The head of Toronto’s most prestigious business school has a seditious idea, and it might save us from financial catastrophe
Last fall’s Occupy Toronto protest was more of an idea than a place, a kind of free-floating rage against what is perceived as an unjust, morally skewed, out-of-control, soul-sucking machine. The number of protesters ranged from a few hundred people to 3,000, depending on the day, and the camp at St. James Park possessed a vibe similar to Occupy camps around the world. Gordon Lightfoot and Rachel McAdams dropped by. The placards that hung from tents or rested on the grass—“Corporate Greed Hurts Everyone,” “Reclaim Your Life!”—could just as easily have been found in London or Atlanta or Calgary.
Almost from the beginning, critics were quick to say that Occupy Toronto was misguided and irrelevant, a copycat protest at best, and a case of rich envy at worst. Corporate kleptocracy is not nearly as bad here as it is in the United States, the argument went, and our economy has triumphantly eluded any deep, lasting meltdown. Canadian executives are not, for the most part, cut from the same overpaid, underhanded cloth as American CEOs. In Canada, super-elite is just a passenger class on Air Canada. “We obviously have a very different situation here,” Stephen Harper said in response to the claims made by Occupiers. “We didn’t bail out our banking sector. Our banking sector is the strongest in the world.” In other words, put down the sign, comrade, nothing to complain about here.
While it’s true that economic disparity is not as pronounced in Canada as it is in the States, and the European Union could take a few pages—maybe even a whole chapter—from our playbook, the smugness is unwarranted. The Conference Board of Canada, a not-for-profit economic research organization, has found that we’ve been outpacing the U.S. in income inequality since the mid-1990s. The ratio between the top 10 per cent and the bottom 10 per cent of earners is now 10 to one (in the early ’90s, it was eight to one). The country’s wealthiest one per cent account for 32 per cent of all income growth between 1997 and 2007—the largest percentage in our recorded history. In 2010, the average Canadian income was $44,366, while that same year the average compensation for the country’s 100 highest-paid CEOs was more than $8 million. Frank Stronach, the former head of Magna International, received roughly $40 million a year over the last decade and in his last year at Magna pocketed $62 million. (In 2007, he set a Canadian record by collecting over $70 million in compensation.)
“There’s way too much money going to far too few people,” says Roger Garland, a former international banker and Four Seasons exec. “The abuses are known to everybody.” The economist Armine Yalnizyan has referred to this era as “Canada’s neo-gilded age,” pointing out that whether the economy has grown or faltered, “the rise of the rich has been unstoppable.” And the consequences affect all of us: reduced social mobility, higher health care costs, a growing discontent.
Just as Michael Pollan articulated how our food
system is broken and Bill McKibben became the
go-to guy on the dangers of climate change,
Martin is now the economy’s village explainer
It was once possible to believe that a rising tide lifts all boats, but now it seems more likely to sink them. After the country’s six biggest banks announced record combined profits of $23.6 billion last December, RBC, BMO and CIBC cut over a thousand jobs, lowering costs, they said, in anticipation of an economic slowdown in 2012.
A couple of months earlier, Statistics Canada reported that a record 35,000 jobs were lost in the finance, insurance and real estate sectors. This was business as usual. Wasn’t it?