Going For Broke

OCAP and the Economic Crisis

For nearly two decades, the Ontario Coalition Against Poverty (OCAP) has been working to mobilize resistance in some of Toronto’s poorest communities. These years have been marked by a concerted drive by capitalist governments at every level to cut social programs and to transfer wealth from the poorest in society to the richest. Using methods of direct collective action, OCAP has fought to defend individuals and families whose rights have been denied. We mobilize to oppose cutbacks to social services, and to demand adequate income levels and affordable housing. We resist the drive to push poor and homeless people out of their neighbourhoods in the interest of upscale urban redevelopment. During this time, we have gained a body of experience and built a base in poor communities. Now, as a deep economic crisis begins to take effect, we are facing the challenge of adapting our work and developing new methods of resistance on a transformed scale. What follows is an attempt to look at how the downturn is likely to impact Toronto’s poor and to examine some of the forms of fighting back that can emerge in this new political period.

It was only a few months ago that Prime Minister Harper was dismissing the possibility of a serious economic downturn. He wouldn’t care to go to a meeting of G8 leaders today and repeat such a laughable assertion. We are now seeing the impact of capitalism’s crisis. Employment insurance offices in Toronto are full of newly unemployed people trying to see if the program can offer them any help. They are, for the most part, finding that they have been cut adrift and that they do not qualify for benefits. Welfare caseloads are registering their first major increases in Toronto, with a 10 percent jump in applications in February 2009. The depths of suffering and the extent of dislocation will increase massively in the months ahead.

It is important to recognize that this crisis is not comparable to the economic recessions of the 1980s and 1990s. Not only is it a more fundamental manifestation of the contradictions of capitalism, but it is taking effect after decades of neoliberalism. The international neoliberal offensive has been devoted to altering the balance of forces in society and removing those limited barriers to profit-making that the postwar compromise created. For this very reason, it destroyed many of the factors that might have lessened the impact of the economic downturn and drastically altered the bases on which resistance to it might have emerged.

There are several major considerations that flow from the legacy of neoliberalism. Systems of social provision, particularly those relating to income support for the unemployed and poor, have been a major target of neoliberal policy-makers. This shredding of the “social safety net” will be a hugely significant factor in framing the nature of the struggle that emerges. We are also dealing with a greatly changed situation created by the weakening of working class organizations. Unions have been hit hard and their leaderships are far more conservative than they were a decade ago. The immediate prospects for rank-and-file challenges to these increasingly weak and collaborationist organizations are not heartening. Economically, the working class is divided into those who have barely maintained living standards by working harder and longer and accessing credit as never before and those who have lost their jobs and are reliant on the inadequacies of social assistance or have been driven into the ranks of the homeless. For most working class people, the call to collective action is more often than not outweighed by individual efforts to survive.

The question that underlies the current situation is: “Now that capitalism is in crisis, who is going to pay for it?” The left’s liberal thinkers who see this situation as an impending return to the glory days of Keynesian class compromise are sadly mistaken. It is true that the reckless deregulation of the recent past has been called into question and that some level of “stimulation spending” has become the mainstream view of those in economic and political power. Liberal Party leader Michael Ignatieff and New Democratic Party leader Jack Layton realized this quicker than Prime Minister Stephen Harper and his Finance Minister Jim Flaherty. However, those who watched the federal budget brought before Parliament and deemed acceptable by the Liberals have seen the two main political formations of the ruling class in Canada ready to go into this crisis with the system of unemployment insurance so greatly reduced that it fails to cover the great majority of the unemployed. The Ontario budget is similarly dismissive of the needs of working-class people. To date, no mainstream political party has demonstrated any intention of improving income support programs to prevent an explosion of poverty and destitution.

It is also important to realize that the sudden frenzied resolve to print money and bail out major financial institutions and sections of the manufacturing sector does not signify benevolence on the part of those in power. The state has always stood ready to underwrite the major organizations of capital and to use public resources to stabilize them. Moreover, as recent developments in the auto industry show us, the measures they take will at every turn and to an increasing degree be used to force massive austerity programs on workers, crushing the already weakened capacity of trade unions to defend working class interests. Even where money may be pumped into initiatives related to basic infrastructure, we can’t expect the needs of workers and poor communities to be at the forefront. We can be certain that the focus will continue to be on profit driven schemes that reflect corporate priorities and that undermine wages and working conditions for workers.

In the United States, the newly established Obama administration has given rise to false hopes, but the situation is fundamentally the same. Only in terms of its deceptive rhetoric and minor gestures will the actions of the US government reflect the need to protect working class people from the impacts of this crisis. Some of the assumptions of the neoliberal era have been questioned by its architects but tactical shifts notwithstanding, the goal of increasing the rate of exploitation has been preserved. Indeed, an explosion in unemployment rates and a heightened level of vulnerability will be seen as a golden opportunity to press forward even more ruthlessly than before with attacks on unions, wage cuts and the undermining of social programs.

Under the impact of this crisis, shock waves are passing through whole communities of people and their organizations. These shocks will be felt most profoundly by low-income communities in crisis and under attack even before the markets imploded. There have been predictions, based on the history of the Great Depression, that we may expect a significant period of shocked passivity to unfold in response to the situation that is taking shape. But we can’t automatically conclude that things will develop along the same lines today. Organizing social resistance and struggle is not like sitting on a platform waiting for a train to come in. If no lead is given, passivity is more likely than resistance. If, on the other hand, there are efforts to develop political education, agitation and models of effective resistance, shock can give way to anger and a readiness to fight back. At this point, we should look closely at how this crisis is playing out in working class communities of Ontario.

As workplace closures and massive layoffs develop, we need to consider the drastic and protracted process of weakening unemployment insurance in Canada. The experiences of the recently unemployed are going to have particular elements to them and they will be a volatile grouping for definite reasons. The fact that most of the unemployed can’t collect unemployment insurance – or employment insurance (EI) as it has been humorously renamed – means that the downturn in the economy will generate a population of people who are waiting to be poor enough to collect welfare. When EI offices turn them away, they will discover that welfare pays a sub-poverty pittance and even this will not be available to them. Welfare is a means-tested system and, if you have any level of savings or assets, you must use those up before you can apply. There is something truly explosive about the kind of bitterness, anger, and desperation that will develop among people who watch their homes and savings being taken from them. It will be driven into their minds that there is no support for them and that they have been abandoned by the system.

Once people have exhausted their savings and reached a level of poverty that enables them to apply for the post-Harris welfare payments, they will find them difficult to access. Welfare is a restrictive and arbitrary system that turns away a high proportion of applicants, even when they are ostensibly eligible under the system’s own rules. People are not told of benefits that would help them and inquiries about such benefits are met with evasion and deceit. Applicants are denied basic assistance and recipients have their benefits cut off on grounds that have no justification under legislation and regulations that the welfare offices claim to be implementing. There is a fundamental uncertainty about what is required to be eligible for welfare, which operates as an additional barrier to accessing welfare, thereby saving the government money and at the same time forming one of the “rituals of degradation” that give the system its punitive character.

It is to be expected that every effort will be made to restrict access to welfare. In Toronto, under the self-styled “progressive” administration of David Miller, the contingency fund for the city’s welfare system has been reduced from $90 million to a mere $8 million. As welfare caseloads explode, the ability of the city to meet its obligation to pay 20 percent of the cost of the program will be called into question. An indication of the impending attack on those in need of welfare has recently emerged. OCAP has worked very hard to help people access a food allowance within the welfare system that goes under the name of the Special Diet. This monthly social assistance benefit was set up to help people – who are able to obtain an appropriate medical diagnosis – meet their basic food needs. Since 2005, we have organized community health clinics through which thousands of people have obtained the Special Diet funds. We have also organized hundreds of direct actions to successfully resist attempts by welfare offices to deny these benefits. When we took up this fight, $2 million a year in Special Diet income was going to people on welfare in Toronto. This year benefits have increased to $4.1 million a month. In March 2009, following a Toronto Sun column that alleged “scammers” were obtaining the Special Diet improperly, the city’s auditor was called in to look for ways to limit access to this vital program. If taking food away from the poorest families in Toronto is the kind of “cost-saving measure” the city will adopt to weather the downturn then we are in for a very harsh period indeed.

Recent media reports show a significant increase in food bank use. For years, food banks and other charitable operations have functioned as a de facto back-up system that masks the gross inadequacy of welfare payments. Without food banks, the full impact of government cutbacks would result in dramatically increased rates of housing evictions and levels of malnutrition. With mounting caseloads and growing numbers of people being denied welfare assistance, the demand for food bank services will continue to grow, but there is no reason to expect that these charities will be able to extend their services beyond their current limited capacity.

The largest landlord in Toronto is the municipally run Toronto Community Housing (TCH), with 180,000 people living in its units. The fact that such a large number of poor people have access to rent-geared-to-income accommodation is a considerable factor in terms of who can get and maintain housing in Toronto. This housing option, however, is in the process of being deliberately eliminated. TCH housing is in a massive state of disrepair and TCH acknowledges that it would need to spend $300 million to bring its housing up to the basic standards that provincial legislation demand of landlords. Since neither the city or provincial governments have provided adequate funding, TCH housing is being allowed to reach a level of dilapidation that will justify a Regent Park-style “revitalization” by private developers. The housing will be pulled down and replaced with developer-built condominiums possessing a “rent-geared-to-income component” that can be reduced and eventually eliminated. Now TCH is increasing the pace of this form of redevelopment and is also moving to sell off the individual homes that it owns throughout the city. With the loss of revenue that so many people face, this threat to the future of public housing is bound to be devastating.

Before the present crisis hit the markets, there were already about 20 percent more evictions from rental accommodations in Ontario under Premier Dalton McGuinty than under former Premier Mike Harris. It needs to be understood what a serious indicator this is in the present situation. People will do just about anything to retain their housing. They will certainly cut expenditures on all other items, including food, before they get put on the streets. For every person who is evicted, there are many others who are within sight of the same fate and staving it off with great difficulty. Job losses, wage cuts, and the denial of social benefits all feed the housing problem. As these factors come more into play, it is to be expected that the scale of evictions will increase and that the problem will assume the proportions of a crisis. At the same time, a dramatic increase in evictions will constitute a major flashpoint for community-based resistance.

A serious increase in homelessness points to another area where the attacks of the recent past have cast their shadow over the developing crisis. Toronto has been generating an oversupply of upscale housing for the past 20 years. As a result, the drive to clear low-income populations from their neighbourhoods and disperse homeless people in order to make way for affluent newcomers has become a defining feature of urban life. The restriction of homeless shelters, particularly in the downtown core, has been a high priority for the political servants of redevelopment. Shelters are already hopelessly inadequate to deal with the size and needs of the homeless population. The downturn will put more people on the streets, including those who come to Toronto from smaller centres that lack the infrastructure to deal with the problem of destitution. In the months ahead we have to organize to ensure that there are available places of shelter for everyone that needs housing.

No One is Illegal – Toronto (NOII-Toronto), the main organization in Toronto that defends the rights of those who live here without legal status, recently organized a series of events under the slogan of “the city is a sweatshop.” The goal of this project was to continue the group’s challenge of racism and racist immigration laws that are used to obtain maximum profits from the most vulnerable workers and to point out that the basic provisions of Ontario’s Employment Standards Act are ignored with near impunity. One of the central features of an economic downturn, of course, is that it massively reduces the bargaining power of workers. That is true even of those who are organized in unions. For those who are unorganized and precariously employed and, even more, for those who are without status and living in Canada under the threat of arrest and deportation, the downturn will place formidable power in the hands of their employers. Sub-minimum wage employment is likely to proliferate and vulnerable workers will face greater abuses as the crisis develops.

The crisis will also entail increased police repression. While just about every system of social provision has been progressively dismantled over the last number of years, Toronto’s police budget has swollen to the point where it is the largest area of city spending. It will soon be an obscene $1 billion per year item. David Miller has bragged to the media that there are more cops on the streets than ever before under his “socially enlightened” administration. The growth of the police force over the last number of years has entailed increased aggressive intrusions into the lives of immigrant communities, people of colour, and homeless populations. In the central areas of the city especially, anti-panhandling campaigns have given the cops extensive training in criminalizing and abusing a population of people in total violation of their civil rights. In the 1930s, municipal police forces would compete with each other to try and establish the most brutal and unwelcoming regime in order to drive away and discourage the unemployed and destitute. As homelessness in Toronto increases, an abundant supply of cops, awash in resources and highly experienced in the techniques of harassment and intimidation, will go to work on minimizing the movement of poor people in Toronto.

The particular targeting of immigrant communities is a given in just about every likely impact of the crisis that I have outlined above. OCAP frequently deals with cases of improper denial of welfare where racism appears to be a factor. Sometimes it is completely blatant. Our office dealt with a Salvadoran family who applied for medical benefits and were told by a welfare official that their claim was bogus and that he would make sure they were deported. A Somali woman applying at an Etobicoke welfare office was told that she did not need a particular benefit because she was better off in Canada than she had been in Africa. As services become increasingly restricted, we can expect this racist behaviour to become much worse. However, I suspect that we are going see more than sly, unofficial racism by public agencies. As the level of unemployment escalates, immigration authorities can be expected to increase their harassment of non-status people with US-style raids becoming a feature of daily life. We can also anticipate ugly “Canadians first” campaigns to emerge around services and employment with far right groupings working to gain influence. A powerful response to such overt displays of racist scapegoating will be vital.

The range of likely impacts and attacks on poor communities that flow from the downturn are points at which resistance can be organized. It is vital to work immediately to generate on-the-ground resistance. The work must begin with community-based organizing that defends those who face attack and abandonment. OCAP frequently uses direct action to ensure that people get the benefits that the welfare system and other bureaucracies attempt to deny them. As the unofficial imperative to deny help whenever and wherever possible moves through the welfare system, there will be a flood of cases of illegitimate denial of welfare benefits. Local committees of poor people will have to be organized to march on welfare offices and employ other militant tactics to defend people and ensure their survival.

One area of resistance that will be critical is the challenging of evictions. We must develop local networks with the capacity for rapid deployment that would make this resistance possible. A powerful and ubiquitous challenge to evictions would tilt the balance of forces, defending families in need and driving home the lesson that such attacks can be beaten back. If putting families on the street only requires sending out an official in a car to tell them to leave and to change the locks, then it’s quite cost effective for the authorities. If, however, working class resistance emerges, things can change rapidly. An eviction can cease to be a bureaucratic procedure and become a major police operation that is financially and politically unwieldy. Real gains could be made in such a struggle.

The growth of homelessness will challenge a resistance movement to find means to ensure people are not just abandoned to the streets and the cops that patrol them. If shelters are overloaded and spaces in them are impossible to find, then homeless people must organize to collectively remedy such a situation. The economic crisis will likely entail the collapse of the condo boom. Condo owners will lose their homes to banks and the speculators who bought up swathes of condo units will lose their properties to the investors who financed them. The systematic movement of people into vacant condominiums is a necessary element of fighting back in the months and years ahead. This can also include takeovers of government facilities for use as additional shelter. To be sustainable, an organized resistance to the crisis must include making homes available to those who have been displaced by the interests of capital.

As communities come together to take up these kinds of fights, maintaining direct pressure at the local level is vital. As we challenge evictions on the streets, we must also demand a moratorium on evictions. “Employment insurance” must be drastically upgraded and welfare rates must be immediately restored to the spending levels that existed before the Mike Harris cuts. That means an immediate 40 percent increase in Ontario’s welfare rates.

We will also need to confront the issue of “stimulation spending.” If public resources are to be used for economic stimulation, the needs of communities must take precedence over the profits of corporations. Massive programs to create housing and to restore infrastructure have to be won. Those who work on such projects must do so as unionized workers and at wages that raise the general level rather than drag it down. Even some sections of the ruling class and their mouthpieces are now calling for nationalization of the banks. While it would be wrong to see this as a solution to the crisis of capitalism, to the extent that such a prospect emerges, we would need to debate and develop demands on the forms and functioning of so vital an institution as a nationalized system of allocating credit.

The task of building a resistance movement in the present situation faces some major problems. The greatest barrier to serious and effective mobilization by the working class is the labour bureaucracy that was established on the basis of the post-World War II compromise that granted concessions to unions and some improvements in social programs in return for a massive reduction in the level of working-class mobilization. During the neoliberal years, the ruling class repudiated this compromise but labour bureaucrats continued, for the most part, to respect the terms of the dead deal. Now, in conditions of fundamental crisis, the situation is even worse. Bold and decisive mobilization that goes beyond the boundaries of seeking accommodation with capitalism is the only way to make serious gains and the labour leadership is both unwilling and incapable of such action. To the contrary, they insist on taking their unions down the road of brokering and facilitating the measures of austerity that corporations say are necessary.

In the 1990s, the Ontario Labour Movement embarked on the Days of Action campaign. It showed us a glimpse of the power of the working class with its city-wide strikes and vast demonstrations, which were some of the largest in Canadian history. However, at every turn, union leaders refused to articulate that they were mobilizing to try and prevent the Harris government from proceeding with its agenda. They vacillated, unable to map out a clear plan to escalate towards a province-wide general strike and finally called off the campaign, leaving the political terrain to the Tories. The legacy of that debacle is still with us today. These dismal failings notwithstanding, the labour leadership of the mid-to-late 1990s look like radicals in comparison to how they function today.

Despite the capture of labour by an accommodationist union bureaucracy, those of us who organize in communities must realize that the power of employed workers and their organizations is a vital prerequisite for building a force that can win the battles that lie ahead. For this reason, a fight to defend communities under attack has to link up with the development of a rank-and-file challenge to the labour bureaucracy. There are already some openings to be found. A recent 85 day strike by CUPE 3903 at York University, that, against formidable odds, challenged both the underfunding of post-secondary education and the exploitation of workers within it, has shown that principled union struggles are still possible. A serious and determined campaign by activists within CUPE Ontario that led to that union taking a courageous public stand against Israeli apartheid shows that there are forces within the unions able to organize and fight outside the framework of accommodation to the status quo. The economic crisis will add to the degree to which this is true. We see the Canadian Auto Workers (CAW) union leaders beginning the process of dismantling the union’s gains in their deal with General Motors. Ford and Chrysler immediately contend it is not enough. For employers, it will never be enough until CAW workers see their wages and conditions reduced to the level of the unorganized and their union is destroyed as a fighting organization and reduced to a bureaucratic shell that serves the agenda of capital. At present, perhaps understandably, 87 percent of GM workers accept concessions but, as the full extent of the “shared sacrifices” that are expected of them become clear, this will change. If the rising discontent of workers that this crisis generates can be addressed with concrete and clear proposals for a new direction for their union, a lot can be accomplished.

Outside of the labour movement, there has also been a real decline in the potential for mobilization. In the late 1980s, the Ontario Liberal Government came under great pressure and faced significant community mobilization around demands for improvements in the system of social assistance. Today, attempts by social-agency NGOs to pressure the McGuinty government to deal with poverty have been focused on a strategy of “constructive engagement” that has utilized lobbying techniques but pointedly avoided attempts to mobilize communities directly affected by poverty. In the mainstream groupings of what union bureaucrats sometimes refer to as their “social partners,” we are going into this crisis with a reduced readiness to take the kinds of action that will be required if there is to be a resistance movement.

These difficulties are formidable, but we should also see that the prospects of igniting the beginnings of a movement cannot be assessed on the basis of assumptions formed prior to the onset of this crisis. We are entering a political moment in which the relative impact of correct ideas and bold action increases dramatically. In this regard, OCAP is well placed to make a significant contribution. We have gone through the difficult period along with the rest of the working class movement over the last few years. After the main challenge to the Harris Tories was demobilized, and before it could assume the scale and form that would make a victory possible, the hard-right government was replaced by a regime dedicated to the duplicitous consolidation of Harris’s neoliberal Common Sense Revolution. This has been a period when there has not been a generalized upsurge but we have continued to extend our base in poor communities. The fight for the Special Diet, the drive to challenge disrepair in public housing and the struggle to rally the downtown homeless community against attempts to drive them out have strengthened that base. We are now facing a situation confronting the poor of this city that demands much more than can be put into action by OCAP alone, but the fact that a militant, anti-capitalist poor people’s organization exists is a helpful factor.That we have experience in mobilizing in poor communities to win redress for individual grievances and taking up broader, direct-action based campaigns is even more promising. OCAP has provided useful examples and continues to make resources available to people as they look for ways to resist.

Efforts toward building a common front in Toronto that unites those within the anti-capitalist left who are ready to take action along non-sectarian lines is now underway. This initiative will make great gains if it can provide a lead to workers and communities facing attack. Unemployment continues to mount, people with no access to social benefits are losing their housing and workers are being told that the only way to keep their jobs is to accept austerity programs and work harder for less. That’s class war and a force has to emerge that can make that war a two-sided affair. We must show that resistance can happen and that it can win. If we are to do this, it is vital that we advance an anti-capitalist perspective. This is vital because it conditions how we will organize and fight. If we accept this system, we can only look for what is possible within it. However, if we seek to defeat the system, then the needs of working class people will be fought for as non-negotiable items that are demanded regardless of the state’s accounting books.

So, who will pay for this crisis? For decades now, we have been in a long retreat and most working class people have been impacted by a sense of inevitability about the agenda of capital. Resistance has been overwhelmingly defensive and, more often than not, unsuccessful. The arrogance of capitalism’s ideologues has known no bounds. Thatcher lectured her victims that “there is no alternative.” Fukuyama concluded that “the end of history” had arrived, so total was the victory of neoliberal capitalism in his view of things. Now the system is in crisis and, as such, it is weakened but more dangerous than ever. It is already scrambling to solve its crisis at the expense of workers and, indeed, the bulk of humanity. But its credibility is not what it was just a few short months ago. There has been a crisis in the markets and there is a crisis in the economy but, now, there is also a crisis of legitimacy. This is a vastly changed situation in which millions of people will see the misery inflicted on them in a new light. Our immediate capacity to exploit it is less than what we would hope but the speed by which we can change is a practical organizational challenge we need to take up without delay.

There has been a crisis brewing long before the subprime mortgages made the situation immanent. People are angry and know that things are going from bad to worse. This is becoming a generalized working class experience. People need practical proof that these worsening conditions are neither inevitable nor unstoppable. This is the starting point for a resistance movement with a bold anti-capitalist vision of what that movement must fight for. Of necessity, we respond to this crisis with working class resistance to any and all attempts to stabilize the system at our expense. However, we must fight back in such a way as to expose the impossibility of continuing with a society that applies its vast productive power on the basis of the profit needs of a small social class. To fail to recognize this is to accept inequality, poverty, and worsening crises. Our struggles can’t be limited to the goal of attaining what rights we can under capitalism. A society based on collective ownership and democratic political and economic decision making is the only means to solve this crisis and create a world where human needs are met and the human personality is developed to its full potential.