"Equalization" and the "Constitutional Entrenchment" Myth

For days now, major daily newspapers have featured one or more reports or columns about the Canadian federal government’s “equalization program”. In a nutshell, the equalization program works like this:

1. The federal government overtaxes Canadians, so that it has more money than it needs to pay for services that it is authorized, by the constitution, to provide.
2. The federal government takes the extra revenue, and contributes it to provincial coffers in an effort to ensure that each province has the same amount of money for its various socialist programs (notably, health care, welfare, and education).

Under this program, people who get skinned are called residents of the “Have” provinces. People who get stuff they didn’t pay for are called residents of the “Have Not” provinces. Read more

Lobbying for Death

In response to my blog entry about David Archuleta, Mark Steyn, and Reason, a facebook friend commented, in part:

I’m worried what those law students will be trying to do once they pass the bar. Sounds like they want to criminalize people’s feelings and anything that may stir the pot in a direction they don’t like. Thought police anyone?

I replied:

Law is a description of the circumstances under which the government may deprive you of liberty or property. It can be consistent with the facts of reality (including the nature of man), or it can be contrary to the facts of reality.

To tell your child that a given religious belief is contrary to the facts of reality, or that it foretells a physical threat to ones liberty or property, may very well offend those who hold the belief, but it may very well save the life of ones child. All of the good feelings in the world won’t allow someone to survive. All of the ignorance in the world will certainly decrease the likelihood of ones survival/happiness.

Freedom requires that a government’s ethical standard be the life of a man qua man. That requires government always to be consistent with the facts of reality.

To call upon the government to seize control of a person’s liberty or property on the ground of emotion is to call upon the government to abandon human life as its ethical standard. It is to lobby for death.

Freedom Requires a Better Defence

{My op-ed, below, appeared on the Western Standard shotgun blog on February 6, 2008. NOTE: this is the first time that I have shared with anyone, in writing, this particular definition of “freedom” (i.e., freedom as control). Prior hereto, I have disclosed this definition, and explained its significance, only to my close friend and colleague, Robert Metz (founder and president of Freedom Party of Ontario). I will explain the significance of this definition in great detail in a forthcoming essay (or book chapter).}

The only thing worse than not defending freedom is defending it so poorly that ones audience is left thinking maybe freedom is not defensible. Consider Ezra Levant, who is currently responding to a human rights complaint for his allegedly “offensive” publication of the famous Mohammed cartoons.

Ezra condemns our human rights commissions’ procedural and evidentiary standards for not being court-like. He thereby implies that censorship would be acceptable did our commissions have court-like standards.

Ezra says censorship is wrong for this reason: we have (he submits) a long history of laws that disallow it. In other words: our laws (allegedly) against censorship are just because they are old. Yet the argument that “old law is just law” implies that we should still have laws that facilitate slavery in Canada, that give only propertied men the vote, and that make it illegal to open your store on Sunday.

Ezra condemns the addition of speech to the original list of things regulated by human rights commissions. He thereby implies that he has no objection to human rights laws concerning employment and housing. Our human rights laws typically cannot prevent someone from denying a person a job or an apartment so long as the reason for the denial is not known to be one prohibited by human rights legislation. Thus, in effect, Ezra’s position is this: nobody should prevent Ezra from saying that a another man’s religious beliefs are dangerous but, if Ezra utters such an opinion, he should lose the freedom to deny that man a job or an apartment. In short: shut up, or put up. That is clearly a self-defeating defence of “free speech”.

To be rational and effective, the advocacy of freedom must be founded upon the material facts of reality.

A human being must obtain values (such as food and shelter) if he is to survive. To obtain values, a man must choose to engage in rational (hence productive) thought. His mind must maintain control of his actions so that his rational decisions will result in the production of values. His mind must remain in control of the values he produces if he is to use them for his own survival and happiness. That control – the control of ones own actions and property – is freedom.

If a man does not think rationally (i.e., if he is irrational), he can live only by obtaining values from someone who does think rationally. If others do not give the irrational man values for free, he can obtain values from others only without their consent; only by interfering with their control of their own actions or property; only by enslaving or expropriating them; only by denying others their freedom.

No amount of rational thought can preserve a man’s life if he lacks freedom. For that reason, the violation of a rational man’s freedom is a threat to his life. Because the irrational man depends upon the rational man’s production of values, the irrational man’s violation of the rational man’s freedom is also a threat to the irrational man’s life. Thus, the life of an irrational man is a murder-suicide in progress. Were a whole society of men consistently to attempt live as irrational men do, the result would be (and, historically, has been) mass death.

It is physically impossible to make another man think rationally, or to prevent him from having racist, sexist, or other irrational beliefs. However, one can make life possible for a rational man by preventing irrational men from violating his freedom. Thus, in a society that values life rather than death, a government’s role is not to compel individuals to think rationally but to defend every individual’s freedom.

When government performs that role well, life and happiness are possible to a rational man because his mind maintains control of the production and use of his values. In contrast, when government increasingly passes and enforces laws to violate freedom, government becomes an ally of irrationality and an enemy of life; it gradually ceases to be a government.

Ezra’s human rights complainant considers Ezra’s silence to be a value. Ezra will not consent to provide the complainant with that value. Were the complainant to obtain that value by physically gagging Ezra, the government would rightly use force against the complainant to restore Ezra’s freedom because life requires freedom. For the government to obtain that value for the complainant by means of force is wrong because life requires freedom.

Ezra’s legal case is, he says, his stepping-stone to the making of a political case. If, in the political realm, he drops his ineffectual legal arguments for freedom, and demands freedom on the ground that it is an indispensable requirement of his life, he will become an asset to the advocacy of freedom, rather than a liability to it.

Column – Financial Post – "Fiscal Imbalance", Cities, Toronto

Consumption tax cure for revenue ‘gap’

PAUL MCKEEVER

Gap-osis has become an all too common and embarrassing syndrome. A government in one jurisdiction allows its expenditures to exceed its revenues, then blames its deficit on “under-funding” by a senior level of government. The asking government claims there is a “gap” between the total tax paid by people who live within its jurisdiction and the amount ultimately spent there. Asserting that it is the “engine that drives” the economy, the asking government demands its “fair share” of tax revenues.

Canada’s gap-osis poster boy has most certainly become Ontario Premier Dalton McGuinty who — with the politically correct approval of the province’s Progressive Conservative and NDP parties — has been demanding a share of federal tax revenues to make up for a $23-billion “gap.”

However, gap-osis is also running amok at the municipal level in Toronto. City councillors, welfare advocates, the Toronto Board of Trade: None are able (i.e., willing) to escape a politically advantageous gap-osis affliction. In addition to more autonomy for Toronto council, they have all been demanding provincial cash to close a gap between the provincial taxes paid by “Torontonians” (by which they mean everyone living in or around the City of Toronto) and the provincial funds spent in Toronto (by which they mean only the city).

What is more, the city’s demands are actually more justifiable than the province’s when one considers the narrowness of the city’s tax base and the breadth of the province’s.

As a result, with the province too strapped to continue shelling out provincial revenues to municipalities that are spending more than they take in, McGuinty has been put in an embarrassing situation: He cannot very well argue that diverting provincial revenues to municipalities is wrong while arguing that diverting federal revenues to Ontario is right.

McGuinty’s problem has unmistakably influenced the province’s newly introduced Bill 53, which facilitates governance and financing reforms for the City of Toronto. The bill is purportedly the result of consultations and research, commenced in 2004, to ensure a fiscally sustainable and accountable governance of the province’s largest city. Yet it has long been obvious that the most effective way to make a government spend in a responsible, sustainable and accountable way is to ensure that it pays for those expenditures with its own revenues, and raises those revenues responsibly, sustainably and accountably.

Since the election of 2003, my party has proposed a set of municipal finance reforms that acknowledge the effectiveness of that approach. Specifically, we propose that municipal property taxes be eliminated and replaced, in each municipality, with a consumption tax. In particular, we propose that each municipality be permitted to impose, within its boundaries, a municipal premium collected as part of the Provincial Income Tax (PST). Municipal taxes, hence municipal spending, would be kept low by market forces. Each municipality would determine its own premium with knowledge that, if the premium is raised too high, customers and businesses will be encouraged to do their shopping and selling out of town.

Similar proposals have more recently found their way into recommendations by non-partisan entities, such as the Toronto Board of Trade. Yet, despite the broad appeal of these proposed reforms, the McGuinty government has decided to proceed with legislation that aims to resolve its own political dilemma by exposing taxpayers to the possibility of even more irresponsible, unsustainable and unaccountable taxing and spending by the government of Toronto.

By titling Bill 53 the Stronger City of Toronto for a Stronger Ontario Act, 2005, McGuinty has made a transparent attempt to bolster his bid for federal cash. He is suggesting that he walks his Ottawa talk about a “stronger province of Ontario for a stronger Canada.” However, the bill does little to improve the lot of taxpayers. It does not remedy municipal reliance on property taxes, which are both economically unsound and unjust. It does not impose any checks or balances on excessive municipal taxation or imprudent municipal spending.

Rather, the bill functions primarily to reduce the likelihood of further demands by Toronto for provincial revenue. Once Bill 53 is passed, any Toronto demands for provincial revenues can be met with a response from McGuinty that the city does not need provincial funds. He will argue that, unlike other municipalities, Toronto now wields some of the province’s taxing power, such that the city now has a broad enough tax base to satisfy its own budgetary needs.

Given that McGuinty wants federal cash even though the province’s taxation powers are already quite broad, it will be a hypocritical response. However, that response may function to quiet the city’s council. With Toronto quieted, McGuinty will be able to continue playing the gap card with Ottawa without Toronto calling him on his hypocrisy.

Paul McKeever is the leader of the
Freedom Party of Ontario.
www.freedomparty.on.ca

The (un)constitutionality of equalization payments

On Friday, August 26, 2005, the Globe and Mail ran an editorial about Ontario possibly falling into “have not” status among the provinces in coming years, and the role that federal equalization payments might be playing. It concluded:

“Do the current program and other federal transfer mechanisms need reform, accountability and an accurate means of measuring their impact on all provinces? Absolutely. Should the rich provinces get back all the dollars their taxpayers send to Ottawa, thereby eliminating the so-called fiscal imbalance? Absolutely not, because that would reduce federalism to nothing more than a financial balance sheet and effectively turn the central government into a non-profit collection agency for the wealthier provinces.”

To my knowledge, Ontario has not proposed that it receive “all” of the money its taxpaying residents pay to the federal government. Ontarians and their government recognize that, as Canadians, they must contribute to exclusively federal matters like the military, for example. However, Ontario is indeed losing under the current equalization scheme, and it is losing unjustly.

In a free and democratic country, a government may spend only what the country’s constitution gives it authority to spend. Canada’s constitution gives the federal government only the authority to pay out the amounts set out in the Constitution Act, 1907, which is still in force and binding. The Constitution does not give the federal government authority to redistribute wealth via the current federal equalization payments. If the federal government wants to engage in such spending, it should be seeking a constitutional amendment.

Because the federal equalization payments are unconstitutional, Premier McGuinty is wrong to ask for federal money . However, Ontario would be in the right to demand an end to equalization payments, and a corresponding reduction in federal taxation. This it could rightly do in the name of freedom and the rule of law.

The new insanity

The Globe and Mail, Letters
Wednesday, May 18, 2005, Page A20

Uxbridge, Ont. — Re Is Premier In Vanguard Of A New Politics? (May 17):

To avoid the political cost of spending cuts or tax increases, Ontario Premier Dalton McGuinty pleads for a $5.7-billion contribution of federal revenue to Ontario’s purse.

Such a contribution would violate Canada’s constitution; aggravate secessionist sentiments; blur the lines of political and fiscal accountability; leave Ontario’s spending crisis unaddressed; and spawn harmful copycat efforts throughout all levels of government in all provinces.

Murray Campbell opines that Ontario’s NDP and Progressive Conservative MPPs would “have to be mad” not to endorse Mr. McGuinty’s strategy. If true, the Premier had better beg for an additional, massive federal investment in psychiatric hospitals for those of us who advocate fiscal responsibility, accountability, and respect for the rule of law.

Paul McKeever, Leader, Freedom Party of Ontario

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