November 1, 2012 - Vol. 2 No. 6

Significance of McGuinty's Prorogation of Legislature

Government to Renege on Public Sector
Pension Obligations

Significance of McGuinty's Prorogation of the Legislature
• Government to Renege on Public Sector Pension Obligations
• Leadership Race Won't End Liberal Party's Crisis of Legitimacy

Widespread Opposition to Austerity
• Province Wide Campaign in Defence of Workers' Rights - Christine Nugent
• Anti-Poverty Actions Oppose Government Cuts
• Health Professionals Demand Ontario Provide Health Care for Refugees

Governments Must Defend Public Right, Not Monopoly Right
• Kingston Town Hall Meeting Opposes Privatization of Health Care - Rob Woodhouse
• Brookfield Captures Important Civic Infrastructure in Toronto - Jim Nugent

Significance of McGuinty's Prorogation of Legislature

Government to Renege on Public Sector
Pension Obligations

The Ontario Liberal government has attacked the defined contribution pension plans of 277,000 Ontario Public Services workers in health care and the community colleges. This is the latest move of the McGuinty government as it continues to push its sweeping offensive against the rights and livelihoods of Ontario's public sector workers while the Ontario Legislature is prorogued.

In an October 23 announcement Ontario Finance Minister Dwight Duncan said he had succeeded in imposing changes to future government contributions for public sector worker pension plans. Duncan boasted to the media that these changes will allow the government to renege on $1.5 billion of its pension contribution obligations over the next five years.

During the announcement, Duncan touted the Liberal Party's anti-democratic proroguing of the Ontario Legislature as an effective strategy for championing the neo-liberal offensive of the rich. "The agreements demonstrate that the government can get work done even when the Legislature is not in session," Duncan told the media.

These changes will mean decreased pension benefits for new retirees if their plans have what are called "deficits" under the bookkeeping frauds used for pension calculation. The changes shift the risk of any decline in investment fund income onto the backs of retirees, effectively converting these plans from defined-benefit plans into a kind of hybrid defined contribution plan.

Duncan's announcement followed meetings on October 22 with the union sponsors of the pension plans. These meetings were called "negotiations" but they took place under a threat by Duncan that the government would dictate changes through legislation if there was no agreement with union co-sponsors of the plans. The pension plans affected are the Healthcare of Ontario Pension Plan (HOPP), the Ontario Public Service Employees Union Pension Plan (OPSEUPP) and the Colleges of Applied Arts and Technology Pension Plan (CAATTPP) with active plan members as shown in the table below:

A so-called trade-off put on the table by Duncan during the meetings with pension plan sponsors was to downsize, at least temporarily, the government's plan to force the merger of public sector pension plans into superfunds. The OPSEUPP and the CAATTPP were exempted from the amalgamation of funds plan being pushed by Dwight Duncan's Special Advisor on Public Sector Pension Reform, Bill Morneau. There is some discussion among workers that threats to force the amalgamation of pension funds may have been a blackmail manoeuvre to increase pressure on the plans' union co-sponsors.

The union sponsors of the Teachers' Pension Plan refused to accept the government dictated changes to their pension plan. As one of the largest pension plans in the country the TPP was not susceptible to amalgamation blackmail. As well, Ontario teachers have already faced serious cuts to pension benefits in recent years. Protection from inflation for teachers retiring after 2010 has been reduced while the pension contributions active teachers are required to pay have risen sharply. Duncan responded to the teachers' defiance by issuing more threats, "We have the option of legislating a deal and my hope is they'll reconsider."

The Canadian Union of Public Employees (CUPE) also refused to sign on to the changes. CUPE represents 30,000 hospital workers in hundreds of bargaining units covered by the HOPP -- about 18 per cent of the active HOPP members. Duncan arrogantly dismissed CUPE's opposition to the changes as "an internal matter for the HOPP board of directors."

The changes being imposed by the Ontario government through blackmail and threats move public sector pensions in the direction opposite to that being demanded by the working class. Workers across the country are waging a struggle to defend the defined-benefit pension plans of workers who have them and to ensure defined-benefit pensions are provided for all with a government guarantee.

For workers, the pension fight for pensions as the right of every working man and woman to retire in dignity and security must be won. The Liberal government's attacks on pensions and pensioners will arouse further opposition to its anti-worker crusade and compound the crisis of legitimacy gripping the ruling Liberal Party.

Leadership Race Won't End Liberal Party's
Crisis of Legitimacy

The resignation of Dalton McGuinty as the Premier of Ontario and the resulting Liberal Party leadership race is exposing the ruling Liberals' crisis of legitimacy for all to see. Working class opposition to the Ontario government's austerity measures has shredded any claim by the Liberals that they are legitimate representatives of the popular will. As demonstrated in the Kitchener-Waterloo (K-W) by-election and in actions throughout the province, workers defending their rights against the attacks of the Liberals and Conservatives are able to mobilize broad support among the electorate, an electorate fed up with the Liberals' austerity agenda, their corruption and their cynical political opportunism.

McGuinty resigned two weeks after the poorly attended Annual Liberal Party Convention in September and only a month after his schemes for the K-W by-election collapsed in failure. This has been followed by leading cabinet members announcing that they will not be running for the party leadership and will be leaving politics, including Finance Minister Dwight Duncan and Energy Minister Chris Bentley. Commentaries in the monopoly media have declared these ministers unmarketable politically because, along with McGuinty, they have been too closely associated with the anti-worker austerity agenda of the government and its corruption scandals.

Other cabinet ministers dismissed by the media as possible contenders because they too are tarred with the same brush of austerity and corruption are Minister of Health Deb Mathews and Minister of Education Laurel Broten. Mathews has been implementing a broad series of anti-human cuts to health care and is embroiled in Health Ministry scandals over the privatization of the air ambulance service and the eHealth data system. Broten has become infamous for the enthusiasm with which she has taken up her role as attack dog in the government's anti-teacher campaign.

The privileged minority that holds political power handed the levers of government to the McGuinty Liberals based on them being able to deliver the same anti-social offensive as Harris without arousing the widespread resistance Harris did. Through three elections the Liberals played the strategic voting card to disorganize working class resistance. The McGuinty government's claim to political legitimacy was based on differentiating itself as more balanced than the Harris government. This claim has been broken in recent months as the Liberals have jumped out to compete with the Conservatives as the champions of the anti-worker offensive.

The monopolies and privileged minority connected to and served by the Liberal Party have decided to try putting things back together with a leadership race, by flushing the old gang and starting with a new one made up of less discredited politicians. Kathleen Wynne and Sandra Pupatello are two Liberals being promoted in the monopoly media as replacements for McGuinty. Both these self-serving politicians are experienced marketers of the Liberal brand and it is hoped that they can re-establish the fraud of Liberal "balance" and "social consensus."

Kathleen Wynne is currently the Minister of Municipal Affairs and Housing and Minister of Aboriginal Affairs. She made a name for herself on the Toronto District School Board (TDSB) by opposing the Harris government's cuts to education before entering provincial politics. From 2006-2010 she was McGuinty's Minister of Education and implemented all of the Harris era underfunding policies she had fought while at the TDSB.

To support Wynne's leadership run by recycling her "reformist" credentials, stories are being circulated about her "criticism" of the government's offensive against teachers and education workers. Curiously, nothing was heard about this criticism until the leadership race began.

Sandra Pupatello was first elected as an MPP for Windsor in 1995 and has served as a cabinet minister in various positions since the McGuinty government was elected in 2003. Her claim to fame is that as the Minister of Community and Social Services from 2003 to 2006, she implemented two small increases in social assistance rates. While doing little to reverse the drastic social assistance cuts made by the Harris government, these small increases allowed Pupatello and the government to pose as upholding the "social consensus" brand. When inflation is taken into account, social assistance benefits are $132 per month less today than nine years ago when the Liberals came to power.

Pupatello is said to have an advantage in the leadership because she did not run in the October 2011 election. Having taken a year off, she supposedly avoided being contaminated by the current anti-worker campaign and corruption of the McGuinty government. This is really the monopoly media aligned with the Liberals grasping at straws -- Pupatello sat for nine years in cabinet with the McGuinty gang and is up to her neck in all its schemes. If Pupatello has a leadership edge it is that she is a life-long hack of the Windsor Liberal Party machine currently headed by Dwight Duncan.

Recycling Wynne or Pupatello in the Liberal leadership race and advertising them as social reformers will not solve the Liberal Party's legitimacy crisis. The attack of the Liberals on the rights of teachers and education workers in Bill 115, the Putting Students First Act, is a fact that won't go away or be forgotten. Even as the Liberals roll out their leadership show, the government is stepping up attacks on public sector workers, imposing more austerity measures on workers under threat of legislation. The continued resistance of workers to these attacks and rallying support to their just cause will further expose and deepen the Liberal Party's crisis of legitimacy.

Widespread Opposition to Austerity

Province Wide Campaign in Defence of
Workers' Rights

- Christine Nugent -

On October 18, Canadian Union of Public Employees (CUPE) Ontario held an all locals leadership meeting in Richmond Hill which gave their unanimous support to launch a province-wide campaign across all sectors to defend workers' rights against attacks. CUPE Ontario represents 230,000 public sectors workers, who work in health care, municipalities, social services, utilities like Hydro One and Ontario Power Generation, non-profit agencies that receive provincial funding, and education, including 55,000 school secretaries, custodians, educational assistants, early childhood educators, instructors, library technicians, lunch room supervisors and other support staff in English, French, public, separate, elementary and secondary schools across Ontario. 

The main focus of the meeting was organizing resistance to the recent passing and implementation of Bill 115, the Putting Students' First Act by the McGuinty government to attack the rights of teachers and education workers.

The meeting also discussed the draft legislation released by Finance Minister Dwight Duncan on September 26, the Protecting Public Services Act, which was part of the McGuinty government's effort to squeeze $13 billion out of social programs, to wreck public services and to drive down the people who deliver and defend these services. While this legislation did not reach royal assent due to the prorogation of the Legislature, another such assault is expected and the leaders of the locals in these sectors passed a resolution against any future attacks on public sector workers and the services they deliver.[1]

"This huge response gives us a clear mandate for intense mobilization of our members from Kenora to Cochrane, from Windsor to Cornwall, and in every community in between," said Fred Hahn, President of CUPE Ontario. "By unanimously passing CUPE Ontario's resolution, Local leaders demonstrated their commitment and resolve to stand firm against legislation that ultimately undermines the rights of all workers," he said.

"We will use every tool at our disposal to defend people's rights," said Candace Rennick, CUPE Ontario Secretary-Treasurer. "The electricity in that room was unbelievable, and people are taking that energy back to their communities. We will join them in helping mobilize within their communities as this campaign rolls out."

For campaign updates and ways to get involved in events in your community and across the province go to the CUPE Ontario website.

Note

1. For further explanation of the proposed  Protecting Public Services Act, see Ontario Political Forum October 1, 2012 - Vol. 2 No. 1.)

Anti-Poverty Actions Oppose Government Cuts

Actions to oppose the Liberal government's cuts to social assistance were organized across Ontario around the International Day for the Eradication of Poverty, October 17. This is a day declared by the United Nations to recognize the principle that security of livelihood is a fundamental human right.

Toronto

The action in downtown Toronto on October 17 specifically targetted the planned termination in January 2013 of the Community Start Up and Maintenance Benefit (CSUMB) to which Ontario Works (OW) and Ontario Disability Support Program (ODSP) recipients are currently entitled. As part of the action, a walk-in clinic was organized to assist people to apply for this benefit before the January cutoff with the aim of also emphasizing its importance to those on social assistance. At noon, some 300 people gathered at City Hall for a rally and a march up Bay Street to deliver the completed applications for the CSUMB to the Ministry of Community and Social Services. A demonstration took place the same day in the Jane-Finch neighbourhood in the north end of the city.

Hamilton

On October 13, as part of these actions, about 150 Hamiltonians participated in a rally and walk. The Hamilton rally was organized by the Campaign for Adequate Welfare and Disability Benefits. Those present included Local 1005 USW, the Ontario Secondary Teachers' Federation, the Canadian Union of Public Employees, the Registered Nurses Association of Ontario and the Hamilton and District Labour Council.

St. Catharines

A townhall meeting of people from the Niagara Region was held in St. Catharines on October 16. It was attended by 100 people, most of whom either cannot work or cannot find work and are dependent on OW and ODSP for their livelihoods.

One after another people dependent on these social assistance programs stood up to describe the difficulty they face surviving on the inadequate benefits provided. People especially expressed concern about the cancellation of the CSUMB. They described it as one of the cruellest measures in the Liberal government's "austerity" budget because the amount of funds required for the CSUMB is very small in terms of the overall provincial budget but the cuts will have a huge impact and further destabilize the lives of people receiving social assistance.

The CSUMB was introduced by the Harris government shortly after it slashed social assistance rates by 22 per cent in 1995. The CSUMB is very important to the poor during emergencies. Over a two-year period OW recipients can access up to a maximum of $799 for single adults or $1,500 for families. While the fund can be used for needed clothing, furniture and other household goods, the limited access means people use the fund as little as possible so that it remains available to them for other crises. It is used mostly for emergencies related to housing, such as rent arrears, first and last month deposits, utility bills and relocation.

In his budget speech in March, Finance Minister Dwight Duncan tried to distance the Liberal government's inhuman attacks on the poor from those of the Conservative government of Mike Harris. A Liberal government, Duncan declared, "will not solve the deficit on the backs of the poor," then announced $120 million in cuts to supports for those on social assistance, including the $30 million cut to the CSUMB, the emergency fund introduced by the Harris government! The Liberals claim they are "more balanced" than the Conservatives, but even the Harris government recognized it was creating a crisis and the CSUMB was established as a discretionary source of funds that those in need could apply for.

Following discussion of the problems created for people by the underfunding and cuts to social assistance, those attending the St. Catharines town hall, including education workers and students from Brock University, discussed taking further action. A representative of the Ontario Coalition Against Poverty (OCAP) spoke about the actions the group is organizing in various cities, including one at the offices of the Ministry of Community and Social Services to protest cuts to the CSUMB. There was discussion about organizing demonstrations at the offices of local Members of Provincial Parliament and for making a representation to the Niagara Regional Council.

Health Professionals Demand Ontario
Provide Health Care for Refugees

Since June when the Harper dictatorship passed Bill C-31, the so-called Balanced Refugee Reform Act, health professionals and others across the country have been carrying out actions to oppose its attack on the right of refugees to health care. The bill, which would be more aptly named the Refugee Exclusion Act, cleared the way for cuts to the Interim Federal Health Program, making health care inaccessible for many refugees. Health care professionals are continuing their campaign against the federal legislation but are also demanding that provincial governments uphold their duty to provide health care for all residents.

To mobilize support for this demand, Health for All, an organization of health care professionals, held a public meeting called "Beyond Refugee Health Cuts: Examining the Roots & Nurturing Resistance" on October 29, with speakers from the Roma Community Centre, the Immigration Legal Committee of the Ontario Law Union and Mexicans United for Regularization of Montreal. A campaign has also been launched petitioning Ontario Minister of Health Deb Mathews to uphold the Ontario government's responsibility to provide health care for all residents of the province. The text of the petition is posted below.

***

Dear Minister Matthews,

In July 2012, the Federal Government implemented drastic cuts to the Interim Federal Health Program, a program that provides health coverage to refugees and refugee claimants across Canada. The cuts include the elimination of essentially all health coverage for refugee claimants who have come from countries that the Federal Government will deem "safe", regardless of the individual circumstances that compel the individual or family to seek refuge in Canada.[1] The cuts also deny all refugee claimants and privately-sponsored refugees access to essential medicines and other services. These cuts are impacting the health status of those seeking refuge in Canada and represent a serious threat to everyone's health and safety.

The provincial governments of Manitoba and Quebec have come out against these cuts and have elected to fill the gap left behind by the Federal Government's bad public policy. We believe that the Ontario government should take action, and make the right decision about how we will bridge healthcare for individuals affected by this Federally-instigated health crisis.

If Ontario chooses to do nothing, our provincial government sends a clear message to migrant communities that Ontario does not care about their health and wellbeing. By choosing to do nothing, this government will also be making a decision to accept the downloading of costs from the federal government onto our province. This further strains our emergency departments, hospitals and Emergency Medical Services through unnecessary delays in care resulting in emergency complications.

Ontario, too, could follow the lead of Manitoba and Quebec in providing health coverage that was once available and it could further pressure the Federal government to reverse the cuts. This sends the message that despite the actions of the Conservative government, Ontario supports the rights of all those seeking refuge to live with health and dignity. It would also be in line with evidence that suggests treating health through primary care in the community is less expensive than treating the resultant emergencies in hospitals. We strongly encourage you to make the socially responsible decision and fully fund healthcare for all those seeking refuge in Ontario.

1. Unless it is deemed necessary for narrowly-defined "public health and public safety"

(This petition can be signed online at www.health4all.ca.)

Governments Must Defend Public Right, Not Monopoly Right

Kingston Town Hall Meeting Opposes
Privatization of Health Care

- Rob Woodhouse -

Health workers and other advocates of public health services are continuing their resistance to the Ontario government handing more and more of the health system over to private for-profit interests. On October 26, Ontario Health Coalition (OHC) organized a townhall meeting in Kingston to engage people in discussion of the violation of public interests by the Ontario government in its plans for a mega-hospital in Kingston. The new hospital will replace St. Mary's of the Lake Hospital and the Providence Care Mental Health Services (formerly the Kingston Psychiatric Hospital).

The government plans call for giving $350 million to a private-public partnership (P3) to design, build and finance the Kingston mega-hospital. The contract will also include a 30-year agreement to pay a consortium of hospital construction monopolies to maintain the new buildings.

The panelists at the October 26 event included OHC director Natalie Mehra and David MacDonald, a researcher for the Canadian Centre for Policy Alternatives (CCPA). The OHC is an organization of health workers, workers' organizations and other defenders of the public health system. CCPA is a public interest research group.

A press release of the OHC said that the construction of the hospital as a P3 will result in an additional $100 million in expenses over what it would cost under standard construction arrangements. The government refuses to provide information about why it decided to build and maintain the hospital using P3 arrangements. Requests to the government by OHC and others for background information on the decision have been refused.

The press release also said that there is opposition by some members of Kingston City Council to the provincial government decision. Council voted to contribute $16 million to the hospital project before the decision to build and maintain it as a P3 was made. OHC quotes Councillor Rob Hutchinson who said, "These P3s tend to cost a lot more money over time. This has been known for years that P3s are costing far more to build than if the government had just borrowed the money."

There are 42 construction and service private-public partnership projects in health care that have been carried out or are underway across the province. P3 projects which provide a bonanza to their rich investors are being organized at a time when the Ontario government is otherwise severely underfunding the healthcare system. The Liberal government's March 2012 austerity budget imposed severe restraints throughout the health system at a time of rapidly increasing health needs among the population.

Brookfield Captures Important Civic
Infrastructure in Toronto

- Jim Nugent -

Brookfield Asset Management has captured a key piece of Toronto civic infrastructure, Enwave District Energy Limited. As a result of a decision by Toronto City Council, Enwave will become 100 per cent owned by Brookfield by the end of this month. Enwave operates a system of steam plants, lake water pumping plants and 40 km of piping that provides heating and cooling to buildings throughout the downtown core. More than 140 large publicly and privately owned buildings are served by Enwave, including all of the downtown hospitals, government offices and universities.[1]

Under its former name, Toronto District Heating Corporation (TDHC), Enwave had already been partially privatized in the Harris era. The original enterprise had been set up in the 1960s under city leadership as a co-operative heating arrangement by hospitals, universities, Toronto Hydro and other public entities. The enterprise was corporatized as the TDHC in 1980 with the city and other public entities as the owners. The Harris government forced the TDHC to sell shares in 1998 and it became a private-public partnership between the city and Borealis Fund Management.[2]

Enwave was a very attractive target for Brookfield because the city has been pouring effort and money into developing the downtown energy system for twenty years. Since 2004, the city hasn't been taking any dividends from Enwave to enable investment in a massive innovative deep lake water project which is now just coming fully on stream -- cold water from the bottom of Lake Ontario is pumped throughout downtown to cool buildings before going into the city's water supply system. Control of Enwave also gives Brookfield control over a significant part of the Toronto water supply.

Toronto City Council approved the sale of its 43 per cent share of Enwave at an October 2 meeting. Borealis Fund Management had already agreed to sell its 57 per cent share to Brookfield. Brookfield will pay a total of $430 million for this important civic asset -- $168 million to the city, $233 million to Borealis and the balance for Enwave debt.

The sale of the city's share of Enwave to private interests has been pending for more than a year. Putting Enwave on the auction block was one of the first moves of the hooligan Ford regime after it grabbed power. A spokesperson for the six Councillors who voted against the sale called the move suicide. He said the city shouldn't be cannibalizing assets that provide revenue generating services in order to pay for ongoing city expenses. Ford's response was that the only city assets anyone wants to buy are the money-making ones.

Brookfield certainly expects to make money on the deal. For starters, Enwave produces a net income of more than $11 million a year. Brookfield also sees in Enwave a huge potential for seizing control of more urban infrastructure. Because it has a large market for heating and cooling capacity, Enwave has potential as an electricity producer using gas co-generation turbines, the most profitable type of thermal electricity production. Co-gen plants produce excess heating/cooling capacity while generating electricity which must be marketed to realize all the potential value creation. Another potential for Brookfield is that Enwave's physical plant is woven into the city's water supply system which positions Brookfield to benefit from any move toward privatized water service.

Brookfield may also be anticipating an increase in income from Enwave by raising the rates charged customers for heating and cooling. These rates are regulated by the Ontario Energy Board (OEB), but the OEB is required by law to set rates high enough to guarantee Brookfield recovers its borrowing costs and receives the going rate of return on equity. OEB decisions are really political decisions and the Brookfield billionaires have had close political connections throughout the ruling elite for generations.

One thing is known for certain: Enwave will be re-orientated to aggressively serve the very narrow aim of Brookfield's moneybag owners, the aim of increasing their wealth. As with all civic infrastructure, Enwave workers produce a huge amount of value. Now that it has captured Enwave, Brookfield will use all its might, political connections and legal skills to maximize its claim on the wealth produced by Enwave workers. This claim will be pushed as far as possible at the expense of the Enwave workers producing the wealth, at the expense of hospitals and other public interests involved with the system and even at the expense of the other monopolies owning buildings downtown.

The working class has been engaged in a fierce battle with this monopoly for an entire generation now and has a lot of bitter experience with its aggressiveness. Under the former name Brascan, it wrecked enterprises in mining, metallurgy, forestry and other sectors. Enterprises were starved of re-investment while as much of the value produced by workers as possible was seized as high profits. Brascan used these profits to re-invent itself as Brookfield, the global real estate and infrastructure management monopoly. Brookfield has been even more predatory, buying enterprises, stripping them of assets, closing them down and then bleeding workers' pension plans dry.

Brookfield is one of the monopolies gaining dominance over other monopoly groups and over the public interest as self-serving politicians like Mayor Rob Ford push the neo-liberal offensive politically. Control of Enwave by Brookfield will undoubtedly result in a dogfight between Enwave's new owners and the owners of downtown buildings, increasing the chaos and incoherence in urban services. Brookfield is also sure to trample on the public interest involved with city heating/cooling, electricity and water services as much as it can get away with. Conflict between Brookfield and the broad public interests will bring more allies to the side of the workers whose battle with the Brookfield moneybags is far from over.

Notes

1. Enwave also owns district heating/cooling assets in Windsor which will also be turned over to Brookfield.
2. Borealis Fund Management is commonly referred to as "an arm of the Ontario Municipal Employees Retirement System (OMERS)," which is not true. Borealis is a fund owned 26 per cent by OMERS, 26 per cent by Canada Pension Plan Investment Fund and 48 per cent by private investors.
     OMERS calls itself a leader of the movement towards P3s and boasts about its role in facilitating the opening up of public enterprises to private investment. According to OMERS President and CEO Dale Richmond, setting up a p3 is politically easier if a public pension plan is involved. In an interview published in the current issue of Summit ( a magazine for the public sector procurement industry) Richmond gives the Ontario electric utility sector as an example:
     "Richmond also sees an important investment opportunity in the deregulation of the electricity industry in Ontario, where many municipalities are reluctant to sell their electricity authorities to big private (and mostly US) utility companies. Borealis has bought an interest in Hydro Mississauga and is talking with several other hydros about a possible amalgamation and funding for their ongoing expansion."

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