The Conservative cabinet is giving itself sweeping powers to rewrite the rules on whether Canadians on EI can turn down certain jobs without losing their benefits.

The measure is contained inside the budget implementation bill and would give cabinet the power to change employment insurance rules later through regulation without the approval of Parliament.

Yet, even though the provision is currently before MPs, Human Resources Minister Diane Finley is refusing to explain its purpose other than to say further details will be announced over the coming months.

Under the existing Employment Insurance Act, the government already has the power to terminate EI benefits if a claimant refuses to take “suitable employment.” That’s a term that isn’t explicitly defined in the law, but numerous court rulings have said personal considerations must be taken into account, such as geography and experience. Essentially, an out-of-work scientist can’t be denied EI for refusing to dig ditches or pick fruit.

The budget bill contains a small section that allows cabinet through regulation to define “suitable employment.” Ottawa isn’t saying what it has in mind, but Immigration Minister Jason Kenney recently expressed his frustration that Prince Edward Island was bringing in temporary foreign workers to fill fish plant jobs even though many Canadians in the area are unemployed.

Although the reference to “suitable employment” in the budget bill is vague, EI experts who cross-referenced the section with existing legislation say the government is clearly planning to give itself more power.

“I strongly suspect that they plan on writing regulations that will increase their authority to require people – or at least penalize them under EI – to take jobs for which the government thinks they’re suited. That’s clearly the direction they’re going,” said McMaster economics professor Arthur Sweetman.

Jon Medow, a policy associate with the Mowat Centre for Policy Innovation, said this and other EI changes in the budget bill – which also include replacing existing appeals bodies with a single “Social Security Tribunal” – are of such significance that they should be studied independently.

“Treating it in the context of a standalone bill would provide a much better framework to discuss any changes that are happening to the program,” he said.

Neil Cohen, who has worked with unemployed Canadians for more than 25 years and is executive director of Winnipeg’s Community Unemployed Help Centre, said he’s deeply concerned by the extent of the EI changes in the budget bill.

“It’s always been up to the courts to determine what constitutes suitable employment,” he said. “This government is determined to reverse the course of 70 years of history … They’re really giving themselves broad, sweeping powers.”

Alyson Queen, a spokeswoman for the Human Resources Minister, repeated that further explanation of the EI changes will come over time. “We will be further connecting Canadians with available jobs. That aspect of the EI improvements will be forthcoming in the coming weeks and months. We’re still working on it.”

NDP MP Jean Crowder said the budget bill should be divided and studied independently by committees with the related expertise. “You don’t know the repercussions when you ram through stuff like this.”

< http://www.theglobeandmail.com/news/politics/budget-bill-gives-conservatives-broad-power-over-ei-rules/article2420742/ >

There is an implicit bargain in Canada regarding immigration. Canadians agree to welcome newcomers. In return, the government agrees not to use immigrants to drive down the wages of those already living here.

While never formally acknowledged, it’s a bargain that’s been in place since at least World War II, one that has prevented the kind of anti-immigrant agitation now roiling Europe.

And it is a bargain that Prime Minister Stephen Harper’s Conservatives are deliberately setting out to break.

Human Resources Minister Diane Finley made the break specific this week when she announced that Ottawa will now let employers pay temporary foreign workers less than Canadians.

The Conservatives talk a good game on immigration. Immigration Minister Jason Kenney speaks of rationalizing the complex system used to decide who comes to Canada and of bringing it in line with what he calls the needs of the economy.

In last month’s federal budget, Finance Minister Jim Flaherty said employers would have to make every effort to hire unemployed Canadians before they’d be allowed to bring in temporary foreign workers.

But in reality, the federal Conservative government’s entire immigration policy is geared to just one goal: lowering wages.

On Wednesday, Finley journeyed to Alberta to announce that Ottawa will make it easier — not harder — for employers to hire temporary foreign skilled workers.

More importantly, she said Ottawa will allow employers to pay such foreign workers 15 per cent less than the prevailing wage.

Up to now, employers had to pay temporary foreign skilled workers the going rate. If comparable Canadian workers in an area received on average, say, $20 an hour, foreign workers would have to be paid the same.

No more.

The temporary foreign workers program began as a stop-gap measure in 2000, specifically to deal with a shortage of software specialists. But under pressure from employers — particularly in the Alberta oil patch — it has vastly expanded.

By 2011, there were some 300,111 temporary foreign workers of all kinds in Canada — 106,849 of them in Ontario. Unlike standard immigrants, temporary foreign workers have no guarantee of staying in Canada and are expected to leave when their papers expire.

While the program technically is supposed to address labour shortages in skilled trades, temporary foreign workers now do an assortment of jobs.

Some serve coffee in Alberta doughnut shops; others work on the assembly line in Maritime fish processing plants.

Employers could solve their labour shortages by offering higher wages or — in the case of skilled trades — by training Canadians to do the job.

But, if government is willing, it’s easier and more profitable to import cheaper, trained labour from abroad.

And this government has shown that it’s willing. It says that if Canadians don’t want to see jobs going to foreigners, they should quit whining and accept lower wages.

Which is why Ottawa’s answer to complaints made about temporary foreign workers is to toughen Employment Insurance rules.

Kenney has warned that unemployed workers who refuse to take low-wage jobs will have their EI benefits cut off. If Canadians agree to work for less, he explains, Ottawa won’t have to bring in as many low-wage outsiders.

All of this is a solution of sorts, I suppose, albeit a 19th century one. But it is a solution that threatens to bring with it the kind of agitation now seen in countries like France, Holland and Greece — where the racist right is on the rise and where far too many workers view immigrants as mortal enemies out to steal their jobs.

< http://www.thestar.com/news/canada/politics/article/1169568–walkom-ottawa-s-low-wage-immigration-policy-threatens-turmoil >

Immigration Minister Jason Kenney has always vehemently denied bringing cheap foreign labour into Canada. Employers had to pay foreign temporary workers “the prevailing wage,” he pointed out.

That indeed is what the rules said – until Wednesday, when Human Resources Minister Diane Finley quietly changed them. Employers will now be allowed to pay foreign temp workers 15 per cent less than the average wage.

“We are taking action to ensure that the temporary foreign worker program support our economic recovery and effectively responds to local labour market demands,” she said at a manufacturing plant in Nisku, Alta.

Kenney chimed in from Ottawa. “Going forward our government will consider additional measures to strengthen and improve the program,” he promised.

Business leaders, eager to recruit low-cost workers abroad, were delighted. Immigrant support groups, already fighting to protect temporary foreign workers from exploitation, were heartsick. And labour leaders warned that the wage cut would bring down the pay scale for all workers and make it harder for Canadians to compete for jobs in their own country.

Under the new rules, foreign temporary workers will still covered by provincial employment standards, meaning they must be paid the minimum wage. But in booming Alberta, the minimum wage ($9.40) is a far cry from the average wage ($26.03).

Despite her 15-per-cent wage cut, Finley expects the influx of foreign temporary to swell. She’s undoubtedly right. Employers will always be ready to find workers overseas who are eager to come to Canada and willing to work long hours for low pay. And under the Conservatives, boosting economic growth will always eclipse protecting workers’ rights.

Since Prime Minister Stephen Harper assumed power in 2006, the number of foreign temporary workers admitted into Canada has grown by 40 per cent. The temporary worker stream is now larger than the stream of permanent workers intending to set down roots and become citizens.

Foreign temp workers man oil rigs, serve coffee at Tim Hortons, harvest crops and work in fish processing plants.

When Canada introduced its temporary foreign worker program in 2002, the governing Liberals vowed never to adopt the European model route in which “guest workers” are paid less than nationals and treated as second-class residents.

But under Harper, the country is now moving in that direction.

That Germany is an oasis of prosperity amid the economic wreckage of Europe is no secret. That the world’s fourth-largest economy, and by far the largest in Europe, is outperforming the U.S. and Canada, as well, has been a topic of a fascination that would be more pronounced if only we weren’t understandably preoccupied with austerity-driven riots in Athens, across Britain, and in a Madrid where the jobless rate is 20 per cent and youth unemployment is running at 40 per cent.

Germany’s economy will grow this year, while most of the rest of Europe has slipped into recession. German civil servants received a bonus last year, while governments at every level across North America and Europe are cutting government jobs – many of them essential-service jobs – or slashing the pay and benefits of those still on the payroll and forced to do the work of their laid-off colleagues.

Germany, an export-driven economy like Canada, retains its export prowess to such a degree that both Volkswagen AG and Daimler AG posted record profits in 2011, despite a slump in the European auto market. The German jobless rate is about 5 per cent, compared with 7.2 per cent in Canada, and 8.2 per cent in the U.S.

German industry is no less productive and innovative than its top peers, including Korea, Japan and the U.S. Yet organized labour in Germany has long had a significant role in corporate governance, as members of corporate supervisory boards. And Germany has long required employers to provide mandatory five-week vacations to workers.

Germany’s public finances are as sound as those of Canada and Switzerland, and the envy of a U.S. and Britain that are struggling with their public indebtedness. Yet Germany is an unapologetic welfare state, with a social safety net more elaborate than any outside Western Europe.

It has seemed to me, in more cynical moments, that a North America so hard-hit by the Great Recession has not been entirely unhappy that the U.S.-originated global meltdown migrated elsewhere, specifically Europe. Misery does like company. And if Europe, the world’s largest economy, was later to get a taste of the brutal austerity that has swept the U.S., in particular, since the Wall Street meltdown of 2008-09, here was proof for conservative ideologues that the European welfare state was untenable once deep recession struck.

Yet Germany’s current experience repudiates that nonsense. Austerity measures imposed by London, Madrid, and the U.S. Congress and American state capitals, among others, are sapping still more demand from economies whose chief ailment is lack of economic activity. Germany, by contrast, has not attempted, simplistically and foolishly, to slash its way back to robust health. Indeed, that Germany remains in robust economic health is a vindication of the social-welfare state.

Germany continues to be hectored to relax its demands for austerity among rescue candidate-nations. And to be resented for this. It seems not widely appreciated that what Germany is exhorting others to adopt is what has worked so well for it. Not austerity for its own sake, but as the necessary precondition to living within one’s means in a way that has served Germans so well.

George Soros, the billionaire speculator, unburdened himself last week of his opinion that Germany will be the death of Europe if it doesn’t relent on its demands for austerity among rescue-fund beneficiaries.

Nicolas Sarkozy, in a tough re-election campaign for the French presidency, has found a convenient distraction for the shortcomings of his own government by lashing out at Germany for its unrelenting demands that Europe’s supplicant nations get their fiscal houses in order. In Athens, newspaper cartoonists for months have been depicting Merkel in Nazi garb.

It is true that Merkel has been a fiscal hardliner in attaching austerity measures to its benevolence. (“Punitive” was Dublin’s view of the high interest rates for its first bailout, until a second, less punishing, rescue package was offered.) And it’s true that Germany has greatly benefited from a euro of lower value than the old Deutschemark, making its goods more price-competitive in eurozone markets.

But it’s also true that in the main Germany has been showing us how to run a country that can take care of its people in good times and bad, and help rescue others as well.

Much as I agree with many of those calling on Germany to try harder to recognize and accommodate the very different cultures of its European neighbours, it would be wise, I think, to take a step back and examine how it is that Germany works so well. Germany holds invaluable lessons for us that for now are obscured by its odium, deserved or not, as a rescuer determined to ram austerity down the throats of beneficiaries of its assistance.

< http://www.thestar.com/business/article/1164402–olive-why-economically-troubled-nations-should-emulate-germany?bn=1 >

In the initial postwar decades, Canada’s economy experienced a historic leap forward, qualitatively and quantitatively. Strong business investment, rapid industrialization, and massive spending on public infrastructure propelled growth and productivity. We went from being poor cousins to our American neighbours to virtual equals: productivity in the business sector rose from 70 per cent of U.S. levels in 1946, to 90 per cent four decades later. And as Canada built a stronger social safety net and more equal income distribution, the quality of life for most Canadians surpassed U.S. levels.

In the 1980s, Canadian policymakers became concerned with how to maintain that momentum. The famous Macdonald Commission, influenced heavily by market-oriented economic analysis, made two core recommendations in this regard. Canada’s social-welfare programs should be rationalized to reinforce labour market discipline. And we should pursue comprehensive free trade with the U.S., to expose our firms to the full force of competition and eliminate our remaining 10-percent productivity disadvantage. The proposals were fiercely debated, but in the end implemented. The Macdonald Commission’s 1985 report heralded a new era of economic rationalism; it might be less “compassionate” than previous policy frameworks, but would surely deliver the productivity goods via the invisible hand of a freed market.

But no sooner had the Macdonald Commission helped spur a historic turn in Canadian policy than Canada’s relative productivity began to fade. The more social programs were curtailed, the more we faced global competition, the more sectors were deregulated, and the deeper taxes were cut, the worse Canada’s productivity performance became. Today we’re back where we started: poor cousins again, with businesssector productivity equal to only 70 per cent of U.S. levels, and sinking.

In terms of innovation, our performance has been even worse: lagging far behind the U.S. and most of the industrialized world. As we focus on extracting and exporting evermore unprocessed minerals, our capacity to develop innovative products, services, and processes for the world has withered away. The current tribulations of Research In Motion (like Nortel before it) reflect much larger problems: The failure to develop a successful national innovation system, the failure to nurture Canadianbased global champions, the failure to penetrate global markets with anything other than what happens to be buried beneath our feet.

Market-oriented economists struggle to identify remaining residual “barriers” or “frictions” that must explain the failure of their whole policy approach to unleash promised efficiency. But what if the starting assumption of the “rationalist” model – namely, that the unconstrained operation of private markets is the most efficient, innovative way to organize economic activity – is not justified? What if, in fact, markets work more productively and creatively when they are guided, supported and constrained, rather than simply being unleashed? What if the best approach is to challenge and direct business to more productive and innovative outcomes, rather than coddling and privileging it?

< http://www.edmontonjournal.com/business/Free+market+rationalism+turned+Canada+from+champ+chump/6211182/story.html >

Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It’s not an official recession yet, but the only real question is how deep the downturn will be.

And this downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s.

Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.

For things didn’t have to be this bad. Greece would have been in deep trouble no matter what policy decisions were taken, and the same is true, to a lesser extent, of other nations around Europe’s periphery. But matters were made far worse than necessary by the way Europe’s leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.

Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

Furthermore, bond markets keep refusing to cooperate. Even austerity’s star pupils, countries that, like Portugal and Ireland, have done everything that was demanded of them, still face sky-high borrowing costs. Why? Because spending cuts have deeply depressed their economies, undermining their tax bases to such an extent that the ratio of debt to G.D.P., the standard indicator of fiscal progress, is getting worse rather than better.

Meanwhile, countries that didn’t jump on the austerity train — most notably, Japan and the United States — continue to have very low borrowing costs, defying the dire predictions of fiscal hawks.

Now, not everything has gone wrong. Late last year Spanish and Italian borrowing costs shot up, threatening a general financial meltdown. Those costs have now subsided, amid general sighs of relief. But this good news was actually a triumph of anti-austerity: Mario Draghi, the new president of the European Central Bank, brushed aside the inflation-worriers and engineered a large expansion of credit, which was just what the doctor ordered.

So what will it take to convince the Pain Caucus, the people on both sides of the Atlantic who insist that we can cut our way to prosperity, that they are wrong?

After all, the usual suspects were quick to pronounce the idea of fiscal stimulus dead for all time after President Obama’s efforts failed to produce a quick fall in unemployment — even though many economists warned in advance that the stimulus was too small. Yet as far as I can tell, austerity is still considered responsible and necessary despite its catastrophic failure in practice.

The point is that we could actually do a lot to help our economies simply by reversing the destructive austerity of the last two years. That’s true even in America, which has avoided full-fledged austerity at the federal level but has seen big spending and employment cuts at the state and local level. Remember all the fuss about whether there were enough “shovel ready” projects to make large-scale stimulus feasible? Well, never mind: all the federal government needs to do to give the economy a big boost is provide aid to lower-level governments, allowing these governments to rehire the hundreds of thousands of schoolteachers they have laid off and restart the building and maintenance projects they have canceled.

Look, I understand why influential people are reluctant to admit that policy ideas they thought reflected deep wisdom actually amounted to utter, destructive folly. But it’s time to put delusional beliefs about the virtues of austerity in a depressed economy behind us

< http://www.nytimes.com/2012/02/20/opinion/krugman-pain-without-gain.html >

I have likened recent events at Electro-Motive Canada in London, Ont., to an “economic home invasion.” The factory operated profitably and productively for decades. Then suddenly its workers and the whole community were confronted by an uninvited visitor — who barged in, demanded money, and then left, leaving a shuttered plant and immeasurable social despair in its wake.

When someone experiences a real home invasion, they call the police. In this case, however, the relevant authorities failed to protect the citizens of London. Indeed, the federal government’s Investment Canada process invited the invaders in, without so much as a cursory review of the possible effects of Caterpillar’s 2010 takeover of Electro-Motive.

Caterpillar had no sooner digested its new subsidiary, than it began shifting production to Indiana (where new right-to-work laws effectively ban unions) and Mexico (where more straightforward, violent techniques are used to keep workers in line). But moving jobs out of Canada won’t stop Caterpillar from raking in billions in revenue here — including lucrative sales to Canadian mines, oilsands and government-financed infrastructure projects. Rich tax incentives (like corporate tax cuts, special writeoffs for locomotive purchasers, R&D subsidies, and government financing for exports) all sweetened the pie.

Yet nothing was demanded from Caterpillar in return for this largesse; that’s like offering a home invader a home-cooked dinner, while they’re rampaging through. Meanwhile, outdated labour laws gave the company free reign to lock out workers, bargain in bad faith, and ultimately close down entirely, with impunity.

The Electro-Motive debacle reflects an all-round failure of economic and social policy. Perhaps that’s why the issue touched such a chord with average Canadians. Indeed, I cannot recall another labour-management dispute in recent memory that garnered so much public support for the workers’ cause. This is partly because of the offensive nature of the company’s demands: imagine the arrogance of a global company that declares its highest profits in history one week, then demands 50 per cent cutbacks from Canadian workers the next.

But I believe the public spoke out because the Electro-Motive case symbolizes so painfully the negative social and economic trends that are destroying the Canada we love. If those 465 hard-working Canadians can lose everything just because an extremely profitable corporation demands it, then no middle-class Canadian is safe. The dream of inclusive mass prosperity, supposedly a core principle of our society, is very much on the ropes.

A union can fight for a better deal for its members, and for all working people. But a union cannot succeed on its own. Just as homeowners need the police to protect them against aggressive strangers, Canadians need governments to actively assert their authority and protect our interests.

Both the federal and provincial governments must intervene to assist the Electro-Motive workers in this desperate moment, using all the tools at their disposal. We’ve asked the federal government to reveal the specific terms of Caterpillar’s original notification to Investment Canada, and subject that data to independent audit. Ottawa should also utilize strategic trade policy (as other countries do), including the potential application of countervail tariff, in an effort to change Caterpillar’s decision. Federal Finance Minister Jim Flaherty should demand taxpayers’ money back from Caterpillar. Provincial labour officials can intervene, too, to make sure the workers receive a modicum of fairness in their final dealings with this shameless corporation.

But ultimately we need permanent policy changes that respond to the unprecedented flexibility, power, and arrogance of companies like Caterpillar. Foreign investments must be carefully scrutinized to ensure they genuinely benefit Canada. Companies cannot harm Canadians, and still expect unfettered access to our markets. Tax incentives must have genuine strings attached, so we get fair value for our fiscal support to companies. Labour laws must be strengthened and modernized to support fair treatment for unionized and non-union workers alike.

We must equip ourselves as a society to deal with the new power alignments of the global economy, so average people can build decent lives. Otherwise, the tragedy that has befallen 465 hard-working, productive Canadians and their families in London, will be repeated many times over in decent communities across our land.

Ken Lewenza has been national president of the Canadian Auto Workers since 2008.

< http://www.thestar.com/opinion/editorialopinion/article/1130788–caterpillar-fiasco-highlights-failure-of-economic-and-social-policy >

Armine Yalnizyan is Senior Economist at the Canadian Centre for Policy Alternatives

Capitalism has entered an ugly new era that may work well for the shareholders of world, but not for the rest of us.

I was struck by a story that broke the same day Caterpillar Inc. shuttered its London, Ont., locomotive plant and headed to low-wage Indiana. The Wall Street Journal reported that U.S. corporate tax receipts, as a share of profits, had dropped to their lowest level in at least 40 years.

Lower taxes and lower wages: It’s a one-two punch that has been hard to duck in the post-crisis period, and not because business is on the ropes. Like Caterpillar, the American business sector as a whole has been booking record profits.

Stubbornly high unemployment, talk of austerity and huge household debt levels have people worried, on both sides of the border, and some employers are using that fear to their advantage. Newly aggressive demands that workers give up income join the decades-old demands that governments give up revenue. The implicit deal is that lower taxes create more investment and competitive cost structures create more demand. Both supposedly create more (good-paying) jobs. Lower taxes, check. Lower payroll costs, check. More good-paying jobs here at home: Insert sound of crickets chirping.

According to the Congressional Budget Office, the effective tax rate on the business sector in the US — federal corporate tax receipts as a share of domestic profits — fell to 12.1 per cent by fiscal 2010-11. It had averaged 25.6 per cent between 1987 and 2008.

Here in Canada, federal taxes on profits had fallen to 16.6 per cent by fiscal 2010-11 after briefly dipping to 13.2 per cent in 2008, a level not seen since the Great Depression. (See chart) The long-term trajectory is headed towards effective corporate taxation rates of the Dirty Thirties.

< yalnizyan-cit_1373672cl-6.jpg >

Unlike the 1930s, corporate profits in Canada have rebounded since the 2008-9 crisis, nearing the previous high water mark ($204-billion in the third quarter of 2011, up from $135.8-billion in the second quarter of 2009 but shy of the peak, $247-billion in 2008’s third quarter).

Despite growth, there is no shortage of profitable firms telling workers they can keep their jobs only if they agree to get less.

In Quebec, Rio Tinto, whose record earnings reached$15.5-billion in the last year, wants to more than double its use of contractors — who are paid at half the rate of union members — to 27 per cent of the work force.

In B.C., Loblaw Cos. Ltd., with almost $40-billion in annual business and a huge jump in its latest quarterly profits, wants to slash wages at Extra Foods.

And in Fort Frances, Ont., Resolute Forest Products (aka Abitibi Bowater) seems to have the $71.5-million needed for an acquisition, while demanding workers take a $10-an-hour pay cut, give up vacation pay and start paying $180 a month for short-term disability.

These are blatant ways to redistribute income, but there are others, as well.

Some companies are “insourcing” low-wage workers, through temporary permits for foreign low- and higher-skilled jobs. Others are creating two- and three-tier work forces, the better to divide workers’ interests. Theuse of temporary foreign workers has exploded since the onset of the recession, and two-tiering has become a routine management demand in collective bargaining.

Employers have told workers to suck it up before. After the free-trade deals of the 1980s and 1990s, companies moved Canadian jobs to lower-wage climates. In the 1930s, bosses fought unions to prevent costs from increasing. But you have to go all the way back to the 1880s and 1890s to see profitable firms — running railroads and coal mines — demand workers keep working for less so they could make more.

Today some companies in the advanced economies are trying to get workers to accept terms of employment that roll the clock back decades, simply to boost profits further. Costs of production in select job-starved markets are starting to close in on costs of production in emerging economies, once transportation and productivity concerns are factored in. Low-wage havens are found, and created, at home.

If memory serves, globalization was sold as an opportunity to export the First World economy and conditions, not import a Third World standard for workers.

In contest after contest, business is getting what it wants: lower taxes and lower wages. But their victories are just making it harder for families and communities to get on with their business.

The snatch-and-grab ethos that has emerged in the wake of the global economic crisis may fatten an individual corporation’s bottom line; but if too many companies play this game, everyone but the giants are going to lose.

< http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/why-were-seeing-the-ugly-new-face-of-capitalism/article2337440/ >

Albert Einstein, who knew something about ideas, once wrote: “A great thought begins by seeing something differently, with a shift of the mind’s eye.” It’s time for Canada, the United States and Mexico to change the way they see each other and the way they address their shared problems. The failure to make that change has resulted in chronic problems and lost opportunities.

Consider this case. During the recession, all three governments decided to stimulate their economies without considering their interdependence. In its 2009 bill, the U.S. Congress included a “Buy American” provision to bar Canada, Mexico and other countries from supplying iron, steel or manufactured goods for public projects. The provision violated the North American free-trade agreement and Canada rightly protested, spending substantial funds lobbying Congress and negotiating a waiver. The U.S. finally relented, but, last September, President Barack Obama asked Congress for a jobs bill with a similar provision.

The U.S. perception of its neighbours didn’t change, and the “Buy American” idea spread into a huge movement. A Harris poll found that 61 per cent of Americans preferred products “made in America.” In his new book, Bill Clinton recommends the website, “How Americans Can Buy American,” and Mr. Obama’s State of the Union address was a rallying cry for the same theme.

Seeking a “Canadian exemption” against such a movement is like trying to stop a tsunami with your hands. Instead of trying to eliminate a negative, Canada should try to catch the wave with an affirmative. Inserting just one word – “North” – in the middle of the “Buy American” movement might do that and begin to change the way Americans think about themselves and their neighbours. When Americans think about North America, however, they include Mexico.

“Buy North American” could be the mantra for helping the U.S. recognize the importance of both neighbours. Few Americans know that the two key markets for their exports and source of energy imports are Canada and Mexico. Our trade with each other enhances our collective competitiveness because many of those goods are jointly produced with parts from all three countries. Thus, the best way to multiply our exports and accelerate growth would be to create a seamless market and construct a North American transportation and infrastructure grid.

All that’s needed is “a shift of the mind’s eye.” Once we recognize the economies of scale that derive from a continental market, we’ll look for ways to reduce the speed bumps that were introduced after 9/11. Once we understand the benefits of working together to address challenges such as jobs, immigration, drug trafficking, energy and the environment, then new opportunities will present themselves to create jobs, facilitate labour mobility, reduce drug trafficking, and balance our shared goals in energy security climate change.

The “North American idea” has to be big enough to inspire people in all three countries to forge a formidable region able to compete with a dynamic East Asia. Minds won’t be changed by dealing with each neighbour, one issue at a time. To convince Americans that they shouldn’t turn inward, they need to see both of their neighbours collaborating.

If Canada would join with Mexico to promote “Buy North American” instead of each country seeking an exemption, Canadians might do more than change the policy; we might awaken the U.S. to the continent’s promise. Then the three countries would not only co-operate in making decisions on pipelines but in building high-speed trains connecting Montreal and Toronto with Boston and New York, and Vancouver with California and Mexico.

“Make no little plans,” said Daniel Burnham, a Chicago architect. “They have no magic to stir man’s blood.” Think big about what three sovereign countries at different levels of development and power could forge if they shifted their minds and bought from all of North America.

Robert Pastor is a professor of international relations and director of the Center for North American Studies at American University in Washington. He is the author of The North American Idea: A Vision of a Continental Future.

< http://www.theglobeandmail.com/news/opinions/opinion/buy-north-american-and-save-ourselves/article2334621/ >