Worth the Fee to Read It

It has been a long time between blog posts: a period in my life where my periodic depression once again got the better of me. Perhaps, however, this is a good thing: it has allowed the past few weeks, with the whole Bernier-Couillard nonsense, yet another abdication of responsibility in the voting on the final bills before the House this spring, and now the introduction of the Green Shift by the Liberals to pass without comment.

For none of them really required it, although all have received reams of commentary, and, indeed, when it comes to the Green Shift, I will enter the fray myself.

So, let’s begin at the beginning. Is the Green Shift necessary?

A societal change certainly is. It takes a particular kind of fool not to notice that, however measured, world oil production (supply) and world oil consumption (demand) teeter at a balancing point. Some believe that we have passed the point and are demanding more than the available supply, thus forcing weaker hands away from the purchasing table already. Others believe there is capacity waiting in the wings — that the Saudis can turn up the valves; that Iraq can be brought on stream quickly; etc. It’s important to note that oil isn’t a single commodity: sludge-filled oils such as Venezuela’s, the tar sands, or even what the Saudis put on the table last week require different kinds of refineries and more expense in converting them into useful products. A refinery meant for light sweet crude isn’t even given these feedstocks. Certainly the production balance is shifting to the residual sludge rather than the high quality, easy to refine product: a permanent shift, indeed, given what we know about residual deposits.

As the price rises, individual decision are made. Gas guzzlers are no longer used for daily driving; econoboxes are, instead. Or, where available and practical, transit becomes a daily option. Food choices change; so do vacation choices. In effect, the price mechanism alone is sufficient; it need not be “goosed into action” by governments.

Still, of course, there are still all those emissions. I have always supported the notion that air and water “consumption” needs to have a price: it is how pollution of the common asset is reduced (perhaps, with the appropriate incentives, nearly eliminated). Similarly, such prices — rather than treating our environment as a free good — act to create “market space” for new experiments in fuel production — something better than “food for ethanol”, which makes no sense either on a energy budget (energy in to energy potential created) or a food supply basis, one would hope. In other words, there is a reason to consider certain price mechanisms at work (and for the common assets these will probably take the form of taxes or regulations), whether one believes in the global warming theory as advanced by its supporters or not.

At this point, it becomes appropriate to ask what kind of strategy might make the most sense.

On this file the Conservative Government has been lamentably silent. Their original environmental focus on pollution was applaudable, but not followed up and that follow up communicated for understanding and acceptance. Oily the splotch and “screwing all Canadians” make for free media coverage but do nothing to advance an agenda. Here the Government is deficient; end of subject. (One could charitably hold, based on other actions, that the real position is that different provinces or regions will form their own styles of solution, suited to their own needs, in this regard, and certainly I do not think it makes sense to have both provincial and federal rules, regulations and taxes in this area, but the Prime Minister has not said this in so many words, either.)

Then there is the NDP approach, centred on cap-and-trade. Effectively, cap-and-trade systems propose to regulate the size of the market created by assigning a price to a “pollutant” — and then allow that market to arbitrate the price mechanism. (If you ever needed evidence that this issue does not turn on the old “left”/”right” categories used in the media still, this is a powerful inducement to change your mind.) The nice part of cap-and-trade is that the decision can be made in a rational fashion: to continue without a reinvestment to reduce emissions, you must ensure you have the capacity — which means paying for what was once free to you, and damaged goods to everyone. Or, you can reinvest, reduce your emissions, and benefit by the capacity you don’t have to purchase. (As an example at a personal level — and the proposed system is not a consumer-level system — for average driving distances each year, it takes more than five years to “pay for” the benefits of a hybrid vehicle in reduced fuel consumption (and emissions). If you drive less than the average, you might buy emission credits; if you drive more, the investment in the hybrid makes economic sense (since the emission credits required are reduced from the time of purchase and thus offset the higher cost of the hybrid).)

As an old Progressive Conservative, I am always on the lookout for any party speaking to those Red Tory values that are my core. The Greens come closest to this: they demonstrate, in general, quite good economic sense. Their Green Plan also has internal logic — and far less gerrymandering of the results. It is what it purports to be, and no more. I could probably extend myself to support it.

This brings us to the Liberal plan, which is, prima facie, unsupportable. It is a mish-mash of spending programmes masquerading as an environmental imperative. There is no revenue neutrality in diverting streams of funds coming in via the price put on carbon via taxation to new federal programmes, or expansions of same. Child care, for instance, has nothing to do with carbon reduction — in fact, it leads to more emissions, in that it helps maintain the two-income, two-car, suburban lifestyle a little longer.

Stéphane Dion’s plan is smoke and mirrors, one more turn of the big government crank. It is less effective than the Greens’ offering, less market-sensitive than the NDP’s. It slams itself down on provincial jurisdiction and proposes taxes on taxes every time the GST is collected. No thank you!

That this well-praised piece of tripe — loved by academics and media personalities alike — doesn’t even have any idea of what reduction targets might be expected for something that slams itself down as a permanent addition to the Canadian body politic, rides roughshod over our sovereign treaty commitments (China cannot easily be assessed for special carbon tariffs under the WTO regime, which we are both signatories to, for instance) and is, in effect, another wealth transfer scheme from the West to the East (this may be harsh, but it needs to be said), speaks volumes. It betrays the Liberal Party’s continuing view of what this country is, and their expectation that we will all just sit still and let “Big Daddy” tell us what to do.

I am no fan of the Campbell Government’s ill-thought-through carbon plans, but they are incremental in nature and can be changed. Dion’s plan is national social engineering, grandiose in conception, a blatant attempt to buy votes and a permanent degradation of the prospects of Canadians. No sensible person should give it — or the Liberals — the time of day, unless, of course, they do secretly want to be (in the words of Stephen Harper), “screwed”.

One final note: while heading out this morning I heard Bill Good’s rapid-fire phone-in on CKNW asking “if a federal election was held today, who would you vote for and why?”. (He asked this question last week for provincial politics, and got a decent split between the BC Liberals, BC NDP and BC Greens.) In the first 15 minutes of the call-in there were 20 callers — and 20 votes for “Conservative”. Not one caller mentioned the Green Shift; many mentioned their expectation that the Liberals, back in power, would steal (à la “sponsorship”) again. The first caller to offer a different opinion supported the NDP. Finally, as I was turning the car off, the first Liberal supporter showed up — and she didn’t mention the Green Shift, either. This is, of course, nowhere near scientific — but I find it interesting as a quick touchstone, given that the callers are all from the “ecotopian” Wet Coast, where greenish thinking is concentrated. Make of it what you will.

One of the things to like about the Conservative Party of Canada is its broad, shallow, “retail” donor base. One of the things to dislike about the CPC is exactly that same means of raising prodigious sums of money. Before you call me schizophrenic, stay with me for a moment and see why it is both a blessing and a curse.

“Money is the mother’s milk of politics.” It’s not, of course, that money plays any different a role in politics than it plays in any other field of human endeavour. Athletes need money to be free of working for any purpose other than their training, and to be able to afford to compete at the levels required for world competitiveness. Non-profits, in doing their work, need the funds to carry out their missions. Policy influence study groups need to be funded so as to pay the costs of researching and publishing their papers. Entrepreneurs need investors so as to be able to handle the start up period, when costs far outrun revenues and the newborn business is nurtured to health and potential prosperity. In all these cases, how the money comes in matters.

Have just a few funders, each of whom writes a large cheque, and you have an oligarchy (even if its members do not know the others) that, by virtue of its financial support and the weight of worry if it were lost in the future, have a significant voice in the direction of affairs in the endeavour they are funding. Have thousands of small funders, on the other hand, and those voices are stilled: the loss of a few dollars is not something that keeps the leadership of an organisation up at night, but the potential loss of hundreds of thousands all at once can cause a ready loss not only of sleep, but rationality, with worry.

What’s to Like: I said in the beginning that the broad donor base of the CPC was something to like. If I’m a donor to anything — a subscriber to start-up capital, a charitable subvention, or a political campaign — I want to know that my money will be used for the things I expect it to be used for. A broad donor base helps ensure this: the party can reasonably conclude that the record of accomplishments and policy options for the future that it puts “on the table” are what is being subscribed to with the donations. As a result, there is little reason not to stay the course, as it is the ebbs and flows of funds in their thousands of droplets that gives an indication of what the “political market” wants, as opposed to just a few voices with the undertone of “be reasonable, do it my way … or else”.

It can — and has been, many times — be objected that this reduces political participation to “consumer” behaviour rather than the involved interactions of being a citizen. Does it surprise you that we act as consumers? For most people of voting age, their entire life has been spent barraged and assaulted by the presumption that they ought to be consumers. That this message should have been internalised ought not to be a surprise. Nor should, in such a world, we be surprised that a political party “gets it” — and treats their donors in precisely the right way to trigger the “consumer” response mechanism.

What’s Not to Like: Alas, every upside does come with a downside. The downside of mass political donation rather than élite accommodation (lubricated by funds) is that there is no easy mechanism to say “hold on, guys, you’re on the wrong track”. The power brokers of old, after all, were steeped in the on-going conversation (both via the media and directly over lunches, drinks and social encounters) of other influencers in the land. High names in one sphere of endeavour — a Jeffrey Simpson, say, in print media — have their calls taken by another high name in another sphere — a Paul Demerais, say. Influence could thus be brought to bear on political parties to adjust their policy vectors — in ways “appropriate” to the large influencers, of course, but there was a path to make this happen.

This is the pattern that operates the Liberal Party, and operated the historical Progressive Conservative Party. Our New Democrats are less so, even despite the long-standing “union connections”. Greens, the Bloc and Reform/CA, on the other hand, were and are all resolutely “grassroots” driven — and it is this strain that influences the CPC today.

”Grassroots” Is a Mixed Blessing: Alas, a permanent policy “conversation” does not occur within parties. It is considered by one and all to be a source of “off message diversions”. Today the Greens, in public, do the best job, with their many Green bloggers linked via their party website, but even there’s a lot of self-policing going on. As a result, the “grassroots” becomes a means of taking over an EDA (riding association) or forcing a candidate upon a riding by weight of temporary numbers — and a source of funds. That’s it, tout court.

EDAs, in turn, are focused on getting their candidate elected at the next opportunity. A free-ranging policy discussion unfolding over months would “tear the association apart” (in the words of one EDA president) or “lose our focus on getting [the candidate] elected” (in the words of another). Yet, without these links back to the party itself, the money comes without its voice. There is the illusion of participation, but not the reality of it. “Turn out your troops for the ground war, keep us flush with cash … and otherwise know your place.” This seems to be the anthesis to the thesis of élite accommodation.

The “Chrétien Revolution”: The closing days of the Chrétien government, as we know, changed election financing in this country to make the micro-funder supreme. This is, on the whole, a good thing (although its impact on leadership selection and other aspects of party management has yet to be fully figured out): more of us can decide, month by month, who to reward and who to punish with our dollars. (The parties, on the other hand, will be working to get the vast majority of Canadians to stick a crowbar in their wallets in the first place. As with any other “consumer” situation, the by-far-largest share of the market is held by “not interested in what you’re offering”.)

Now, as the Liberals try to ramp up their micro-donor base with their Victory Fund, and the Conservative Fund keeps on massing its monies, and the New Democrats turn in substantial-enough performances at the cashbox, the second half of this revolution must be undertaken. In this, the burden will be on the donor. Part of this comes by demanding that gag laws and other anti-democratic initiatives be put to rest: parties no longer need protection, nor an exclusive field. Issues, indeed, are far closer to the future of politics than parties in a stream of minority governments! — and far more likely to engage that growing body of Canadians who can, but won’t, take part. The other part is that we must engage with EDAs and other structures and bring democratic discussion to them.

These considerations apply regardless of party — and just as much to issue-oriented groups as to classic political venues. To only give money — and not to bring your voice into the fray, somewhere — is to essentially allow those in charge to do as they please. After all, these days, there isn’t the restraint traditionally offered by the élites.

It’s our money: our voice comes with it. Only then will the synthesis of the new power arrangements be complete.

“An election if necessary, but not necessarily an election” seems to be off the table. St-Stéphane, le Dauphin Dion, has apparently reached a decision: Liberal MPs are to spend the summer communicating new Liberal policies (to be revealed shortly) to the electorate and then the fall session will “be allowed to begin”.

It is not my place today to throw wood and camp stove fuel, along with a lighted match, on the fire of controversy about the various Conservative bills and Liberal Puffery placed against them that occasionally manages to leak out around the edges of the drool and theatre surrounding Liberal indignation over “In-and-Out” and the rebuttals thereunto that pass for the nation’s business these days. Talk radio, at least here in Vancouver, is ignoring the whole sordid mess of Ottawa: none of it matters. This echoes what I was highlighting last month during the lead-up to the Vancouver-Quadra by-election: the irrelevance of the whole Ottawa thrust and counter-thrust. My guess (and, to be fair, my hope) is that when Stéphane’s Liberal MPs — the underwhelming Don Bell in North Vancouver, the indescribable Dr. Hedy Fry in Vancouver-Centre, the party-switching Ujjal Dosanjh in Vancouver-South, the lunch-bag-let-down Joyce Murray in Vancouver-Quadra, the seldom-seen Raymond Chan in Richmond and the generally-forgettable Sukh Dhaliwal in Newton-North Delta — come to hit the hustings in what on all the available history and evidence ought to be fertile ground for their party they discover that not one — not a single one — of the “policy issues” they want to talk about get any traction, or, indeed, any interest, other than the local party ground troops from the EDAs there to clap on command.

I’m not being hard, by the way, on the Liberals — the NDP MPs and the Conservative MPs are just as likely to meet quiet indifference to their presence in their ridings, and to require equal levels of support from their EDA members out to make it look good — because, frankly, if the Lower Mainland of BC is anything to go by there’s little going on in Ottawa that’s seen as mattering to people here, and even less that anyone here can do to influence what goes on in Ottawa. (Do you suppose there’s a correlation between BC’s “worst compliance record in Canada” with the Canada Revenue Agency and that sense that that happens over the mountains, across the Prairies, and through the endless lakes and forests that lie between here and the Nation’s Capital really happens on another planet?)

The Liberals, for instance, are likely to be here selling Dion’s much-anticipated Carbon Tax. BC residents, of course, will — oh, frabjous joy for Dominion Day! — be paying the BC Liberal Government’s carbon tax come July. Of course, in the grand scheme of things, 2.4¢/litre doesn’t sound like much, and as a percentage of the typical current pump price for 87 octane of $1.31.7/litre perhaps it’s not. But it’s the principle: Excise Tax, Deficit Reduction Tax (for a deficit long gone), GST & GST on the taxes!, Translink Tax … the list is long and here’s another one. The hub of cross-border shopping in Canada is across the Peace Arch/Douglas Point crossing, followed very shortly by a stop at a Washington State filling station, where, at US$3.60/US gallon, the price is still only 96.4/litre in Canadian funds. Selling yet another tax won’t be easy. Selling reversal of the GST cut — every trip to Bellingham is 2% cheaper now when you declare your purchases on a day trip — won’t go far, either.

The Liberals will be pitching their wares against the latest Statistics Canada data, which shows that BC has benefitted the least — wages up a paltry 0.7% over 2001-2006 (and how much is the cost of living up?) with increased bifurcation of the incomes of British Columbians out of the middle class and into the small but increasing-like-mad incomes of the “rich” and the growing numbers of the poor. They’ll be selling against a party with the same name, and many of the same well-known “names” involved, that gave the Premier a 54% pay increase, Cabinet Ministers a 39% increase, established independent “Boards” for BC Ferries and Translink that voted themselves massive (40-60%) increases while raising fares, and which has recently funded playground equipment at well-heeled private schools like St. George’s without a penny going to any school on the East Side of Vancouver, all because St. George’s could write the matching funds cheque and despite all the hard work of the parents and community around the East Side schools they couldn’t raise the sums required in the time available. Blatant mis-steps like these await the Liberal MPs.

It’s not even a matter of being tarred with the same brush because of the similarity of name: it’s that they’re coming back with a “Government Knows Best” approach when a spring of similar arrogance has been laid down by the Province. We get to deal with our MLAs next spring; we get to deal with these MPs now. Expect — just as in talk radio — the average citizen not to give any care as to which level of government did, or proposes, what: you’re here, I’m ticked, you must be responsible.

That lack of knowledge of where and whom to actually target, of course, is yet another indication of the disconnect involved. (The inevitable “that’s not us, that’s them” en riposte, of course, solidifies the inclination to ignore the lot of them.)

As with Chicken Little (or Professeur Puffin) the running about shouting le ciel tombe day after day has now led to the point where tune-out is complete. Vote, don’t vote; topple, don’t topple; threaten, don’t threaten; it’s all just noise now. If Ontarians, for instance, have expressed more favour for the Liberals since In-and-Out that can just as much be because Ontario’s Provincial Government is Liberal, and fighting Ottawa’s Conservatives as it might be for In-and-Out. In other places the shift is not happening, or not profound: evidence of disregard or a belief that, yes, they all do it.

What this means is that when the next election does finally come it will be fought, not on accusations of sleaze (much though a Kinsella-inspired Liberal War Room might salivate at the thought) but on policy. Chatter about global warming has died down and mostly gone away, in the face of tougher economic times (jumping food and fuel prices, slowing pay, increasing taxes and fees, fewer opportunities, knowing people who are now laid off) and a winter spent literally chattering as La Niña worked its oscillatory magic on our weather. No doubt the warming goes on, but it is not the issue it was. Feeding the family, dealing with the member in distress, wondering how to close the gap between income and every two-bit oligolopolist and agency head who thinks they’re the only one shovelling a double-digit increase at you: that’s what matters.

A bevy of MPs who have spent this year sitting on their hands or ducking for cover when the division occurs — we might call it a sit-in, except the last place they wanted to sit was in the House — will come to face a population likewise on sit-down strike. Or most of them at any rate: there will be those who shift their agitation (such as with immigrant community leaders) from the Conservatives for “changing the rules” to the Liberals for “not stopping this” (as has been threatened). For the rest of us, though, we’ll get to yell at any politician who shows their face.

It shall all be a fire storm of sound and fury — signifying nothing.

If you could deliver the same benefits with less than one quarter the overhead, wouldn’t you?

Dr. Roy Eappen posted a piece this morning about Senator Hugh Segal’s speech at the Fraser Institute in Montréal yesterday. In it, the Senator made his case for a negative income tax form of guaranteed annual income to replace the current multitude of income assistance programmes in effect.

It’s not my point today to speak for or against this particular notion. Rather, something that I think does need a good airing is the cost and complexity of all sorts of programmes. These include on the government’s income side (taxation, worker’s compensation and the like) quite as much as on the expenditures side.

Human beings constantly complexify things. Take, for instance, the many calls for a flat tax régime. That sounds reasonable, doesn’t it? — a tax return the size of a postcard. No real questions of interpretation, or so it might seem. Unfortunately, three different forces come into play.

First, taxpayers (quite rightly!) look to minimize the taxes they pay. However income is defined, grey areas will exist. There will therefore be a need to question even simple declarations of income and taxes to be paid. Second, tax administration will, as each grey area is subjected to scrutiny, require more documentation (and therefore more people to file, organize, study, etc. that documentation), and as administrative rulings and Tax Court findings pile up more and more interpretation enters the system. Third, the political will to stick to the basics is tested regularly: an education “push” leads to an education deduction, a demographic “push” leads to a family deduction, questions of fairness lead to complexity (e.g. joint returns, poverty-line protections, etc.) and the net effect is that soon the massive infrastructure of our tax code and the thousands of people employed in handling it, plus the loss of time and energy we are all put through building our tax bundles each year, has been recreated.

This leads us to an important point: politics should be as much if not more about stripping back this complexity as about giving us new “goodies” to swoon over (or, at the very least, extend a vote for).

Laws passed should have sunset provisions. Universally. It may seem frivolous to, for instance, have sunset provisions on our laws concerning murder — “who in their right mind would want to overturn those?” — but think just for a moment about the intersection of foetal viability and the question “is it murder?”, the question of voluntarily deciding to end one’s own suffering but being in a state where someone else must assist and the question “is it murder?”, the nine-year-old who, in full premeditation, takes another’s life and the question “is it murder in the same sense as if a twenty-two-year-old had done it?”, or the question of Tasering as a routine first response, and the complexity of writing a viable code about the taking of another’s life becomes visible. The need to redebate these periodically is foregone in today’s code — we simply pile yet more into it — rather than going through it, cleaning it up, making limits clear.

The science-fiction author Robert A. Heinlein, in his book The Moon is a Harsh Mistress, has his character, rational anarchist Professor Bernardo de la Paz, offer the following thought: perhaps laws should require a two-thirds majority to be passed, and a one-third “majority” to be repealed. The idea here is that if 33% of the population is at odds with a provision it needs to be rethought. The character also called for universal sunset provisions, forcing items to be redebated.

Alas, in the story, these provisions were not a part of their nation-building, but then few who take on the job of writing constitutions see themselves as trying to make it as difficult as possible to do something. Instead, they focus on what can be done — and the complexity piles up and up until finally the structure topples under its own weight. We call that revolution, whether it comes piece-meal as in the British tradition (although the Blairite revisions to the Lords, to devolution and to the mechanisms of measurement in recent years ought to have been considered revolutionary rather than evolutionary) or with periodic sound and fury, as is most of the rest of the world’s experience.

When we lived in The Netherlands in the late 1990s, there was an interesting provision in its tax laws: a maximum percentage of income to be paid out in taxes. If the combination of VAT, municipal levies, specific imposts and income tax added up to more than the maximum, you lowered your income tax to the maximum. This still required all the record-keeping, documentation (and a small army of people in the Belastingdienst (equivalent to the Revenue Agency)), but at least it set a limit — even if it was around 68%! — on what various governments could take. It recognized “one taxpayer”.

I tell this story because, in a federal system, the interactions between the parts do ultimately come down to “one taxpayer”, yet the various levels of government do not co-ordinate well between themselves. (Aside from TILMA in Alberta and British Columbia, there isn’t even a single market and single regulatory régime shared between provinces, although we have such an agreement with multiple countries!) What this suggests to me is — and wait for the screams of anguish from provincialists coast-to-coast — the single most important power in the Canadian Constitution just might be Section 47, the provision to allow the Federal Government to disallow provincial legislation (and, since the provinces in turn control municipalities, therefore to disallow elements of municipal charters and enabled municipal actions requiring provincial approval, e.g. with the Ontario Municipal Board).

Why does this matter? Suppose our Senate took sober second thought seriously, and worked primarily to repeal legislation passed by the Commons? Suppose our House of Commons tirelessly worked to prune provincial legislation? What kind of country might this be?

For those who believe that only government can make things happen, of course, this would be anathema. But for those of us who believe in individual initiative, such a process might be quite liberating. In any event, it is a thought experiment, but one worth spending time to think about.

This is why Senator Segal’s thoughts on negative income taxes are worth considering. It is simplifying. It might not be a good policy — as always, the devil is in the details — but it cuts through a thicket of vines that have grown up with many point solutions. Just as with a more general pruning of the legal thickets, a severe reduction in form-filling and compliance regulations, tax reduction (those who are regular readers know I am a proponent of tax elimination: keep one type of tax per level of government and get rid of all the rest — and add the Dutch limit to keep the combination at a sensible total outlay) and other forms of repeal/sunset clearing away, Senator Segal proposes something that should have less overhead, less cost to deliver — and thus be more effective at using our money.

At every step, ask the question: does this simplify things, or make them more complex? Even if you are emotionally committed to alternatives — as Dr. Roy admitted, in his posting, he is — consider the simple carefully before rejecting it. If we can’t clean the Augean stables of public policy easily, we could at the very least not add to the mess.