Global Employment Trends Meets Talent Crunch

The great recession of 2008-2009 highlighted two startling trends in the global economy.  Both impact workers – from CEOs to entry-level employees and tomorrow’s recruits.

The possibility of the first trend frightened the father of cybernetics, Norbert Weiner (1894 – 1964), long before the current reality hit.  An American child prodigy, he graduated from high school at 11, was awarded a BA in mathematics at 14 and received his PhD from Harvard at a mere 18. His dissertation was on mathematical logic.  During World War II, he applied this logic to automate the aiming and firing of anti-aircraft guns.

Afterwards, Weiner gloomily predicted the high-tech world he and his colleagues were inventing would “undoubtedly lead to factories without employees…and the unemployment produced by such plants could only be disastrous.” 

While the United Auto Workers understood that automation would shrink the ranks of the unskilled labour force, they failed to grasp the single-minded determination CEOs and managers had to replace workers with machines — the core dynamic of automation.  Not only did these actions reduce labour costs, but also increased quality making customers happy and boosted profit margins, benefiting shareholders.

Then one day there were too many cars.  North America was left with Saturn and Pontiac’s eerily silent assembly lines and hundreds of thousands of unemployed wage earners.  GM had filed for bankruptcy.

Mums and dads who had urged their children to train for these previously high-paying, assembly-line jobs were suddenly wrong.  And math-wizard Norbert Weiner was right there would be serious consequences to local communities, suppliers, small businesses and especially people’s lives.

Automation eliminated those positions.  Many others were purged by the second global trend, which quietly gained steam during the past decade – outsourcing.

To save the costs of workforce salaries and sweeten bottom lines, CEOs of manufacturing companies discovered they could produce their goods cheaper overseas.  Those positions departed.  Next, call centres were located abroad, followed by information technology and business process services. 

Abruptly, North Americans found educated workers abroad were performing tasks their neighbours previously did.

Outsourcing, predicts American writer Daniel Pink, will gain momentum. “Left-brained work – legal, accounting, computer programming – can and will be done more inexpensively in developing nations (especially in China and India).” 

As traditional assignments disappear, parents and guidance counselors need to assist young people to make wise career choices.  Outplacement groups want the same for their unemployed clients.

The Calgary Chamber of Commerce and the Talent Pool Development Society are jointly hosting their annual Career Show (October 30 – 31 at the BMO Centre, Stampede Grounds) to connect Chamber members, other Calgary businesses, industry associations and educators looking to provide career information and possibly hire talented entry-level and experienced professionals interested in job opportunities.  The current economic downturn offers an excellent chance for Calgarians to prepare for the jobs of the future.

Julie Ball, the Talent Pool’s executive director and manager of the Career Show, reports the show targets, amongst others, high school and university students.  “We want attendees to discover interesting and exciting jobs they might want to pursue after taking their post-secondary courses and training.”  The show also supports under-represented groups of talent – mature workers, Aboriginals, people with disabilities, immigrants and youth – to become valuable contributors to their families and the economy.

“The Show was originally launched to help the business community deal with the 13-year labour shortage Calgary endured,” Ball states.  “Today’s show focuses on employers who will need to attract and retain gifted workers capable of giving those companies a real competitive advantage.  That’s an issue for the CEO, the executive team and line management.”

Calgary companies need astute human resource strategies to ensure they attract the best and brightest to their organizations.  “Create a strong employer brand to attract ideal talent,” Ball advises, “plan ahead to map out your strategic advantage, invest in your current workforce and train your exceptional workers to run the business tomorrow.”

So what careers should Mum and Dad encourage their young people to choose, whether high school aged or adult offspring who have moved home to weather the recession?

Manpower states the top 10 jobs Canadian employers are trying to fill are:  skilled trades, sales representatives, engineers, technicians, secretaries and administrative assistants, teachers, drivers, accounting and finance, labourers and nurses.  Interesting since the global talent shortage is exactly the same in the first four and differs in the order of the last six (managers and executives, followed by accounting and finance, labourers, production operators, secretaries and administrative assistants, and finally drivers).

Daniel Pink believes Canadian and American companies need to concentrate on right-brained assignments – research, development, design, marketing and sales, global supply chain management – to survive and thrive.  “Right-brain abilities are those creative and big-picture thinking skills that can never be reduced to a formula,” he reports.  “Businesses need right-brained thinkers who can think up products and ideas, like the Apple iPod, that we didn’t even know we needed.

As comedian Sid Caesar used to say, “The guy who invented the first wheel was an idiot.  The guy that invented the other three, now he was a genius.”

Time to Scrap Unnecessary Law

One of the greatest documents ever written was the Magna Carta, the Great Charter of Freedoms, in 1215.  It bound King John of England to give rights to his subjects, whether they were free or fettered, and allowed prisoners the right to appeal against unlawful imprisonment.

Historians agree this document was the cornerstone for both constitutional and common law in the English-speaking world.  Although many of its clauses were renewed in the Middle Ages, by the mid-1850s, most of the original articles had been repealed.

Under Premier Klein’s leadership, the legislators acknowledged Albertans cherished their publicly funded and administered health care system.  Everyone – from the government to the doctors, nurses, technicians and therapists – wanted to deliver efficient, timely and compassionate care to those in need.

With the noblest of intentions, the Alberta government passed the Health Care Protection Act (Bill 11) in April 2004.  In essence, it prohibits the operation of private hospitals, bans the practice of queue jumping and regulates the delivery of surgical services in hospitals and clinics. 

The good news is surgical success rates rose for urgent procedures and several Alberta hospitals are now renowned for their heart, cancer and spinal operations, complemented with excellent patient care.

Meanwhile, the waiting lists for routine surgeries – such as hip and knee replacements or cataract removals — grew longer and longer.  It is a tragedy that sick Albertans and their families – those who are most harmed by the lack of quick access to medical care – must endure the delays.

Employers are burdened by the loss of their skilled employees, away on disability. 

As the complaints grew nosier, the government realized this was an unintended consequence of the Act.  It rescinded the piece on private hospitals and allowed a number to become centres of excellence for certain, standard surgeries.  All are paid by Alberta Health Care.  Wait times were dramatically reduced and patient satisfaction rates rose.

The Calgary Chamber of Commerce believes the Health Protection Act has served the province well, but its best before date has expired. 

The legislation triples the regulatory bodies that oversee public and private surgical facilities – Alberta Health Services (AHS), the College of Physicians and Surgeons (CPSA) and Alberta Health and Wellness (AH&W).  Not only does this create a mountain of duplicated paperwork, but it also gave conflicting oversight to the three groups.

The Chamber, ever a proponent of streamlined regulatory environments, recommends the following important articles should be saved if the current Act is scrapped or replaced:

• Ensure all facilities, whether public or private (and paid by the public system), operate at the highest, most stringent conditions and all prioritize patient safety and wellbeing.
• Make Alberta Health Service and the College of Physicians and Surgeon accountable and responsible for the quality of patient care and safety, thus decreasing the need for ministerial authority over surgical facilities.
• Encourage competition between surgical units to promote technological and clinical innovation – this will help attract private capital to purchase new diagnostic and treatment equipment (such as the prostate laser equipment at the Rockyview Hospital).
• Order the majority of pharmaceuticals in bulk (by the thousand) and buy unusual and seldom- prescribed drugs in units of 10 or less to save costs and prevent waste.
• Create a level playing field for all health providers distributing resources fairly and equitably.

Since the Magna Carta, governments have passed pieces of legislation.  By law, Alberta spends billions every year to deliver a quality health care to its citizens.  Smart legislators will eliminate unnecessary paperwork and focus precious resources to help the sick heal.  Isn’t that what we all want?

World feels heat in Copenhagen

In April 1940, Germany invaded Denmark.

For a couple of hours the Danish army fiercely resisted but was quickly subdued.

King Christian X led the nation’s passive resistance against the Nazis.

Every morning, he mounted his horse and rode unarmed and unaccompanied through Copenhagen to emphasize his claims for national sovereignty. He always recognized the greetings of his citizens while ignoring the salutes of the German army.

This fall, another invasion will happen in Denmark and Christian’s great-grandson, Crown Prince Frederik, will preside over it. The Danes hope it results in an environmental agreement signed by the countries of the world.

On Dec. 7, more than 190 nations will descend on Copenhagen to sign a new global climate treaty.

It is designed to replace the fatally flawed Kyoto Protocol, adopted in 1997 and ratified by 184 countries.

In 1997, former PM Jean Chretien called a snap election, defeated Reform’s Preston Manning that June, then signed the Kyoto agreement in December.

Canada was obliged to reduce its emissions to 6% below 1990 levels by 2012.

Not only was this unrealistic, but the federal bureaucracy had done little analysis of the potential economic impact this would have on the country’s then red-hot economy.

Worse still, they failed to consult with the energy-producing provinces.

Fast forward to 2009. Federal Environment Minister Jim Prentice and Michael Martin, chief negotiator and ambassador for climate change, will lead the Canadian delegation to Copenhagen.

The team is committed to an overall reduction in Canada’s GHG emissions and is prepared to support a sustainable energy future. They have sought input from the provinces and territories in an attempt to reach consensus.

Canada’s position is to:

• Acknowledge GHG reduction is a long-term challenge and must be done gradually to reduce costs for consumers.
• Balance environmental protection and economic prosperity with the need for low-cost energy security.
• Reduce GHGs at the source through technology development.
• Reach agreement with major economies and trading partners to avoid international competitiveness issues.
• Recognize that Canada is a growing exporter of energy intensive commodities and should not be put at a competitive disadvantage.
• Allow regional flexibility to avoid pitting areas of the country against each other.
• Avoid wealth transfers internationally.

Opponents argue the Copenhagen signatories will sign away portions of their national sovereignty for global climate change.

Others say the recession has already dampened the economy and lowered emissions by 2.6%. The International Energy Agency calls it “unprecedented and the steepest drop in 40 years.” The Danes have a long track record of doing what’s right for humanity. In 2008, Forbes ranked Denmark as the best business climate in the world.

The Global Peace Index said the country is the happiest place to live (based on health, welfare and education) and among the most peaceful. Obviously, Danes have practised this ethos for many years.

In September 1943, the Nazis decided to deport Denmark’s Jews to German death camps. The Danes collectively smuggled their Jewish friends and neighbours to neutral Sweden, which offered asylum to all who reached its shores. Almost 8,000 lives were saved.

After the war, returning Jews elsewhere in Europe discovered their homes and valuables had been ransacked. When the Danish Jews went back, their fellow citizens had cared for their homes, possessions, pets and gardens.

Pandemic Planning Toolkit for Business

The Chamber released A Pandemic Influenza Planning Toolkit to provide its members, and other interested organizations, with an easy-to-use guide for developing an internal pandemic influenza response strategy.

The Chamber wishes to thank GlaxoSmithKline for providing an unrestricted educational research grant to support this toolkit. The Chamber also wishes to recognize the funding support and subject-matter expertise provided by Global Consulting in the writing of this toolkit.

For a copy of the toolkit, please visit www.calgarychamber.com or email pandemic.preparedness@calgarychamber.com to receive a complimentary CD.

Getting ready for the flu

The most damaging influenza pandemic to strike Canada (and the world) was the Spanish flu that hit right after the First World War (1918-1919).

Interestingly, it was an early subtype strain of the H1N1 virus.

Like today’s disease, it demonstrated a perverse tendency to kill the young and healthy.

Spanish flu was brought to Canada by returning veterans and spread to even the remotest hamlets. Children were orphaned and many families lost their breadwinners.

These deaths caused social and economic disruption. Commerce decreased from a lack of demand for goods and services as workers were sick and businesses could not fulfil their contracts.

In an attempt to halt the disease, municipal governments closed all but necessary services. Provinces enacted laws mandating the sick be quarantined and citizens wear masks in public.

That pandemic killed 50,000 Canadians and about 21-million globally. Most victims, weakened by the virus, generally died of pneumonia. Fortunately, the discovery of penicillin now saves lives.

This year’s H1N1 virus was a novel strain of influenza with no vaccines to provide protection. Thankfully, the medical community has invented and tested the appropriate nasal sprays and injection vaccines. The Canadian government ordered 50.4-million doses at a cost of $400 million.

The U.S. Centers for Disease Control and Prevention reported children have no pre-existing immunity to the virus while a third of seniors have the appropriate antibodies to fight the disease. Translation? Children and healthy young adults are most at risk.

This poses a unique challenge to employers and employees in Calgary where the average age is 33.

Ever helpful, the Calgary Chamber of Commerce has developed an Influenza Planning Toolkit for Business to help its members with their business continuity planning.

Many companies have not clearly thought through the potential absenteeism even a medium-sized pandemic could create.

• Do your clients know how your business will respond and what services you will keep or temporarily drop?
• Do employees understand if you plan to close the business or maintain a skeleton workforce?
• What types of precautions will your company enact to protect front-line service delivery people and clients visiting your premises?
• What safety measures will you take to encourage wellness amongst employees?

Many organizations have posted notices advising staff and visitors not to enter if they have influenza symptoms.

Other signs advise workers to wash or sanitize their hands, cover their mouths and noses with their sleeves and avoid touching their faces. Employees must stay home if they are ill or must care for sick children.

If all Calgarians make the extra effort to get vaccinated and take the precautionary measures to avoid transmitting the virus, this city will prove the prophets of pandemic doom wrong.

Worker absenteeism might cause declines in productivity elsewhere, but not here.

Other regions may see the projected drop of 4.8% to their gross domestic product because tourism sagged, planes, trains and automobiles were grounded and malls and grocery shops closed. British insurance giant, Lloyd’s of London, envisages a pandemic on the scale of the Spanish flu has the potential to reduce global economic activity by up to 10%.

Last week, the World Health Organization announced at least 3,486 people had died from H1N1. Tragic, yes, but 4,000 Canadians die annually from normal seasonal flu. Hardly a pandemic so far.

If every employer, employee, and family takes the necessary steps, we can prevent the next wave of H1N1 from causing social and economic disruption here.

Playing chicken with royalties

In a modern-day Aesop’s fable, flocks of chickens have crossed from B.C., Saskatchewan and Montana — coming home to roost in Alberta.

Provincial officials were flummoxed by this mass migration. The price of poultry dropped. Albertans complained they were sick of slaughtering and eating the birds. Sadly, Colonel Sanders reported layoffs as few wanted to buy their “finger-lickin’ good dinners.”

Like all fables, this too has a moral. Foolish deeds, like chickens, come home to roost. In Alberta’s case, it is embodied in the infamous phrase: “Our fair share.”

In 2007, the Calgary Chamber of Commerce appeared before the Alberta Royalty Review Panel to caution against dramatically changing the royalty system. Our members believed it risked undermining investor confidence and capital flight.

The government ignored our advice. Instead, it decided to “rebalance the royalty and tax system to ensure a fair share was collected on behalf of the grandchildren and yet-to-be born great-grandchildren of Albertans.”

Now it’s 2009 and the chickens have come home to roost.

Alberta is no longer favoured by investors. Unfortunately, according to the Fraser Institute’s Global Petroleum Survey, Alberta rates 92 out of 143 oil and gas basins globally. Worse, investor confidence has evaporated so significantly that Alberta ranks eighth within Canada.

Some of Alberta’s politicians and bureaucrats assert the Fraser survey only measures the perceptions of energy executives and disregards the true potential of the basins.

Global capital quickly flows from areas with high royalty fees or taxes, insufficient infrastructure, price controls, skilled worker shortages and costly regulatory regimes and moves to regions creating good returns for shareholders and institutional investors.

The survey reports these decision-makers rate Alberta as the least fiscally-attractive region in North America and 11th worst in the world.

The petroleum industry used to represent 42% of Alberta’s economy –15% generated by direct oil and gas exploration and production while another 27% came from downstream and spin-off activities. No longer.

Public and private investments have dropped 17.2% while mining and energy investments are down 28.2%. Energy exports slumped 43.4% as the capital dried up.

Even the neighbourhood dry cleaners have seen a drop in business as thousands of laid-off oilpatch workers no longer need their coveralls washed or suits pressed.

It’s time Alberta changed the royalty regime to again attract capital, stimulate the economy and enable industry to create challenging jobs for the unemployed. The Chamber asks the government to:

• Prioritize a competitiveness review now underway and implement its recommendations to improve investor confidence.
• Make Alberta the most competitive jurisdiction for energy investment in North America within five years.
• Change the royalty system to better compensate for investor risk by reducing the short-term royalty take to allow for faster recovery of capital costs and reduce the steepness of the royalty curve so the rate better tracks price and production increases.
• Restore investment certainty through fewer short-term, temporary measures.
• Reduce regulatory costs and timeframes by streamlining the legal framework so small companies can get projects approved quickly.

Alberta is well-positioned to be a leading energy producer for decades. Challenging unconventional resources — oil sands, shale, tight and sour gas — are all a vital part of our future. Surely the government will not linger until Alberta is globally regarded as the least fiscally-attractive basin to do business before it makes changes.

We can’t wait for more chickens to come home to roost.

Crossing street for democracy

 

Isn’t it ironic?

 

A citizen of Calgary will cross an ocean and fight through enemy lines for democracy, yet many will not cross the street to vote or get engaged with the municipal government.

 

Calgary has a proud history of defending democracy.

 

In 1910, the King’s Own Calgary Rifles was formed and housed at Mewata Armoury.

 

Its most famous soldier, Pte. John George Pattison, earned the Victoria Cross, Britain and the Commonwealth’s “highest and most prestigious award for gallantry under enemy fire” at Vimy Ridge.

Pattison’s biographer records the details: “On April 10, 1917, the advance of Canadian troops was held up by an enemy machine-gun which was inflicting severe casualties. Pattison, with utter disregard for his own safety, sprang forward and jumping from shell-hole to shell-hole, reached cover within 30 yards of the enemy gun. From this point, in the face of heavy fire, he hurled bombs killing and wounding some of the crew, then rushed forward overcoming and bayoneting the surviving five gunners. His initiative and valour undoubtedly saved the situation.”

 

Pattison was killed in action less than six weeks later at Lens, France and is buried at La Chaudiere Military Cemetery. He was 42. His Victoria Cross is on display at the Glenbow Museum.

 

What a shame that, just short of a century later, Maclean’s ranks Calgary as the worst city in Canada for voter turnout, with a trifling 25% of the eligible electorate showing up to cast ballots.

 

The poll cites the national average as 41%. Quebec City boasts a 63% turnout, closely followed by Gatineau, Quebec at 61% and Charlottetown at 60%.

 

Maclean’s also places Calgary as dead last among 27 Canadian cities in citizen engagement. While much can be blamed on apathy and the lack of personal accountability, some think it is because city hall treats Calgarians as tenants, not citizens.

 

The Calgary Chamber of Commerce is a champion of open government, a noble form of democracy. It’s simple. The public has a right to know what government is doing and why. Conversely, the public must be engaged and empowered to get involved in the processes of government and be consulted on key decisions.

 

Council meetings are where local democracy happens and the Chamber encourages improvements to better connect Calgarians with city hall:

 

1. Schedule council and policy committee meetings so citizens who wish to have input know when issues will be debated. Currently, interested parties have to wait their turn during a period of several hours or days.
2. Publish an easy-to-access on-line Hansard record of all council and policy committee meetings.
3. Implement a meeting monitor system to provide (nearly) real-time updates on the status of items.
4. Improve the format of council minutes to ensure each alderman’s votes are recorded whether for, against, abstain or absent.
5. Shift the burden onto council to prove there is a legitimate need for secrecy before taking a meeting in-camera.
6. Implement an on-line feed to notify Calgarians when a new document or change is made to the website.
7. Use simple links, as an alternative to the cumbersome database already in-place, to provide a basic archive of all council minutes and agendas.

Calgarians still fight and die for democracy abroad. We salute Cpl. Nathan Hornburg, killed in operations in Afghanistan on Sept. 24, 2007. He is the first soldier of the King’s Own to die in combat since the Second World War.

 

 

In Cpl. Hornburg’s memory, Calgarians must engage and vote on the future of our community. Crossing the street will improve the quality of our democracy.

No quotas on Hansom cabs

Brilliant fictional detective Sherlock Holmes depended on hansom cabs to rush to crime scenes and help London’s finest solve England’s foulest murder mysteries. Conversely, hailing a taxi in Calgary today can be very challenging, and private eyes shun them.

 

Summoning a hansom in the 19th century was easy. Those magnificent horse-drawn, two-wheel carriages were plentiful. If one was not sitting at the curb of 221B Baker Street, a simple shout or two sharp whistles was enough to bring one trotting up.

 

Before the 1980s, anyone in Calgary with a car (whether owned or borrowed) could put out a “for hire” sign and transport people. Quite a few vehicles were rattletraps, as there were no vehicle safety regulations. Then a few enterprising cab companies formed an interest group, called the Calgary Livery Association, to provide safe and reliable service. It also lobbied city hall saying there were too many drivers and the “ruinous competition was turning the cabbies into paupers.”

 

City council, based on advice from the Taxi Limousine Advisory Committee, sets a quota on the number of licences available, establishes the prices charged and regulates the safety standards that all cabs and drivers must meet.

 

Despite the recent economic downturn, the value of a Taxi Plate Licence has almost tripled in the last two years, rising from $50,000 to about $140,000. The inflated tag price means taxis in Calgary are sometimes scarce. In 1986 there were 1,311 cabs available. Today the city has 1,411; the extra 100 are dual-usage cars with wheelchair accessibility and were added in 2006.

 

The Calgary Chamber of Commerce believes a city with more than a million residents needs a lot more taxis to meet the needs of visitors and citizens. However, in a free market environment, the number of taxis should match demand.

 

Sherlock Holmes understood most hansom drivers were savvy professionals. The best knew where the savoury meals were, could find a decent room at a hotel or inn, would steer the cab through the maze of some of London’s seedier districts and delivered their passengers to the train platform on time.

 

The Chamber appreciates the often-unnoticed work of this city’s cabbies. They welcome tourists to the Calgary Stampede. They bring investors to meetings with local entrepreneurs. And they provide a real service to the elderly and poor who use them for their weekly grocery-shopping outings. Many late-night workers, especially women, rely on them to get home safely. They do this while negotiating construction barriers, traffic congestion and slippery streets.

 

But, the Chamber hears complaints about Calgary’s taxis. Most criticize the long waits and the shortage of taxis during rush hour, blizzards, or after-hours concerts and Christmas parties. Nearly all think surplus cabs are queued at the airport. Some Chamber members, who own hotels or restaurants, now offer shuttle service to their patrons and bypass the taxi industry altogether.

 

Despite the numerous frustrations citizens and tourists experience, the city is not willing to deregulate the market. The Chamber recognizes fewer people hire taxis during a recession. As soon as the economy turns around however, Calgarians will face shortages. Drivers are struggling, but the reality is the quota system keeps them poorer.

 

New Zealand deregulated its taxi markets, abolished the Taxi Plate Licence quotas and allowed all operators who met basic safety and competence requirements to drive cabs. This resulted in more cars, better service, cheaper fares and more employment for drivers who previously could not afford the exorbitant cost to buy a tag. Their drivers got creative and offered a much wider variety of prices and services.

 

Chamber members like the idea of deregulating Calgary’s taxi industry. They support the notion of more drivers making better wages, improved service and shorter wait times. Our members recommend city council lift the cap on quotas and pricing to permit greater competition for drivers between existing and new companies, while maintaining oversight to ensure high safety, environmental and driver standards. The Calgary International Airport is a unique market and should continue to set conditions for ground transport on its property.

 

The legend of Sherlock Holmes was enhanced by his trademark deerstalker hat, curved pipe and quick access to hansom cabs.

 

Alas, while Calgary has its cowboy hats and boots, the quotas can keep our cabs as scare as the proverbial hens teeth.

EI Equality Needed

”All other problems and all other desires tend to disappear when one is out of work.  An economic recession is a national problem; unemployment is a personal problem,” said former Prime Minister Pierre Elliott Trudeau (February 13, 1971).

Canada is a great country because it has a social network to ease the transition back to work for the unemployed.  Concerned Canadians believe their fellow citizens, without employment or means of support, should get financial help and this assistance must be fairly and equitably distributed. 

Unfortunately, the badly named employment insurance (EI) distorts who can collect benefits (money and retraining/upgrading) and for how long.  It entrenches higher rates of unemployment in areas already prone to seasonal work and penalizes employees in provinces, like Alberta and Ontario, who faithfully paid their premiums for years and yet 40% are ineligible for benefits.

If the chattering glitterati are right, the federal opposition will be sorely tempted to call for a non-confidence vote in the House of Commons this fall, citing national problems – the recession, high unemployment rates and the EI program – as grounds for Canadians to go to the polls.

The business community is alarmed by the rhetoric of the various parties.  Each seems to try and outdo the others with generous pre-campaign promises. 

One party soberly proposed that Canadians should only work 360 hours – nine weeks or one summer – to collect 50 weeks of insurance.  That’s an extra $1 billion to cover the fall, winter and spring periods of idleness.  Another party proposes to boost weekly payouts from 55% of income to 60 or 70% (almost a whole salary).  Others want to waive the two-week eligibility time (adding another $1 billion in costs).

A truly creative election war room recently floated the notion that employees, who work five continuous years, should get a bonus, from the EI fund, deposited directly into their RRSPs.  No one has done the arithmetic on this proposal.

The EI fund has approximately $2 billion in reserves but is expected to be empty by Christmas.  If the national unemployment rate rises to 10% (from 8.6%), the program will need a cash infusion of $4 or $5 billion to provide the same level of payouts as those on EI presently receive.  Add in any of the proposed changes and the costs increase substantially, perhaps tripling premium rates during the next three years (if existing legislation changes).

The business community is eagerly waiting for politicians to promise that employers will also be treated fairly.  And the 91.4% working Canadians want their premiums kept reasonable.

The Calgary Chamber of Commerce believes EI should be a true insurance program, based on principles of evenhandedness and equality:

• Operate the program to ensure it provides income support for those who are temporarily unemployed through no fault of their own and who qualify for the program.
• Restructure EI to promote high employment, lower costs, streamlined processes, increased productivity and labour mobility.
• Set a standard qualifying rate of 560 hours wherever unemployment rates are lower than 10%.
• Keep the two-week waiting period to enhance EI’s program efficiency.
• Maintain the maximum weekly payouts at 55% of income.
• Amend the present rate-setting formula so that deficits in the EI account are funded during 10-year business cycles.
• Social benefits, like retraining courses or maternity benefits, should come from general revenues, not EI.

If a $300 million election happens, will the next government have to pick the pockets of employers and employees to fund its new EI commitments?  Employment insurance should be about insurance for the unemployed.

Everyone loses in a trade war

It is no secret U.S. President Barack Obama’s hero is Abraham Lincoln, the president who fought to end slavery.

 

Their lives have interesting parallels.

 

Both trained as lawyers. Both were elected as junior senators from Illinois. And both proudly campaigned as protectionists.

 

Lincoln’s campaign slogan was “protection to American industry.” Lincoln’s Congress imposed punishing tariffs –90% for lace, 70% on toys, and 50% on eyeglasses — with the average exceeding 50%.

 

He believed, “Protection is the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man,” and his government rejected free trade.

 

Later presidents sought to dismantle the walls of protectionism. In 1935, Franklin Roosevelt dropped tariffs to 35%, Harry Truman lowered them to 16% (1947), Dwight Eisenhower (1957) reduced them to 12%, Lyndon Johnson trimmed them to 8% in 1968 and Bill Clinton cut them to 5% in 1995.

 

Obama took office as the world’s financial markets plunged into a growling bear market recession.

His campaign slogan, ‘Change we can believe in’ quickly morphed into a joint chorus with Congress of ‘Buy American,’ as they faced the collapse of the real estate bubble, subprime mortgage debacle and rising unemployment.

 

During the first 100 days of his presidency, U.S. capitalists embraced socialists; the government nationalized companies allegedly “too large to fail,” and, in the hallways of power, there was talk of imposing state controls. Congress upped its protectionist rhetoric as it approved a variety of stimulus packages.

 

Canada grew alarmed. One in five jobs in this country is linked to international trade and the U.S. is by far its largest trading partner (76% of exports and 65% of imports.

 

Everyone loses in a trade war and so retaliatory action is not an option.

 

Ottawa voiced its concerns about how protectionism would damage our economy, saying costs would rise, trade disruptions would occur more frequently and North American-made goods and services would be less competitive internationally. It predicted serious jobs losses on both sides of the border.

 

The Calgary Chamber of Commerce joined with the Canadian Chamber and its network of 175,000 companies, Canadian diplomats and U.S. business owners to protest ‘Buy American’ provisions in the stimulus package.

 

We have already gotten results. Congress amended the legislation to say the U.S. “would respect its trade obligations under international law” and Canadian companies will not be shut out of federal contracts.

 

Protectionism grew in manufacturing and border-states with Canada and Mexico.

 

To protect trade between the provinces and states, the Calgary Chamber and 121 other Alberta Chambers wrote to Premier Ed Stelmach.

 

We urged his government to sign onto the World Trade Organization’s Agreement on Government Procurement as a way to help provide Alberta companies with access to American state-level procurement projects.

 

“Securing open trade at the provincial, territorial and state levels is the best way to offset the ‘Buy American’ provisions in the federal stimulus package and ‘Buy Canadian’ movement,” our letter stated.

“Alberta led the way on interprovincial free trade and we believe our province should carry the banner on this important issue.”

 

The world’s bear and bull markets tend to run in cycles. The protectionist bears will splutter when the open-trade, profit-driven bulls come roaring back to Wall Street.

 

Perhaps Obama will abandon protectionism in favour of global fair trade. — a legacy comparable to Lincoln’s.