Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- David Macdonald takes a closer look at a Fraser Institute study on income mobility, and finds strong evidence that there's a significant lack of mobility at both the bottom and the top of Canada's income distribution:

What should be very shocking to people is that in the shorter term panels, 50% of the poorest people in 2002 were still in the poorest category five years later (table 3).  That’s a pretty stunning conclusion.  For the second poorest category, a shocking 69% either ended up in the second poorest category or the poorest category (making even less).  So about 60% of the people in the bottom poorest categories were stuck there between 2002 and 2007.  That’s a lot of people living on very little income.  They are a bit mobile, but they are mobile between very poor and poor.  That’s not really the kind of mobility we should be looking for.

While the study focuses on the low end, there are some very interesting things going on at the upper end.  Take a look at table 6 for the top 20%.  The table does a “where are they now?” analysis over 19 years from 1990 to 2009.  For people that were in the top 20% in 1990, how many are still in the top 20% in 2009?  The answer is a whopping 64%.  Six out of 10 people that were in the top 20% in 1990 are still there today, two decades later.  Over a 10 year period between 1990 and 2000, almost 80% of the wealthy stayed at the top.

This is the opposite of income mobility, if you manage to slip into the exclusive club of wealthy Canadians it looks like you get a 10, if not a 20-year membership.  None of the other income groups are anywhere near that level of exclusivity.

- Meanwhile, Allison Jones reports on a Campaign 2000 study pointing out that it's possible to end child poverty in Canada by redirecting assorted tax credits. But I'd note that the contrast between universal benefits and the most narrow focus possible only serves as a means of pitting the currently-poor against the nearly-poor who are likely to lean heavily on the universal benefits - meaning that the real takeaway should be that it's possible to muster enough resources to end poverty in one form or another.

- Anne McGrath suggests applying a seven-generation test to Canada's international agreements, and finds the Cons' planned investor privilege pact with China to be sorely wanting by that standard:

The Iroquois had a rule: when making a major decision, consider its effects on the next seven generations.

It’s a good rule, one the Conservatives would do well to adopt. The reluctance of this government to submit the Canada-China FIPA (Foreign Investment Promotion and Protection Agreement) to parliamentary analysis and oversight deepens the apprehension many Canadians feel about the way we are pursuing trade and investment with China. Despite the government’s assurances, many remain unconvinced that the FIPA will be good for Canada in the long-term. Even its supporters acknowledge that further study and debate would be beneficial.
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Given that under the current government Canada has gone from a $26 billion trade surplus to a $50 billion trade deficit, we cannot simply take it as gospel that a trade deal exempt from parliamentary scrutiny is in this country’s best interest.

Critics argue that FIPA promotes corporate rights at the expense of Canada’s democratic, environmental and social rights and may have negative consequences for this country for years to come. In the agreed terms, FIPA cannot be terminated for 15 years. What’s more, any investments made prior to the date of termination will stand for a further 15 years.

The North American Free Trade Agreement, in contrast, can be cancelled with six months’ notice. The impact of FIPA will be felt well beyond its 31-year duration and Canadians deserve to know it in detail.

 - But unfortunately, the Cons look to be applying a rather different lens to their dealings with the world.

- Finally, Bill Curry reports that the Senate is determined to remind people of its existence (and make a wrong-headed claim to relevance) by trashing a bill passed by Canada's actual elected representatives.