Working Families Poorer, Fed Demands Action

Jim Lipkovits

The BC Federation of Labour has challenged Olga Illich, newly-appointed Minister of Labour to deal with the growing inequality facing working families.

The challenge comes from BC Fed President Jim Sinclair who points out that  "Employment standards are the lowest in Canada and too many people are dying or are injured on the job," said Sinclair. "The new Minister has her work cut out for her. This government didn't need a new Labour Minister, it needs new policies to deal with the really difficult situation facing thousands of working people."

"Working people are sharing less and less in the benefits of economic activity. High living costs and no real growth in wages have wiped out disposable income. People can't afford to set aside any savings for their family's future," said Sinclair. "It's no wonder we have the highest levels of child poverty in Canada."

BC's working poor still face a $6/hour training wage and the minimum wage of $8/hour hasn't changed since 2001.

According to a survey conducted earlier this year by Ipsos Reid, 51 per cent of British Columbians said they haven't benefited from the improving provincial economy, including 59 per cent of those with an income under $40,000, which is close to BC's average income.

Sinclair added that one of the first tasks facing Illich is to immediately address serious problems at the Labour Board. "It was tough enough when the BC Liberals changed the Labour Code to favour employers," Sinclair said. "Now we face a significant backlog and delay created by an apparently deliberate shortage of skilled and knowledgeable staff. If BC's Labour Board doesn't work, then labour relations in BC won't work either."

Union Refugee Vows for Re-instatement in a Free Mexico

Marco Procaccini

A high-profile and controversial Mexican union leader has taken temporary refuge in the Lower Mainland after fleeing last week from what he says are trumped up charges by a fraudulently elected anti-democratic regime.

MexicoNapoleon Gomez Urrutia the leader of Mexico’s 280,000-member National Union of Miners and Metalworkers (Los Mineros) was secretly removed from his position in February by the Mexican government, accused of embezzling $55 million in union funds and replaced with a company-backed rival. The action was made public after Gómez accused Mexican-owned mining company Grupo Mexico of “industrial homicide” in a February 19 explosion at the Pasta de Conchos mine that killed 65 workers. Most of the victims were temporary contractors with no training and insufficient oxygen supplies.

The ruling PAN, led by right-wing corporate-backed President Vicente Fox, who reportedly has connections with the Group firm, intervened and removed Gomez under its special powers act. That move sparked six months of crippling labour unrest across Mexico

In an interview with the Solidarity Center web site, Gomez said “the union’s executive is ready to call for another nation-wide general strike of all mining and resource workers if the charges are not dropped” and he is not re-instated as the union’s elected president.

The Fox regime, a close ally of US President George Bush and the ruling Republican Party, has been on a month-long crackdown on civil rights and liberties since its re-election, which international observers and supervisors say was the result of outright ballot tampering and intimidation.

Andrés Manuel López Obrador, leader of the center-left opposition group, which had enjoyed a small lead in the polls right up to July’s election, has demanded a full recount, citing numerous reports of ballot tampering and intimidation by government officials at voting places across the country.

But the country’s electoral tribunal, currently dominated by PAN officials, has refused the request.

“The largest demonstrations in our history are daily proof that millions of Mexicans want a full accounting of last month’s presidential election,” he said. “Unfortunately, the electoral tribunal responsible for ratifying the election results thwarted the wishes of many Mexicans and refused to approve a nationwide recount.”

It is currently facing rotating strikes by both public and private-sector workers and students, and many of its corporate backers are being targeted by mass consumer boycotts. Reportedly, many Mexican cities are experiencing rent strikes and refusals to pay taxes unless the government agrees to a full ballot recount or a new election.

The union has become one of the most vocal advocates for workers’ rights, social democracy and other democratic reforms (including calling for the abrogation of the North American Free Trade Agreement, saying it is a destructive and ineffective deal for all three countries), ever since Gómez was elected as its general secretary in 2002. In 2005, Los Mineros waged a 45-day strike against major steel producer Grupo Villacero, winning an unprecedented eight per cent pay increase and 34 per cent in benefits.

Thousands of union miners in Mexico joined solidarity actions with miners in Peru and U.S. border cities employed by Grupo Mexico and its subsidiaries. The union also opposes corporate-sponsored labor law reform proposals aimed at undermining fundamental worker rights such as freedom of association and the right to strike.

In response to Gómez's removal, workers at Grupo Mexico and other major mining plants nationwide walked out in solidarity, refusing to negotiate their contracts without Gómez to lead them in collective bargaining. On April 20, police stormed Grupo Villacero’s Sicartsa steel plant, where a strike had entered its nineteenth day. Armed with tear gas, clubs, and guns, they shot and killed two miners and wounded dozens more.

In a strongly worded letter to President Fox, Steelworkers President Leo Gerard decried the government’s “murderous actions.” AFL-CIO Executive Vice-President Linda Chavez-Thompson issued a statement deploring the violence. Despite national and international protests and the decision by the union's Congress in May to ratify Gómez's leadership, the government continues to threaten him with criminal prosecution.
Gómez has built international solidarity, gaining a seat on the executive committee of the International Metalworkers' Federation , the Global Union Federation that represents 25 million miners worldwide. In April 2005, Los Mineros signed a strategic alliance with the United Steelworkers, which represents 850,000 members in the United States and Canada.

Worker rights activists have rallied worldwide to support Los Mineros and demand Gómez’s reinstatement. Letters have been sent to Mexican President Vicente Fox from AFL-CIO President John Sweeney; the Steelworkers’ Gerard and leaders of other national unions; the International Confederation of Free Trade Unions and its regional office, ORIT; ICFTU affiliates; the IMF; and 17 members of the U.S. Congressional Hispanic Caucus.

On March 17, thousands of union members, students, and community activists in six US cities joined demonstrations. Chavez-Thompson issued a statement deploring the violence. In Indianapolis, protestors presented to the Mexican Consulate a resolution passed by the Indiana AFL-CIO Executive Board that pledged support for Gómez and called for full trade union rights. A delegation of U.S. and Canadian Steelworkers traveled to Mexico to voice their support for Gómez and Los Mineros.

On April 28, Workers Memorial Day, more than 4 million miners, teachers, electricians, telephone workers, and other union members participated in a rolling general strike during a day of action on Los Mineros. Three days later, hundreds of thousands of workers from unions affiliated with the newly formed National Front for Trade Union Unity and Autonomy marched in May Day rallies throughout the country, demanding an end to government interference in Los Mineros.
The “Fiscal Imbalance” and Bad Ideas for Federalism

Marc Lee
Most Canadians, if asked, would probably view the issue of the “fiscal imbalance” as a good cure for insomnia. That’s too bad because it is an issue that could fundamentally reshape what it means to be Canadian.
The term “fiscal imbalance” is a loaded one, a pejorative used to imply that balance must be restored to Canadian federalism.
To date, the issue has revolved around provinces seeking more money from Ottawa. Moving forward, the waters of the alleged “fiscal imbalance” are muddy – it means different things to different people due to federal-provincial squabbles, party politics, academic analyses, and the somewhat blurry filter of the media
The reason we should be concerned is because of more radical proposals to shift responsibilities to the provinces in areas where the national interest necessitates a federal presence. With the small-government Conservatives seeking to appease separatists in Quebec, the ingredients are on the table for a major restructuring of the Canadian federation.
Solving the “fiscal imbalance” runs the risk of becoming a downsizing exercise for the federal government. Some influential commentators, including a Quebec government commission, the C.D. Howe Institute, and the Canadian Council of Chief Executives, are calling for massive federal tax cuts, paid for by eliminating the major transfers to the provinces for health care, post-secondary education, and social welfare. The provinces, it is argued, would then pick up the tab by raising their taxes.
Yet, a careful look at Canadian history and other federations worldwide suggests that Canada does not have deep structural problems. It is not obvious that the present situation constitutes an “imbalance,” nor that “empowering the provinces” is the answer in a federation that is already one of the most decentralized in the world.
What is being called an imbalance is, in fact, a relatively normal state of affairs in federal systems. Canada has used federal taxes to fund transfers to the provinces to support social programs, such as medicare, that are now at the heart of our national identity. A number of benefits result, including regional development, greater tax harmonization, the efficiency gains of a single administrative system, and common standards and levels of service.
History demonstrates the importance of a strong federal role in the development and expansion of social programs and the achievement of national standards. For example, the federal government played an essential role in winning the battle over hospital user-fees and extra-billing by doctors in the early 1980s.
The problem with fiscal federalism over the past couple of decades has been the adverse consequences of federal withdrawals from the “cooperative federalism” model, plus increased tax competition among the provinces.
Provinces have rightly criticized the federal government for cuts to transfer payments in the mid-1990s, amounting to approximately $6 billion per year. However, in response to provincial lobbying, these transfers have recovered most of the lost ground.
But provincial governments themselves deserve much of the blame for their current fiscal challenges due to tax cuts over the past decade. The lost revenue to provincial treasuries from personal and corporate tax cuts is estimated to be as much as $30 billion per year, an amount that dwarfs the original loss of federal transfers in the mid-1990s.
Proposals that would see the federal government cut its taxes so that provinces can raise their own taxes would actually worsen regional inequality in Canada. Smaller and poorer provinces would be the losers because they would have to raise their taxes much more to provide public services equivalent to richer provinces.
Moreover, in a climate of tax competition, provinces are not likely raise taxes if some provinces, like Alberta, can rely on underlying budget surpluses arising from resource royalties without needing to raise their taxes. Indeed, the different revenue-raising capacities of provincial governments arising from resource royalties does represent a real imbalance that should be, but is not, currently on the table.
Rather than decentralization, Canada would actually benefit from uploading some provincial responsibilities to the federal government. These include Pharmacare, social assistance and labour market training, areas where the federal government could reinforce its existing activities and programs, and that would benefit from a coordinated national approach.
Federal-provincial talks later this year should not be limited to a narrow tug-of-war over transfer payments nor should they be an exercise in downloading of federal responsibilities. Rather, they should consider options that increase and consolidate federal responsibilities in certain areas, and address the real resource-royalty imbalance among provinces.
The result would be strengthened Canada, with common standards and services, not a patchwork that bears little resemblance to the Canada most of us want.
Marc Lee is a Senior Economist with the BC Office of the Canadian Centre for Policy Alternatives, and the author of Tax Cuts and the “Fiscal Imbalance” available at

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