A Time of Recession: Trend Lines in Canada

Public Justice in a Time of Recession: What has hopeful citizenship to offer?

Address to the Annual General Meeting of
Citizens for Public Justice
May 7, 2009 Ottawa

Joe Gunn, CPJ Executive Director

In this first excerpt from Joe’s speech, he explores the trends that have arisen in this time of recession. Look for other excerpts in the coming weeks or read his full speech.

As a relatively new ED at CPJ, someone perhaps not known to a majority of CPJ’s members, I’m glad to take advantage of a few moments to provoke some thinking about “Public Justice in a Time of Recession: What Has Hopeful Citizenship to Offer?”

I’d like to center my remarks on three main questions:

1) What are a couple of trend lines in this time of recession and difficulty?
2) What is the status of faith-based work for social justice in Canada today?
3) Where might we find meaning in this business of “hopeful citizenship? How might we concentrate our efforts at this time of recession and difficulty? Where do life, hope and energy reside.”

Major Trend Lines

There are many major trend lines that we could discuss, but for purposes of this discussion I’d like to mention just a few…

It isn’t a bad place to start by referring to Barack Obama, especially now that we have had the chance to see him in action for just over 100 days. You have to believe that there really is an “Obama Factor” at play that spills over to Canada in at least three ways:

a) our largest trading partner’s new economic strategy (where government intervention for bailouts and stimulus might reach as high as $13 trillion) has the effect of making government intervention and even regulation a necessary, and even “good” thing again. Here, we’ve seen the Conservative government in Ottawa undergo a major conversion from the Economic Statement of last November in which no extra spending was necessary, to a January budget where massive deficit spending has now been proposed;

b) President Obama seems to propose a new manner of insertion in the global game of power projection, with a softer, much less unilateral, rhetorical stance (something that Ottawa has not quite imitated yet);

c) evidence of a different style of leadership: a calm and eloquent leadership that relies heavily on teamwork (values-based and emotionally compelling narratives.) A noticeable shift in the PMO and the PM himself towards less belligerent attacks on opposition parties less of an effort to control the media have been perceived since the government almost fell and Parliament was prorogued at the end of last year.

Let me move to another, perhaps the most prominent trend line for Canadians at present: the economic recession.

The economic crash of 2008 has been an unspeakable tragedy for many; that some 4 million poor people in the USA have been driven from their homes due to the market meltdown, and that many North Americans have lost one quarter of their net worth in just a year and a half. And while Canadian politicians try to assure you that Canada is better able to handle the mess caused by the greatest regulatory failure in modern history, thousands of us have already lost work and livelihoods, and feel that our future is in peril.

The first round of layoffs has hurt the manufacturing and commodities sector, “men’s jobs” hardest, but this will spread soon to the service sector. Here in Canada, 387,000 full time jobs have been lost to date. Some studies suggest that unemployment could rise to 12%.

But what’s interesting is that in the recession of the 1980s, the economy recovered lost ground in a year and a half, but it took 4 years for the number of full time jobs to rebound. And it took 7 full years to get back to the pre-recessionary number of full time jobs after the 1990-91 recession, even though GDP bounced back in four quarters.

Worse yet, changes made to the Employment Insurance system in the 1990s have gutted worker protections: whereas in the last recession, 85% of unemployed men and 81% of unemployed women could rely on EI benefits if they lost their job, today only 45% of men and 39% of women can. No wonder the head of the Bank of Canada, a fellow known for his rather rosy economic predictions, is saying that employment will be a major difficulty in Canada for quite some time even after the recovery begins.

Let me make a third observation, concerning a trend that we people of faith must attempt to change…the tendency to look inward as the recession takes hold. In other words, when things get tough, we can recoil into our safe havens and cocoons, or we can be seen and known to translate our deepest beliefs into visible and effective action.

You see, even in this recession, it might be a privileged time for groups like CPJ to propose action by the federal government towards developing a federal poverty reduction strategy. Our Dignity for All campaign will do exactly that. We’re hoping that Canadians who are affected by the economic downturn will increasingly see the need for such a strategy, because they themselves understand that even middle class folks have become more vulnerable.

But what about beyond our borders? We know the first wave of the financial crisis began in the USA, and that the contagion has spread to other wealthy countries. Less well known perhaps, is the fact that the global recession could bankrupt as many as 16 “emerging” economies. Countries such as Latvia, Ukraine and Hungary are part of the second wave of the downturn, and the International Monetary Fund (IMF) has been rushing to their aid.

However, a third wave is coming as well, composed of poor countries. Weaker economies are now experiencing the downturn in international trade, the precipitous fall in foreign investment and perhaps most importantly, large reductions in remittances (those monies sent home to families by loved ones working overseas). ActionAid, a British anti-poverty charity, has released research suggesting that the global financial meltdown will cost developing countries over US$180 billion by the end of 2009 and over $400 billion within three years.

How has Canada responded? We’ve turned inward, away from the poor.

The recent federal budget made no mention of international aid. Apparently the government intends to maintain its previous commitment to an 8% increase. Even with this level of over $2.2 billion, however, Canada’s aid spending now sits at less than half our stated commitment of 0.7% of GDP.

So a new Parliament should not be allowed to dodge Canada’s international commitments. It was amazing how little debate there was on Afghanistan, where Canada has spent billions of dollars and lost over 100 soldiers. In the face of growing international hunger, rising hunger rates and economic turbulence, Canada must increase development assistance and display the leadership necessary to keep our pledge to meet the Millennium Development Goals.

There are many more trend lines we could discuss tonight, but what we’re really here for tonight is to engage in thinking about our role as faith-filled citizens. Read the rest of Joe’s speech, and look for excerpts from the rest of his talk in the coming weeks.