Author: Sabine El-Chidiac

Beyond the trade war, Ford’s to-do list is long

Ontarians are also watching Ford closely to make sure he doesn’t take his eye off the ball when it comes to other critical issues. Pictured: Ontario Premier Doug Ford. Photo Credit: Doug Ford/X. 

After a cold and snow-filled election, Ontario Premier Doug Ford emerged as the victor, although he did not make the electoral gains he had hoped for. He was given the third mandate he desired to lead Ontarians through a difficult time marked by a trade war and a fracturing relationship with the United States. However, Ontarians are also watching him closely to make sure he doesn’t take his eye off the ball when it comes to other critical issues. 

Tariffs are not the only government policies set to harm Ontario consumers in the days, months, and years of this renewed majority government. Interprovincial trade, housing, alcohol policy, and broadband internet are all topics that are important to Ontarians and must be addressed. 

Canada’s premiers have long put interprovincial trade on the backburner, seeing it as something that was nice in theory but too difficult to achieve in practice. They wasted an enormous amount of time not making it a reality for the good of Canadian consumers and as an escape hatch in case of economic disaster like the one Canadians are now facing in a Canada-United States trade war. The lack of interprovincial free trade is costing consumers immensely, already by robbing our economy of more than $200 billion a year. Other premiers need to follow Nova Scotia Premier Tim Houston’s lead immediately and introduce reciprocal domestic trade legislation. Ford has indicated he plans to do just that, but he should make it an early priority for his new government. 

In addition to interprovincial trade, Ford should set to work coordinating with the federal government to ensure Ontario diversifies its economy by building trade relationships with countries other than the United States. Consumers benefit when they have more economic choice, and this will allow for items to be exported and imported at a lower cost with much more stable and predictable partners. 

Ontarians feeling the financial pinch are more than likely also struggling to buy a home. The election was full of ideas and promises when it comes to housing, with the most prominent being rent control from Marit Stiles, the leader of Ontario’s NDP. Economists have long argued that rent control is actually very bad for low-income people looking for housing. However, even though Ford has peeled back this bad policy, the housing crisis persists. 

There is a housing crisis because there are not enough units to house people. And there are not enough units to house people because of outdated red-tape from the federal, provincial, and municipal governments. The Ford government is falling short of its own housing targets. Ford can take ownership of the slowdown experienced at the provincial level and work with his federal and municipal colleagues to make it easier and more attractive for builders to build. Ford has announced billions of dollars in new spending on housing and other projects, but this will turn out to be meaningless if developers are stuck in red tape. 

On the alcohol front, Ford has done more than any other premier in Ontario history to liberalize alcohol sales, but there is more to be done that will benefit both Ontario consumers and small and medium-sized businesses. The LCBO remains the only retail store that can sell spirits. Ontarians looking to buy whisky, vodka, or gin from their grocery or convenience stores are out of luck. Why liberalize alcohol and get stuck on this very simple detail? If wine can be sold in grocery stores, so too should vodka. The LCBO should be given less power, not niche areas of control. 

Ford should also promise not to build any more LCBO retail spaces, and indeed close retail stores that are no longer needed due to the amount of convenience and grocery stores surrounding it, and save the Ontario consumer money on retail rent and on running an inefficient operation. If you compare the LCBO’s operations to comparable private retailers in Alberta, it costs the LCBO approximately $1,000,000 more per store in operation costs. With 669 LCBO stores being inefficiently run in Ontario, that’s a lot of wasted money the government could otherwise spend on Ontarians’ core priorities, making the problem even worse simply doesn’t make financial sense. 

Finally, Ford has, under pressure, ripped up the contract Ontario had with Starlink. While perhaps understandable given the current trade dispute, the bad news is that Starlink was supposed to provide desperately needed high-speed internet access to 15,000 homes and businesses in rural and remote communities by June 2025. Now that this contract is cancelled, and assuming the relationship between the province and Elon Musk’s company is now strained, Ford must put significant effort into finding alternative companies to take on that project. It is outrageous that rural Ontarians do not have access to reliable internet when the economy and their lives rely on being online. Businesses in rural Ontario are also struggling to succeed in a modern economy without access to the internet, and the lifeline they thought was coming is now no longer an option. Businesses that are already in rural areas are struggling, and businesses who many want to start in rural areas will be scared away. This will only depress the local economy and isolate rural communities even further from the rest of the province.

Ford would do well to keep in mind that Ontario is a complex province with many problems to be addressed, even during a trade war and in its aftermath. Ontarians elected him to guide them through this turbulent time, but also to strengthen the economy, make their lives more consumer-friendly, and support the growth of businesses in the province. While much of the present focus is on the trade war, Ontarians still have many other pressing issues that need to be dealt with.

Originally published here

Be wary of the CRA autofiling for taxes

Two complaints are most common among Canadians during tax time: taxes are too high, and filing taxes is too complicated. With every new kind of tax and deduction hitting Canadians every tax season, it’s no wonder something like autofiling might seem like an attractive prospect. The refrain is often that the government already knows what you owe, so why would they make you do the work to figure it out and, if you’re wrong, get you in trouble?

Enter autofiling, a program that at first glance seems to solve this problem. The Canadian Revenue Service (CRA) is now enabling low-income Canadians, often the people with the most straigh-forward claims as well as those who tend not to file on time or sometimes at all. However, as one American president once put it, some of the most terrifying words in the English language are I’m from the government and I’m here to help.

It should not come as a surprise that the government getting in the business of controlling your tax returns is not going to end well. This new system entails the CRA automatically filing your taxes based on all the relevant information they have on hand, plus what they receive from third parties. Or, at least, what they think they have received from third parties. One Quebec man received an “unreported income letter” from the CRA after using the CRA’s autofill feature to fill out his TurboTax return. The CRA claimed that he had not filed investment income on his tax return as a result of a third party tax slip not appearing on his CRA account. It was never submitted because the CRA simply did not receive it in time.  As a result, the CRA, which had themselves made the mistake in the autofill, issued the man a Notice of Reassessment and a fine of $70,000 in arrears interest

The CRA encourages taxpayers to use their autofill system to fill out their tax returns, and then fines them because the CRA did not have a certain document. If the CRA wants to enact an autofile system for Canadians, how can taxpayers trust that the CRA isn’t going to make a mistake and then make the taxpayer pay for it? If there is a fight over a return, who would arbitrate this disagreement between the taxpayer and the CRA? Well, the CRA of course. This massive conflict of interest is akin to your boss adjudicating himself over whether he’s paid you your wages or not. You likely aren’t going to win that fight. The British experiment with autofiling has shown that the tax agency is not a reliable tax filer, since in 2010 six million taxpayers who used autofile received incorrect returns, and three-quarter of those returns overbilled taxpayers.

In addition to the harrowing possibility that the CRA could simply fine you for their own mistakes, autofiling will have to contend with the fact that the CRA is going to need a lot of information about the filer in order to make the system work. However, the CRA’s abysmal track record of being able to protect taxpayers’ privacy should scare Canadians away from this system. How can Canadians trust the government to protect that information when the CRA has proven time and again they cannot protect themselves from getting hacked. In 2014, the CRA allowed hackers access to 900 social security numbers. In 2020, hackers were able to use usernames and passwords they had previously stolen from the CRA to access peoples’ accounts, a breach which affected approximately 48,500 users. More recently, in 2021 the CRA admitted that they had to lock approximately 800,000 online accounts because third parties might have been able to obtain usernames and passwords. This centralization of data into one bureaucratic behemoth that cannot seem to be able to stop itself from getting hacked does not just flirt with danger, it invites cyber attacks, identity theft, and the potential misuse of personal information. 

There is often an elitist notion that low-income individuals can’t do things for themselves, and simply need help from those who obviously know better. This smug and paternalistic argument continues to prevail in systems like tax autofiling. If low-income people seem to not be able to do their taxes, that might be because most people in Canada of all socio-economic backgrounds find filing their taxes challenging. Rather than build this leviathan-looking program that will put legality and privacy at risk for Canadians, the CRA should focus on making tax filing less complicated by simplifying the tax code. There are many redundant tax credits that could be grouped together, small tax credits that are filed for with very little money in return, and different tax rates for small businesses that could simply be unified rather than having them file for multiple deductions and credits. For low-income Canadians more specifically, the CRA could simplify things by increasing the tax-free basic personal tax threshold from $15,705 in income to a higher amount. The CRA could even reduce the fines they impose on low-income people who file late, or expand the Community Volunteer Income Tax Program that has people from their community help them file their taxes if they need it. 

Tax autofiling has clearly failed in places like the United Kingdom, and promotes a system where the CRA is the judge, jury, and executioner of filings that they often get wrong, in a database that is often hacked. This should not give low-income Canadians a sense of relief, rather they should be worried that they are being targeted in a misguided attempt to make life easier for them. What all taxpayers in Canada need is a more simplified tax code that makes the process more streamlined and straight-forward rather than relying on the government to do the work for them. Whenever the government steps up to help, Canadians of all income brackets should seriously worry. 

Originally published here

The time to tear down internal trade barriers is now

Canadians and Americans are holding their breath as they wait to learn if they will have to deal with 25 per cent tariffs on the goods they buy every day.

In response to the threat of tariffs, Canadian premiers have stepped up with their own ideas about how to respond to Donald Trump’s tariff threats, from Danielle Smith’s insistence that a more diplomatic approach is necessary, to Doug Ford’s approach of threatening to cut off various sources of American trade in Ontario.

There has been much talk about a Team Canada approach with regards to tariffs. But how can there even be a Team Canada when the provinces can’t agree to trade freely with one another?

This tariff debacle should be the sobering wake up call to all provincial premiers that international trade partners should not be seen as unwavering allies, and that diversifying trade is essential to maintaining economic prosperity.

One obvious place to start is looking within our own house, and breaking down the trade barriers that preposterously continue to exist between Canadian provinces.

The refrain has long been that eliminating interprovincial trade barriers is an insurmountable task.

Section 121 of the Constitution states “all Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.” This is clear language, and should mean that we are a unified nation — one country, with one market.

However, despite this clear language in the Constitution, trade barriers continue to be high.

Former Canadian Chamber of Commerce president Perrin Beatty has stated there are many different levels of barriers to tackle, including mobility barriers and commercial barriers, some of which have existed since confederation.

According to a recent post on X by former policy advisor to Québec’s Minister of Finance Jean Philippe Fournier, even though the political will existed at a certain point in Quebec (notably, the province that is most closed off to interprovincial trade), the minister was stopped from dropping barriers by the realization that each province was creating regulations in silos without taking into consideration the actions of other provinces.

These rules ended up creating niche interest groups of companies who adapted to these regulations and would lobby the government not to standardize with other provinces so they could stay in business.

And despite text in Section 121 that reads clearly, the Supreme Court of Canada’s restrictive interpretation of it has taken out all its teeth. Section 121 was considered in the Supreme Court case of R. v. Comeau, which involved a man who bought some beer for personal consumption in Quebec and brought it over the border to his home in New Brunswick. He was caught and handed a $300 ticket, and took his case all the way to the Supreme Court with the help of the legal charity the Canadian Constitution Foundation.

While Gerard Comeau had success at the lower court, the Supreme Court found Section 121 does not allow absolute free trade across provinces.

Provinces can adopt laws and regulations that restrict trade if they show the overall aim is for another purpose, like “public health.” This has allowed provinces to impose all kinds of trade restrictions under the guise of some other purpose.

This was an unfortunate result that should be seen as inconsistent with the plain reading of the constitution, but could easily be addressed through political action.

Provinces could choose to enact freer trade, which would unite us as a country during this time of deep economic uncertainty. The political will to tackle interprovincial trade appears to be getting stronger. Conservative Leader Pierre Poilievre recently released a video questioning why it’s easier to trade with other countries than within Canada itself.

Reports also show the federal government and the premiers are finally having conversations about the positive effects of breaking down these barriers.

Team Canada and “Buy Canadian” are not complete until buying Canadian means having free trade to do exactly that within the borders of our own country.

Originally published here

More Alcohol Freedom Means Revenue for Ford

As the election in Ontario moves along, it is timely to reflect on a policy that Premier Doug Ford delivered on, and that is alcohol retail modernization. Consumers in Ontario can now walk into their local Costco or Circle-K and pick up a 2-4 of beer along with their groceries and gas. That’s a big win for consumers who for so long have been treated like children by the bloated LCBO who continue to believe it is their moral duty to save Ontarians from themselves. 

This may sound great, and a win for the Ford government, but there are glaring omissions to alcohol modernization policy that may prove to be big problems as the USA’s’ tariff threat looms. Premier Doug Ford is planning a 22 billion dollar relief program similar to pandemic stimulus to help businesses and Canadians as a result of President Donald Trump’s tariff threat on Canada. It is wise for Premier Ford and all the party leaders to realise that this kind of spending needs to come from somewhere, and that somewhere could be from further modernizing alcohol retail in Ontario. 

Despite the increase of ease for Onarians to buy beer, wine, cider, and ready to drink cocktails, liquor can still not be bought anywhere but the LCBO as it maintains a monopoly on those specific items. Want to pick up a bottle of Scotch to enjoy with your friends at a party this weekend? You certainly can’t get one when you’re at the grocery store trying to buy some snacks. Why give consumers partial convenience and then stroke the LCBO’s ego by giving them complete power over one kind of alcohol? 

Today, the LCBO boasts 669 bloated and inefficient retail stores in Ontario, all of them with the exclusive right to sell liquor. If it seems like a bizarre concept to Ontario policymakers to perhaps stop selling through retail stores owned and operated by the government, or to stop having this outdated and decrepit crown corporation be the only one to sell liquor, they will be comforted to learn that it is already happening successfully. Alberta privatized all liquor sales in 1993 and the results have been excellent.

Alberta’s model maintains their government agency as the wholesaler and that agency marks up the liquor before selling it to private retailers, and that markup is used for various government programs. The retailer is allowed to set whatever price they choose after having paid for the product plus the markup. The government is no longer in the business of running and maintaining inefficient retail stores and having management in silos decide what they should and should not sell. This type of model is shockingly not on the table currently in Ontario, and never really has been. 

The net revenue returned to Alberta from the Alberta Gaming, Liquor and Cannabis (AGLC) has been much higher post-privatization, in case policymakers needed more of an incentive. The net revenue of liquor sales, or the amount of money that the AGLC transferred to the Government of Alberta, was $825,104,000 in 2022/2023, up from $566,690,000 in 2004/2005 and $405 million in 1993 ($662 million when adjusted for inflation). 

According to a study by University of Waterloo Professor Anindya Sen, the cost savings of Ontario switching to an “Alberta-style model” of private retail sales of spirits while maintaining the wholesale aspect of the process would be exceptional even without a significant rise in liquor sales. An estimate shows that had the Government of Ontario moved to an Alberta-style system between the years of 2012 to 2022 (with respect to selling spirits in a private model), it would have saved the Ontario government between $4.8-$5.8 billion dollars. His estimates further indicate that increases in net income would have been roughly $300 to $360 million dollars from 2019-2022. That’s almost $360 million that could have gone to government programs in a short three year period. 

With a looming tariff threat that has only been kicked down the road for another month, and Premier Ford’s intention to provide Ontarians with COVID-like financial support, the savings from liberalizing alcohol sales in Ontario are getting harder to ignore. These savings will be necessary as Ontario continues to navigate a financial storm, and it is time that the leaders of every party address the further modernization of alcohol and the savings and convenience it brings during this election season. 

Tomorrow’s Tariffs Will Hurt Everyone

By Sabine El-Chidiac and Elizabeth Hicks

While tariff threats have been a roller coaster ride of will he or won’t he, reports indicate that President Donald Trump’s plan to tack on a 25% tariff on Canada is on track to becoming a reality on February 1. Given the harm tariffs have on Canadians and Americans alike, the best course of action would be to eliminate tariffs as a policy option and focus on working out the issues the United States has with Canada diplomatically. Not only would tariffs from the United States be devastating to both American and Canadian economies, but the proposed retaliations by Canada would further hurt the pocketbooks of the citizens of both countries.

Ontario Premier Doug Ford has been very clear when it comes to Trump’s proposed tariffs: impose tariffs on Ontario, and Ontario could cut off electricity to 1.5 million homes in New York, Michigan, and Minnesota. The federal government also said they would respond with the “single largest trade blow the U.S. economy has ever endured” if Trump follows through with his plan for tariffs, and a future government will likely feel compelled to do the same due to the harsh economic implications tariffs will have on Canada. Rather than allow tariffs to be imposed at any point, the U.S. and Canada must find an off-ramp to protect consumers on both sides of the border. Canada needs a new approach based on political reality and the unique economic interests of both parties in this dispute.   

Tariffs are simply another word for taxes, and imposing such taxes on Canada will affect Canadians’ day-to-day lives even more than the cost-of-living crisis already has. Canadian economist Trevor Tombe predicts that if the U.S. follows through on tariffs and Canada retaliates, the Canadian household cost would be $1,900 CAD per person annually. In the U.S., that impact would be nearly $1,700 CAD per person. This is one of the more conservative estimates.

Tariff showdowns tend to be more about a battle of wills and less about positive economic outcomes. 

The 1930 U.S. Smoot-Hawley Tariff Act resulted in world trade falling by 66% and U.S. exports and imports crashing by about two-thirds, prolonging the Great Depression. More recently, the 2018 steel and aluminum tariffs imposed by Donald Trump resulted in skyrocketing manufacturing costs for U.S. industries. The ongoing softwood lumber tariffs imposed on and off by the United States have significantly raised American housing prices.

In response to the Smoot-Hawley tariffs, Canada retaliated and imposed harsh tariffs on the United States under Prime Minister R.B. Bennett, sending Canada’s export markets into a spiral and sparking a Canadian economic depression. A very similar story has predictably played out over the 2018 steel and aluminum tariffs and again with Canadian retaliatory tariffs in the softwood lumber feud. 

Canada is the United States’ second largest trading partner, with imports from Canada to the U.S. totaling almost $344 billion in 2024 through October. Canada and the U.S. are neighbours and long–time allies, and the integration of our supply chains has resulted in lower prices for consumers in both the US and Canada while increasing the global competitiveness of both countries.

Premier Ford has been promoting a “Fortress Am-Can” program that would have the US and Canada working as a team on various energy-related policy issues, and there has been rhetoric from the Conservative party leader Pierre Poilievre about striking a “great deal” with Donald Trump by increasing Canada’s energy exports to the U.S. This direction can be workable answers to the tariff standoff, and could extend this pause to a permanent reversal on tariff policy.

Many Canadian consumers can barely afford the necessities of life such as groceries, clothing, and housing. Adding tariffs and retaliations to the mix may be the last straw that leads to Canada’s next great depression. 

Day 1 tariffs are bad for everyone — including President Trump

Today, on the day of President-elect Trump’s second inauguration, his proposed Day One actions are beginning to take shape. Axios reportsTrump is now weighing immediate tariffs on Canada and Mexico under the guise of a “national economic emergency.” With Canada ramping up its plans for retaliatory tariffs to slam America “dollar for dollar,” cooler heads in the new Trump administration must prevail if Americans are going to be spared the blow to their household budgets. 

Trump understands the practical politics of having leverage over both allies and opponents, but he risks losing all of it in a North American trade war.  

Trump ran in 2024 on his plan to saddle Canada and Mexico with a 25 percent tariff as leverage to get their help on his immigration agenda, but the fact remains that Trump’s voters will be the ones feeling the direct impact. Day 1 tariffs would make February’s Super Bowl the most expensive for consumers in recent history.  

Trump ally and fellow TV star Kevin O’Leary of the hit show Shark Tank has been making the rounds on air, telling Trump to be “hardcore” with tariffs on China. He even suggested China could see “riots in the streets” if Trump targeted China’s consumer exports, which explains the massive influx of Chinese goods into the U.S. in December.  

North America as a trading block is uniquely positioned to thrive during the Trump administration, but instead of promoting growth and lower costs for Americans, framing a destructive trade war is all that’s being discussed. The sophisticated supply chain integration between the U.S. and Canada has resulted in lower prices for consumers, especially when it comes to automobiles. In 2022, Canada exported $12.9 billion in motor vehicle parts and accessories, with $11.4 billion of that flowing directly to the U.S.  

In Michigan, 13 percent of the state’s gross state product is reliant on Canadian automotive trade. What’s the point of expanding U.S. oil production and lowering the price of gas at the pump if cars and auto parts are just going to get more expensive nationwide? Considering that $132 billion in oil and petroleum flows from Canada into the U.S. every year, it’s highly unlikely the Trump administration could replace that oil with American product fast enough to avoid sticker shock at gas stations.

Trump and his Canadian bargaining partners don’t seem very committed to rolling back the painfully high costs of living that marked the Biden years; instead, they’re shifting the costs to new sectors.  

Everyday Canadians would face significant hardships from a 25 percent tariff on exports to the U.S. Even without the almost certain costs of retaliation, bread in Canada could climb from $3.50 to $5.00 per loaf. Spread across the grocery sector, it amounts to thousands lost annually to price hikes. Atop inflated prices, job losses due to corporate cost-saving measures could spell catastrophe for Canada.  

Trump’s hardball mindset is that this is Canada’s problem and that it can be solved simply by submission to his demands, but it’s more likely that the U.S. will then be thrown into a “shallow recession” before he’s even finished decorating the West Wing. As O’Leary warned about potential unrest in China, unhappy Americans dissolve any leverage Trump and Republicans in Congress may have in this trade standoff.  

To get a better look at the potential repercussions, we can look at the effects of the 1930 Smoot-Hawley Tariff Act, which imposed tariffs on tens of thousands of imported goods in an attempt to protect American farmers and industry during the Great Depression. The result was an international trade war that caused global trade to fall by 66 percent and U.S. exports and imports by about two-thirds, effectively worsening and prolonging the Great Depression in the U.S.  

Of course, Canada responded to Smoot-Hawley in the same way Ottawa is planning right now, sparking their own economic depression north of the border. It’s the epitome of the phrase “cutting off your nose to spite your face.”  

At the very least, President Trump should not pursue rash day-one tariffs after his inauguration is over. The market shock will be severe. At best, trade negotiations should proceed with caution and tariffs should be recognized as the tax on consumers that history has shown them to be.  

Reality must be our guide if North America is going to rebound and unlock its economic potential in the years to come. Canada and the U.S. can both thrive, and that means we must come together.  

Originally published here

Privatize Canada Post so it can’t keep stealing Christmas

A month after postal workers walked off the job, the Government of Canada asked the Canada Industrial Relations Board to order an end to the strike. This may seem like a relief to Canadians, but it is also time to reflect on why the country is forced to suffer such disruptions every few years. How much longer do Canadians have to be held hostage to the whims of a Crown corporation with a monopoly on letter mail?

The strike has caused charities to lose significant sums of money at a time when Canadians are usually feeling particularly generous. For example, the Ottawa Citizen recently reported that the Ottawa Mission, a local homeless shelter, relies on holiday charity mail-outs for donations from a broad base of donors, especially at this time of year. The Salvation Army has also stated that donations are down 50 per cent since the beginning of the strike.

The Canada Post strike could also not have come at a worse time for Canadian small businesses, as this is the season in which their sales are usually highest. Back in November, the Globe and Mail reported that “​​small businesses, which tend to be dependent on Canada Post because it is a cheaper option for parcel delivery, have warned that a prolonged strike could devastate them financially and could lead to higher costs for consumers.”

This has proven to be correct. I spoke with Canadian small business owner Brynn Deamer, who said that, “Canada Post is the only option for Canadians to send letter mail, all of my Canadian customers must use other parcel carriers like UPS, Purolator, FedEx. So when my customer orders, they must now pay at least $15 for shipping to get their orders on time, which, with my items being an average $10-$40, that type of shipping cost is far too high.”

What happens if a customer doesn’t want to pay $15-$20 for shipping from a small business? “I’m still offering the free Canada Post shipping option, but they have to wait to get their package shipped out until the strike is over,” Deamer said. Even though the strike has now ended, her customers will likely be waiting a long time, as experts are saying that most packages will not arrive before Christmas.

Deamer went on to recount what she has seen happening to other small businesses: “Some are taking the route that I did and are offering other shipping options, and some are all together shutting down their shops temporarily and hoping the strike ends soon.”

Vincent Geloso, a Canadian economist who teaches at George Mason University, recently argued that it might be time to break up the Canada Post monopoly. There is a precedent for this. He gives examples found in Europe, where, as a result of a European Commission directive, “all letters regardless of weight have been open to competition since 2013. The directive does not mandate the privatization of state-owned postal companies; it simply ends postal monopolies.”

Without a monopoly over letter mail, Canada Post would have to compete with other providers like any other company would. Workers could still strike when they felt they needed to, but such strikes would no longer hold Canadians hostage due to the Crown corporation’s monopoly.

Some European countries went even further and privatized their postal systems. As a result, Geloso points out that prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany over 10 year when adjusted for inflation, with all those countries now having lower prices than the European average.

Before the strike happened, Canada Post was planning on increasing stamp prices in January to try and generate about $80 million in revenue. Now that the strike has added to its financial burden, Canadians shouldn’t be surprised if harsher actions are taken to recoup the Crown corporation’s losses.

The last time Canada Post workers went on strike was in 2018, and it was also timed to coincide with the start of the holiday season. Canada Post’s monopoly allows its union to hold the entire country hostage, especially during the holidays. Without that monopoly, workers could still strike, but it would no longer bring charities and small businesses to their knees. It is time for Canadians to seriously rethink this government-granted monopoly before the next strike hits and ruins another holiday season.

Originally published here

Ticket to Nowhere: How High Costs Are Derailing Canadian Air Travel

Recently, Ottawa lost its last ultra-low-cost airline as Flair shut down operations at the Ottawa International Airport. Flair had been saying they were going to leave YOW for several months due to insufficient demand to meet the airport’s high fees. In a statement, airport authorities said “YOW prides itself on keeping its aeronautical fees as low as possible, as paid by all airlines.” However, not all airlines have the same ticket prices. The essence of an ultra-low-cost airline is that it charges much lower fees than other airlines, but what is the point of a low ticket price when the airport fees make the ticket essentially the same price as a regular-priced airline? 

This is a loss to Ottawa consumers as less choice means less competition, and that means higher ticket prices. An ultra-low-cost, no-frills airline might allow a family to travel and unwind when they might not be otherwise financially able to do so, particularly at a time where the cost of living is becoming more onerous. There are several other airlines operating out of Ottawa, so Ottawans will not be stranded, but taking a low-cost option away means less people might be able to fly, and if they do, they will be flying less often.

Airline fees are enacted in order to help the airport continue operations and development of its facilities. However, in 2021, Canada’s Minister of Transport gave the Ottawa Airport $12 million to help them recover from COVID-19, some of which were to go towards the construction of the airport’s light rail transit (LRT) station, a station that still hasn’t been used thanks to the Ottawa LRT debacle (which was supposed to be completed in August 2022). In 2022, the Minister added another $4 million in funding, followed by another $11 million in 2023. And yet, the onus remains on consumers to help the airport out.

The fault lies with the government continuously handing out money to airports across Canada, while the airports stretch their hands out for more money from those who wish to fly. This is costing cities like Ottawa the ability to have an ultra-low-cost airport, and might start irritating other airlines that are scrambling for ways to get consumers on their flights. There is hope now as a new CEO takes over at YOW, and Flair is already stating that they would like to speak with her and see about finding a way to come back.

The growing costs to consumers does not stop there. As David Clement pointed out during the pandemic, the federal government continues to over-regulate the domestic airline industry. Airlines that fly domestic routes in Canada have to be majority-owned by Canadian citizens, which crowds out foreign investors. As it stands, airlines must go begging to the government for handouts rather than trying to secure foreign investment, or charge more for their flights. That also means existing international carriers can’t fly domestic routes, which forces less competition, thereby allowing airlines to charge exorbitant prices for a flight from Toronto to Saskatoon.

All of these fees and taxes and regulations mean less convenient travel for people across Canada, not just in Ottawa. The departure of Flair from the Ottawa International Airport serves as a microcosm of an overregulated, expensive, and out of date air transport system that is bursting to expand after a long and stifling pandemic. It is time airports, airlines, and the government realize that punishing consumers for simply wanting to travel can no longer be the answer. A reduction of fees and regulations need to be on the table to keep people flying and bring more options to Ottawa and cities across the country. 

Canada Post lets Canadians down…again 

Canadians are now planning for the holidays, they are figuring out how to get the best deals on a particularly tight budget for all the Christmas gifts they have to buy, and making lists for Black Friday…but that’s just a waste of time because Canada Post is on strike, again. 

If Canadians thought the Crown corporation would help them out by simply delivering the parcels they need as they start ordering gifts for the holidays, well, they should know better because Canada Post workers have done this before: go on strike just when it will hurt Canadians the most. 

Not to mention small business owners who will likely make their best sales at this time of the year, only they can no longer charge $2 for shipping, they’ll have to charge $20. And we know how customers love to pay ten times the price for shipping! According to the Globe and Mail, “small businesses, which tend to be dependent on Canada Post because it is a cheaper option for parcel delivery, have warned that a prolonged strike could devastate them financially and could lead to higher costs for consumers.” Yes, devastate. In an economy where Canadians are struggling to get by and small businesses have pressure on them from all sides, enter Canada Post to make life more difficult. 

While Canada Post has sometimes conducted rotating strikes, this time it’s all or nothing, they are taking it nationwide. This move will seriously disrupt the mail system across the country, and it will take a long while until it’s fixed even after the strike is over. They want pay increases and more defenses against competition from technological advancement and rivals like Amazon. The union is “asking for a compounded wage increase of 24 per cent spread over four years, while Canada Post has proposed a 11.5-per-cent wage increase over four years.” 

Jan Simpson, a representative for the union, has said that competition with places like Amazon that have same-day delivery has led to “tougher work conditions” for her workers. Of course, competition is something the small business owners who will be devastated by this strike always have to contend with. If only they could send their parcels so they could maybe survive. 

55,000 workers aren’t going to work today, and likely won’t for a while. The last time this happened was in 2018, and it was also before the holidays. It took them one month to get back to work, and that was on a rotating strike. Something similar this time around during a federal strike is going to likely cripple the Canada Post corporation and seriously hurt the livelihoods of small business owners. While we wait for the government to most likely intervene with back-to work-legislation, it might be smart to take a good look at this postal system that decides to strike just when it’s hardest for Canadians, with no compassion to struggling Canadian families or small businesses trying to survive. 

Economist Vincent Geloso argued recently that it might be time to privatize Canada Post, and there’s precedent. He gives examples found in Europe where, due to an EU directive, “all letters regardless of weight have been open to competition since 2013. The directive does not mandate the privatization of state-owned postal companies; it simply ends postal monopolies.” Additionally, Geloso says that countries like the Netherlands, Austria, and Germany completely privatized their postal system. In both examples, prices for stamps and other services fell, and has forced postal organizations to find better solutions because they can no longer turn to taxpayers for a bailout. 

Do we really need a national postal monopoly that holds Canadians hostage every few years, or do we start agreeing with the union that their (privately owned) competition might just do things better? According to Geloso, it might be time for Canadians and its small businesses to start seriously considering privatization before the next strike comes right before a future holiday season. Consumers shouldn’t be held hostage by their own postal system any longer. 

Ontarians can’t get complacent about the liberalization of alcohol

Many Ontarians are celebrating the new rules that allow them to buy alcohol at big box stores like Costco and at their local convenience store, a practice other provinces and other countries have had for many years. This is a victory to be sure for convenience and consumer choice, but it is important not to become complacent and accept that this is the final victory when it comes to the Liquor Control Board of Ontario (LCBO). There is so much more that can be done.

The response from Ontarians has been positive to the new retail rules, and the provincial government should take that as a signal that consumers in this province would be accepting of more changes. For example, why do Ontarians still have to go to the LCBO to buy their vodka, whiskey, and gin? The LCBO remains the exclusive retailer of spirits in the province despite the fact that you can get your 2-4 box of beer from your local Costco. Why can’t you pick up a bottle of gin to make some cocktails for your friends as well? The only real reason seems to be to keep the LCBO feeling special, and to potentially avoid another strike. However, strikes won’t hurt Ontarians as much if they are able to buy their alcohol from places other than the LCBO. This exclusive right to sell spirits doesn’t make much sense, and only serves to inconvenience Ontarians with no real evidence that such exclusivity is necessary. However, the evidence is clear for the positives, allowing for existing private retailers to also carry spirits would generate savings for the province of between $100M – $120M per year.

Another aspect of alcohol retail that Ontarians should continue to push for is changing the model of the LCBO completely. There are two options for this that we can learn about from Alberta and British Columbia. Today, the LCBO boasts 669 retail stores in Ontario and continues to be the wholesale supplier for all private retailers and hospitality venues. The reason is simply no longer clear as to why this is still necessary. Alberta boasts a fully private model which still involves the provincial government: Alberta Gaming, Liquor and Cannabis (AGLC) is the legal importer of liquor in Alberta. Manufacturers and suppliers sell their liquor products to private retailers through the AGLC, and licensed retailers then sell that liquor to consumers. No need for government-run retail stores like the LCBO, and the model works: before privatization, there were a total of 208 Alberta Liquor Control Board stores. Today, there are more than 1,500 private retail liquor stores. Alberta is even the only province in Canada to have standalone Costco liquor stores. Alberta revenue from liquor sales transferred to the provincial government has consistently increased since privatization.

In B.C., there are private liquor stores alongside province-run liquor stores, but they do not allow alcohol sales in convenience and grocery stores, although wine is allowed in grocery stores (understandably, given B.C.’s rich wine scene). Although that’s not the best model in terms of consumer convenience, it still allows for private retailers and does not allow the provincially-run department to select the products to be sold to retailers. If a manufacturer or seller is approved, then they are eligible to be bought by retailers through B.C.’s Liquor Distribution Branch (LDB). In Ontario, it is LCBO bureaucrats who decide what is and is not sold on their shelves, and even encourage the extremely inefficient practice of alcohol distributors lobbying individual LCBO store managers to ask the higher ups in the LCBO to stock their product.

This is all evidence that the Government of Ontario should far from congratulate themselves on a mission accomplished. There is so much more that could be done to make the LCBO less present in the lives of Ontarians, thereby making picking up a case of beer more convenient and consumer-friendly. It was not the government of Ontario that one day woke up and decided this is something they wanted to do, it was the push from consumers, everyday Ontarians, that encouraged them to make these present liberalizations a reality. Since it seems the provincial government is ready and willing to make life easier for adults in Ontario when it comes to purchasing alcohol, now is the time to take the next step and truly become a more modernized Ontario.

To read more about this, take a look at the Consumer Choice Center’s latest report, Modernize Ontario.

The LCBO is an archaic system with an ugly history

The history of the LCBO is rife with the contradiction of making money off a social vice they take pride in suppressing, and its existence is based in a sense of moral superiority that it knew what was best for Ontarians when it came to alcohol consumption.

However, this moral superiority is contradicted by the fact the existence of this Crown corporation includes a largely forgotten history of racism, sexism and paternalism.

The LCBO opened its doors on June 1, 1927, with a lineup of customers eager to purchase alcohol. Journalists of the time described the scene as disgraceful, and the government agreed, since it placed the employees behind steel bars and would not allow customers to purchase alcohol without their individual purchasing permit.

These permits were given out only if the individual was deemed moral enough to earn one, and if the employees looked into a person’s purchase history and felt they had bought too much or exceeded government limits, they could arbitrarily refuse to sell them alcohol. It was quite difficult to get the law passed that would allow for the sale of alcohol in Ontario in the first place, and so the LCBO had to show it was taking its role as a “control” board seriously. However, its stringent temperance-inspired rules continued on to the 1970s when the sale of alcohol was commonplace and non-controversial.

The LCBO was, and is, a government monopoly on the sale of alcohol. This type of power allowed it to pick and choose who could work at the LCBO and who could purchase alcohol.

Women and people of colour were effectively not allowed to work at the LCBO in its early days, researcher Jamie Bradburn notes. Indigenous people in Ontario were not allowed to hold permits to purchase alcohol from the LCBO until 1959.

Named the “Indian list,” the LCBO maintained a list of people it deemed not responsible enough to purchase alcohol. This patronizing and racist policy was cemented through Ontarians having to apply for a Liquor Permit Book, which made citizens prove they were 21 years old, a resident of Ontario and of “good” character; this of course did not apply to Indigenous peoples.

It was up to LCBO employees to further decide if those who were of Indigenous and white background would be a good candidate for the ability to purchase alcohol. If they were not sure, the LCBO employee could reject their application because “ … a person of part-Indian blood, living in, say, an urban community, could be refused for such reason.”

Not only did it take until 1959 for Indigenous people to fully have the right to a permit to purchase alcohol from the LCBO, Bradburn wrote in his TVO feature, ”Buzzkillers: A brief history of the LCBO,” the corporation continued to view Indigenous people as a high-risk population after that time.

Those LCBO employees who did sell alcohol to Indigenous persons would be prosecuted under the Indian Act and the Liquor Control Act, according to the research paper “Administrative surveillance of alcohol consumption in Ontario, Canada: pre-electronic technologies of control” by Gary Genosko and Scott Thompson.

In addition to Indigenous persons, the LCBO was wary of those living in rural areas since they decided those might be places with heavy drinking.

The LCBO continues its legacy of self-proclaimed moral superiority, saying it is still proud of its ability to “embrace (its) obligation and opportunity to … govern the responsible sale of alcohol.” Despite recent advances in consumer choice in alcohol in Ontario, the LCBO still maintains a monopoly over the sale of spirits, and over wholesale alcohol in the province.

It is a mystery why Ontarians continue to put up with this system. The LCBO even has a page on “Honouring National Indigenous History Month,” with absolutely no mention of its own dark role in the history of Indigenous peoples.

Switching to a system that relies even less on the LCBO, or that eliminates the need for the LCBO, would be a positive change in Ontario. Although the LCBO generates revenue for the province, Ontario could instead be saving millions and even billions of dollars if the LCBO was simply the wholesaler, and not retailer, of alcohol.

Alongside these savings, Ontarians could also start seeing more of the alcohol they want on the shelves when LCBO employees stop being the only ones able to decide what to buy and inevitably sit on boxes of unused merchandise.

With the province of Ontario projecting a $6-billion deficit, it might do well to reconsider an archaic system once marred by racism, sexism and surveillance and which continues to run inefficiently and with a maintained sense of paternalism.

Originally published here

Plastics bans make no legal or climate sense

Many Canadians let out a sigh of relief late last year when they heard Justice Angela Furlanetto had ruled that the federal government’s listing of all plastic items as toxic was “unreasonable and unconstitutional.” Ottawa had failed to show, she found, that every single plastic substance was toxic, and in any case its classifying them that way encroached on the rights of provinces. Such a listing would have allowed for bans well beyond just straws and grocery bags: every plastic product would have fallen under criminal law.

Plastic manufactured products are included in Schedule 2 of Canada’s Environmental Protection Act (CEPA) at the end of a long list of other materials deemed to be toxic. The rest of the list includes materials identified by their complicated chemical components, as well as other entries involving 64 categories, sub-categories and sub-sub categories specifying exactly which are considered toxic. In contrast, entry number 132 simply lists “plastic manufactured items” and nothing more. No wonder the judge felt the category was too broad.

The federal government is appealing the judge’s decision. In June, government lawyers appeared before the Federal Court of Appeal in Ottawa to argue that the court had made a mistake in ruling this listing of plastic as unreasonable and unconstitutional. They argued that all plastics could possibly be harmful and the point of the law was to reduce harm. In other words, let’s ban everything, just in case.

Organizations and parliamentarians are pushing back. The Canadian Constitution Foundation, acting as an intervener in this appeal, is arguing that while the government does have the constitutional authority to list toxic substances in the CEPA, it cannot constitutionally use that criminal law power to include every single possible plastic product. The CCF’s Christine Van Geyn explains that “the criminal law power is not a magical incantation. Invoking the words ‘criminal law’ does not transform any issue into something Ottawa can regulate … the Cabinet Order plastic ban is outside the scope of the federal power.”

In the House of Commons, Conservative MP Corey Tochor has proposed a private member’s bill to delete plastic manufactured items from the CEPA list. It’s unlikely to get support from the Liberals or NDP, but it could be revived by a future Conservative government, which would be a win for all Canadians.

We’re not opposed to sensible policies to address climate change. But the many different bans (and exemptions, such as for heating oil) that Ottawa has already put into place are far from that. The regulations governing single-use plastics that they released in 2021 included strange exemptions like how much heat and washing-machine lasting-power the items needed to have to be considered exempt. They also gave exemptions to heavier plastic bags that would actually use more plastic to manufacture, and inexplicably allowed people to ask for plastic bags that the retailer had to keep out of sight. None of this seemed scientific or backed by expertise.

The listing of all plastic as a toxic substance means such exemption options won’t be available to consumers, who will be forced to use alternatives such as paper bags, cardboard straws and cotton totes. Studies suggest these alternatives are often worse for the environment than their plastic versions and costlier to boot. Danish research concluded that in order to have the same life-cycle effect on the environment as a single-use plastic bag paper bags would have to be used 43 times. Cotton totes would have to be re-used 7,100 times. Paper bags are also 2.6 times more expensive than single-use plastic bags. For their part, paper straws are three times more expensive than their plastic alternatives.

Slapping plastics onto the end of the CEPA’s Schedule 1 and calling it a day was sloppy and counterproductive. If the government were truly committed to environmental change, it would look into alternatives like expanding “chemical depolymerization,” which is the recycling of plastic products in ways that allow them to be broken down and repurposed into new products.

Right now, only one per cent of plastic waste is chemically recycled in this way. But many entrepreneurial Canadian companies are working on such alternatives, which could well help save the environment in a more efficient, less expensive way. But that takes more effort than adding three words to a list and ignoring what might actually work both for the environment and for Canadians who end up paying the price for costly and ineffective mandated alternatives to plastic.

Originally published here

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