June 11, 2012 - No. 37

Ontario Budget Bill-Schedule 28

Expansion of Executive Power to Serve Private Interests

Ontario Budget Bill-Schedule 28
• Expansion of Executive Power to Serve Private Interests

P3 Extension of Highway 407
• Another Outrageous Pay the Rich Scheme - Dan Cerri

Morneau Public Sector Pension Consultation
• A Consultation Farce with a Pre-Determined Outcome - Jim Nugent

Ontario College Faculty Negotiations
• Ontario College Faculty Enter Significant Negotiating Period -Christine Nugent

More Than Half a Million Unemployed
• Ensuring the Livelihoods of All Is the Fundamental Duty of Government - Rob Woodhouse

Ontario Budget Bill-Schedule 28

Expansion of Executive Power
to Serve Private Interests

As ruling parties in power in Parliament and in the legislatures of the provinces and Quebec step up the reckless promotion of the private interests of the international monopolies and rich minority, these ruling parties are also pushing to the maximum their constitutional prerogatives to facilitate their betrayal of public interests. One of the ways this is being done is by drastically increasing the executive power of government ministers. Vague, open-ended laws are being passed giving ministers carte blanche power to issue regulations affecting every aspect of the economy and people's lives without ever having to return to parliament or the legislature for approval. These laws typically give ministers power to issue decrees overriding existing laws. This expansion of executive power completely marginalizes the parliament, legislatures and the electorate.

The Harper dictatorship's omnibus budget Bill C-38, which is being denounced by people from coast to coast , gives ministers sweeping powers to rule by decree in wide areas of federal jurisdiction. The omnibus budget bill of the Ontario government, Bill 55, contains similar provisions for expanded executive power of ministers, in particular Schedule 28 of that bill, the Government Services and Services Providers Act, 2012 (Government Services Act).

Under the Government Services Act a minister named by the government will have complete power to issue regulations for privatizing services provided by any government ministry or any institution that falls within provincial jurisdiction, including municipal services, school boards, crown corporations and other broad public sector entities in Ontario. None of the regulations issued by the government minister needs to ever be approved by the legislature. The minister issues a decree; it's published in the Gazette; it becomes law of the land.

Workers throughout Ontario are opposing the Ontario 2012 budget bill which is just completing committee hearings and going to final vote. On April 21, the day the first budget motion was voted on, thousands of teachers, public sector workers and workers from the private sector demonstrated at Queen's Park to demand the budget bill be voted down. Schedule 28 of the bill, setting up a privatization czar, was one of the main elements of the budget bill workers denounced. Despite widespread opposition to the budget, McGuinty's minority Liberal government was able to get it passed in the April 21 vote by making a deal with NDP leader Andrea Horvath. Workers and workers' organizations, especially public sector workers, have continued to oppose the budget bill as it went through committee hearings.

The Canadian Union of Public Employees (CUPE) Ontario, which represents many workers throughout Ontario's broad public sector, has been speaking out and organizing against the budget bill, especially the Schedule 28 provisions for privatization of public services by ministerial decree. As part of a campaign to expose how harmful to the public interest the budget bill is, CUPE Ontario commissioned a review of Schedule 28 by the law firm Sack Goldblatt Mitchell LLP. The findings of that review were released during a press conference on May 28.

At the press conference, CUPE Ontario President Fred Hahn said, "The Liberals are taking a page from Stephen Harper's playbook. They're attacking the foundations of our democracy, and hiding the legislation in a huge budget omnibus bill. We believe the public has a right to know what its government is doing, and has a right to have a say in how services are delivered. Schedule 28 takes the last requirements for accountability and transparency and throws them out the window."

The legal opinion released by CUPE gives the following general assessment of Schedule 28: "The Government Services Act would have far-reaching and adverse consequences for legislative and governmental accountability for the provision of virtually all services provided by the provincial government or provincial public institutions, from Crown corporations to regulatory bodies. The Act is also intended to facilitate the privatization of services provided by municipalities and local public bodies, including school boards and public hospitals. The notion that the Act is somehow limited in scope to Service Ontario is entirely unfounded."

Commenting on the extent of the ministerial powers under the Act, the opinion says, "...in key respects the authority of Cabinet and the Minister under the Act overrides the requirements of any other statue where a conflict arises. This effectively subordinates other statutes, and the authority of the legislature, to that of Cabinet in regard to contracting out or privatizing government services. Furthermore, the open-ended and prospective nature of the Act makes it impossible for the legislature or the public to understand, let alone assess, the likely impacts of the Act."

Among the issues raised about Schedule 28 is the framework of complete irrationality in which the privatization would take place. "The authority to contract out or privatize public services is entirely unguided by any provision in the Act setting out the purpose, policy or criteria that such privatization is to achieve or satisfy,'" the legal opinion notes.

Under international treaties, the opinion warns, the measures being taken by the McGuinty government will be irreversible. "Once government services -- both Ontario government services and broad public sector services -- are contracted out on a commercial or competitive basis, any attempt by future governments to restore such services to the public sector would be inconsistent with the WTO General Agreement on Trade in Services (GATS) and with the proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA ). In other words, once market access is granted by contracting out government services, it cannot be revoked by future governments."

In its headlong rush to serve private interests by opening investment opportunities for the rich in the public sector, the McGuinty government is fully leveraging the power available to the ruling party under the current political arrangements. Public sector workers struggling to defend their livelihoods and the services they provide are seeing that current political arrangements serve private interests, not the interests of workers or the public interest. They have to be changed.

P3 Extension of Highway 407

Another Outrageous Pay the Rich Scheme

- Dan Cerri -

The Ontario government has awarded a fixed-price contract to a joint venture involving SNC-Lavalin and Cintra Infraestructuras to extend the user fee toll highway 407. According to the SNC-Lavalin website, it is part of a joint venture, known as the 407 East Development Group General Partnership, that will design, finance, build, maintain and administer Phase 1 of the extension. The "Partnership" as it calls itself, is a new 50/50 joint venture between SNC-Lavalin and Cintra Infraestructuras' respective subsidiaries. The subsidiaries are SNC-Lavalin Operations and Maintenance and Cintra.

A SNC-Lavalin press release indicates that the fixed-price contract is worth $1 billion (net present value) to extend the highway north of Toronto from Pickering to Oshawa. The partnership will also maintain the road for 30 years.

The press release also indicates that the project will be delivered using Ontario's alternative financing and procurement (AFP) model. According to Infrastructure Ontario's website, AFP is a government initiative that brings together private and public sector in the delivery of large scale infrastructure projects ($20 million or more). The website also says: "The AFP model brings together private and public sector expertise in a unique structure that transfers the risk of project cost increases and scheduling delays typically associated with traditional project delivery."

The announcement is another example of public-private partnerships (P3) that continue to be developed by the McGuinty government. It also coincides with concerns over Schedule 28 in the Ontario Omnibus Budget Bill 55. CUPE Ontario released a report that reveals that Schedule 28 opens the door to unlimited privatization of government services and that it gives ministers and cabinet more powers to do so behind closed doors.

The awarded contract to extend the 407 reveals that privatization in the Ontario Budget extends beyond Schedule 28. In fact, the budget also includes Schedule 29, the Highway 407 East Act, which outlines the rules and regulations of the highway, including the "Minister's powers regarding collection and enforcement." The 407 is a privately owned highway but falls under public administration under the jurisdiction of the Public Transportation and Highway Improvement Act. It is another example of the politicization of private interests.

Continued attention should be paid to how governments are making privatization the norm and what consequences this has for the economy and people's lives. Financing the project means that the consortium will not only make a big score off this fixed-price contract worth $1 billion but also from interest charged from lending money to the government for the project. It is a glaring example of how different sections of finance capital are making an end run on the infrastructure which is a state responsibility to make even bigger scores off the public treasury and, ultimately, off the backs of people of the province, not to mention the claims on added-value created by construction workers on the project. The consortium will also make money off of interest and other additional charges to motorists. The Toronto Star recently reported that many customers have accused the 407 Express Toll Route of predatory billing and taken the highway company to court.

Governments are very willing to develop projects that benefit the monopolies but when it comes to nation-building projects that benefit public interest they claim that their hands are tied by debts and deficits. It requires a response by the working class and everyone in Ontario to resist this ideology and develop a new way of organizing the economy that benefits them and their society. Ontario Political Forum will continue to report on P3s and analyze how they are being implemented.

Morneau Public Sector Pension Consultation

A Consultation Farce with a Pre-Determined Outcome

- Jim Nugent -

The Ontario government is pushing ahead with the attack on the pension plans of workers in the broad public sector which was announced in the Ontario 2012 Budget. Immediately following the budget motion being passed, the Minister of Finance Dwight Duncan announced what he called "consultations on a new legislative framework for jointly sponsored public sector pension plans." At the end of May, Duncan announced that the consultation will be headed by William Morneau and will report in the fall of 2012.

Although the government is calling this a consultation, Ministry of Finance statements show that the government has already made a decision to renege on its pension obligations to public sector workers in the same way that many international monopolies in the private sector have done. It intends to convert defined benefit pension plans to inferior defined contribution plans by stealth through a cap on future government contributions and reduction of benefits to eliminate government liabilities for benefits.

The consultation over the summer will dispense with the government's "duty to consult" so as to clear any legal obstacle to imposing legislation in the fall. Besides the pending legislation, another gun to the heads of workers being "consulted" is the government's threat to create a dispute resolution tribunal to impose new terms on pension plans when public sector unions and the government "cannot agree on benefit reductions through negotiations." The key element is that the government will define and control this dispute resolution tribunal.

A process can only be truly consultative when there is no pre-determined outcome and when the party being consulted can say "No!" This is clearly not the case in this public sector pension consultations farce being organized by McGuinty.

The appointment of Morneau as the head of the public sector pension review also exposes as a fraud any concept that the process underway is a consultation. Just as when it hired TD Banker Don Drummond to head the Public Sector Reform Commission, the McGuinty government knows exactly what it is getting by hiring Morneau. Like Drummond, Morneau has full credentials as a warrior serving the anti-social offensive of the rich minority, serving those who will benefit from extinguishing the pension claims of the public sector workers so more government revenue is available for the government's pay-the-rich schemes.

Morneau has leading positions in international financial groups, including being a director of the privately owned American Financial Group (AFG) with assets of $50 billion. He is also the owner of the Toronto based international financial and management services firm Morneau Shepell, which specializes in helping companies minimize pension, health benefit and workers' compensation costs. Morneau's appointment is part of a trend being established by McGuinty where decision making on important policy affecting public interests is being handed over to private sector chieftains.

Morneau Shepell was hired to develop policy in the past for the McGuinty government. This includes work as the financial consultant on the recently released Arthurs Report which is part of the government's strategy for unloading the Workplace Insurance and Safety Board's unfunded liability onto the backs of injured workers. Morneau Shepell personnel are also involved in attacks on pensions at the federal level. One of the directors of Morneau Shepell is Jack Mintz, who has been the leader of the pension expert group advising the federal Minister of Finance Jim Flaherty on the roll-out cuts to Old Age Security (OAS) pensions and developing plans for extinguishing the federal government's civil service pension obligations.

Besides his private business interests and corporate directorships, Morneau also sits as the Chair of the Board of the C.D. Howe Institute, a political organization representing the most powerful banks and monopolies operating in Canada. He chairs a board of directors made up of CEOs of the monopoly groups sponsoring the C.D. Howe Institute, including the CEOs of GE Canada, Manulife, Potash Corp, Enbridge, BMO and Merrill Lynch, Brookfield Renewable Power, KPMG and others. Since 2007, the C.D. Howe has operated a Pension Policy Council, which Morneau Shepell sits on. This council has launched report after report calling on governments to renege on their pension obligations to their employees and to dismantle social security pensions. McGuinty knows exactly what decisions he will be getting from Morneau in the fall.

There has been broad support throughout the Canadian working class for the resistance of workers in the private sector to attacks on their pension plans by GM, US Steel, CP Rail and other international monopolies There has also been widespread opposition to the cuts to OAS by the Harper government. The Ontario government is anticipating similar opposition and resistance to its attacks on public sector workers' pensions and is making every effort to undermine it. With the support of the monopoly media it is shamelessly attempting to pit worker against worker by suggesting that it is "unfair" that public sector workers have a guarantee of security and dignity in old age while many workers do not.

Indeed! This is outrageously unfair! But this unfairness is the result of governments failing in their duty to ensure a Canadian standard livelihood for all in retirement. It is not caused by public sector workers demanding and fighting for Canadian standard pensions over the years. This fight has in fact raised the bar on what constitutes a Canadian standard in retirement. Defeat of the public sector workers in their fight will lower standards for everyone.

The solution to unfairness is not to extinguish pension obligations the government has contracted in negotiations with its employees. The solution is stepping up the fight for enhanced social security pensions so they provide a standard Canadian livelihood for all in old age and continuing this fight until a decent pension for all is guaranteed.

Rallying around public sector workers to defeat the attacks of governments on their pensions is part of the struggle for the right of all to live in dignity and security in old age. The fight for decent pensions for all must be won.

Ontario College Faculty Negotiations

Ontario College Faculty Enter
Significant Negotiating Period

- Christine Nugent -

Members of college faculty at Ontario's 24 community colleges, represented by OPSEU, are entering a significant negotiating period for a new contract. In the last round of negotiating in 2009, many were caught off-guard when the colleges, represented by the College Employers' Council (the Council), imposed a final offer which it said it had the power to do based on changes to the Colleges Collective Bargaining Act (CCBA), 2008. The Council did not even put its final offer to faculty for a vote. The Council's shock and awe approach, as opposed to good faith bargaining practices, further marginalized faculty members from the decision making process and ultimately led to a controversial vote in favour of the last offer. It is this historical context in which college faculty are entering negotiations.

Negotiations are to begin on June 4 and are to continue throughout the summer, with a deadline set for August 31, just before the start of the fall semester. College support staff represented by OPSEU found themselves in the same situation last year and, based largely on the Council's refusal to bargain in good faith, called a strike vote to avoid an imposed contract and ultimately took strike action to defend their interests.

Based on the experiences of the last round of negotiations, and more recently for support staff, and the all-around atmosphere surrounding collective bargaining in Ontario and Canada, it is necessary to begin discussion among members of faculty now so that they are not caught off-guard by the fast-paced nature of negotiations and disinformation created by different sources. The reality of collective bargaining has changed drastically in the last few years. Although the economic and political origins of these changes have been developing over a longer period of time, their reflection has been most apparent in recent collective bargaining for workers in different sectors of the economy. Many examples of aggressive tactics by employers in the form of imposed contracts, back to work legislation and the all-around refusal to negotiate in good faith have all sent a clear message to workers that the times are not the same and that the idea of waiting for the negotiating process to address their concerns is no longer adequate. The atmosphere around collective bargaining requires new ways of thinking and acting.

Who Is the College Employers' Council?

The College Employers' Council represents the colleges in negotiations. It is important to characterize the makeup of this body so that members of college faculty are armed with common information to discuss negotiations early on and to follow developments with this information in hand.

The Council gained significant notoriety in 2008 when it sought to re-write the CCBA in an effort to gain new powers to unilaterally change the terms of employment. The Ontario government appointed Kevin Whitaker, Chair of the Ontario Labour Relations Board, to review the old CCBA with respect to the right of part-time and sessional employees to unionize. The Council used this opportunity instead to concoct their own legal interpretation of the Whitaker Report to speculate that they had new powers to impose their last offer whenever they choose. It was this interpretation of the Act on the part of the Council which led to its imposition of a final offer during the last round of negotiations with college faculty in 2009. The Council was represented by the law firm Hicks Morley which has its own notoriety given its representation of Vale Inco. The company refused to negotiate with USW 6500 in Sudbury unless it accepted numerous concessions which led to workers being on the picket line for 11 months starting in July 2009.

The Council's bargaining team is comprised of former college faculty and managers which suggests that they have links to the college system. But it raises the question of why they would implement such tactics as imposing a contract on faculty and refusing to negotiate in good faith. It really raises the question of where the Council's decisions originate and whether it is simply a mediating body for the government to implement its anti-social agenda, similar to its use of bargaining tables with elementary and secondary school teachers and education workers.

This is the body that will be negotiating with the union to come to an acceptable agreement in the time allotted for negotiations. Can faculty members have confidence that it will negotiate in good faith this time around? What responsibility does the McGuinty government bear in all this? Faculty members must actively follow developments as they unfold and demand the Council not be permitted to act with impunity against their rights.

More Than Half a Million Unemployed

Ensuring the Livelihoods of All Is the Fundamental Duty of Government

- Rob Woodhouse -

Toronto Rally Against Cuts to Employment Insurance Monday, June 11 -- 12:00 noon Constituency Office of MP Ted Opitz (Etobicoke Centre) 577 Burnamthorpe Rd., just west of Highway 427 Join in to oppose the Harper Government's proposed changes to Employment Insurance in the Omnibus Budget Bill C-38 which pose a grave problem to workers at this time. Organized by: Canadian Labour Congress, United Steel Workers, Good Jobs For All Coalition and Toronto & York Region Labour Council

A fundamental issue on which the legitimacy of any government should be judged is whether or not the government is meeting its responsibility for providing a livelihood and a bright future for all. This means ensuring every worker able to work has a job and ensuring social security programs are in place to provide for seniors and for those unable to work. The continuing scourge of high unemployment, together with the dismantling of social programs and services -- the all-round failure of government to provide for the livelihood of all -- underlies the crisis of legitimacy confronting all levels of government.

There is no acceptable excuse for a government failing to meet this basic responsibility. But every manner of political trickery is used by self-serving politicians to cover up their irresponsibility; an irresponsibility which is exposed month after month as figures are released showing continued high unemployment, increased indebtedness and increased poverty among the working class and people.

The Harper government has defined the problem of unemployment in Canada as a problem of workers being unwilling to take available jobs because Employment Insurance (EI) benefits allegedly provide a disincentive to working. This criminalization of workers is intended as both a cover-up of the government's failure to ensure employment and an excuse for dismantling EI. But facts expose this excuse as complete fabrication: there are 1.4 million unemployed workers in Canada; 6 workers are lined up for every job that becomes available.

Another deception of the Harper government around employment and social security is its justification for cuts to Old Age Security (OAS) benefits. OAS benefits are being reduced under the hoax that they are unaffordable because of a lack of labour force growth. In fact, the problem is that the economy is organized in such a way that it cannot absorb any labour force growth. This is why the unemployment rate for new entrants to the labour market, youth and recent immigrants, is double the unemployment rate of experienced workers. The creation of jobs is far, far behind the growth in the labour force and this situation has persisted over many years.

The situation in Ontario is an important part of the overall national picture because, despite increased number of workers in some regions of Western Canada, Ontario workers still make up 40 per cent of the national work force. The latest figures show that 570,000 workers in Ontario are unemployed, an unemployment rate of 7.8 per cent. Despite the nightmare of insecurity for workers that these figures represent, the McGuinty government tries to prop up its claim to legitimacy by promoting itself as the "job creation government."

During the October 2011 election the McGuinty Liberals used a short-lived decline in the Ontario unemployment rate to campaign that a recovery from the 2008-09 recession was underway and that Ontario is "the leading job creation jurisdiction in North America." Immediately after the election, the unemployment rate continued tracking up, revealing that the recovery is another jobless recovery, where corporate earnings increase while unemployment remains high.

There is a basic deception in McGuinty's claim about job creation that is also carried in monopoly media reports. In terms of the government's duty to provide for the livelihood of all, job creation numbers have to be related to the growth of the labour force. The number of jobs has been increasing at only half the rate of the increase in the labour force and in the latest reporting period the rate of job creation fell even further behind labour force growth.

The number of jobs in Ontario has increased to a little above the pre-recession 2007 levels, but since 2007 the labour force has also increased by 316,000 workers. Half of these workers who joined the labour force joined the lines of unemployed. Re-hiring and creation of new jobs simply does not keep up with population and labour force growth and with the number of jobs being destroyed. From before the 2008-09 recession until now, the number of unemployed workers has grown by 118,000 workers to a total of 570,000. This is a drop of only 75,000 from the number of unemployed at the worst of the recession in 2009. For workers in Ontario, the recession hasn't ended.

The job situation for Ontario workers will get worse if the McGuinty government is able to push through its austerity agenda, directly eliminating thousands of jobs in Ontario government services and spin-off job losses as wages of these workers are eliminated from the economy. More jobs will be destroyed through privatization of public services as the owners of privatized services derive profits from squeezing workers and cutting jobs. Profits of privatized government services enterprises are also often removed entirely from the economy, disappeared into the vaults of the international financial oligarchy.

McGuinty runs around the province staging photo ops every time a company hires 100 workers here or 200 workers there, declaring "My plan is working!" But jobs are continuing to be lost by the thousands as the international monopolies are allowed to continue their wrecking of Ontario manufacturing unabated. This was the case earlier this month when GM announced the elimination of 2,000 auto assembly jobs and the closing of one of the Oshawa plants. Thousands more jobs in auto parts feeder plants in the Oshawa area will also be lost when the plant closes next year. McGuinty's only plan is to offer manufacturers hundreds of millions of dollars to keep plants open, which isn't much of a solution since the monopolies simply use this money to increase automation and eliminate more jobs.

No amount of political posturing and excuse making will wash with the more than half a million unemployed workers in Ontario, with the hundreds of thousands only working -part or with the employed workers whose livelihoods are under downward pressure because of this army of unemployed looking for work. Ensuring a job for all who are able to work has to be put at the centre of all economic activity, along with support for social programs that ensure a livelihood for all who cannot work and for retired workers. Any government that fails in its duty to ensure the livelihood of all has no legitimacy in the eyes of the working class.

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