CRESCIA: As Canada slips into economic decline, the power moves to big players

Crescia is a Toronto-based freelance writer.You want to know why the Liberals borrowed so much in the last budget and plan to keep on borrowing next year and the year after and on ad infinitum?Answer: The Canadian economy has stagnated. We have had six — Six! —consecutive quarters of declining Gross Domestic Product. That means that on a per capita basis, the country’s standard of living is falling. It is actually moving in the opposite direction of the US, our most obvious comparator. Eighteen months from an election, we are all becoming poorer and facing economic collapse. That's why the Liberal government has decided to borrow, again... next year another tranche of bonds worth $228 billion will be issued (although the Canadian economy being what it is, they're going out at much higher rates.)Bottom line: The Trudeau Liberals have transformed a free market-based economy. It is no longer capitalist. Instead, it's an expanding progressive welfare state controlled by monopolies and oligopolies. Think about it.The big six banks control 87% of the mortgage market. Three big telecoms (Rogers, Bell, and Telus) have an 86% market share with consumer costs being twice that of the US. Two airlines control 80% of commercial aviation and Air Canada is still the worst performing for on-time flights in North America. The grocery industry is one big oligopoly with five chains controlling 76% of the market. Meanwhile, the country’s political and corporate elites are thriving with pay increases and bonuses they don’t deserve.April 1st was April’s Fools Day but politicians are no fools. As others struggle, their automatic pay increase kicked in. The fools are working Canadians, struggling to make ends meet but who do not qualify for automatic wage increases. This year an MP’s salary increased to more than $200,000. Cabinet ministers make just under $300,000 and the PM's salary climbed to $406,200. Those who hold senior roles or cabinet posts receive an additional $96,800, plus car allowances.According to a Leger poll, 80% of Canadians oppose automatic pay increases. But it doesn't stop, does it?When one considers that Canada is suffering from a productivity crisis and that the accumulated federal deficit is projected to hit $1.2 trillion, the prudent thing to do is what Conservative Prime Minister Stephen Harper did during the 2008 financial crisis when he imposed an across-the-board pay freeze on MP’s and senators. “MPs are taking more out of Canadians' pockets and stuffing more into their own and that’s wrong," stated Franco Terrazzano of the Canadian Taxpayers Federation, “MPs should be providing tax relief, not hiking taxes and their own pay."The situation is no better provincially. Ontario’s Premier Doug Ford is a Conservative in name only. Back in 2014, Vic Fedeli, who now chairs the cabinet, blasted the then-corrupt Wynne Liberal government for appointing 26 ministers along with 23 parliamentary assistants. "Our party continues to talk about a very small cabinet of 16 and that would send a strong signal that she’s paying attention to some of the needs of Ontarians," stated Fedeli. Today, Fedeli chairs a cabinet that is much larger, slightly more effective than the Wynne government and a gravy train as a record number of MPPs appointed as parliamentary assistants get their pay increased to $140,000. Not bad when everyone's pay is supposed to be frozen.The province's Sunshine list (those earning more than $100,000) hit a record high of 300,000 in 2022 and at the top is Metrolinx CEO Phil Verster who earned $838,097 and oversees the Eglinton Cross Town LRT boondoggle that is billions over budget and has been under construction for 13 years and no one knows when it will be completed.The CEOs of the big six banks averaged $11 million in compensation in 2023 despite missing their performance targets. The worst underperformer is Toronto Dominion Bank CEO Bharat Masrani who received $13.3 million in compensation and much of his bonus even though the termination of the First Horizon bank transaction cost the bank $200 million and an anti-money laundering investigation by US regulators could cost the bank up to $1 billion. Masrani went out of his way to recommend to the board that he should forfeit one million in bonus pay. The bank's board is so out of touch that in its information circular, it reads "The board believes that the CEO demonstrated excellent personal leadership and performance through a challenging year.” Another underperformer is Bank of Montreal CEO Darryl White who missed all of his key targets on return on equity, efficiency ratio, and earnings per share but still took home a hefty $2.71 million bonus.BCE's CEO Mirko Bibic received $2.96 million in bonuses as part of his $13.43 million compensation package last year while missing all of his targets. “We continue to face a difficult economy and government regulatory decisions that undermine investment in our networks, fail to support our media business in a time of crisis and fail to level the playing field with global tech giants,” Mr. Bibic has written. One has to wonder what is the point of a board setting performance targets if CEOs miss them and still receive 90% of their bonuses. If the average Canadian worker does not perform on the job they get fired. In sum, breaking up Canada’s concentration of monopoly power will take an injection of what Nobel Peace Prize-winning economist Milton Friedman referred to as "competitive capitalism." Friedman believed that "government regulation destroys competition and stifles innovation.” He felt that monopolies are "created by too much government regulation" that leads to protective relationships at the top of the economic pyramid. Overhauling the Competition Act along with removing regulations that protect big business would begin the process of ending the cozy relationship between the corporate and political elites and make the Canadian economy competitive again.Crescia is a Toronto-based freelance writer

CRESCIA: As Canada slips into economic decline, the power moves to big players

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