Target’s Gain, Canada’s Loss


Attention Target Shoppers! Start your shopping carts as Target gets ready to liquidate stock from its 133 Canadian stores! Great news, right?

going out of bizNot quite, actually. In a continuance of mismanagement, and “whatever could go wrong, will,” Target will begin to sell off stock in early February, after receiving court approval of a liquidator. They will not, however, be advertising closing sales with “bankruptcy” or “going out of business” signs. You’ll have to pick through the goods to find the goodies.

But – what goods? Canadians have been faced with lacklustre merchandising from Target stores since they entered the market, with many stores being visibly under-stocked, and shelves either empty or with a few sad items lined up in single rows.

There’s been a problem with Target’s supply chain management since they first arrived in Canada, which resulted in Tony Fisher, the first president of its operation here, being fired in early 2014. CEO Gregg Steinhafel was asked to resign from Target Corp in Juntarget less for moree of 2014 – he’s the one that got a total severance and other benefits package worth about the same as the total amount being offered to all 17,600 of the chain’s Canadian employees.

(Steinhafel’s severance, which includes Gregg_Steinhafel_Golden_Parachuteprofit sharing and stock, will amount to $61 million USD, according to Fortune magazine, a sum greater than the severance package for all 17,600 Canadian Target employees combined ($58 million USD). Target Corp has now agreed to increase the employment trust to $90 million (CDN) to ensure the Canadian employees receive their full severance payout.)

empty-shelvesMark Schindele was parachuted in as president of Target Canada in May 2014 to try and fix the merchandise log jam, and pricing discrepancies that resulted from products arriving at warehouses with incorrect information, thus failing proper price comparison checks. In January 2015, he was quietly moved to Minneapolis to become SVP of Target Properties.

Target’s withdrawal from Canada is going to cost the corporation a bundle – they have said they estimate they’ll take a loss of $7 Billion. But what has been the cost to Canada?

<> on January 17, 2013 in New York City.The total amount of jobs gained across Canada in all industries for 2014 were 121,000 positions, down from the previous high figure of 186,000 reported in November. I’m not great at math, but the loss of 17,600 jobs at Target, spread across 133 stores, is a significant chunk of the pie. Also, our new jobs were concentrated around the oil industry, which is taking a beating as OPEC drops prices.

“The City of Edmonton’s chief economist says 80 per cent of new net jobs in Canada in the last year came from Alberta. “Over the past 12 months, Alberta has generated more new jobs than any other province in Canada and that includes Ontario, which is five times as large as we are,” said John Rose.” (Sept 11/14 http://globalnews.ca/news/1559263/40-of-all-new-jobs-in-canada-last-year-generated-in-edmonton/)

target-continues-to-failAdditionally, those 17,600 jobs were suspect to begin with. . When Target first arrived, they bought 200 Zellers stores, but did not honour the employees union in place. In fact, the first thing it did was ditch the union, eliminate seniority for long term employees, and drop all former Zellers employees to the bottom of Target’s pay scale. Because the majority of Target Canada’s workers were largely part-time, seasonal, or working irregular shifts, they will not qualify for Employment Insurance or other benefits.

The 133 stores, as well as office space leases and the three massive distribution centres in Milton, Calgary and Cornwall, will all be put up for sale at the same time, as early as March 5.

target distribution centreThe distribution centres alone represent a significant real estate investment; each warehouse covers some 1.5 million square feet, or about 26 football fields.

Target came to Canada promising jobs, new shopping opportunities, and a boost to the Canadian economy. In exchange, they received subsidies and tax breaks, along with favourable bank financing. This should have been a win/win situation.

bankruptInstead, it’s one of the biggest corporate bankruptcies in Canadian history.

Target wants to walk away from over $5 billion that is owed to creditors, big and small. They owe cities, suppliers and landlords. It’s such a long list of creditors that it took a 45-page document to list them all. They owe The Canada Revenue Agency and provincial governments millions in taxes ( $12 million to the CRA, $2.6 million to the B.C. government, and $6.5 million to the Quebec government.)

PharmacistGuest With just five stores in Manitoba, they still managed to rack up bills of $850,000 to Bison Transport, more than $450,000 to TransX, more than $200,000 to Old Dutch Foods and more than $1 million in tax owed to the Manitoba government. Beyond that, there are hundreds of thousands of dollars owed to smaller suppliers and pharmacies which operated independently within the stores.

elfe juvenileSuppliers owed hundreds of thousands of dollars are considering ways they can force Target to return their unsold goods that were shipped within 30 days of the filing – rather than have the inventory be included in the chain’s liquidation sales. Target filed under the Companies Creditor Arrangement act, which doesn’t have the 30-day goods provision. After aggressively purchasing stock for anticipated December sales, it entered the crucial holiday season with the highest levels of stock possible. Companies such as Elfe Juvenile Products of Montreal, listed as being owed $38,294, is actually out $147,758, based on stock now in Target’s possession. So is Sager Food Products Inc. in Montreal, which is owed more than $11,000 on the books, but the company estimates as closer to $16,000.

Sager Food VP Santo Fata received its last order the day before the filing. Sager had been happy to fill Target’s orders, which “were steady, regular and getting larger. We were happy.”

Sobeys vegChapman’s Ice Cream is owed $19,987. Coca-Cola Canada hopes to see some of the $339,699 it is owed. $1.7 million is owed to Hillcrest Mall Management Inc. Roots Canada Ltd is owed $433,248 in royalties. Sobeys will have to absorb over $3 million in losses.

But no worries – Canada will take up the slack, in a loss of jobs, and increased prices and taxes to cover the share that Target is walking away from. Over $5 billion.

CANADA-CORPORATE-TAX-RATEThis is not the first corporation that has been invited, even aggressively courted, to bring their business to Canada. Nor will it be the last. It’s just one more corporate experiment that failed, and is ultimately paid for by workers, taxpayers and Canadian companies.

Added March 6/15 …

The gall of these thieves!

http://www.huffingtonpost.ca/2015/03/05/suppliers-gear-up-to-chal_n_6809404.html

So – Where Are You From?


everything-affects-everythingI live in Canada, and I am Canadian. However, I am also a citizen of the world. When it comes to activities all over the globe, there are no more borders – all countries are affected by the actions of those in all other countries. You’ve only to look at the recent terrorist attacks, the Ebola outbreak, or the long tail rising from weather or chemical spills at home or half-way around the world to see that we can no longer ignore or be silent about events in other countries.

global citizenshipThe world has become a global village. Understanding that we are world citizens should be creating a new level of understanding amongst countries. We have the ability to stop thinking that it’s “us against them,” to end foolish militaristic posturing, and to work together to solve problems as one, rather than reinventing the world with every new advancement.

Instead, some countries seem to be curling in on themselves, becoming xenophobic, fearful of anything even slightly foreign to their lives. We stereotype each other, with the more fervid extremists creating myths that certain people and races are not only different to us, but evil and subhuman. Some feel it’s not enough to enjoy their own religion; they insist that everyone must adhere to the same beliefs, at pain of death.

nigeria_boko_haramEvery human life is worthy and valuable. The lives of the thousands of Nigerians being slaughtered by Boko Haram are as worthy of being honoured as those of the Charlie Hebdo journalists in France. The world’s leaders marched in solidarity with France, but are strangely silent over everyday atrocities in Africa and the Middle East.

Racism, tribalism, regionalism, religious bias, segregation – these are the beliefs and banners of those who would divide to conquer. In that division, there is money to be made, regardless of how much blood must be spilled. Wars hell-bent on maintaining those divisions kill the young and naive, who sacrifice themselves on these altars of delusion.

bomberman Luis QuilesIn the free world, we raise barriers around ourselves, building ‘safe’ communities where those who are not like ourselves are not granted admission. We wrap our own children in protective cocoons, while children in war torn countries deal with the madness of adults who consider the maiming or death of innocent civilians nothing but collateral damage.

wealthy foodIndustrial complexes rape the land, destroying century old forest growth and rain forests, and pushing the creatures that once lived there further and further away from their natural habitats. Those too wealthy and jaded to have a sense of their place on the planet elect to spend their family vacation picking off animals near extinction for ‘sport,’ while illegal poachers slaughter the last remaining wild elephants for their tusks and temporary riches. Impoverished villagers rise early to secretly haul away the sand from their beaches, which they sell to industrialists for use in manufacturing computer chips – for computers they’ll never have access to in their lifetimes.

Poverty has an effect on us all. 70% of the world’s population live in countries where inequality has increased since the 1980s.

wealthy never have enoughThe middle class is disappearing, and a new stratum of untold wealth shelters the richest 85 people across the globe who share a combined wealth equal to that of the poorest 3.5 billion of the world’s population.

In a global economy, where we are all citizens of the world, wealth inequality is becoming the most important division of all, threatening political stability and driving up social tensions. The wealthy elites, not content with merely controlling vast fortunes, are now concentrating their efforts on controlling the political process of many free world countries, in an attempt to rig the rules in their own favour.

Oxfam executive director, Winnie Byanyima cautioned that people around the world believe that the rich have too much influence over the direction their country is heading.

WealthDisparity“In developed and developing countries alike we are increasingly living in a world where the lowest tax rates, the best health and education and the opportunity to influence are being given not just to the rich but also to their children.

“Without a concerted effort to tackle inequality, the cascade of privilege and of disadvantage will continue down the generations. We will soon live in a world where equality of opportunity is just a dream. In too many countries economic growth already amounts to little more than a ‘winner takes all’ windfall for the richest.”

trickle_down_xlargeWe global citizens fear an oligarchy, and for good reason. The wealthy wield more and more political influence, allowing them to shape government policies in their favour. Faulty economic principles like the ‘trickle down theory’ have given the lowest tax rates to the rich in 29 out of 30 countries while personal taxes for the poor and middle classes have increased.

world citizenWe can no longer be silent when we see inequality or injustice, no matter where they are happening. “Where are you from?” is no longer applicable in a global village. The only question can be, “What are you doing to help change what is wrong with our society?”   

On a lighter note – here’s a link to my Sunday music column, at Bob Segarini’s “Don’t Believe A Word I Say” blog.

https://bobsegarini.wordpress.com/2015/01/25/roxanne-tellier-popping-the-top-off-covers/

Running On Empty


It’s minus -21C today – that’s 5 below zero in Fahrenheit – and it’s so cold my cats have cat I has a sadgone beyond being angry and have become despondent, either staring sadly into space or denying the existence of the world with their heads smacked up against a wall. I’m sitting at my desk, wrapped in a black flannel poncho, and wondering where I’ve left my fingerless gloves.

I sprang from my bed this morning, rested and brimming with ideas of ‘great social and political import,’ but instead of researching, I’m waiting for oatmeal to cook – this is not the sort of day you face on an empty stomach.

On days like this I am very grateful for the science and technology that allows me to stay warm. I’m over the moon that I can flip a switch and have light to see by, and flip another switch to start up my computer and read mail and messages from family and friends. I’m really pleased that I have warm clothing that just rests in my closet until I want to wear it, and I’m grateful for the closet being part of a house that has walls and a roof that keep out the worst of the cold.

Silly-HolidaysWe often take for granted what less fortunate people would consider luxuries. We set aside a day here and a day there to give lip service to the giving of thanks, the honouring of lovers, parents, veterans and a host of others to whom we see fit to throw a bone. “Here you go, secretaries. It’s not much, but we’re calling today National Secretary Day! As soon as you’ve read that card, I’ll have a coffee with two sugars. Thanks for being you!”

Our culture has moulded us into people that can never have enough. Everywhere we turn we’re told that we’re missing out on something – a new power drill, an iPhone6, a bigger or tidier home, a more luxurious car, vacations in the sun, and most importantly … money, money, money!

and then we'll get himEven though studies have definitively shown that those with heaps of money are not significantly happier than those with enough to comfortably cover their needs, we’re still told that it is only with the amassing of wealth that we can really be content.

In reality, rich people are not all tanning by their dollar-shaped pools while chatting casually with the men and women we’ve elevated to media stardom. They’re far more likely to be spending their time trying to get yet more money, in any way possible, and are probably more anxious and hostile than you are when trying to decide whether to go with a name brand tin of peas or the generic house brand.

Scrooge-PorpoiseBeing addicted to money is like being addicted to drugs; at first, a small amount gives you a buzz, but as time goes by, you need higher and higher doses to maintain the high. And if money is your drug, that upward spiral contains another component – a need to have more than anyone else, to have it all, regardless of whom it damages. Exorbitant, mindless wealth precludes empathy towards those who struggle to survive on minimum wage or government assistance.

“The peasants have no bread!” “Then let them eat cake,” tittered Queen Marie Antoinette. Her joke, rather than having them rolling in the aisles, soon had heads rolling from the guillotine instead.

That anecdote is likely only the fabrication of Jean-Jacques Rousseau in his autobiographical, “Confessions,” but has been used ever since as a cautionary tale of the perils of great wealth and self-indulgence in the face of social unrest. One would think the lesson would be self-explanatory, but apparently the accumulation of wealth does not always translate to the accumulation of historical knowledge.

In Canada, we can point to arriviste Kevin O’Leary, who, with a net worth of US$300 million that the true 1% would consider pocket change, can’t seem to stop patting himself on the back. When he’s not crowing over his own wealth, he’s exhorting the poor of the world to pull themselves up by their socks – even if they don’t own any socks.

But of course, that’s the dream we’ve been sold since the Industrial Revolution. “Come, work for me, make me wealthy and I will share my largesse. You too can be like me, all you need do is work hard, save your money, and keep your nose to the grindstone.” And we bought it, for decades. We called it the Protestant work ethic, and called anyone who didn’t agree lazy and stupid.

scrooge silly pleasures“The Protestant work ethic (or the Puritan work ethic) is a concept in theology, sociology, economics and history which emphasizes hard work, frugality and diligence as a constant display of a person’s salvation in the Christian faith, in contrast to the focus upon religious attendance, confession, and ceremonial sacrament in the Catholic tradition.

The phrase was initially coined in 1904–5 by Max Weber in his book The Protestant Ethic and the Spirit of Capitalism.” (Wikipedia.org)

We forget that his essay was his observations on the Germany of his time, and not a ‘how-to’ manual. Weber considered himself agnostic. His argument was that Catholicism, with its emphasis on doing good works in the hope of eternal salvation, rather than pursuing wealth for its own sake, impeded the development of the capitalist economy in the West.

Capitalism depends upon everyone in the society believing in the same goals. When the West had a booming middle class, there was room within the prosperity to dream of a country free of traditional constraints. We could reach out a hand to those who needed help, be they poor or infirm, or young or old. That sense of community resulted in government safety nets and a surge of infrastructure building that connected and included all of the people, regardless of their economic place.

North America looked at what they had wrought in the 1940’s and ‘50’s, and found it good. Good enough to not make a priority again until it started to collapse around us.

glittering TorontoIt’s been decades since the roads and bridges and communities were put in place, decades in which the needs of the wealthy became more important in politics than the needs of the tax payer. In Toronto, once Canada’s most glittering city, our highways are clogged with commuters, while our transit system is woefully inadequate to shuttle workers from their homes to their jobs. The local politicians have been arguing about whether to tear down the eastern end of the Gardiner Expressway since the 1990’s. And the majority of our subway system, which opened in 1954, is held together with patches and prayers.

business and politicsThere’s blame enough for everyone at this sorry state. Although we love to complain about ‘the system,’ every aspiring politician has to present a platform that will be seen to not only address community issues, but cost the tax payer less. Once in office, the newly elected official can point to budgetary concerns, and remind us all that there aren’t any funds since he’s cut taxes, just as we requested. Or that they are working on a solution, but we mustn’t hope to see real change until some year in the future where they will hopefully no longer be held accountable for the project and the additional costs incurred during the delay.

Politics on crosswordFor corporations, political concerns are less about the community, and more about expediting the accumulation of more wealth. Despite needing an infrastructure that allows workers to arrive at the work place on time, and roads and other delivery systems to get product to consumers, the emphasis is placed squarely on tax cuts that they have convinced politicians, and even many consumers, will result in a more equitable distribution of wealth.

Corporations spend billions on pushing forward measures that will deny workers fair wages and benefits, and will spend yet more on media essentially blackmailing consumers into giving them what they demand. Health care, no. More tax cuts, yes. Or we’ll take our ball (company, franchise) and go home. Many even believe that we have no other alternative but to agree.

The last several decades of austerity for the general public, but unheard of wealth for the few, is slowly shaping us into a timid, obedient mass, who are only valued as long as we are able to further enrich business through our labour and consumption of goods and services.

hedonic-treadmillThe pursuit of happiness has become a joyless pursuit of money, dooming its followers to an endless treadmill of greed and desperation. You’ll never catch up to the 1%, no matter how hard you try, but real happiness and satisfaction can be had in a life that encompasses empathy, generosity, and gratitude for what you’ve achieved.

Has Democracy Become A Luxury?


With the onset of computers and advanced technology, the lines separating the haves and the have-nots have grown so far apart that 1% One Percentof the wealthy elite essentially controls the fate of 99% of the rest of the planet. The development of robotic manufacturing techniques has reduced the number of people necessary to run factories and plants. Access to cheaper labour in third world countries increases a corporation’s bottom line, at the expense of jobs in the corporations location. The rich get richer. But at the expense of the middle and lower classes.

Capitalism is a funny thing; at its best, capitalism should promote economic growth, as measured by a standard of living enjoyed across the whole of its extended reach. Proponents would argue that this give and take would bring about a better availability of food, housing, clothing, and health care, better education for children, and the ability to provide for the elderly and less fortunate. Capitalism assumes a level playing field, where more opportunities exist for individuals to create their own businesses or new professions.

99 percentBut in practice, “capitalist economies prioritize profits and capital accumulation over the social needs of communities, and capitalist enterprises rarely include the workers in the basic decisions of the enterprise.” (Tom Brass, author and academic, University of Cambridge.)

Modern day capitalism has its origins in slavery and indentured servants; “when historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery.” (Greg Grandin, Historian.)

Politicians have pandered to the wealthy for decades. “Reaganomics,” or “the trickle-down theory,” posited that “tax breaks or other economic benefits for businesses and upper income levels will benefit poorer members of society by improving the economy as a whole. “ (Wikipedia)Trickle Down

It’s a lovely thought, but just a theory, I’m afraid. Corporate and personal greed eclipsed the high-minded ideals, and by 2008, after the spectacular 2007 global collapse of the banking system, economist Alan Greenspan admitted to the United States Congress that, “The whole intellectual edifice collapsed. I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders. … I was shocked.”

In 2013, Pope Francis issued an 84-page paper describing unfettered capitalism as “a new tyranny” and calling upon world leaders to fight rising poverty and inequality: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.” (Wikipedia)

crashSo, on the one hand, capitalism has the potential to benefit both the job creators and the workers, while raising the overall standard of living for society. On the other hand, capitalism can create economic and social instability, fiscal inequality, endanger or destroy the natural resources of its own or other countries, and has only to hold its own self accountable for how profits are distributed throughout that society, whether through payrolls, donations, or taxation.

Ah, what to do, what to do? In 2010, in the United States, politicians decided that giving even more power to corporations would benefit their parties.

“Still, for decades, candidate elections remained free of direct corporate influence under federal law. Only money from individuals and groups of individuals — political action committees — were permitted in federal elections.

citizensunitedThen came Citizens United, the Supreme Court’s 5-4 First Amendment decision in 2010 that extended to corporations for the first time full rights to spend money as they wish in candidate elections — federal, state and local. The decision reversed a century of legal understanding, unleashed a flood of campaign cash and created a crescendo of controversy that continues to build today.

It matters not, the court said just this year, that some speakers (corporations), because of the money they spend on elections, may have undue influence on public policy; what is important is that the First Amendment protects both speech and speaker, and the ideas that flow from each.” (http://www.npr.org/2014/07/28/335288388/when-did-companies-become-people-excavating-the-legal-evolution)

CRONYISMIn exchange for receiving personhood, corporations sponsor politicians. And the politicians slash tax rates and offer tax credits and benefits in response. It’s a perpetual motion machinery that keeps power and money in the hands of those already in politics or corporate businesses, and gives an unfair monetary advantage to the wishes of the wealthy, while muffling the voices of socially conscious citizens who believe in a democratic government.

In Canada, under the law, a corporation has the same rights and obligations as a natural person. It can acquire assets, go into debt, enter into contracts, sue or be sued, and even be found guilty of committing a crime. A corporation’s money and other assets belong to the corporation and not to its shareholders.

Our politicians, well aware that corporations have money to burn, have adopted similar tax cuts and incentives. Corporations are taxed at 38% of taxable income, which drops to 28% after federal tax abatement, and then drops again after general tax reductions. The net tax rate for corporations keeps falling, from 18% (2010,) to 16.5% (2011,) to 15% ( 2012,) For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%.

taxesContrast that with your personal tax rate for this year, which is 15% on the first $44,701 of taxable income, 22% on the next $44,700, 26% up to $138,586, and 29% of taxable income over $138,586.

Most Canadians believe that those with higher incomes ought to share a bit more of the tax burden than those with low incomes, especially businesses and corporations which rely on public infrastructure to do business. Taxation lawyers argue, however, that wealthy corporations taxed more than poorer ones will simply split themselves into smaller entities to avoid the higher taxation. And a smart high-income person with good lawyers and accountants will form small corporations to shelter their income.

The harsh reality is that Harper’s government has given businesses an extra $50 billion in tax cuts and credits in the last few years. And due to cuts to the GST, personal and corporate taxes, Ottawa now collects about $45 billion less revenue per year. Meanwhile, plans are in place to cut public health funding by $36 billion over the next 10 years. Retirement age will be raised to the age of 67. Education and child care are low priorities, and our veterans are disrespected by the very people they protected during foreign wars.

InfrastructureThe rate of economic growth, government revenues and employment could be raised by investing in infrastructure like mass transit, but where can you find the funds to do so when you’ve already spent the taxpayer’s funds on corporate incentives, security, policing, corrections, spy agencies and multimillion-dollar taxpayer-funded ad campaigns designed to get Canadians to vote Conservative in the next federal.election?

Capitalism appears to be trumping the objectives of democracy; the voices of the people are unheard, while money and power remain in the hands of the rich and the powerful.

It would seem that true democracy cannot co-exist with unrestrained Capitalism.

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