"Right Wing" Reality Check

For those who insist on deluding themselves by saying that Ontario’s “Progressive Conservative” party (you know, the one that introduced rent controls, a ban on private health insurance, the provincial income tax, etc.) is “right wing”, “centre right”, “right of the liberals” – or that it is the right party to support if you are pro-free-market/pro-capitalism – here’s more evidence to the contrary straight from the lips of party leader John Tory, as reported in today’s Cornwall Standard Freeholder:

Our party has been steadfast and unanimous in saying that (supply management) is a system that is working for the farmers, it’s working for Canada, and we should just leave it alone.

and

We should be more concerned with the fact that we’re importing Chinese apples, and who knows what kinds of pesticides have been used to grow them there, when we have perfectly safe gown apples here in Ontario.

The most that can honestly be said about the differences between the Liberals and the PCs is that the PCs use socialism as a justification for handing out grants, loans, market protection, and special status to certain alleged nobles in society…all of whose wealth and privilege depend upon regulation of – not freedom of – the market. The Liberals, in contrast, regard a socialist system as the ideal. In short: PCs view socialism as a means to a dishonest and corrupt end, whereas Liberals view socialism as a means to a dishonest and corrupt end.

Objectivist "Political Views" Finally Arrive on FaceBook

Heads up everyone (especially if you are on facebook.com).

A few weeks ago (or is it months now), I wrote to facebook.com and asked that it consider dispensing with the pull-down menu in the “Political Views” field of its member profiles. It allowed things like “Conservative”, “Liberal”, “Very Liberal”, and “Libertarian”, but did not allow Objectivist responses. I suggested, as one of a couple of options, allowing people just to type-in what their political views are.

Good news. I don’t know WHEN it happened, but it appears that it is now possible to TYPE-IN your political views on FaceBook (instead of picking them from a pull-down menu).

I would encourage Objectivists to use the word “Objectivist”, rather than “Capitalist” for one reason: so that people know WHY you support capitalism (i.e., so they do not confuse your metaphysics, epistemology, or ethics to be mystical, irrational, or altruistic, respectively). Let people know that you are impliedly a capitalist because you are committed to the facts of reality, to reason as man’s only tool for obtaining knowledge, to rational egoism as man’s proper ethics, to consent as the requirement for all human interactions, and to capitalism as the only socio-economic system compatible with those commitments.

Cheers,

PM

Environmentalism's Attack on Reason, Individualism & Capitalism

Climate change environmentalists deny that they are motivated by their well-documented opposition to capitalism. Question their motives, and you will often find yourself accused of being ignorant, of being on the take, of being like a Nazi, or of being a criminal.

Fortunately, it is not necessary to question their motives. To know what they would do to society, one needs simply to understand the essential nature of their arguments for restricting or banning the use of technology.

To light a fire, decontaminate water, erect a shelter, bake a birthday cake, or build machines that increase human productivity and broaden human opportunities, requires humans to act in accordance with the facts of nature. To do so requires that someone achieves knowledge of those facts. Only rational thought – a strictly logical process of thought about that for which there ultimately is physical evidence – makes it possible for human being to obtain knowledge of the facts of nature. A belief not supported by physical evidence, or not resulting from ones own rational process of thought, is not knowledge.

All knowledge is the result of rational thought, but not all rational thought results in knowledge. Novel observations and the discovery of new evidence sometimes change the logical mind’s conclusions: what was originally thought to be knowledge may prove eventually to be false belief. That is why scientists never conclude further inquiry is unwarranted. However, the fact that a lack of the appropriate data – or the fact that a lack of knowledge has led someone to consider immaterial facts or irrelevant evidence – does not change the fact that knowledge cannot be achieved except by rational thought.

Those at the forefront of efforts to have the government fight “climate change” ultimately take issue with that assertion. They tell us that, because rational thought sometimes leads us to erroneous conclusions, rationality is dispensable, worthless, or even harmful. Knowledge of the facts of nature, they erroneously or falsely imply, can and should be obtained with faith, consensus, or illogic.

In 2005, Green Party of Canada leader Elizabeth May gave a speech which began with a quote from Bertrand Russell: “Ever since Adam ate the apple, man has refrained from no folly of which he was capable…”. She lamented that, since the commencement of the industrial revolution, humans have “…taken the life-giving, life-creating, life-nurturing systems of Planet Earth and pushed them into reverse.” Making it clear that she believes the Garden of Eden actually to have existed – she, for example, refers to the “location of the Garden of Eden” – she concluded with a hope that “we can re-write Russell’s History of the World to say that humanity rejected folly and that we returned to the Garden”. Taken to its logical conclusion, May’s message is a demand for an anti-human atrocity. Her belief, founded on faith, is that the fruit of rationality – knowledge – leads us always to sin, so we must outlaw productive thought and action, return to a state of naked ignorance, and have a supernatural being provide for us when, where, how, and to the extent that he wants to.

With his foundation’s website, geneticist turned CBC TV personality David Suzuki spreads the falsehood that the “…Intergovernmental Panel on Climate Change (IPCC) is universally recognized as the world’s most authoritative voice on the science of climate change” (emphasis added). You will not find scientific reports on Suzuki’s web site, but you will see lots of talk about “consensus” that man’s use of technology is causing catastrophic global warming. Suzuki’s implicit message is that a belief is knowledge if an alleged majority of allegedly credentialed people say so. Galileo and Einstein would undoubtedly beg to differ.

In his self-promotional flick “An Inconvenient Truth” Al Gore points to a genuine historical correlation between changes in global temperature and changes in CO2 levels. He implies that changes in CO2 drove the temperature changes with which they were correlated. At least, this is a logical fallacy, because correlation does not prove causation. At worst, it is a lie, because the data he claims to have presented to over 1000 audiences actually shows CO2 levels to change hundreds or thousands of years after the temperature changes with which they are correlated. Encouraging us to accept logical fallacy or plain lies as a means of obtaining knowledge, he is discouraging rationality.

The victims and foot soldiers of Hume, Kant and Hegel frequently can be heard to say “We have to cut CO2 emissions because we simply cannot risk the possibility of a man-made CO2 global warming catastrophe in the future”. To those who deny the possibility of knowledge – or who are too lazy to achieve it – rationality is no virtue. In a misguided attempt to avoid perishing in the distant future, such people would have us all chop off our heads in the present.

The west’s standard of living is highest precisely because western governments have done a better (though hardly good) job of shielding individuals from such irrationality; of ensuring that people are free to conduct themselves rationally and productively, hence consistently with the facts of nature. Western governments have better defended every individual’s control over their own life, liberty and property. To that end, they have also been better at separating irrationality and state.

When a government succeeds in defending rational conduct from irrational restrictions of individual freedom, the result is a capitalist society: a wealthy and happy society in which trade is governed solely by consent. When a government founds its decisions on faith, alleged consensus, or logical fallacy, it merges irrationality and state, fails to defend rational conduct, and undermines every individual’s ability to live and pursue their own happiness. The political result is a collectivist society: a society condemned to rationing, misery and premature death, in which trade is governed not by consent, but by coercion.

It makes no difference whether May, Suzuki, Gore and the others are consciously anti-capitalists, or whether they are simply well-intentioned irrationalists because their expressed or implied disregard or hatred for rationality necessarily implies a condemnation of capitalism and an endorsement of collectivism. However, more fundamentally, their assault on rationality implies a condemnation of human life; of life that depends upon rationality. To the extent that our governments appease these Romantic Savages of the Endarkenment, humanity’s survival on this earth is imperiled.

Why the Money Supply Should not be Manipulated: a Response

(I recently received a copy of an e-mail written by a Mr. Wiseman, who was participating in a discussion among many others in a mailing list concerning monetary reform. The letter was cc’d to me, and I responded to the list as follows. )

Dear Mr. Wiseman / all on the cc list:

I regret that the work on my desk is both imposing and demanding of priority, so – as much as I enjoy debating the issue of monetary reform – my response here will be limited to addressing what I see as the more substantive questions or comments that have been directed to my inbox.

Mr. Wiseman writes:

“I have not heard a definition of inflation from the party nor in Healthy ….etc …Inflation refers to prices.”

The word “inflation”, today, means an increase in prices. However, that is not the original meaning given to the term by economists. In older texts (especially in those preceding Milton Friedman’s work on monetarism), the term “inflation” means “an increase in the supply/number of dollars”. The more recent definition was, in my view, introduced to mislead. By making “inflation” refer to prices instead of to the number of dollars comprising the money supply, the focus went from fixing the supply of dollars to fixing prices: i.e., it was introduced by those who were advocates of wage and price controls.

My booklet “Healthy, Wealth & Wise” does not use the term “inflation” because (a) it is directed at the layman, and (b) because I want to be understood unambiguously. Had I used the term “inflation”, most folks would wrongly have thought I was talking about run-away prices instead of a run-away supply of money. When your intellectual opponent manages to destroy the meaning of a word, deny him the fruits of the battle: cease to use it.

Mr. Wiseman writes:

“The money supply must expand…”

The only alleged purpose for expanding the money supply is to make sure that prices do not fall as productivity grows. There are a number of consequences – both positive and negative, depending upon ones circumstances – when prices fall. The principle effect of expanding the money supply is to prevent those consequences. In my view, however, the consequences of falling prices are actually the consequences of increased productivity: of better and/or more numerous goods and services entering the market and chasing the same supply of dollars. Those who want the money supply to expand (or to contract), in reality, are trying to prevent the consequences of increases (or decreases) in productivity.

For example, the employer who makes candles finds the value of his candles taking a dive as electricity and the lightbulb are introduced. With reduced revenues, he finds himself making no profit or losing money. In reality, the introduction of electricity and lightbulbs has decreased the value of candles and decreased the value of a candle-maker’s labour. The employer cannot afford to pay the wages that he has agreed to pay his workers because, in reality, their product is not as valuable as it once was. He has four choices, in reality. He can expect the workers to improve the value of their labour by learning to make lightbulbs. He can continue to make candles but try to get the workers to accept lower wages for their work. He can seek a ban on lightbulbs. Or, he can seek monetary laws that devalue the dollar itself so that the buying power of a dollar will decrease with the value of candles: that way, the price of his candles won’t change, and he’ll be able to make a profit without lowering anyone’s wages.

If he tries to get the workers to improve their skills, he will be met with the Candle-makers’ union’s refusal or with its demands that he pay the education bill for the workers: he cannot continue to operate with the former and does not want (or might not be able) to afford the latter. If he tries to decrease wages, he will be faced with employment/labour laws that punish him for doing so, or will be prevented from hiring workers by a state-backed closed-shop union that decides to strike. If he seeks a ban on lightbulbs then his society (including his business, himself and his employees) will be denied the fruits of technological advancement that other individuals and companies in other societies will use to speed their further advancement. But, if he simply gets his local MP to cause the government to make a law that facilitates an increase of the money supply, he can devalue the dollar and not have to go through any of the grief. Guess which option appeals to him most?

These days, it appeals to misguided banks and to unions too. The private bank’s economists line up to tell the public, on TV/radio/newspapers, that the only “feasible” answer is to increase the money supply as productivity increases so that the price of candles doesn’t change. The unions sing the same tune, and claim they are fighting for the wages of their members.

The banks – and the government – know that whoever creates additional dollars owns them. If the dollars are created in the form of bank of Canada notes (i.e., currency), then the state-owned government will increase the percentage of the total dollar supply that it owns. If, instead, dollars are created in the form of bank credit, then an increased percentage of the total dollar supply will be owned by the credit-creating banks. Whether created in the form of paper currency or in the form of bank credit, more dollars are created: “dollar” is a term that applies equally to currency and to bank credit. In other words, more “money” is created: both currency and bank-credit are “money” and, together, currency and bank-credit make up the total “money supply“.

In practice, those who have been permitted to increase the money supply want to collect interest on the use of the dollars they have created and now own. If 98% of the supply of Canadian dollars is in the form of bank credit issued by Canada’s chartered banks, then the banks are collecting interest on as much as 98% of Canada’s money supply. If the government creates the extra dollars (e.g., in the form of Bank of Canada notes), then the government will be able to collect interest on the use of that money. And, throughout history, governments have done just that: expanded the money supply either (a) to spend the money into the economy, or (b) to make money off of the interest paid by those who borrow the government’s money.

Now, consider the candlemaker in all of this. Assume that the candle-maker employee is being paid $20 per hour by the employer. Assume – for the sake of simplicity – that the price of a candle is $2 before the light-bulb is introduced and that it drops to $1 after the light-bulb is introduced. Assume that a light-bulb costs $2 after it is introduced. The employer wants his candles to continue selling for $2, so he wants the money supply expanded enough that the buying power of a dollar will be cut in half: he wants the price of his candles to go back up from $1 to $2. Of course, the relative value of a candle and a light-bulb cannot be changed: the market, in this example, considers the light-bulb to be twice as valuable as a candle. So, if the employer is successful in his bid to devalue the dollar, light-bulbs will increase in price from $2 to $4. Assume that the employer is successful in having the money supply increased. What has happened to the candle-maker’s standard of living? Well, after the introduction of the lightbulb – but before the supply of dollars was inflated – he was able to buy twice as many candles with his income: with his $20 hourly wage, he went from being able to buy 10 candles to being able to buy 20 candles or 10 lightbulbs. However, after the employer manages to have the dollar devalued, the candlemaker’s $20 buys him only 10 candles (at $2 a piece) or 5 lightbulbs (at $4 a piece). Ask yourself: did the candlemaker benefit from an increase of the money supply?

Take it a step further. Before the employer had the money supply devalued, the employee had $200 tucked under his pillow. With that $200, he could have bought 100 lightbulbs at $2 a piece. However, after the employer had the money supply devalued, the employee’s savings now will buy only 50 lightbulbs at $4 a piece.

Now, ask yourself: what happened to the buying power that would have bought the other 50 lightbulbs? Answer: when the bank created additional dollars, those dollars were sufficient in number to buy the 50 lighbulbs that the employee can no longer afford. In other words: half of the value of the employee’s saved dollars (i.e., half of his “buying power” or “wealth“) has been transferred to the newly-created dollars that are owned by the banks that issued them. Wealth has been transferred from the employee to the bank.

Who creates the dollars does not make a difference: the non-consensual transfer of wealth (i.e., the theft) occurs no matter who is the person creating the dollars. So, if the government prints up the extra dollars instead of a private bank, the government thereby takes half of the employee’s savings: wealth is transferred from the employee to the government. With no effort, the government gains the value needed to buy 50 lightbulbs, and the employee loses the value needed to buy those 50 lightbulbs. Some will argue that, if the wealth taken from the employee goes to the government, that makes things acceptable because the government represents the employee. Consider, however, that one could say the same about taxes. And, if that argument holds any moral water, it is an argument in favour of communism and against property rights: there is no difference, in principle, between inflation by government and taxation by government, and there is no difference in the morality of inflation vs. taxation.

And notice one thing: the chief difference – in principle – between more dollars being created by (a) the Bank of Canada or a chartered private bank, and (b) a counterfeiter, is that the counterfeiter doesn’t have a government-issued bank charter. He is, in principle, banking without a licence if he creates look-alike dollars and lends them to people in exchange for interest. In short, we lock up counterfeiters in this country because, unlike the government and our chartered banks, they do not have a state-issued licence to steal from that candle-making employee.

You will forgive me if, on moral grounds, I disagree with the conclusion that “the money supply must expand”. Although I am reasonably confident that Mr. Wiseman is not knowingly advocating theft, I assert that expansion of the money supply is – in reality – (a) theft, hence wrong, and (b) not to anyones advantage except the person creating the extra dollars.

I do not have the time, here, to go into it – it will be noted that the problems associated with falling prices are, first and foremost, the result of laws that some erroneously believe “protect” wages, jobs, etc.. Monetary expansion makes the union look strong while it allows banks to empty its members’ bank accounts. Incidentally, that is why some bankers see socialism as a convenient ally.

Finally:

Let nobody confuse me with a bank-basher. I am pro-capitalist: I believe the state should use defensive physical force to ensure that an individual or corporation (e.g., a bank) has exclusive, uncoerced control over (a) the use of its property (by which term I include dollars), and (b) the amounts and terms, if any, that he/it chooses to demand in exchange for the use of that property. I view capitalism as the only moral social system ever known to man. I believe that expanding the supply of dollars involves the non-consensual transfer of control over the use of a person’s wages and savings: I believe that expanding the supply of dollars is vicious, not virtuous, and that the practice is anti-thetical to the moral foundations of capitalism. Monetary expansion is not an aspect of capitalism (those who think otherwise hold an erroneous understanding of the definition of capitalism). When it is done by the state, it is an instance of socialism/fascism. When it is done by a private individual/corporation, it is an instance of what should be a criminal offence. Either way, it is an instance of vicious conduct.

I believe firmly in the propriety of lending ones money for interest and view it as equivalent to lending a lawnmower for rent: I view that as true both for individuals and for corporations such as banks. I believe firmly in the practice by which a bank borrows from its depositors and lends that money to borrowers as intermediary, and I believe that that function has a value that is rightly rewarded with interest revenues and/or other charges.

I have no objections to lending, borrowing, charging interest, making a profit, and becoming incredibly wealthy and influential in the process: that is true whether I am speaking of an individual or a banking corporation.

My objection is not with banks, but with inflation of the supply of dollars. I do not believe that inflating the supply of dollars is rightly an aspect of banking: it is an instance of what – like robbing, raping, and arson – falls more appropriately into the category of anti-social, rightly-prohibited behaviour (that should be prevented by imposing a 100% reserve requirement). Moreover, my firm belief is that controlling prices with monetary manipulations is not in the interests of banks over the long term, any more than it is in the interest of the candle-making employee. Again, I have little time to expound on this, but consider that monetary expansion erodes the value of both interest and principal. Inflation – by which I mean an increase in the supply of dollars in the form of central bank notes or private bank credit – is the rust of the monetary world, and is anti-thetical to capitalism. It is as harmful to a bank as it is to the employee and his savings.

Regards,

Paul McKeever, B.Sc.(Hons), M.A., LL.B.
Leader, Freedom Party

How to win the softwood lumber war

National Post, Letters
August 25, 2005

Re: The Case For Surrender, Andrew Coyne, Aug. 24.

Mr. Coyne is right that Canadian provinces are subsidizing timber, and that those subsidies are bad for the economy. They also encourage environmental harm and poor forest management. He also has a clear-cut case on the wrong-headedness of domestic retaliation: imposing more taxes on goods imported from the United States would only lower the Canadian standard of living.

However, I cannot agree that Canada should simply surrender. There is another, quite peaceful, option. Canada should buy some commercial time on major U.S. media networks so that we can speak directly to hardworking, overtaxed American homebuyers.

I can see the commercial now: happy, smiling, Canadians waving their Canadian flags in front of their newly built homes. The overdub: “By overtaxing imported Canadian lumber, the U.S. government has made it more costly to build a home in the United States. But there is an upside: by paying more to build your home, you have made it possible for Canadians to build their homes at lower rates. We, the new home owners of Canada, thank you for your ongoing financial commitment to the housing of Canadians.”

It would not be long before Americans demanded the axe be taken to U.S. taxes on Canadian wood.

Paul McKeever, Oshawa, Ont.

Canadian duties on US imports: attacking Canadian consumers

On August 25, 2005, the Toronto Star published an editorial saying that Canada should speak directly to the American people about the consequences of US duties on imported Canadian lumber. I agree with that part, but disagree with the Star’s suggestion that Canada threaten to “launch a painful trade war”.

US duties already impose a painful consequence for Americans: the duties force American consumers to pay a higher price for their lumber and their new homes. Were Canada to retaliate by imposing duties on imported US goods, Canadians would similarly suffer an unjust hike in their cost of living and a decrease in their standard of living. A trade war would be “painful” to Canadian consumers of US goods, first and foremost.

Our federal and provincial governments must not lose sight of the powerful fact that the Canadian lumber producer’s greatest ally is the American consumer. The appropriate response is to give American consumers an honest and true perspective: that the US lumber producers’ war on Canadian lumber is actually a scheme to loot the pocket books of American consumers.

Courting the 'burbs

National Post, Letters
Saturday, August 06, 2005

Re: A City Stunt that’ll Play Well in the ‘Burbs, Adam Radwanski, Aug. 5.Contrary to Mr. Radwanski’s speculation, Stephen Harper’s promise to make drivers, cyclists and pedestrians subsidize GO Transit and Toronto Transit Commission fares will not “endear” him to those living in the 905 belt. Mr. Harper does not propose that drivers receive a similar subsidy for their gasoline, licensing fees, artificially inflated auto insurance premiums or car maintenance costs. Nor can I imagine that drivers, cyclists and pedestrians will discontinue their current mode of transportation for a chance to give Mr. Harper a peck at the GO’s Kiss ‘n’ Ride.

To make residents of Oshawa, Ont., or Flin Flon, Manitoba subsidize GO and TTC riders is not merely something that will turn off Harper’s “conservative base” — it will rightly turn off anybody who believes that it is wrong to hitch your wagon to another person’s horse. Each individual should pay the full cost of his own freight, and should choose only the method of transportation that he or she can afford.

Mr. Harper would do well to advocate the tried-and-true policy of personal responsibility: “Pay only for what you get, and get only what you pay for.” The something-for-nothingers displeased with that message have already parked their votes and their Volvos elsewhere.

Paul McKeever, Uxbridge, Ont.

Healthcare: Saving the System vs. Saving the Patient

On June 9, 2005, the Supreme Court of Canada issued a decision in the matter of Chaoulli v. Quebec (Attorney General). The majority of the court found that prohibiting privately-funded health care leads to waiting lists. They concluded that those waiting lists can and have led to deaths and to physical and psychological harm and pain. They concluded that prohibiting privately-funded health care creates patient pain without any corresponding public healthcare gain. And, for those reasons, the majority declared Quebec’s prohibition of privately-funded health care is an unjustifiable violation of an individual’s rights to life and security of the person.

The court’s decision does not render private health care prohibitions in Canada’s other provinces unconstitutional, but the reasons for the decision certainly make it clear that prohibitions in other provinces may in the future be found unconstitutional if their respective government health care monopolies leave patients as poorly attended as they are in Quebec’s government-run health care system: according to the reasons for the decision, Quebec’s prohibitions never would have been declared unconstitutional if Quebec’s government-run health care system had provided “reasonable” levels of health care. Throughout Canada now, the left is staring at that “if” without a blink, and they are engaged in an all-out war of words to make sure that Canadians believe that the court’s decision imposes a duty to dump even more tax dollars into government health care. In newspapers, on television, in the board rooms of numerous left-wing health care NGOs, “how can we improve the government system and thereby keep the prohibitions in place in Canada’s other provinces?” is, foolishly, the focus of almost all related discussion.

One would like to think that at least the National Post – arguably the Canadian newspaper most sympathetic to free market economic reforms – could be relied upon to make the case for privately-funded health care. Such has not been the case. Instead, the National Post has published a number of columns and editorials issuing warnings of possible pitfalls of capitalist competition in health care funding, and promoting what is nowadays politely labelled “corporativism”, “public-private partnership” or “the third way”, but what was originally known as “fascism“: a system in which private companies serve a single payor – the government – which sets down rules and regulations dealing with such things as the nature, quantity and speed of services provided, the prioritization of service recipients, and the prices at which services will be provided.

For example, on June 10, 2005, columnist Andrew Coyne re-assured Canadian socialists and corporativists that:

“Despite what you may have heard, yesterday’s Supreme Court decision does not mean the “end of medicare.” It does not even necessarily mean the legalization of private insurance, at least outside of Quebec. …Conservatives who are already citing the court’s ruling in support of a parallel private health care system…are as unconvincing as the Prime Minister’s smug assurances that all is well because of last September’s health care accord….The case for private insurance would be more compelling were there reason to believe the public system was operating at maximum efficiency…Nor are we lacking for detailed plans for reform. These are to be found…in two other recent inquiries: the report of the Senate committee headed by Senator Michael Kirby, and that of the Alberta government commission headed by Don Mazankowski. Both propose radical reforms to the delivery and funding of health care — but within the envelope of public finance. That is, each would seek to import the basic mechanisms that make private markets such efficient allocators of resources – choice, competition, prices — while preserving the “single payer” model.”

On June 11th, Mr. Coyne continued his pitch:

“But the right of an individual patient to purchase private insurance, in the particular circumstances of his own situation, need not be the model for society as a whole. There may be better ways of alleviating waiting times in the public system than by allowing a private system to work alongside it, which would obviate the need for such drastic remedies. And indeed the evidence suggests there is: a system of “internal markets,” along the lines proposed by the Kirby committee or Alberta’s Mazankowski commission.”

On June 17, 2005, the National Post published a colum by Adam Radwanski, who wrote:

Preserving the same system for Canadians of every social, economic and regional background is a noble and worthy goal; indeed, it’s essential to preserving the sense of social responsibility on which this country has been built. But that aim has been clouded by politicians and interest groups who, to either score points against their rivals or maintain a status quo they benefit from, have lumped together universal care with the manner in which it is delivered…Universality is a question of principle; delivery is one of practicality…Last week’s ruling represents an opportunity as much as a threat — a chance for a long overdue dialogue that puts all the delivery options on the table in order to ensure universality for the long-haul.”

Most recently (on June 29, 2005), the National Post ran an editorial that stated:

With the Liberals having bizarrely dismissed the [Chaoulli] decision out of hand, and with Health Minister Ujjal Dosanjh now picking fights with the Canadian Medical Association because doctors dared suggest a role for the private sector in medicare, a Conservative campaign in favour of greater flexibility within the public system could not be more timely.

Given the sort of columns that the National Post has been publishing, that assertion clearly implies private sector delivery of health care services within a system in which government is the only payor. The assertion could not be more counter-productive and harmful to the future of Canadian healthcare. And given that it is coming from a paper that – rightly or wrongly – is widely thought to be pro-capitalist, there is a definite risk that the National Post’s pro-corporativist/anti-capitalist proposal will be mislabeled “capitalist”, thereby undermining the very concept, and defaming capitalism in general. Yet capitalist health reforms, not corporativist partnerships between government payors and private sector service deliverers, are a Canadian patient’s only hope.

He who pays the piper calls the tune. In a system funded only by government, politicians are the only payors. As such, they demand of health care service providers one thing: a system that, by appearing good enough, keeps voter discontent sufficiently low to avoid ejection from office. Vendors – even private sector vendors – respond the only way they can: by rationing healthcare. As a result, patients suffer and die on waiting lists. In truth, this is of little relevance to the politician, because only a minority of voters are in health care waiting lists, and because those who die in line do not vote. It is also of little concern even to a private-sector vendor: having kept the politicians happy, it gets a comfortable, competition-free, seat at the government trough.

Patients do not want better rationing. They do not care if “average wait times” are reduced. They want their own wait times reduced, and they know that decreased averages might have no effect at all on the amount of time they wait. Canadian patients also know that waiting is not the only problem: the quality of service delivered patients takes precedence, as it should, over any socialist, ideologically-driven commitments to “save universal health care”.

Introducing more “private delivery” of publicly-funded health care will not end rationing, it will not improve wait times significantly (if at all), and it most certainly will not improve patient satisfaction. The time is now to allow each Canadian to make their funding of the public system optional. We must allow patients also to be the payors, so that they can call the tune, instead of the government doing so. Their tune, I assure you, will be not “save the system” but “save the patient“. Health care providers then will either play that tune, or go out of business. And that is exactly as it should be.

Education: Financial Post's Chevreau interviews McKeever

Outrage at tax credit reversal

Jonathan Chevreau
Financial Post
Tuesday, December 02, 2003

Canadian taxpayers are generally an obliging lot, considering the top marginal rate in Ontario is still an egregious 46%.

Most of us go along reluctantly with this level of confiscation, play by the rules and plan our financial lives accordingly. We take advantage of the few tax deferment vehicles available, such as RRSPs and registered education savings plans, and make do with comparatively little disposable income.

But when governments change the rules retroactively, as did the Dalton McGuinty Liberal administration in Ontario last week, taxpayers rise up in justifiable indignation.

The public and professional tax experts alike were outraged by McGuinty’s move to eliminate the private school tax credit retroactively to last Jan. 1, 2003.

“It is indeed unfortunate that you can’t plan your affairs with certainty based on the enacted tax laws in place at the time decisions are made … without worrying about the law being changed retroactively 11 months later and benefits being taken away,” says Paul Hickey, national tax partner with KPMG.

Hickey was genuinely surprised by the retroactive move. “I thought it would have been cancelled from say the date of last week’s bill (or going back to the election date at the earliest) or possibly Jan. 1, 2004.”

Since the credit has been around since 2002, people would have already taken the credit into account in their financial planning, Hickey says, “and likely in some cases in their decision as to whether or not they can afford to send their children to a private school.”

The maximum credit for a child age 6 and over in 2003 was supposed to be $1,400 ($7,000 maximum tuition fees times 20%) and $700 for a child under age 6 ($3,500 maximum tuition times 20%), Hickey says. “So if you had two children in private schools (age 6 or older) this retroactive tax change will cost you a cool $2,800 in 2003.”

Parents who put their kids into private schools and planned their financial affairs with the expectation of the credit are understandably dismayed. Ken Klassen is an accounting professor at the University of Waterloo and has two children in private school.

“I’d say it’s unfair,” Klassen says. He had expected the worst case would be the Liberals would repeal the tax credit effective Jan. 1, 2004. So the retroactive repeal exceeded his most pessimistic expectations.

“You make decisions under the assumption the tax system is as it currently exists in legislation. If they actually implement a new provision you can make a decision based on that. But if they repeal it a year and a half late, you’re stuck.”

Speaking myself as a parent in the same situation, the private school tax credit has been nothing more than a series of hopes dashed. When it was first unveiled, it was clear you would have to wait five years before the full 50% (on $7,000) would be phased in. Then even the Eves Tories delayed the implementation, so the second year the credit remained 10% instead of rising to the originally promised 20%.

Meanwhile, many private schools raised their fees, on the expectation the promised credit meant parents could better afford their fees. Needless to say, few intend to lower their fees now the credit has been axed.

With the retroactive elimination of the credit, parents now have the worst of all worlds: higher fees and no credit. I can only feel sorry for any single-income family on a budget that took their kids out of the public system on the basis of this ever-receding mirage of a tax credit.

“It is outrageous and morally wrong,” says John Williamson, Ontario director for the Canadian Taxpayers Federation. “The ETC is good education policy, good for kids and gives parents choice. If the government insists on taking it away, fine! But it should have happened not before the next school year so parents could budget for the change.”

Because of the new administration’s haste in acting on the credit, it was eliminated just in time to be incorporated into tax software programs for the 2003 calendar year, according to Intuit Canada, maker of QuickTax tax software.

Paul McKeever, head of the Freedom Party of Ontario, doesn’t lament the demise of the tax credit, but does believe the “education tax” needs a radical overhaul. By that, he means the part of Ontario taxes (or surtaxes) allocated to the public education system.

“The current method of financing education causes and entrenches educational apartheid,” McKeever says. “By forcing everyone to pay for government schools, it ensures that only the very wealthy will be able to afford to send their children to schools offering an environment or curriculum better suited for their children. Only the very wealthy can afford to pay two tuitions for one child.”

McKeever’s vision of choice in education is to eliminate the practice of forcing people to pay for an education their children do not use. But he also views the Ontario Conservative party’s tax credit as “deeply flawed.”

“It facilitated choice in schools, but allowed government to continue preventing choice in education.” The tax credit went only to parents whose children are in schools which teach the curriculum set out by the Ministry of Education.

“By continuing to force everyone to pay eduction taxes, the PCs ensured that government could continue to dictate curriculum: conditions could be placed on which schools were eligible for the tax credit,” McKeever says.

Ideally, both the tax credit and the “education tax” should be eliminated, McKeever believes. “However, eliminating only the former certainly leaves us worse off than we would be with the tax credit in place.”

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