Friday, March 2, 2007

Unfit for the light of day

There are days when I think that the London Free Press should go back to an evening edition — reading it in the morning is enough to put you off your food for the rest of the day…

Let's take today, March 1, 2007, as an example:

Butchered

Graham PollettThere is a sort of man who would like to set the price for what he dislikes at the price of his vanity, which is to say unnecessarily and artificially high. And very often this man's economics, based on his prejudices, make him suitable for no other occupation except political authority. Graham Pollett, head of the London Middlesex Health Unit, is just such a man…

The illegal sale of cheap cigarettes is keeping thousands of Ontario smokers hooked, the London-area health unit says.

[…] The health unit board has endorsed recommendations of Physicians for a Smoke-Free Canada (PSC) and is writing to federal and provincial health ministers in support of them, said Pollett. … The doctors are asking senior governments to crack down on contraband activity.
Not surprisingly, authority skims off the difference in price.

Baked

On the subject of prejudice-based economics, board of control is again considering raising development charges for new residential and commercial development in response to growing shortages and lengthy wait times that are plaguing the city's urban works reserve fund. The reserve, funded by development charges, allows developers to borrow for infrastructure connections between new developments and road and sewer services to be paid back when infrastructure work is done instead of when lots are sold, saving developers money on interest charges.

Although developers have agreed to higher charges, the debate at board of control has attracted the attentions of anti-growth advocates who would like to use development charges as an artificial disincentive to outward development to advance their particular political agenda. It is one thing, and a proper one at that, to equate charges to the city's costs for municipal infrastructure relating to new development, so as to avoid taxpayers having to subsidize them, but it is an altogether different and unwarranted thing for the city to make pricing a punitive measure. Given political control over infrastructure, though, it's inevitable that political considerations will eventually supercede rational indicators of price like supply and demand. In the meantime, however, the current council tends to be quite pragmatic on the subject of the much-loved and handsome profits it makes for its political feel-good projects from assessment value growth, and can be expected to continue to strike a nice revenue-happy balance between pandering to political prejudices and developers.

Candlesticked

Further on the subject, city politicians gave a warm reception to the idea of paying a 25- to 30-per cent premium on its energy costs for "green" power; i.e., electricity generated from "clean, renewable sources like wind and water." Whether electricity from these sources, when the methods for obtaining them are included, is really that much "cleaner" or more "environmentally-friendly" than from other sources must be — and is — taken as an article of faith by the momentum of popular bandwagons; iteration of words like "green" and "environment" are after all intended to substitute for thought, research and scrutiny. But in any case, green power is certainly not more economically efficient, at least as yet. City engineer Peter Steblin estimates that powering city hall alone under such a regime would cost an additional $80,000 a year — just one of many arguments for shutting it down entirely — but it is only a small piece of London's municipally-owned property assets. The actual cost of such a plan would have a significant bearing on taxes.

London's politicians would like to imagine themselves as the stewards of the city's conscience, but a conscience cannot be exercised by fiat and remain a conscience. Despite the blandishments of politicians, however, political exigency really cannot conceive of conscience in any way except for popular prejudices, and that's exactly what we get instead of sound and appropriately circumscribed management. In the only objective sense possible, politicians can only be stewards of our taxes, but they have long ago abandoned any pretence of being any good at that.

It must be added that recent innovations to reduce energy consumption that have been adopted by the city have been reported to have saved taxpayers $1.8 million since 2001. This is an all-too-rare example of sensible stewardship of taxes because taxes are saved, but city staff are trumpeting it instead as "green" policy:
"Municipalities and all levels of government should be leaders in Canada's fight to reduce fossil fuel energy use and to fight global climate change," said Sean Russell, corporate energy manager for the city. "Our goal is to create a long-term sustainable London."
… and greenhouse gases, sustainability, awareness, blah blah blah, are all given mention too, straight from the environmentalist rolodex. An erroneous equivalence is being suggested here between economic utility and environmentalism, when the real equivalence is with thrift, but the suggestion reinforces the It's certainly telling when environmentalism is imagined to be a more popular and saleable platform than efficient management of taxes.

Fatted

Paul BertonA typical editorial from the Free Press' Editor-in-Chief Paul Berton, incidentally on the subject of taxing plastic bags:
Governments know full well money motivates consumers. That's why they tax, and why they should continue to tax, consumables such as gasoline, alcohol and tobacco. So what if the Irish plastax is a cash grab?
Fleeced

The Federation of Canadian Municipalities is meeting in London for three days of political strategy planning for wheedling the federal government for more of its tax revenue in anticipation of the gratuitous handouts that precede elections. Never minding the fact that federal and municipal taxes are paid in the end by the same taxpayers, municipalities are eager to obtain money for their pet electoral projects and avoid the less politically-popular burden of having to collect the taxes for them. To displace the possibility of scrutiny with rhetorical shortcuts, municipalities are trotting out the tried and trusty canard about "fiscal imbalance yet again:
"We'll be talking about the fiscal imbalance, the $60 billion municipal infrastructure deficit, much of it based on the upcoming federal budget," said Ward 3 Coun. Bernie MacDonald, who sits on the FCM board and two committees.

"We're a lot like a lobby group representing the interests of municipalities but, really, the grassroots voters. We let the federal government know what we want, what our needs are and where to spend the money."
From a net tax perspective, the grassroots voters must be entirely indifferent unless they prefer one jurisdiction's brand of vote-buying over another's. But MacDonald doesn't know the first thing about "fiscal imbalance" except what he's been trained to repeat. MacDonald's position is understandable, however, because no one knows what it means or how it's calculated. Given that mayor Anne Marie DeCicco-Best and deputy mayor Tom Gosnell cited London's fiscal imbalance as $400 million and $80 million respectively in the same year, it's safe to conclude that the figures are pulled from the air and are just as substantially meaningful. The heavy dependence of London's economy on institutions like the university, college and hospitals, to name just a few of the biggest, suggests instead quite that London at least probably receives a net fiscal benefit from the tax revenues of provincial and federal governments. Of course, that doesn't count unless it passes through the clutches of municipal politicians first.

4 comments:

Honey Pot said...

I thought it was rather strange that the Health Unit would be giving free advertising to the cheap smoke shops. Legally they wouldn't dare touch them, another native stand off isn't something the province will want to get into, so it was sort of pointless and very dumb bringing it up. At work everyone was talking about it, and planning on heading out for cheap cancer sticks. The government just lost another whack of sin tax. Keep this up and there will never be another road or hospital built in the country.

Jake said...

On Dr. Pollett:

So Dr. Pollett, you're saying that only non-taxed cigarettes are addictive? This isn't surprising me since you are a government bureaucrat who gets paid by McGuinty to make propaganda against smoking.

Well, if you want more Caledonia disputes to erupt by imposing taxes on natives, I'd say go for it!

On the topic of "Green" power:

Paying extra money to buy "Green" power is a total fallacy. This form of electricity is an indulgence that makes society "feel like they are making a difference" and nothing more.

In reality, the power coming through the grid to your home comes from whatever source that is immediately available (whether fossil fuel or otherwise). It's not like the electric company is going to "personalize" what source you get you power from because you paid extra for "green" power. If anything, you are still consuming the same source except you are paying a 25% premium for it.

On CFM tax rationing:

The CFM will never stop asking for more tax money from the feds. They are basically bureaucratic heroin addicts: they got their first fix with the gas tax transfers and now they want to upgrade to the "premium junk" with one cent of the GST.

The crumbling infrastructure of municipalities is the fault of cities themselves--not upper levels of government. Cities such as London and Toronto have misspent countless millions in pet projects and other wasteful initiatives, however they don't want to go through the hassle of fixing the problems they created. Instead, they point the finger at other levels of government because its simply easier and get more attention than, lets say actually being fiscally responsible.

Bernie the dinosaur will never tell the voters that now will he?

Sonny Drysdale said...

Isn't it bad enough we have Peter Jaffe looking out for us? Do we really need Graham Pollet too?

God, what I wouldn't give for a large sock stuffed with cow manure.

MapMaster said...

The kicker is that Jaffe and Pollett aren't doing it on their own time, they're doing it on our time.