February 25, 2014

Making Life More Affordable

While major media outlets were busy covering the federal Liberal policy convention in Montréal on February 22, 2014, there was another significant political development that day which needs to be heard. In 141 ridings across Canada, a total of 2,172 volunteers mobilized for the NDP’s first National Day of Action to promote their affordability campaign. I was part of this campaign with MP Peggy Nash and fellow members of the Parkdale High Park NDP riding association. While canvassing, I found most of those who answered the door expressed their support and signed the petition, which Peggy confirmed in an earlier blog post.

What is included in this affordability campaign?

The NDP’s affordability campaign has five elements – four of which were pursued when Jack Layton was leader – and is in response to record debt levels, in which Canadians owe $1.65 for every dollar they make. The elements are the following:
  • Capping ATM fees at 50 cents per transaction. For withdrawals from ATM’s not owned by a customer’s financial institution, such fees can be in excess of $3.
  • Expanding availability of no frills credit cards capped at prime plus 5% for a total of 8%.[1] In comparison, many credit cards charge over 20%. Certain financial institutions will offer lower rates, but charge an annual fee.
  • Cracking down on payday loans, which are considered to be loans of last resort. The maximum charge allowed in Ontario is $21 per $100 borrowed over a two week period, which leads to an annual rate in excess of 500%.[2]
  • Ending gas price gouging by making collusion between companies illegal and enforceable under the Criminal Code.
The fifth element is banning pay-to-pay schemes, which is a recent trend of companies charging their customers a statement fee of up to $2 in order to encourage online billing. However, online billing may not be ideal for certain demographics such as (but not limited to) seniors. These issues may not be significant up front, but they do add up and addressing them can be achieved in the short term, which can attract voter attention.

How are other political affiliations addressing affordability?

Thanks in part to pressure from the federal NDP, the Conservative government pledged to take action on payday loans and made banning pay-to-pay schemes part of their 2014 Budget.[3] Their budget also included measures such as capping wireless roaming fees, cracking down on cross-border price discrimination, and developing a financial consumer code.

In Ontario, both the NDP and Progressive Conservative parties supported eliminating the provincial portion of the HST (8%) on essentials such as hydro and home heating in the 2011 provincial election, as well as condemned the recent talk of levying gas taxes for transit expansion. Regarding gas taxes, the PC’s reason was “available efficiencies” while the NDP called out the Liberals’ planned tax cuts for corporations and the wealthy. The NDP secured a 15% reduction in auto insurance rates in the 2013 budget and currently has a campaign on hydro rates. The PC’s website has white papers discussing these two subjects, but focus on reducing bureaucracy and insurance fraud.

Affordability can also mean increasing the minimum wage. Recently, the Ontario Liberals approved a minimum wage hike from $10.25/hour to $11/hour and pegged future annual increases to inflation, which the NDP called for in 2011. The NDP announced today they support a $12/hour minimum wage, while labour organizations support a $14/hour minimum wage, which they claim would put full time workers 10% above the poverty line.

Final thoughts

While identifying short term affordability fixes can capture voter attention, affordability can also be achieved via long term measures. These include transit and cycling infrastructure (reduces gridlock and automobile expenses), affordable housing, and expanding Medicare to include things such as prescription drugs (reduces long term health costs). There are many other ways affordability can be addressed, but what matters most is making it relevant to the issues you believe in and taking action.

To close off this post, here is a clip of NDP leader Tom Mulcair making the case for affordability leading up to the National Day of Action.
Happy canvassing!
Rob Z (e-mail)

[1] The current Bank of Canada prime rate is 3%, which would make the credit card rate 8%.
[2] Mike Crawley. CBC. “Ontario wants to revoke licence of payday cash stores.” http://www.cbc.ca/news/canada/toronto/ontario-wants-to-revoke-licence-of-payday-cash-stores-1.1307424?cmp=rss
[3] Government of Canada. “Budget 2014.” http://www.budget.gc.ca/2014/docs/plan/ch3-4-eng.html

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