Inequality: An issue that needs a champion
Income inequality goes to the heart of who we are as a nation. The issue is preying on Canadians’ minds as the federal election approaches. But it hasn’t crystallized into a clear set of political choices.
If one of the party leaders puts forward a viable plan to narrow the gulf between the affluent minority and the stalled majority, we could see a historic shift in the political landscape on Oct. 19, say two of the country’s most respected social policy analysts. If not, the troubled debate will go on.
Keith Banting of Queen’s University and John Myles of the University of Toronto have just completed a study titled Framing the New Inequality: The Politics of Income Redistribution in Canada. (It will be published by the Institute for Public Policy in a forthcoming book called Income Inequality: The Canadian Story.)
The chief value of the 26-page essay is not the authors’ election forecast; it is their clear, comprehensive analysis. They explain how Canada became so economically polarized. They outline the policy tools available to reverse the trend and identify the risks of using them.
The good news, Banting and Myles say, is the issue is finally on the national agenda. For the first time in more than a decade, voters are willing to consider measures that would reduce the gap between the richest 1 per cent of the population and the other 99 per cent: tax increases, social investments and income transfers. “As election day approaches, the country is engaged in a fierce debate to define or frame the new inequality.”
The bad news is that a powerful array of forces — corporate interests, bureaucratic inertia, anti-tax sentiment, distrust of government — will confront any leader who attempts to mitigate moderate market forces. Numerous advocacy groups have tried — and failed — to challenge the status quo. A few brave backbenchers have attempted to spark a parliamentary debate. Think-tanks, unions, churches, the media and concerned citizens have tried to create a groundswell. None of these efforts gained traction.
“Only electoral politics can generate the political momentum to overturn established policy norms and powerful economic interests,” Banting and Myles conclude. “The struggle to frame the stresses we face will be central to the electoral politics of 2015 and beyond.”
Contrary to public perception, this issue is not new. The middle class started losing ground in the 1980s. But most Canadians didn’t realize it. They assumed a rising economic tide would lift all boats. They believed they lived in a nation in which people cared and shared. They regarded Canada’s strong, resilient middle class as its political and economic backbone.
Now the trouble signals are too obvious to ignore. Middle class families are struggling financially. The social programs that used to mitigate the disparities in market income — employment insurance, social assistance, disability support, affordable post-secondary education — have been sacrificed to budget balancing. Household debt levels are rising. The top 1 per cent of the population is skimming off 37 per cent of national income growth.
Banting and Myles lay out three potential remedies:
The first is to shore up the poor. That is what Canada has traditionally done. It worked when the economy was expanding and the poor were a small, relatively stable minority. Neither of those conditions prevails now.
The second is to constrain the ability of the ultra-rich to reap a disproportionate share of the country’s economic success. That is what the 2011 Occupy movement called for pointing out that the top 1 per cent of the population was leaving the other 99 per cent far in the dust. It was a compelling, but divisive, narrative. So far, no one has come up with a palatable response.
The third is to bolster the middle class. That is the approach both Justin Trudeau and Tom Mulcair are taking. Each is promising a combination of targeted tax hikes and enriched social programs to redistribute income from the privileged to those who are losing ground. But neither dares use the politically loaded phrase income redistribution. They talk in careful euphemisms “helping families,” “making life fairer” and “supporting hard-working Canadians.”
“Canada is in a period of flux,” Banting and Myles conclude. “The result is a somewhat unfocused debate. The prospects for building the momentum required to address the new inequality are uncertain.”
The study is not prescriptive. It is designed to guide readers through a confusing and emotionally fraught issue.
But it is an excellent primer for voters who want to understand what is happening to their country and what they can do. Update: After filing Wednesday’s column on Rogers Television’s decision to cancel ethnic newscasts, I learned that Unifor has joined the coalition of ethnic groups challenging the broadcaster. The union, which represents the 110 workers who were cut, initially opted not to seek a CRTC review. It has now submitted a formal complaint to the broadcast regulator.