Economic Matters of Concern to the Polity
Fall Economic Statement Much Ado About Nothing
Acting on behalf of the ruling elite, the representative of the Liberal cartel party government Chrystia Freeland presented a fall economic statement on November 3. She and much of the mass media made feeble attempts to portray the statement as important but could not, as it was just the normal run of the mill "things are not really as bad as they feel" pronouncement of policy objectives. Besides, the government admits it cannot do much because private interests control the economy as their private domain and fiefdom.
The role of governments and the cartel parties has degenerated. They no longer consider providing for the public good as a duty, but rather provide solely for the private interests of the giant oligopolies, including repeatedly taking money from the public treasury to pay the rich in one way or another. The vast human productive powers that have been created by the workers are out of their control and that of the rulers as well. For the workers this poses the necessity to advance a nation-building project of their own, to take hold of these vast powers and use them for the benefit of the human and natural environment. The rulers, who cannot control the human productive powers, in their desperation resort to governments of police powers, which act with impunity to repress and criminalize the workers while destroying human productive powers through wars of destruction abroad and closures and demolition of factories, mines and mills at home.
The spokesperson of the Liberal cartel party in power admitted, "Canada cannot avoid the global slowdown, any more than we could have avoided COVID once it had begun infecting the world."
It shows the extent to which
governments are impotent to solve problems as they are bound
within a straitjacket of serving the rich and their enterprises
and maintaining the status quo based on private ownership of the
socialized economy. The imperialist economic system needs
complete renewal with a new pro-social direction and aim, not to
serve global private interests but the people and their society.
Policy objectives from the imperialists and their elite are par
for the course. The rulers are smug because, like the emperor
who struts around naked while the courtiers praise his new suit
of clothes, they have the power to speak nonsense while they
carry on unmolested, paying the rich and privatizing social
programs, abandoning the people to fend for themselves.
Their pablum has the aim of presenting current arrangements in a manner designed to make the people feel that something is being contemplated to deal with the very real insecurity and worries they are feeling. They suggest that, in the final analysis, nothing of substance can or should be done because the economy will somehow sort itself out on its own without human intervention. Increasingly, their empty chatter is seen as such with working people beginning to seize the initiative to defend their rights, interests and claims through actions with analysis to open a path forward to build the New.
The cartel party's feeble attempt in the economic statement on social programs and to give assurances things will not be as bad as many fear fell flat. Without much conviction Freeland proposed some minor tweaks such as, "to make the federal portion of all Canada Student Loans and Canada Apprentice Loans permanently interest-free, including those currently being repaid." What is hidden is that this is not a cancellation of student debt and measures to make education a right for all but a transfer from students to the government of interest payments on student debt to the private moneylenders. It is, in effect, yet another pay-the-rich scam.
What are made to appear as
investments in social programs, either new or refurbished, are
measures designed to strengthen private interests in control of
the economy. This includes the government topping up of wages
for low-income workers, paying rent subsidies to landlords, and
paying up to $1,500 in closing costs when buying a home. These
solve no problems and change nothing of substance, certainly not
the anti-social anti-people direction and aim of the economy to
serve the rich.
Freeland also announced new programs to pay billions of dollars to private enterprises to transition to "clean energy" and "clean hydrogen." The imperialist media say this scheme is to catch up to President Biden's plan to hand over billions of dollars in public green funds to private interests. The media call this "attracting business investment."
She then said the Liberal cartel party will move "forward with the Canada Growth Fund (CGF), a $15 billion institution to help businesses fund emissions-reducing technology and 'unlock private capital.'" It is clear private interests have locked up private wealth the working class has produced and the Liberal party government can bribe the private interests with public funds to unlock it.
The government reports, "The 2022 Fall Economic Statement outlines the design, operations, and investment strategy of the Canada Growth Fund, which will help to attract private capital to invest in building a thriving, sustainable Canadian economy."
Canada's "Rationale" for Using "Innovative Public Funding Tools"
In its Fall Economic Statement, the Liberal cartel party in power provided the following "rationale" for upping the ante in the CGF:
"CGF will help Canada keep pace with a growing list of jurisdictions that are using innovative public funding tools to attract the significant private capital required to accelerate the deployment of technologies required to decarbonize and grow their economies.
"Because Canada's economic prosperity has traditionally been built on natural resources and other emissions-intensive industries, a substantial transformation of our industrial base will be required to meet our climate targets and ensure long-term prosperity for Canadians and the Canadian economy. Canada needs to build the technology, infrastructure, and businesses to reduce our carbon reliance, but this will not occur without rapidly increasing -- and then sustaining -- private investment in activities and sectors that will strengthen Canada's position as a leading low-carbon economy.
"Today, while companies and investors are aware of opportunities to commercialize and deploy emissions-reduction technologies, they are often restrained due to investment risks that are often associated with these investment opportunities. CGF is designed to invest in a manner that mitigates these risks that currently limit private investment, and unlock the domestic and foreign capital that Canada needs now.
"The energy security and climate change provisions in the recently passed Inflation Reduction Act (IRA) in the United States have created particular urgency for Canada. The IRA includes U.S.$369 billion in new climate and energy spending to find new areas of growth in the American economy. To further unlock private investment, the IRA increased the loan and loan guarantee authority of the U.S. Department of Energy's Loan Programs Office almost tenfold -- from U.S.$40 billion to U.S.$390 billion, which significantly expanded available financing for both new innovative clean energy projects and the retooling and decarbonization of existing energy infrastructure.
"The magnitude of the IRA incentives and expanded financing supports will significantly mobilize investment and improve U.S. project economics. This will draw capital, talent, and raw materials away from Canada if we do not respond. As an instrument that can attract private capital, CGF will be an important part of Canada's work to respond to the IRA and remain competitive."
What this means is that the CGF will use public funds to "scale up" private companies and "capitalize on Canada's abundance of natural resources and strengthen critical supply chains" to serve the U.S. war economy.
The statement highlights some pay-the-rich schemes: "Following the adoption of the Inflation Reduction Act in the United States, the need for a competitive clean technology tax credit in Canada is more important than ever. The 2022 Fall Economic Statement proposes a refundable tax credit (for private enterprises) equal to 30 per cent of the capital cost of investments in: Electricity Generation Systems, including solar photovoltaic, small modular nuclear reactors, concentrated solar, wind, and water (small hydro, run-of-river, wave, and tidal); Stationary Electricity Storage Systems that do not use fossil fuels in their operation, including but not limited to: batteries, flywheels, supercapacitors, magnetic energy storage, compressed air storage, pumped hydro storage, gravity energy storage, and thermal energy storage; Low-Carbon Heat Equipment, including active solar heating, air-source heat pumps, and ground-source heat pumps; and, Industrial zero-emission vehicles and related charging or refueling equipment, such as hydrogen or electric heavy duty equipment used in mining or construction."
The regressive and unequal practice of handing out public funds to private enterprise is given the veneer of being pro-labour and showing concern for the natural environment. It is meant to woo rich oligarchs to set up shop in Canada. The economic statement says: "The Department of Finance will consult on any additional eligible technologies (e.g. large-scale nuclear and large-scale hydroelectric). To incentivize companies to create good jobs, those that adhere to certain labour conditions will be eligible for the full 30 per cent credit, while those that do not will only be eligible for a credit of 20 per cent."
The cartel party in power also pledges yet another pay-the-rich scheme saying, "The government is proceeding with its commitment, announced in Budget 2022, to establish an investment tax credit to support investments in clean hydrogen production.... The lowest carbon intensity tier that meets all eligibility requirements is proposed to receive an investment tax credit of at least 40 per cent."
Left unsaid in the economic statement is the reality that the government will continue the imperialist practice of borrowing money from private cartels to finance its budget deficits and debt. The recent deficits have pushed the public debt to private interests beyond $1.2 trillion. The interest charges to service the debt last year amounted to $24.5 billion. The amount flowing into the already bulging pockets of the global private oligarchy to service the debt rose by 52 per cent in the first five months of the fiscal year, in tandem with interest rate hikes. This means yearly debt interest service charges will immediately double to $49.8 billion.
These payments to the rich from the public treasury are a huge burden on the working people who are best served if they put forward the demand for a moratorium on servicing the existing debt, establishing an investigation into the legitimacy of the existing public debt and making it a criminal offence for government to borrow from private moneylenders.
The economic statement confirms
the continuing restructuring of the state as a machine to
guarantee control of the Canadian economy by a global
imperialist oligarchy pushing the U.S. striving for world
hegemony. The Canadian state's capacity to mobilize public funds
and control the working class through the use of its prerogative
powers is being used to subordinate Canada to the U.S. frenzy to
escape civil war at home and feed its war preparations which
will plunge the world into a dangerous world war.
The working people will give the fall economic statement a fitting response by stepping up their fight for the rights of all, putting forward the claims they are entitled to make on society by virtue of being the producers of all the wealth the society depends on. The demand for a moratorium on debt incurred to pay the rich and suspending interest payments on that debt would show how much money is available to fund social programs and restore the health care and education systems.
This article was published in
Volume 52
Number 11 - November 2022
Article Link:
https://cpcml.ca/Tmlm2022/Articles/M520111.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca