said "a combined group of state and federal authorities peacefully reopened access” to the mine site on Wednesday morning.

The company credited the Concerned Women of Bermejillo for assisting the company's workforce in re-entering the mine through the access, which at the time was blocked by five demonstrators. The company said the women disrupted a “new illegal blockade" of about 40 demonstrators gathered at the alternate entrance on Wednesday afternoon.

“In the event that the illegal blockaders interfere with the escort provided by the Concerned Women of Bermejillo, the Company will be forced to put the mine on full care and maintenance for an indefinite period,” the company said.

The blockade had been in place since July 8, when negotiations broke down with a group of local landowners known as Ejido Sierrita, who accused the company of repeated breaches of contract. The company is also at odds with some of its 250 workers over alleged labour rights violations.

These groups have filed multiple complaints with Canadian regulators about Excellon’s activities at the mine, as The Huffington Post reported earlier this week.

Excellon maintains that the demonstrators are being manipulated by third-party interests, including unions and ProDESC, a local human rights organization.

The company did not indicate when it intends to resume regular production at La Platosa, which is its only revenue-generating source.

A trade hold on the company's stock, imposed on Wednesday before trading opened, was lifted on Thursday morning. On the Toronto Stock Exchange, Excellon shares opened at 37 cents on Thursday, up from 34.5 cents at Tuesday’s close.

ProDESC, which has been advocating on behalf of the landowners and workers in the mine for several years, did not immediately respond to a request for comment.

Speaking to HuffPost on Wednesday, Valeria Scorza, deputy director of ProDESC, raised concerns about the ongoing safety of demonstrators, who had chosen to remain at their encampment despite the significant security force presence reportedly assembled at the entrance of the mine.

From earlier:

Excellon vice-president Brendan Cahill declined to comment on the situation and would not confirm whether the blockade had been breached. But on Wednesday afternoon, the company issued a lengthy backgrounder on what it described as “the illegal action” at La Platosa.

“The company has the full support of the state and federal governments and is working closely with them to end this action as soon as possible so that the workers can return to the mine and resume their livelihoods,” the release stated.

A trading halt was imposed on the TSX-listed company’s stock before trading opened on Wednesday morning. The regulatory body typically puts such halts in place in anticipation of material news.

Cahill confirmed that the halt was imposed “pending news.” It was still in place at the time of publication.

Valeria Scorza, deputy director of ProDESC, said the blockade — comprised of about 70 community members — was broken without violence.

But in an interview with The Huffington Post, she raised concerns about the ongoing safety of demonstrators, who have chosen to remain at their encampment despite the significant security force presence now reportedly assembled at the entrance of the mine.

“They are scared. They’re really scared about their security, and the possibility of the use of force,” she said of the community members and workers.

The blockade had been in place since July 8, when negotiations broke down with a group of local landowners known as Ejido Sierrita, who accused the company of repeated breaches of contract.

The encampment halted production at the company’s only revenue generating source. After exhausting its stockpile, Excellon declared “force majeure” at La Platosa on Aug. 8, a contract clause that absolves a company of shipment obligations in the event of circumstances beyond its control, and filed criminal trespassing charges with local authorities.

As HuffPost reported earlier this week, various disputes at La Platosa have persisted over several years despite multiple complaints to Canadian regulators filed by the landowners and workers about Excellon’s alleged activities at the mine.

While the publicly traded Excellon has had an agreement with the Ejido to operate on their property since the mid-2000s, the landowners claim the company has not fulfilled many of its promises to the community, such as building a water treatment plant and offering preferential hiring.

Excellon is also at odds with some of the 250 workers in the mine, who cite health and safety issues and allege that management violated labour rights with a campaign of intimidation to thwart a recent union organizing drive. Some of those workers have thrown their support behind the Ejido.

According to Excellon, however, the demonstrators were being manipulated by union groups and ProDESC, which has been advocating on behalf on the landowners for several years.

"I understand the concern of our shareholders regarding what is effectively a confrontation between competing unions for control over the workforce at La Platosa,” CEO Peter Crossgrove said in a recent press release.

In a backgrounder released on Wednesday, Excellon said it had paid the Ejido “well in excess of US$2 million” since 2008, when the latest agreement was signed. Certain elements of that deal have yet to be put into place because they “were designed to be implemented over time upon the fulfillment of certain conditions that the Ejido were unable to satisfy at the time of signing,” the company said.

Last year, Canada’s Corporate Social Responsibility (CSR) Counsellor spent six months trying to mediate between the company and its workers, who alleged various labour rights abuses. But CSR Counsellor Marketa Evans suspended her efforts when the company pulled out of the process, which is voluntary.

Cahill told HuffPost that the company withdrew because it believed that Evans’ “position was very much swayed and influenced by the other parties.”

The CSR Counsellor was created in 2009, under the umbrella of Foreign Affairs and International Trade (DFAIT) to mediate disputes involving Canadian mining companies on a voluntary basis.

In May, the workers and the Ejido took their concerns to Canada's National Contact Point for the OECD Guidelines for Multinational Enterprises, an interdepartmental committee chaired by DFAIT that has the authority to carry out investigations and determine whether laws were broken.

Then, in mid-July, another complaint was filed with the Ontario Securities Commission. Acting on behalf of ProDESC, a group of volunteer lawyers and students at Osgoode Hall Law School’s Justice and Corporate Accountability Project alleged that Excellon violated securities regulations for failing to adequately disclose to its shareholders the significance of the conflict at the mine, and the effect of the blockade on its bottom line.

Excellon dismissed the charges filed with the OSC as “baseless,” maintaining in a press release that it “has met and continues to meet all of its disclosure obligations.”

THE EXCELLON BLOCKADE IN LA PLATOSA, MEXICO

Canada Real Estate Affordability: First-Time Home Buyers Sidelined By Prices, Mortgage Rules

2012-08-28T07:50:12-04:00

In some respects, Katrina Armstrong has chosen to have a family over owning a family home.

She and her husband, who share a two-bedroom rented apartment in a leafy, west-end Toronto neighbourhood with their 18-month-old son, had envisioned buying a house that they could someday leave to their children.

But despite their “above average” household income — she works as an online projects manager; he juggles several serving jobs — the 33-year-old said they expect to rent for as long as they stay in Toronto.

“We want to expand our family, and that adds to it,” she said. “Unless we actually started playing the lottery and won it, I don’t foresee us ever buying a home.”

This is the bizarre irony facing many families in Canada’s major urban centres as new figures show that it’s gotten even harder for average Canadians to afford a family house, despite evidence of a downturn in the market.

PHOTOS: THE 10 LEAST AFFORDABLE CITIES FOR HOUSING

Amid talk of a buyer’s market and signs of cooling condo sales, a report from Royal Bank of Canada released Monday shows that affordability is eroding in the segments of the market most sought after by families — a trend that senior economist Robert Hogue said will force many young people to adjust their expectations.

“Especially for first-time buyers, many of them cannot afford a two-storey home or bungalow the way that previous generations have been able to,” he told The Huffington Post. “The market has shifted toward condominiums as the entry level for home ownership. Those trends are there to stay.”

As Hogue explains, while active cranes in many downtown areas signal a still-growing supply of condos, the opposite is true of single-detached family homes, as a lack of construction — and, in cities like Toronto and Vancouver, a finite amount of space on which to build — has pushed prices upward.

The RBC housing trends report found that detached bungalows became 0.2 percentage points less affordable in Canada over the past three months, pushing home ownership costs to 43.4 per cent of household income. For two-storey homes, affordability declined by 0.6 percentage points, increasing ownership costs to nearly half of household income.

The measure for condos remained flat at 28.8 per cent.

PHOTOS: WHICH PARTS OF CANADA HAVE THE HIGHEST HOUSEHOLD DEBT?

The RBC report marks the second straight quarterly decrease in affordability across all housing segments in Canada, following back-to-back quarterly increases in affordability during the last two quarters of 2011.

Although in Vancouver, home sales are dropping and price increases have tempered, the report still pegged the coastal city as “by far the least affordable market” as the bank’s affordability measures “deteriorated for all house types … to levels that stood very close to the worst on record.”

But while excluding the Vancouver market would bring the affordability of bungalows much closer in line with historical averages, RBC found that this would make “little difference” for two-storey homes, a further indication of just how out-of-reach the prototypical family house has become.

The decline in affordability of two-storey homes was observed throughout the country. In Saskatchewan, for instance, affordability in this category plummeted by 2.8 per cent, while in Manitoba, affordability fell by 1.6 per cent.

According to Vancouver-based real-estate agent Sarah Daniels, the recent tightening of mortgage restrictions, which reduced the maximum amortization period for government-insured mortgages to 25 from 30 years, has made it even more difficult for first-time buyers with smaller down-payments to break in.

“That does drastically change things for them,” she said.

But while market forces may be pushing potential homeowners to condos, some are more reluctant than others.

“Growing up in a house has really affected my expectations,” said Jean Farrugia, who has been house-hunting without success in Toronto for the past five months.

Although some of her friends, disenchanted by high prices and bidding wars, have settled for a condo, the 31-year-old said she holds out hope for a family home, where she feels she can best build a life with her partner — even it means moving out of the city.

“It’s hard for me to wrap my head around owning a box in another box,” she said. “I don’t feel like you own anything when you own a condo.”

WHICH PARTS OF CANADA HAVE THE HIGHEST HOUSEHOLD DEBT?

THE 10 LEAST AFFORDABLE CITIES FOR HOUSING

Excellon Blockade: Mexico Conflict Highlights Shortcomings Of Canadian Mining Oversight

2012-08-28T06:00:00-04:00

The blockade outside La Platosa — a high-grade, Canadian-owned silver mine in the northeastern Mexican state of Durango — is by all accounts a peaceful protest.

Since early July, about 70 community members have camped out on the remote, sunscorched patch of land to demonstrate against what they see as repeated breaches of contract by Excellon Resources, a small scale mining firm headquartered in Toronto.

Against the backdrop of a bloody labour standoff in South Africa, where 34 armed miners were recently shot dead by police, the Excellon blockade would seem a relatively auxiliary dispute.

Although the blockade has halted production at the company’s only revenue-generating asset, the demonstrators — a group of communal land owners known as Ejido La Sierrita — cite only minor disturbances. For the most part, they spend their days gathering wood, preparing meals and keeping the encampment clean. When time allows, the adults can be found playing bingo or reading newspapers, while the kids kick around a soccer ball.

But the appearance of calm belies a deep and ongoing conflict that strikes at the heart of many of the complex issues surrounding the growing presence of Canadian mining companies in developing countries.

It’s a glimpse at the shortcomings of a system that observers say still relies primarily on industry to self-police, and lacks the transparency, standards or mechanisms needed to prevent and resolve conflicts, even as Canadian mining firms expand their reach in this space.

PHOTOS: EXCELLON MINE BLOCKADE IN LA PLATOSA

While the publicly traded Excellon has had an agreement with the Ejido to operate on their property since the mid-2000s, the landowners claim the company has not fulfilled many of its promises to the community, such as building a water treatment plant and offering preferential hiring. They say they started the blockade as a last resort, after the company cancelled a meeting scheduled to discuss their concerns.

Excellon is also at odds with some of the 250 workers in the mine, who cite health and safety issues and allege that management violated labour rights with a campaign of intimidation to thwart a recent union organizing drive.

According to Excellon, however, the demonstrators are being manipulated by union interests in the mine.

"I understand the concern of our shareholders regarding what is effectively a confrontation between competing unions for control over the workforce at La Platosa,” said CEO Peter Crossgrove in a recent press release.

Calling the blockade illegal, the company has filed criminal trespassing charges with local authorities, and is refusing to negotiate until the blockade is lifted.

Despite complaints to Canadian authorities filed by the Ejido and the workers, negotiations have completely broken down, with both sides digging in for what could be a long — and costly — haul. With its stockpile of ore exhausted, Excellon declared “force majeure” at La Platosa on Aug. 8, a contract clause that absolves a company of shipment obligations in the event of circumstances beyond its control.

Meanwhile, the workers in the mine — many of whom have thrown their support behind the Ejido — aren’t being paid, and the landowners say they will not move until negotiations show signs of progress, creating an impasse that is jeopardizing a crucial source of local income.

Battles such as this one are not uncommon. In recent years, concerns among labour activists and human rights groups have been mounting over the activities of Canadian mining firms in developing countries, where they have been implicated in charges of abuse and environmental degradation. The allegations are serious: In Guatemala, security guards employed by HudBay Minerals have been accused of deadly shootings and rape; in Papua New Guinea, guards working for Barrick Gold have been implicated in alleged gang rapes.

But due to weak local regulations and an absence of Canadian rules governing the activities of mining firms abroad, local communities continue to have little recourse against alleged injustices even in the most serious cases, observers say.

“At the moment, [Canadian mining firms] don’t even have to answer to any of these allegations,” said Cory Wanless, a lawyer at Toronto-based Klippensteins, which is pursuing several lawsuits against HudBay Minerals.

“They’re not held to account anywhere.”

Yet despite these concerns — and the tremendous reach of Canadian mining firms — activists, politicians and legal experts characterize the federal government’s recent efforts to introduce more accountability as half-hearted and ineffective. According to these critics, the conflict in Durango shines a light on the utter inability of regulators to intervene in -- or even assess -- the operations of these companies in some of the most vulnerable places in the world.

All of which, they say, has put local communities, shareholders — and the global reputation of Canadian mining firms — at risk.

BAD EXAMPLE?

While the involvement of mining firms in developing countries (and allegations of abuse in these settings) is not a uniquely Canadian phenomenon, Canada is a global leader in this space. More than 80 per cent of global mining equity financings and one-third of the equity raised for mining globally happen on the Toronto Stock Exchange and the TSX Venture Exchange, which together list the most mining companies in the world. Seventy-five per cent of the world’s mining and exploration firms are headquartered in Canada.

But there have long been questions about the kind of example Canada is setting. According to a 2009 report by the Canadian Centre for the Study of Resource Conflict (CCSRC), in the previous decade Canadian mining firms were responsible for more than one-third of the 171 reported incidents of human rights abuses, community conflict, unlawful practices or environmental degradation in developing countries. That figure was triple the involvement of Australia, Canada’s closest peer. (Incidents included in the report were corroborated by two sources of information and assessed by researchers.)

The report, commissioned by the Toronto-based Prospectors and Developers Association of Canada (PDAC), was not made public until 2010, when it was obtained by media.

The findings also challenged the perception that Corporate Social Responsibility (CSR) policies are in themselves an effective safeguard against abuse: the authors observed that nearly eight in 10 of the Canadian mining firms involved in incidents in developing countries from 1999 to 2009 had CSR policies in place.

“There are still significant improvements that these companies must undertake if their efforts are to be seen as legitimate by local communities,” the report concluded.

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But despite numerous attempts by Ottawa to hold Canadian mining firms operating abroad accountable to more than their own voluntary standards, Liberal MP John McKay said the current regulatory framework resembles “a vacuum.”

In the fall of 2010, shortly after the CCSRC report surfaced, Bill C-300 -- McKay’s so-called Responsible Mining Bill -- was narrowly defeated in the House of Commons. The private member’s bill, which drew consternation from the Conservative government and industry groups, would have established a process for the federal government to investigate credible allegations of wrongdoing against Canadian mining firms. Potential consequences for firms found to be guilty of abuse included a withdrawal of financial support from Export Development Canada, and a removal of political support from local embassies.

While PDAC and other industry groups praised the death of the bill, which they argued “would have jeopardized jobs here in Canada and local jobs in the communities in which we work,” Amnesty International called the defeat “another blow to Canada’s international reputation as a leader in the protection of human rights.”

Foreign Affairs and International Trade Canada (DFAIT) declined an interview request for this story. But in an email to The Huffington Post, spokeswoman Caitlin Workman said, “Canadian mining companies lead the world in responsible mining practices.”

In voting down Bill C-300, the Conservative government appeared to put its faith in the Corporate Social Responsibility Counsellor, a position it created in 2009 to mediate disputes involving Canadian mining companies on a voluntary basis. Under the umbrella of DFAIT, the counsellor is intended to be “an honest broker that brings parties together to help address problems and disputes” and “create space for constructive dialogue and problem solving,” according to a government website.

But that goal was not achieved in the conflict involving Excellon — one of only two complaints the office has probed to date.

INEFFECTIVE INTERVENTION

Excellon’s experience in Durango — where it has rented the surface rights to land from the Ejido since 2004 — has not been without its bumps. Before signing a new deal in 2008 with Excellon to expand its surface holdings to 1,100 from 27 hectares, the landowners staged a three-month-long blockade after the company refused to include provisions for social programs and the construction of a water treatment plant. In the end, the Ejido were successful. According to Excellon, the company has paid a total of $2 million to the Ejido since 2008 for rent and a community fund.

Canadian authorities did not get involved in the company’s dealings at La Platosa until April 2011, at the behest of workers in the mine. In their request to CSR counsellor Marketa Evans, the workers maintained that the company had violated a number of voluntary policies governing the behaviour of mining companies in developing countries. The alleged infractions included condoning the beating of two workers by police following a reported copper theft, and threatening workers involved in a union organizing drive — a bid to join the National Mining Union (NMU) to address health and safety concerns.

The company disputed these allegations, blaming the dispute on the meddling of ProDESC, a local NGO that filed the claim on behalf of the workers, and which Excellon said was acting on its own accord, according to a CSR report published in October, 2011.

Excellon told the CSR counsellor it would support any successful unionization bid, but that the workers were already represented by another union — a position this group had held since 2005. The company characterized the National Mining Union, a Mexican labour group affiliated with the United Steelworkers (USW), as illegal.

Workers claimed to have had no prior knowledge of this other union, however. Dubbed the “Adolfo Lopez Mateos” union, the USW and ProDESC representatives have derided this group as a “protectionist union” established to protect the rights of management.

But the process never made it to the dialogue stage. Following a six-month investigation, Excellon withdrew its participation from the CSR process and Evans suspended her efforts, which depended on the willingness of both parties to negotiate.

In the October report, the CSR counsellor said she had conducted dozens of interviews with Excellon’s “direct stakeholders,” and confirmed that “bona fide project-affected people underpinned the request.”

“This request for review had every reason to move fruitfully to the structured dialogue,” the report concluded. “Excellon’s withdrawal represents a significant missed opportunity for the company to meet its stated interests of building relationships and reputation with Mexican stakeholders.”

The office said it found “no indication that the NMU had been declared illegal.”

According to Excellon executive vice-president Brendan Cahill, the company withdrew from the process because it believed the CSR counsellor was biased.

“Her position was very much swayed and influenced by the other parties. She didn’t really take a very balanced view of the facts or have very much concern for the facts at all,” he said.

Cahill said the company has instead opted to seek assistance from “every single level” of government in Mexico, where officials are Spanish speakers familiar with local labour law.

“I’m not sure why we’d bring in a Canadian CSR counsellor to deal with Mexican issues,” he said. “I don’t think there’s any value in it whatsoever.”

Evans’s office declined a request for an an interview for this story, and DFAIT did not respond to questions about the Excellon conflict or the CSR counsellor.

But in her email, Foreign Affairs’ Workman pointed to the recently announced Canadian International Institute for Extractive Industries and Development as the way “our government is helping developing countries better manage their natural resources.”

“Specific incidents are investigated by local authorities,” she said.

'THIS VOLUNTARY STUFF AIN'T WORKING'

Since the CSR counsellor closed her case, the advocacy groups representing the Ejido and the La Platosa workers have been attempting to appeal to Canadian authorities through other means.

In May, these groups took their concerns over to Canada's National Contact Point for the OECD Guidelines for Multinational Enterprises, an interdepartmental committee chaired by DFAIT that has the authority to carry out investigations and determine whether laws were broken. Co-signed by ProDESC, MiningWatch Canada, and several labour groups, the complaint maintains that Excellon has not upheld its social obligations to the Ejido, such as building a water treatment plant and providing preferential hiring and other concessions. It also alleges that the company conducted exploration activities outside of its territory, causing significant environmental damage, and reiterates the workers’ concerns about the company’s alleged interference in their attempt to unionize.

Then, in mid-July, about a week after the blockade started, another complaint was filed with the Ontario Securities Commission — a regulatory body with much more significant investigative and punitive powers.

Acting on behalf of ProDESC, a group of volunteer lawyers and students at Osgoode Hall Law School’s Justice and Corporate Accountability Project alleged that Excellon violated securities regulations for failing to adequately disclose to its shareholders the significance of the conflict at the mine, and the effect of the blockade on its bottom line.

According to Shin Imai, an Osgoode Hall law professor who helps run the accountability project, the company downplayed the severity of the conflict. A few days after the blockade started, Excellon issued a press release saying it would be meeting with the Ejido and other parties involved. The company said it expected the blockade to end “within the next 24 to 48 hours.”

Excellon dismissed the charges filed with the OSC as “baseless,” maintaining in a press release that it “has met and continues to meet all of its disclosure obligations.”

The OSC would not discuss the case, or even confirm that it had received correspondence from the accountability project. But individuals or companies that violate securities regulations can be subject to fines and restrictions on their ability to conduct business transactions.

Imai said the complaint is an attempt to “go beyond the traditional human resources instruments.”

“If something terrible is happening on the ground, you have to tell shareholders because people who might be investing in companies should know and people who are already investing in a company might want to sell,” he said. “This is just straight corporate law.”

And as the recent violence in South Africa shows, mining disputes can spiral and send commodity prices soaring.

Other efforts are also underway to build more accountability into the system.

Law firm Klippensteins is fighting to have the allegations against HudBay heard in a Canadian court of law, which would set a precedent for such cases. And McKay has begun work on a draft bill that would echo 2010 legislation in the U.S. requiring mining companies to disclose the details of their financial transactions for each project to securities regulators.

The draft bill, which McKay expects to table this fall, would require mining companies to disclose the details of their financial transactions for each project around the world to securities regulators -- an idea he said is winning support from the mining industry.

“The progressive mining companies are saying, ‘We’ve got to have something.’ Because the progressive mining companies actually get tarred with the same brush [as companies that are behaving irresponsibly], and that weighs on their shareholder value as much as anything,” he said.

“This voluntary stuff ain’t working no more.”

DAMAGE TO THE BOTTOM LINE

In the meantime, however, the blockade in Durango shows no sign of dispersing, even as Excellon’s shares drop, and workers in the mine -- whose salaries help to support the Ejido -- struggle to make ends meet without getting paid.

Earlier this month, Excellon, which has a market cap of about $100 million, reported a big dip in second-quarter profits, as earnings fell to $478,000 from $8.1 million in the same period (ending June 30) the previous year. The next day, the company announced the resignation of Chief Financial Officer Steve Poad, a change Cahill said was motivated by a personal decision, and had nothing to do with the events at La Platosa.

According to Cahill, interference from unions and ProDESC is also at the heart of the allegations surrounding the company’s obligations to the Ejido, and does not reflect the position of the community at large.

“We fully believe there’s going to be resolution here,” he said.

In the worst case, the company, which is in the midst of exploring other mining opportunities, has sufficient cash reserves to wait out the demonstrators for up to two years, he said.

As for the Ejido, past president Daniel Pacheco told HuffPost that some demonstrators have left their jobs to maintain the blockade, where they have been joined by some of the workers in the mine.

“We’re not just going to sit down on our knees and accept what they are not complying with,” Pacheco said in a phone interview facilitated by ProDESC.

“It affects us economically, but we didn’t want this company to be able to continue to deny its obligation to this community.”

EXCELLON MINE BLOCKADE IN LA PLATOSA

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