IT’S BUDGET DAY, AND ONGOING POLLING SPEAKS to significant amounts of support for the new Trudeau government. The new PM himself has hinted that he is prepared to help lead a reinvigorated progressive movement internationally. It’s still early days, but it’s difficult to deny that the initial impressions of Justin Trudeau internationally have been favourable.
To be one of the leaders of global progress, however, Trudeau has to show that his ideas work at home, and on this particular budget day that will be a tall order. We’ll hear the usual spin from politicians, economists, media pundits, and interest groups on the budget’s effects. People will debate the size of the proposed deficit, the effectiveness of investment in infrastructure, and how Canada has to get its productivity moving again.
Yet, as with the recent meetings of the World Economic Forum in Davos, all this maneuvering will be taking place against a backdrop of staggering global financial inequity. Just as in Davos, where the world’s elite heard directly from Oxfam that 62 people now control over half the world’s wealth (more than the poorest 3.5 billion people), Canada has to come to terms with the harsh reality that much of the great wealth created in this country goes to fewer and fewer people. While today’s budget will mostly involve tinkering, it’s likely that the fundamental flaws on inequity on how we handle our finances will go unaddressed.
Oxfam’s revealing study was the work of Deborah Hardoon, Sophia Ayele, and Ricardo Fuentes-Nieva. One of their main subjects of research was the increasing disconnect between workers and their earnings. In advanced nations, like Canada, the national income going to workers is falling, while that going to owners and elite executives is growing. This shouldn’t come as a surprise to any of us who have watched average wages remain stagnant at the same as corporate profits mushroom.
In the poorer countries, the same trend continues. Between 1990 and 2010, in many developing nations learned that some 40% of their workforce saw their wages grow more slowly than the national average – a tragic reality that left 200 million people mired in abject poverty despite the growing wealth of their respective nations.
Then came the intriguing revelation in the Oxfam report that $8 trillion dollars of global generated wealth remained untaxed because it was diverted to offshore savings accounts. Much of this was from countries like Canada and the United States – revenue that could have been put towards alleviating poverty or increased worker wages in advanced nations. This has remained the financial backdrop for successive Canadian governments.
We’d be making a great mistake to assume that this vast inequity in our wealth is only taking place in poorer regions of the world. It’s a reality that continues to cripple worker wages in Canada and to rob citizens of the vital investments required to prepare ourselves for a fairer economic future. Canada was built upon the model of effective wealth sharing – the only method possible to adequately manage such a large nation with a relatively small population.
This is crucible working its way through the global financial system at the time that Canada’s new government is laying out its first budget. To lead a global progressive movement means to come face-to-face with this one great conundrum: how to work toward income equality when the financial trends are heading the other way, burgeoning the gap between the rich and the poor? Countries shouldn’t become victims of their own wealth, but, indeed, be liberated by it. Budget 2016 is likely to be more about the former than the latter.
It will take a remarkable amount of courage, ingenuity, and popular support to lead a global movement that will reverse current trends. Mr. Trudeau has some time to develop that leadership by showing that it works at home. People in Canada and around the world are dissatisfied following a decade or more of austerity and the lack of investment in people and in the planet. They are eager for change and it’s this reality that has provided a window for progressivism to take on its onerous task. But should we tinker, the downward slide will continue, affirming Irish writer Oliver Goldsmith’s observation: “Ill fares the land, to hastening ills a prey. Where wealth accumulates, and men decay.”