Election 2021: Whither social democracy in Canada?

September 21, 2021
The New Democractic Party has jettisoned references to socialism from its platform and moved to become the party of small business. NDP leader Jagmeet Singh (left) and MP Wayne Stetski. Photo: Yvonne Bambrick/Flickr CC By-SA 2.0

Canada's 2021 federal election currently underway has stoked the hopes of social democratic voters, offering a sense that the New Democratic Party (NDP), Canada’s perpetual third party federally, could make some gains.

Frustration with the COVID-19 policies of the ruling (neo)Liberal government of Justin Trudeau and the bumbling fake populism of Conservative leader Erin O’Toole have provided an opening. Yet, a closer view suggests that this NDP is a far cry from what supporters of a social democratic party might expect or desire.

Hallmarks of social democracy historically have been a commitment to the working class and issues of key importance to working-class people — affordable (non-market) housing, universal health care, unemployment and welfare supports, etc. While not pushing for the end of capitalism, social democracy has put forward policies meeting some working-class needs within capitalism.

Over the past several decades, however, social democracy has moved away from even these limited commitments, taking instead a managerial style more akin to a pitch for neoliberalism with a human face. Balanced budgets, lower taxes for small businesses, and tougher bargaining with public sector unions have become the new hallmarks of social democratic governance.

This is certainly true in the Canadian context, both through provincial NDP governments and in electoral programs of federal NDP campaigns. While the NDP has never been the ruling federal party, it has served as the ruling party in several Canadian provinces and territories.

In assessing the character of social democracy in Canada, we can look at some key planks in the federal NDP campaign during the current election. And faced with these we might well ask, “Whither social democracy in Canada?”

The small capital turn

A strong indication of the NDP’s orientation away from the working class and toward petit bourgeois, or small business capital, is its description of small business as “the backbone of the economy”. Recent platform statements as well as campaign efforts show how rooted this approach has become in the party and its political commitments. This accompanies a shift in language as the NDP has moved to discuss the “middle class” rather than the working class in its public statements.

The NDP’s platform priorities for small business — published on its website — says: “Small businesses are the engine of job creation in Canada, and an important part of every community across the country. The truth is that mom and pop shops keep our communities running, and they need our support now more than ever.

“The problem is — Justin Trudeau is ready to go to any lengths for big corporations, but since the beginning of the pandemic, he’s done the bare minimum for small businesses in our communities.

“[NDP candidate] Jagmeet Singh believes that big corporations that profiteer from this pandemic should be asked to pay their fair share so we can support small businesses.

“Local shops keep our communities running, and they need our support now more than ever.”

There is nothing in this about small businesses profiteering from the pandemic, requiring workers to work in unsafe or unhealthy conditions, taking advantage of a wage subsidy program that pays businesses, not workers, with no mechanism for ensuring hiring or decent conditions. The NDP does not even go so far as critics of the pandemic wage subsidy, who call for direct payments to be made to workers instead of employers.

Instead, the NDP calls for continued payments to businesses, rather than workers, so that businesses can “hold on [to] their workforce by making sure the wage subsidy program continues until the pandemic is over” and calls for “the rent subsidy program and the business loan program” to continue until the pandemic is over, so that businesses can “keep paying their rent and invest in their businesses”.

The NDP even makes a further commitment to the multinationalisation of small businesses, advocating for public funds to be dedicated to advancing Canadian capital’s interests globally (even if it is, for now, small capital). As the NDP priorities page states:

“To help Canadian small business step out on the world stage, a New Democrat government will streamline access to government export services and make it simpler to break into foreign markets. We’ll also provide small- and medium-sized businesses with a single point of contact to help ease regulatory processes and support compliance — freeing up time for entrepreneurs to invest in growing their business.”

In parliament, as an opposition party, the NDP has worked to reduce taxes on profitable small capital, even chastising the Liberal government for taxing small capital too much. Rather than seeking to increase taxes on businesses of all sorts to expand social spending in the context of a pandemic and climate restructuring, the NDP seeks to give small capital an even bigger break than the neoliberal ruling party. As the party puts it:

“In 2015, New Democrats successfully pressured the government to lower small business taxes from 11% to 9% by 2019. During the election, all parties promised to honour these reductions. But the Liberals have quietly broken their promise — and it will cost small businesses in Canada $2.2 billion over the next few years.”

Singh has made it a priority on campaign tours to do events with small business owners alongside local candidates. At a campaign stop in British Columbia (BC) he met specifically with small capital and said:

“We were able to fight to improve support for small businesses and that made a big difference. The Liberals started off with a 10% wage subsidy, which was not enough to keep people employed. We spoke to small businesses and they said it will not be enough, we fought hard to increase it to 75%.”

All of this presents two mistaken assumptions that show how far the NDP is from any basic class analysis or working-class approach. First, of course, small businesses are not the backbone of the economy. Workers are. They produce the value that circulates in the economy. Secondly, the NDP approach acts as if small business is not extracting profit from workers.

Individual market models for housing

A keystone of social democracy, whatever its limits, is supposed to be a commitment to social housing and moves away from market models of shelter provision. The NDP has opted to pursue an individualist market model of housing focusing on personal home purchases. Critics have pointed out that the NDP approach could actually serve to drive housing and rental costs upwards and benefit landlords.

Among the NDP’s market measures for buyers are: doubling the existing Home Buyer’s Tax Credit to $1500; and offering $5000 a year in rental subsidies. Other planks include re-introducing a 30-year term on Canada Mortgage and Housing Corporation-insured mortgages for entry-level homes for first-time home buyers.

These measures do nothing about the skyrocketing cost of rent that has made many Canadian cities unaffordable and contributes to rising levels of homelessness. Instead they represent a social transfer to landowners and landlords.

Tenants’ organisations have pointed out the impacts of these policies on working-class people. The Vancouver Tenants Union (VTU), for example, has argued that the NDP policy proposals amount to putting public money in the pockets of landlords, and this could, in turn, drive upward pressures on rents, making life even more precarious for working-class people, especially poorer people.

VTU organiser Mazdak Gharibnavaz said: “We should not be giving public money toward rents that are too high. In the short term, this basically would mean public money is subsidising rents that shouldn’t be as high as they are, and essentially, it’s going to end up in landlords’ pockets … In the long term, we could actually see effects that this would raise the overall average rent.”

Penny Gurstein, a professor at the University of BC’s school of community and regional planning, seconded these concerns, saying the plan must “come with some safeguards to ensure that this housing assistance will not just benefit landlords”.

Paul Kershaw, of Generation Squeeze, said: “The moment we allow people to borrow more, you can understand how that might help an individual … But the moment you allow someone to borrow more, they can then bid up the price of the home. And then when you bid up the price of a home, what do you do? You cause home prices around you to rise, which then hurts those who are following in your footsteps.”

An individualist market-based approach to housing flies in the face of social democracy’s supposed commitments to social and non-market (below market) housing options that would shelter working-class people from the demands of profit in housing. That the NDP would focus on such policies shows a shift away from commitments to socialisation and housing as a human good.

The emphasis on market models that benefit landlords is perhaps not too surprising, given the number of landlords among NDP members of parliament at federal and provincial levels. A recent investigative report, by socialist publication Passage, found the following numbers of NDP parliamentarians who are landlords: In Ontario, 7 out of 40 parliamentarians who were landlords were NDP MPs (17.5%); in British Colombia, it was 5 out of 33 (15.2%); in Alberta, it was 9 out of 24 (37.5%); in Saskatchewan, it was 2 out of 7 (28.6%); and federally, it was 3 out of 24 (12.5%).

Another plank of the NDP platform, which would impose a 20% tax on foreign homebuyers, actually stokes the flames of xenophobia and anger against non-Canadians. This poses speculation as a problem of “foreign buyers”, rather than land speculation, investment housing purchases, and home flipping for profit, which domestic purchasers are involved in.

Removing socialism

The orientation away from the working class and toward small business and market-based policies by the NDP in the 2021 election should not be too surprising, given it set itself on this path many elections ago. This was perhaps most clearly asserted, both symbolically and practically, when the party took the astonishing decision to remove references to socialism from its constitution in 2013, in preparation for the 2015 election.

The NDP’s orientation towards a neoliberal centrism is not a recent move. It has been evident in provincial NDP governments from the early 1990s on, such as: Ontario’s Bob Rae (1990–95); Manitoba’s Gary Doer (1999–2009); Saskatchewan’s Roy Romanow (1991–2001); and BC’s Mike Harcourt (1991–96) and Glen Clark (1996–99). More recently, it includes anti-ecological and pro-extractives governments like the Rachel Notley government in Alberta and the current John Horgan government in BC.

All have echoed the Third Way politics most associated with neoliberals such as former British prime minister Tony Blair and former United States president Bill Clinton.

The NDP still claims a commitment variously to social democracy or democratic socialism, though it is less certain what it means by this, given the nixing of socialism from its guiding document. Its consumerist approach of 2021 might give some idea.

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