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April 17, 2014

Defend the Portland Hotel Society!

SS Editorial

Portland Hotel Society

Vancouver’s Downtown Eastside (DTES) is the poorest neighbourhood in Canada. It is the last refuge of the most downtrodden people who are excluded from Canadian society – who suffer from addictions and are marginal to the labour market.

In this tough environment, people have tried to survive on minimal welfare, while being preyed upon by drug dealers, pimps, and slumlords. Recently, George Worsley, ex-owner of the Palace and Wonder Hotels, has been convicted and fined $18,000 for failing to maintain these rental properties. He has also been expelled from the BC College of Pharmacy for forcing his tenants to buy methadone from him.

To fight these conditions, left activists have worked since the 1970s to provide a self-help path through social housing, community improvement, and various services, including addiction treatment and labour skills training.

These efforts have been made against the opposition of conservatives at the municipal, provincial and federal level – sometimes revealing conservatives’ contempt for basic human rights, such as when the Portland Hotel Society (PHS) successfully sued the Harper government against closing North America’s only legal drug injection site, Insite.

The latest round of this struggle by conservatives against anti-poverty activists is the BC Liberal government firing of the PHS Executive, the largest, most successful anti-poverty organization in Canada.

Poverty in Canada

As a developed country, poverty in Canada is measured in relative terms, as being below the low income cut off line ($11,000 for individuals and $15,000 for families) – though one could argue there is absolute poverty when 850,000 Canadians used food banks in 2013. By the LICO standard, about 13% of the population is impoverished, with 17% of all children (and over 50% of aboriginal children). Before the welfare state, 40% of the population was below the poverty line in 1940, which declined to 25% by the 1960s as direct and indirect transfers were achieved (better welfare rates; Old Age Security; the Canada Pension Plan; Unemployment Insurance; and Medicare).

In the 1970s there was even an experiment with a guaranteed annual income – that is, paying LICO individuals and families a modest income above the line – in Dauphin, Manitaba. As Evelyn Forget has revealed in her 2011 study of Mincom, labour force participation only declined by 2-3%, while health care costs dropped 10% (especially for mental illness) and high school graduation rates rose. In other words, public spending costs to address need actually fell, and people’s lives improved appreciably, when people’s welfare was addressed in a pro-active way.

However, in Stephen Harper’s austerity world, direct transfers have fallen, while income tax cuts, like the Working Income Tax Benefit, are applied to subsidize cheap labour for employers – a kind of complement to the Foreign Workers guest program. Nor have provincial Liberals or New Democrats been any different in expanding direct transfers.

So, despite verbal commitments to reducing child poverty since the 1990s, all the conventional political parties have retreated from engaging poverty issues. This makes the struggle by anti-poverty activists of critical importance.

Fighting For Social Justice

In 1973 Bruce Eriksen and Libby Davies (the current federal NDP MP for Vancouver East) organized the Downtown Eastside Residents Association (DERA) as an advocate for the community – in a year when 40 people died from fires in unregulated Single Room Occupancy Hotels (SROs).

DERA successfully pressed for a sprinkler bylaw and campaigned for public housing alternatives (with several housing co-ops being established), turned the Carnegie Library into a Community Centre, and initiated several public safety measures like lighting the area’s numerous alleys and patrols of hotel bars to pro-actively deal with alcohol addiction.

However, in the 1990s a new addiction threatened to overwhelm the community – heroin. Scores of drug users were dying every year from overdoses and a new HIV epidemic threatened from shared needles. DERA was racked by political infighting over how to address an illegal substance threat. Alcohol as a legal recreational drug could be advocated on without threatening the existence of the organization, heroin could not.

In the turmoil, Mark Townsend of the Portland Hotel (a DERA housing initiative for the hardest to house, those with addictions and mental health issues), organized a split in 1993 to develop the Portland Hotel Society (PHS) as a separate anti-poverty organization.

On the basis of drug user campaigns, PHS set up Insite, an illegal but safe drug injection site that dramatically reduced death and HIV infection rates. Users, who bring their own drugs, can exchange needles and inject under a nurse’s supervision. Insite can also provide referrals to detox programs and community services.

The results have been extraordinary. Over 5000 addicted people use Insite. Despite a 10% overdose rate there have been no fatalities. In 2003 the federal Liberal government gave Insite an exemption from Canada’s Controlled Drugs and Substances Act and, with the province, began to fund its services. Over thirty peer-reviewed studies have confirmed that public health and safety has dramatically improved. Even the local business community, and conservative mayors and provincial politicians came to endorse the program.

Even so, the Harper Conservative government tried to shut down Insite. In 2007 they gave notice to cancel the exemption in 2008. Townsend and two drug users took the Tories all the way to the Supreme Court of Canada and won. The court ruled that public health measures are Charter matters, i.e., human rights. As a result, Insite has kept its legal existence and public funding.

But the very existence of a safe injection site is a fundamental challenge to Conservatives’ law and order agenda. Despite a court order to amend the Drug Act to recognize this human rights principle, the Conservatives are in the process of doing the minimum by allowing only for exemptions under new, tougher assessment and reporting measures.

The Social Housing Challenge

As the Mental Health Commission of Canada’s recent At Home report on Homelessness shows, there are 30,000 homeless people in Canada every day, with the mentally ill the hardest to house. Yet if we provide housing, for every $1 we spend $2.17 is saved in medical and policing costs.

In Vancouver, while Insite is the most dramatic example of the positive work of PHS, PHS also has become the largest social housing provider in the DTES with several SROs (1153 rooms with 451 staff); and through several sponsored contractors – a credit union, food service, pest control service, and storefronts offering job training. The annual budget, funded by BC Housing with PHS as a contracted supplier, is now approaching 30 million dollars with PHS having assets of 58 million dollars.

It is the social housing responsibility that has proven to be the mainstay of large-scale anti-poverty groups in the DTES – and their Achilles heel.

In 2010, DERA’s social housing enterprise was put in trusteeship by the province for unpaid rents and taxes. Now it’s PHS’ turn. Mark Townsend and the other three senior executive members have been forced to resign as the result of an audit claiming personal abuse of administrative expenses – and clearly there have been some mistakes.

But the way in to an attack on the most public, successful, and transgressive poverty organization has been the social housing mandate. In 2010 PHS was given an ultimatum by the city of Vancouver – either purchase two SRO hotels or they would be demolished for commercial development. PHS finally got a developer to provide the necessary credit (since PHS has no significant reserves), but in the process ran up a temporary multi-million dollar deficit. This gave an opening to the provincial Liberals to finally have a serious go at a longstanding political opponent.

The Audit

What the 2013 audit revealed was a pattern of compensation abuse and potential conflicts of interest.

The most infamous compensation abuse has been for the board to approve ‘fees and gifts’ to executive members for travel and personal expenses (in the absence of disability insurance or pensions), which has resulted in the provincial NDP MLA, Jenny Kwan (who appears to have been blindsided), having to repay $35,000 her ex-husband spent on family trips with PHS money. And there appears to be a pattern of awarding contracts to PHS spin off companies at above market rates by PHS insiders without tender.

These problems are inherent in anti-poverty groups. Funding is makeshift, not known and stable, and the original founders find it a struggle to pay a decent salary, let alone benefits. But such pressures do not excuse abuse.

What could be done?

Instead of firing the PHS executive, the province could easily have insisted on better accountability through transparency measures, professional administrative methods, and board education (and penalties) – even if this requires amendments to the provincial Societies Act or the housing contracts, which the province would have to fund in its operating grants to anti-poverty groups.

Many DTES activists have noted that PHS did not publicize its annual reports or financial records. But that can be remedied, though it appears the NDP is trying to distance itself as far as possible from PHS, rather than arguing about how to fix what are legitimate strategies and organizations to fight poverty.

The Missing Party

What are some of the larger political questions in the struggle against poverty?

One, the PHS leadership was rightly prepared to transgress bourgeois norms, economic , legal or moral, to claw every bit of material resources to lift up a profoundly impoverished group. Insite’s original beginning was a needle exchange run out of the Main and Hastings public toilet.

Two, PHS, unlike DERA, welcomed unionization of its staff once it got on its feet. By doing so, it managed to get the province to respect market rates of compensation for the people who work for it.

But PHS developed a transgressive culture that hasn’t been grounded in working class socialist norms. Instead of defining executive compensation on political grounds, as the average workers’ wage, the leadership defined compensation at executive market rates, with rising entitlement expectations. Ultimately, leading anti-poverty activists adapted to market dynamics.

At the root of the PHS’s political woes is the lack of a socialist party that can educate, and hold accountable, activists about the dangers and possibilities of representing the disempowered, who have little ability or confidence to act for themselves. Unemployed Workers Unions of the early 1980s that were not rooted in politically conscious trade unions showed many a case where activists developed a command agenda, and culture, over its members – usually with the best intentions.

The history of DERA and PHS shows a similar pattern, where neither the NDP, which heavily relies on PHS in the DTES (and did provide critical openings for social housing through anti-poverty groups), nor the occasional anarchist intervention like the Anti-Poverty Committee in DERA (which descended into ultra-left moralism - making DERA vulnerable to government intervention), have developed a supportive, yet disciplined relationship with anti-poverty groups. We need a class struggle oriented organization like the Communist Party was in the 1930s with unemployed groups to fight for the disempowered – but in the context of working class strength for the empowerment of all.

For more information on the national struggle against poverty see Canada Without Poverty.