Rebuilding our social institutions

In July 2024, workers of the Liquor Control Board of Ontario (LCBO) went on the first strike in their nearly 100-year history. In an unprecedented move, under the leadership of president JP Hornick, members of the Ontario Public Service Employees Union (OPSEU/SEFPO) took a stand not over wages, but against the gutting of a Crown corporation. 

The LCBO is one of the largest purchasers and sellers of booze in the world. Most importantly, as a unionized Crown corporation, all those profits funnel directly into bettering Ontarians’ lives by funding housing, health care, and education. The LCBO alone injects over $2.5 billion annually into Ontario’s provincial coffers.

“As trade unionists we are one of the last bastions of an organized progressive force in this world that can mobilize in opposition to the power wielded by capital,” Hornick told me this past August. “But we are living in dangerous times when even long-cherished public services like health care and education are being privatized on the pretext that we cannot afford to run them as public operations.” 

The Doug Ford government’s attack on the LCBO was shocking. The provincial government redirected hundreds of millions in sales out of the LCBO’s unionized stores and into Canada’s multi-billionaire-owned private grocery oligopoly. During the strike, Ford went out of his way to discourage Ontarians purchasing from the LCBO, effectively redirecting funds from social services to private profit. As Hornick put it, Ford was laying the ground for mass privatization. 

To proclaim that Suncor cares about workers is bold given the company has featured in headlines for safety violations in Alberta including worker deaths, cutting over 1,500 jobs, and shaving $450 million off their payroll while posting record profits.

It’s a tale as old as time: underfund social institutions until they can barely function; gut the social institutions tasked with our care and well-being such as health care, housing and education; and then while the public is reeling and looking for someone to blame for their suffering, privatize. These highly strategic political choices designed to sow fear, hatred, and confusion have a body count in the hallways of our hospitals and in city encampments. The compounding crises we face have far surpassed their tipping point. 

Historically, unions have fought for the strength of our social institutions and public services in tandem with bettering working conditions for their members. With the climate crisis and living affordability crisis, labour unions more than ever need to intervene in the current trends of privatization and the unchecked billions lining the pockets of billionaires.

One solution being tabled by tax fairness organizations and social movements alike is an excess profits and wealth tax, which would bring billions in private profits back into the public purse. A second concurrent solution is federally regulating Canadian banks which would clamp down on the continued funding of destructive industries (like fossil fuels) and incentivize investments in climate safe and socially supportive industries.

An Excess Profits Tax

"I appreciate your desire to create headlines, point fingers and attempt to villainize the industry," Rich Kruger, CEO of oil sands giant Suncor sniped at NDP MP Laurel Collins, when asked how he sleeps at night. "But what I would say, when you do that, you're actually attacking hundreds of thousands of Canadians who work hard to provide energy to this country." 

Closing the tax loophole where the wealthiest in the country are getting breaks on private gross profits has the potential to provide a crucial lifeline to the funding and strengthening of our social institutions.

Kruger was being questioned by a Parliamentary committee on Suncor’s stunning private profit margins while the country reeled from heat waves. To proclaim that Suncor cares about workers is bold given the company has featured in headlines for safety violations in Alberta including worker deaths, cutting over 1,500 jobs, and shaving $450 million off their payroll while posting record profits. Kruger personally brought home $36.8 million in his first year as CEO as he moved Suncor away from green energy, ramped up oil production, and laid off over a thousand workers. 

Executives from all three sectors of Canada’s oligopolies (fossil fuels, the big five banks and grocery chains) were summoned before Parliamentary committees in the last year to answer why and how profits continue to skyrocket amid stagnating workers’ wages and raging climate change.

The U.S.-style theatre of committee interrogations confirmed what many economists have been saying for years: these CEOs are cheating workers, pocketing public funds in the form of tax exemptions and federal subsidies, and getting rich on a lack of regulation. 

In his report “Breakfast of Champions,” Canadian Centre for Policy Alternatives’ David Macdonald outlines two potential explanations for what’s happening with Canada’s wealthiest CEOs. Either companies are downloading higher costs directly to consumers – which makes one ask why they’re receiving bonuses at all – or else CEOs are deliberately driving inflated prices, receiving private bonuses as a direct reward for the inflation they are facilitating. Both possibilities are damning.

This false profitability for the rich is manufactured by policy – which means policy can change it.

While corporations rake in record profits, working people are suffering. Inequality, poverty and suffering are not inexplicable tragedies – they are deliberate policy decisions.

According to the Canadian Parliamentary Budget Officer’s (PBO) report in April 2021, an excess profits tax would bring in $7.9 billion in revenue. Closing the tax loophole where the wealthiest in the country are getting breaks on private gross profits has the potential to provide a crucial lifeline to the funding and strengthening of our social institutions.

As executive director of Canadians For Tax Fairness Katrina Miller told me, “[these taxes] are not new principles, they’re old ones that have been done before in Canada. This is also not unique to Canada. Even the International Monetary Fund (IMF) is formally recommending an excess profits tax across the globe. We can safely say this is a mainstream and unradical economic solution.”

As well, since banks such as the Royal Bank of Canada continue their support for housing financialization by propping up the investment purchasing of housing, it effectively contributes to the inability of many to afford shelter. 

The size, speed, and pacing of the shift necessary to address inequality and the attacks on our social institutions requires not only enforcement of closed tax loopholes, but also mandating the big banks to uplift responsible investments. 

Regulate the banks

Working in tandem with CEOs pocketing massive profits, Canada’s banks are propping up the life of the fossil fuel economy by bankrolling an industry in clear decline globally. According to the 15th annual Banking on Climate Chaos report, Canada’s top five banks – RBC, TD Canada Trust, BMO, CIBC and Scotiabank – pumped a combined total of US$103.85 billion into fossil fuel projects in 2023. As well, since banks such as the Royal Bank of Canada continue their support for housing financialization by propping up the investment purchasing of housing, it effectively contributes to the inability of many to afford shelter. Inequality is no accident, but rather a series of deliberate policy decisions carried out with precision.

From Cranberry Junction in so-called British Columbia to the U.S. Gulf Coast, communities in rising numbers have been fighting projects that harm their health, land, and well-being. These site fights have created conditions where fossil fuel companies are repeatedly being sued in many major cities around the world, making investments in these industries not without consequence. 

These risky financial decisions are masked by banks that continue to finance destructive projects. Hiding financial liabilities (e.g. massive instability) from investors while exacerbating the climate crisis is not only wrong, it’s bad business. Wealthy investors playing monopoly with people's lives, like they did before the housing crash, is a danger to us all. With an overarching profit motive for everything from housing to health care to breathable air, investors move quickly to make as much money as possible before getting out. The goal isn’t long-term, sustainable service provision – it’s “get in while it’s hot, then cut and run.” The fact that many new homes (especially but not exclusively affordable ones) are being built on flood plains or below sea level is a design decision that puts working people on the front line of climate disaster and shores up developers' private profits. Removing financial protections on fossil fuel investments would showcase the industry for what it truly is: a danger to the life of the planet, people, and the economy.

Canada’s pension funds have some of the largest portfolios in the world, in the trillions of dollars, propping up fossil fuels, weapons, and surveillance technology. 

This false profitability for the rich is manufactured by policy – which means policy can change it. Federal regulation can determine what investments are in the best interest of the public good. Canadian senator Rosa Galvez introduced a bill, currently under review, called the Climate-Aligned Finance Act (CAFA). The Act would impose first-of-their-kind rules on Canadian financial institutions, to align these institutions with Canada’s climate goals. These regulations have the potential to enshrine the expansion of climate-safe jobs to replace those in the fossil fuel sector. Implementing CAFA could reshape financial investments, change what makes up a sustainable investment; and force destructive industries into the red.

Private companies, though located in countries that have signed international agreements like the Paris Agreement, are not required to adhere to global climate commitments – just like they’re not required to treat workers fairly or clean up their environmental disasters  – unless governments make them. 

CAFA aims to close the major loopholes. Right now, the number of future-facing permits for fossil fuel projects and exploration vastly exceeds room for carbon in the atmosphere. Moreover, insufficient regulations have contributed to a regulatory landscape much more closely resembling industry self-regulation instead of pathways toward phase-out. CAFA would tackle this through a series of policies. First, it would create a system where insuring fossil fuel projects inconsistent with climate targets would be removed from the table, potentially shifting billions away from the fossil fuel sector by tackling every entity with investments propping up the industry from bank insurers to public pensions to companies exploring new reserves and expanding infrastructure. Second, it aims to bake in regeneration programs that enshrine the United Nations Declaration on the Rights of Indigenous Peoples in its application of just transition activities.

Indigenous and labour rights must be foundationally set in investment regulations in order to build an economy with the capacity to fight the climate crisis. Justly produced green energy is one solution; so is rebuilding our social institutions. 

Reinvesting pension funds

Investments propping up destructive systems are everywhere. Workers across the country from teachers to nurses to federal staffers have been shocked to discover that their pensions are sitting in some of the most violent industries on the planet. Canada’s pension funds have some of the largest portfolios in the world, in the trillions of dollars, propping up fossil fuels, weapons, and surveillance technology. For these industries to be financially starved into decline, workers must push the federal government to change the rules of the investment game. 

Organized labour has the capacity to move billions in global flows overnight. If secretary treasurers, pension investment board members within labour, and the rank-and-file decided to truly dig into how banks are investing their funds, some powerful demands could be made. In fact, some have already happened.

PSAC and elder care

At the height of deaths in long-term care homes during the COVID-19 pandemic – a crisis that saw the military called in – the Public Service Alliance of Canada (PSAC) learned that their pension fund, managed by the Public Sector Pension Investment Board (PSP), had inadvertently become majority stakeholders of Revera Inc., a long-term care company. Appalled at the way the company was being run, PSAC began an internal campaign to make Revera Inc. public. 

During my time at the Leap, a colleague and I supported the creation of a national collective of unions, health-care groups, and other labour organizations representing workers inside these facilities. The campaign demanded the federal government facilitate talks between PSP and provincial health authorities to make the federal government the building landlords, turn the running of facilities over to the public provincial health authorities, and ultimately take a piece of privatized health care and make it public again.

The Shareholder Association for Research and Education (SHARE) in Canada houses the secretariat of the Global Unions’ Committee on Workers’ Capital and has found investments can be done in ways that both uphold freedom of association and collective bargaining as well as economy-shifting investments in a new green economy. SHARE highlights that when investors (including those managing unions’ private investments and pension funds) adhere to strict internal metrics for strong workers’ rights, working-class solidarity, measures of affordability, and workplace safety when choosing their investments, the impacts on health are profound. 

We are on a dangerous path when one of Canada’s largest public pension funds is now one of Canada's largest mega-landlords.

“Workers are the foundation of human rights due diligence because they are best placed to observe and report risks and violations in a company’s operations or value chains,” they write in their executive report Shared Prosperity. They continue: “A U.S. Study of 13,350 [long-term care homes] found that unions were associated with a 10.8% lower COVID-19 mortality rate among residents.” These are life-and-death statistics. 

As Ricardo Tranjan, political economist and senior researcher with the Canadian Centre for Policy Alternatives, highlights for me, “During the recent historic rent strikes in Toronto by York South-Weston Tenant Union and Thorncliffe Park [residents], these buildings were effectively owned by Public Sector Pension Investments, but day-to-day managed by asset managers. One of the tenants involved in the strike was a federal servant and when he got his eviction notice, he found out he was being evicted by his own pension fund.” 

We are on a dangerous path when one of Canada’s largest public pension funds is now one of Canada's largest mega-landlords.

What kind of world could have been possible in our homes, in the lives of our elderly, on the shop floor of Revera – or in the buildings in York South-Weston and Thorncliffe Park – if they had been owned by the public? If they had been run and operated by members of the community not motivated by private profit but rather regulated based on the quality of their care and resourced by taxing billionaire executives?

As stakeholders in the largest pension funds in the world, unions can harness working-class power by becoming active on those fund, boards, and demanding that investments be weighed against the value systems of members, the working class writ large, and the political values that organized labour was built on. In doing so, labour could lead a monumental movement that has the power to fundamentally change the face of the Canadian economy. 

Shift, a Canadian organization closely tracking public pension investments in fossil fuels, releases a comprehensive report annually. In their 2023 review, they highlight that most pension funds are still grossly off track in supporting efforts to limit global warming beyond a 1.5-degree threshold. 

If the climate crisis continues apace, we’re talking about a retirement future with costs we only fathomed in worst-case predictions. Wildfires, floods and more pandemics are on the horizon. What good is a pension representative of costs from 2008 when your own union’s pension fund evicts you from your home to make way for your former boss's new Airbnb? 

Decades of propaganda and financial propping from government and industry have made talk of divestment itself seem like the risk. Pension fund managers and secretary treasurers might think that to step out against the grain is to abandon their responsibility to make as much money for workers as possible – but it's important to weigh the facts against the story. The fossil free economy is coming – and fast. As the jobs end, the investments wind down, and the billionaires cut and run, it is workers who will lose out. 

The stakes are high – but the possibilities for building something new are as life-saving as they are world-building.

Climate-safe path forward

Rank-and-file members of unions have many options to intervene and have a say in their pension investment. First and foremost, members must research and get information about where their pension, strike funds, and other union resources are invested. Get familiar with the union representative on the pension board and the union’s secretary treasurer. Question them on where the investments are. Familiarize yourself with the investment and political policies that drive your union investments – have you divested from fossil fuels, weapons, and war? Did you do it just through a resolution at convention or have the policies actually been implemented? 

“Governments are constantly making choices.” JP Hornick tells me. “Funding services is a choice, as is not funding them. Privatization is a choice as is keeping a service public. As trade unionists, as organized workers, our job is to ensure that they make the best choices for people. We have to mobilize like never before because right-wing politicians are now coming for us all and all of the services we value. We do that by organizing in our communities – because we are in every community in this province and in every community across the country.”