Videos of working Canadians crying because they cannot make the two ends meet are heartbreaking. They also tell us that we are just a few steps away from social unrest.
PORTRAITS OF AGONY
Over the last few days, several videos have gone viral where Canadians facing extreme financial difficulties have narrated their circumstances, often while in tears. The Twitter / X account ‘Wall Street Silver’ (@WallStreetSilv) has posted a few of these videos, including this one. Naturally, CPC leader Pierre Poilievre had to pick up on this (and I don’t mean this in a negative sense; the possibility of financial ruin / dire economic prospects is now the topmost concern of millions of Canadians, and he is right to highlight that), so he posted a compilation of some of these videos on his Twitter / X account. The compiled video (naturally) puts all the blame on Prime Minister Trudeau, but in fairness, all 3 levels of government have played a role in birthing the crisis for so many Canadians.
The critical part of these videos is that in all the cases (that I saw, anyway), these are working Canadians. One lady had just got a job at $20 per hour, while another said that she was making $34 per hour. Although the latter said that she drives to work 3 days a week, meaning she could be working part-time, let us pause here and consider what this means for full-time work around the year (for clarity – she didn’t say if she partly works from home). At 1,950 hours for the year, she is in the range of over $66,000 a year in income. That is slightly above the median wage in Canada. Individual circumstances differ, but it would be fair to say that a person earning a median income shouldn’t be worried about having enough food to eat, or having enough money to be able to put petrol in their car so they can drive to work. The former individual, a young lady, would be making $39,000 a year and therefore ineligible for the ‘grocery rebate’ – but after payroll deductions and paying rent, a person in her position would be left with hardly any money on which to live.
As Kirk Lubimov pointed out on Twitter / X (which is where most meaningful commentary seems to be happening nowadays), Canada is blessed with multiple boons such as an abundance of natural resources (including water) and a location right next door to the world’s largest economy, therefore there is no reason for such economic doldrums to exist in Canada.
This reminded me of a joke that the great 20th century intellectual of India, Nani Palkhiwala, used to say during the period when India was known for its moribund economy and poor people: A delegation of all countries went to God with the complaint that while He had given several good things to each country, He had been partial to India by giving her every good thing in Creation: glaciers, deserts, jungles, wildlife, natural resources, a long coastline and talented people. After hearing out their complaint, God smiled and said, “You are forgetting one thing – I have given them Indian government also”. I think the same joke can be said about Canada now.
PORTRAITS OF INDIFFERENCE
It is a rule-of-thumb principle that in times of economic stress, it is generally a bad idea to increase taxes. But ideological zeal has little time – if any – for principles other than its own, so the federal government has gone ahead with an increase in the carbon tax (and imposition of another carbon tax under the euphemistic title of ‘Clean Fuel Standard’). Not to be left behind, the mavens at Toronto City Council recently mulled the idea of levying a municipal sales tax within the city’s boundaries. As bad as this idea is, it doesn’t even have the distinction of being a novel one; many years ago, the then-Mayor of Toronto, David Miller, also floated a similar idea of giving cities 1 percent of the GST proceeds. Dubbed ‘One Cent Now’, the only revenue it accrued was to the people who made the website and ran the publicity campaign. This happened in 2007, when I was new in Canada and therefore unable to pay much attention to politics, so it is unclear to me if he was aware that federal funding is an integral part of the cities’ budgets. But coming back to the present, the very fact that the current City Council of Toronto thinks that this additional tax on an already suffering public is worth exploring shows how indifferent they are to that suffering. The sadder part is that this atrocious proposal is entirely likely to be taken up by some other city councils / mayors, especially Mayor Jyoti Gondek in Calgary and Mayor Amarjeet Sohi in Edmonton.
Unfortunately, this indifference is not restricted to the political class. When I tweeted (X’ed?) my comment on this, a significantly large percentage of the responses (perhaps an overwhelming majority) were to the effect that Torontonians voted for this, so they (paraphrasing) ‘had it coming’.
Of course, not every resident of the city is eligible to vote: immigrants who have yet to attain citizenship, work-permit holders, international students, refugees and (crucially) children. Moreover, many of the voters would have voted against the incumbents. It behooves us as Canadians to be sympathetic to these residents. Of course, even the people who voted for the incumbents deserve our sympathy; people’s vote is based on a myriad of factors. The outcome of the election is not in their control – especially when the votes for the opposing camp are split among several candidates. Nobody deserves punishment for the fact that the candidates on one side of the political divide could not unite behind one of these candidates.
CAUSE AND EFFECT
The plain reality is that the cost of living is out of control and rising further, and the forces that caused the crisis to develop are largely unattended to. What is worse, the only policy measure deployed so far (raising interest rates) has only served to exacerbate the crisis. If we had been at a good point at the start, things could have been (marginally) better. However, as I calculated in my earlier article ‘Immigration Does NOT Increase Prosperity’, the inflation-adjusted compounded annual growth rate (CAGR) in per capita GDP during the 10 years from 2012 to 2021 was a measly 0.67%. This means that a lot of Canadians did not have much of a financial buffer to tide them through lean times. If or when the much-feared and long-predicted recession arrives, entailing wide ranging job losses, things are likely to spiral out of control.
I have seen this movie before – more than once. I can’t decide whether this makes me lucky or unlucky. My earliest memory of this nature is from the mid-1970’s. A decade of moribund economic growth in India had caused dwindling job opportunities even for educated people. At the same time, severe draughts for 3 years in succession (1965-1967) and two wars (1965 & 1971) had caused inflation to spike up sharply. In 1974, the famous actor & producer of Bollywood, Manoj Kumar, made a movie titled ‘Roti, Kapda aur Makaan” (‘Food, Clothing and Shelter’), focusing on the issues of common people. In the same year, another very successful movie, ‘Chor Machaaye Shor’ (‘Thief Causes a Hubbub’), showed the leading male character as an unemployed engineer. ‘Educated unemployed’ became a commonly used term and a standard ingredient in many movies.
A point was reached when the unemployed youth in Gujarat had had enough. Demonstrations erupted in the streets of Gujarat that often turned into riots. I still remember vividly the morning when I reached my school and saw that some time between the close of school on the previous day and the morning, the school has been broken into; many windows were smashed, and smouldering chairs and desks were strewn in the compound and in the hallways. The protests soon drew in people from demographics other than the ‘educated unemployed’, including – inevitably – some hooligans who were in it just to indulge in the destruction. The police personnel who were sent to quell the protests and riots soon began to be seen as ‘the enemy’, and many of their vehicles were burned.
Ultimately, the government of Gujarat was forced to resign, and the legislature was dissolved. After a period of ‘governor’s rule’ (an arrangement where the federal government oversees the administration for a while until elections can be held), the party that had been in government lost the election. This proved as a national inspiration, and in 1977, the government of Prime Minister Indira Gandhi lost the federal election as well. The protests and the violence (from both sides, viz., the protesters and the government / police) had remained limited to Gujarat, and a monument commemorating the martyrdom of a local protester (usually a young man) was a common sight in many cities in the state.
Nothing enrages starving people more than the sight of the privileged class feasting. More generally, nothing infuriates people under severe financial stress en masse than the sight of politicians – who are supposed to come up with solutions for them – waltzing as if nothing is remiss. This is so basic to the understanding of human nature that it shouldn’t even have to be said. Unfortunately, our political class apparently didn’t get this memo. To be clear, this applies equally to all the 3 levels of government, but whether rightly or wrongly, all eyes are on the federal government, and therefore it is incumbent on them to exercise utmost discretion – indeed, restraint – in the optics of their movements and actions.
It was therefore simultaneously disappointing and unsurprising to see the cringeworthy tweet of Liberal MP (and former cabinet minister) Carolyn Bennett having a great time with her caucus colleagues on the shores of Georgian Bay. But we have to remember that in the overall scheme of things, Ms. Bennet is a two-bit player. Just as in corporate culture, ‘cabinet culture’ and ‘caucus culture’ also start at the top. This is why Prime Minister Trudeau decided to have the annual retreat for his cabinet in Charlottetown, PEI. I am seeing a lot of people opining that they could have had a virtual meeting, and there is some validity to the argument – but I am also open to the possibility that the scattered locations of the participants could have compromised confidentiality of the discussions. My view is that they should have met in Ottawa (note that I am not using the word ‘retreat’ here; I envisage this as just a meeting of the cabinet). I am pretty sure that PM Trudeau does not realize that the media reports quoting him as saying that “affordability will be the main agenda item” at this retreat only serve to rub salt in a lot of people’s wounds. Seeing this report reminded me of the clip from the classic BBC TV series ‘Yes, Minister’ where Sir Humphrey’s companion, a top-level bureaucrat, makes a disapproving remark about ‘subsidizing self-indulgence’ of ordinary people while stuffing his mouth with expensive food (at the 2:54 mark here).
The protests in Gujarat came to be known as ‘Nav Nirman’ (‘Reconstruction’). That may sound like a bit too ambitious a title, but it did have a far-reaching impact nationwide. The question is whether a similar movement (minus the violence and destruction) is possible in Canada, roughly half a century later. In this regard, the experience with the Truckers’ Convoy in the winter of 2022 is not very inspiring – but there are important differences between then and now. To start with, it will be much more difficult – if it proves to be possible at all – to create a divide among Canadians the way it was done around the vaccination issue, which was seen by many as an essential measure for public health. Secondly, financial hardships have hit people across the political spectrum, so Bill Clinton’s dictum of ‘It’s the economy, stupid’ is at play. Barring a die-hard core of party loyalists living comfortable lives, I don’t see the government retaining the support of many Canadian voters. Of course, they will try to inject the ever-reliable wedge issues such as abortion, ‘climate denial’ and (their latest favorite) ‘far-right’ into the election discourse, but how far that tactic would succeed remains to be seen.
On the other hand, mass mobilization is always believed to be a challenge in Canada – although the Convoy showed incontrovertibly that it is eminently do-able. If the rising tide of economic difficulties spurs masses of Canadians to rise up, would the federal government resort, once again, to invoke the Emergencies Act? It can do so only at its own peril; the punitive harshness (I would go so far as to call it vindictive) of the measure would only alienate even more Canadians. Milquetoast efforts such as a cabinet retreat aren’t going to bring forth any solution to the people’s tragedies. It may be fair to surmise that the government is currently out of options, and all that they can manage to do is to hang on to power for as long as they can before meeting their inevitable fate. But by the time that transpires, a lot of people will have suffered too much grief to recover from it and be made whole again, and that is a tragedy in itself.
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