Parliament in Review - April 25, 2012

Wednesday, April 25 saw one of the more noteworthy economic debates we've seen in the current session of Parliament, as a former-PC-turned-Liberal raised the issue of income inequality to a noteworthy response from the Harper Cons.

The Big Issue

Scott Brison presented what should have been a relatively non-controversial motion - calling not even for immediate action to address income inequality, but merely for study of the issue with a focus on "welfare walls" rather than substantive redistribution. But Dany Morin recognized that the Cons are doing everything in their power to reduce public knowledge of the issue - and sure enough, Brison's motion was met with admonitions from Shelly Glover and Cathy McLeod that their party doesn't believe the issue deserves any discussion.

Meanwhile, Peggy Nash nicely summed up what we already know about the corrosive effects of inequality. And Hoang Mai lamented the Cons' refusal to recognize reality. But the Cons made it abundantly clear that they don't see inequality as a problem worth addressing - meaning that we can expect at least three more years of matters getting worse.

First Principles

Another day of debate on the citizen's arrest bill led to plenty of discussion about the parties' general philosophies about criminal justice. Mike Sullivan noted that the Cons' anti-refugee bill treats newly-arrived individuals as offenders, then made the point that few if any potential offenders will look into the possible sentences before deciding to engage in criminal activity.  Raymond Cote questioned how the Cons can favour judicial discretion when it comes to the reasonableness of a citizen's arrest but not when it comes to sentencing, and suggested that we take an epidemiological point of view in evaluating our criminal justice policy. Charlie Angus commented that dealing with crime has to be a community effort rather than relying unduly on individual action. And Craig Scott pointed out that the committee process had been highly effective in addressing C-26 - again raising questions as to why the Cons are so eager to shut it down most of the time.

In Brief

Nycole Turmel criticized the Cons for slashing support to co-operatives in the budget. Charlie Angus pointed out that Bev Oda was a repeat offender when it came to frivolous spending of public money which went unaccounted for until opposition parties raised the issues. Romeo Saganash compared the cost of Oda's limo rides and five-star hotel rooms to the much smaller price of saving children through programs which the Cons are cutting, while Marjolaine Boutin-Sweet noted that the Cons had sunk to a new low in refusing to fund programs covered by a homelessness partnering strategy. Fin Donnelly contrasted the Cons' rhetoric about merely wanting to change fisheries regulation to avoid regulating ditches against their admission that part of the goal was to grease the skids for massive pipeline projects. Maria Mourani presented a private member's bill to review the extraterritorial activities of Canadian businesses. And in adjournment proceedings, Linda Duncan questioned the Cons about their choice to limit consultation with First Nations on resource projects which affect their land and livelihood.

On stagnation

Jim Stanford offers a reminder that it isn't only south of the border that the private sector is pocketing stimulus money rather than making any investments that would actually encourage recovery:

Despite a few signs of life (mostly in the oil and gas industry), overall business investment spending has not bounced back at all. Business capital investment is just 6 per cent higher than it was in the trough of the recession a year ago. Yes, profits shrank during the downturn, but they’re recovering. And businesses aren’t even reinvesting what they get, let alone taking on new debt. Cash flow (profits plus depreciation) continues to outstrip new capital investment by almost 2-to-1.

The odd result of this private-sector passivity is that non-financial firms have actually saved close to $100-billion since the recession began. That about offsets the new debt taken on by our governments over the same period. In other words, governments (and the taxpayers who fund them) are taking on debt to try to restart a sick economy. But for every dollar they put in, private firms take out a dollar – in the form of idle, uninvested cash flow, used to pay down their own debt or, worse yet, to speculate in the paper markets.

Business should be leading economic recovery, borrowing money (from households and banks) to fund new investments and jobs. That’s how capitalism is supposed to work. In today’s lean-and-mean world, however, business is free-riding on the spending efforts of others. Despite tax cuts and other business-friendly policies, the private sector isn’t taking on the risks, and taking on the debt, necessary to fuel broader recovery.

Information at risk

CanWest reports on the lack of attention paid to consumer privacy by businesses in Canada, as many businesses still aren't even trying to meet their obligations under the governing legislation which was passed in 2001:

The majority of businesses in Canada collect personal information from customers, but many are ignoring privacy laws and might be using sensitive data illegally, putting Canadians at risk of fraud, warns new research unveiled yesterday by the federal privacy commission.

What's more, a new survey conducted for the commission reveals an overwhelming proportion of staff - about two-thirds - at Canada's small, medium and large businesses have little to no training to handle personal information and ensure it doesn't fall into the wrong hands.

Results of the survey were made public in conjunction with the commission's annual report, which urges the private sector to do more to protect the personal information it collects in order to prevent massive security breaches like the ones experienced earlier this year by TJX Cos., the parent company of Winners and HomeSense, as well as the Canadian Imperial Bank of Commerce's Talvest Mutual Funds...

Despite the fact that more than 60 per cent of businesses said they collect personal information from customers, about one-third aren't complying with the Personal Information Protection and Electronic Documents Act, which sets rules and limits on how the private sector collects, uses and discloses the personal information it collects.

Although it was passed seven years ago, 15 per cent of businesses surveyed said they still haven't started putting the necessary policies in place to comply with the law, while 16 per cent said they are in the process of putting measures in place.

Of course, it's breaches in widespread actors such as Winners/HomeSense that are more likely to attract major media attention. But the potential dangers from a breach are no less severe even in a business too small to capture the public eye. And based on the significant number of businesses which haven't yet made any effort to meet their legal obligations to protect customer data, it looks like there's still a need for plenty more awareness about the responsibility of private-sector actors for personal information about their customers.

Insider trading

David Olive discusses suspicious trading of stock in Canada and abroad, noting that while Canada stands out with "aberrant trading patterns" preceding nearly 2/3 of large mergers, a substantial number of major transactions in the U.S. and U.K. have similarly followed dubious increases in trading. And somewhere, a free marketeer claims there's no reason to think the market will operate anything but fairly on its own.