for economic freedom
Updates from the Prairie Centre Policy Institute from Regina, Saskatchewan.
Hot off the press! Don Baron's Jailhouse Justice
web posted October 21, 2002
Disappearing free enterprise
By Ken Dillen
Investment capital is to an economy what seed is to a farmer's field. Nothing happens in an economy until an investment is made. The crop in this case is all of the economic activity that results. This is what puts the pay cheques in the hands of people and makes the economy run.
Capital is invested where it is believed to be safe. Saskatchewan, unfortunately, has always viewed capital with suspicion and is incapable of understanding the concept of capital attraction without crown investment intervention.
In 1933, the CCF adopted The Regina Manifesto as its founding document. The document outlines the political, economic, and social goals of the CCF. It provides a blueprint of "class struggle" in action. The Manifesto proudly states that no CCF government will rest content until it has eradicated capitalism and what it views as all of its inherent evils.
The Regina Manifesto is still highly visible to potential investors today at www.saskndp.com/history. (The CCF was renamed the New Democratic Party when unions officially amalgamated with the party.) The Regina Manifesto has never been publicly denounced.
Is it any wonder that investment in Saskatchewan is well below the national average and that real growth in business investment in the past 20 years is non-existent? According to the Fraser Institute's May 2002 report on Saskatchewan Prosperity, real net business investment shrank by 59.9 per cent between 1981 and 1985, decreased 24.4 per cent between 1986 and 1990 and contracted another 146 per cent between 1991 and 1995. Real business investment did increase 30.6 per cent between 1996 and 2000, which is still 32 per cent below the national average of 151.6 per cent.
Without capital investment, Saskatchewan is forced to carry about 14 billion dollars in accumulated debt and is dependent on about 1.3 billion dollars in assorted transfer payments from Ottawa.
Potential investors use many tools to determine which country or province provides a welcomed environment for investment, not the least of which is to examine political websites. Any analyst who examined the NDP website would conclude immediately that Saskatchewan was not an investment friendly place and would not even make the short list of preferred locations. Once an investment analyst discovers the section in the Manifesto that declares, "We believe that these evils [of free enterprise] can be removed only in a planned and socialized economy in which our natural resources and the principal means of production and distribution are owned, controlled, and operated by the people [meaning the government], Saskatchewan is immediately identified as an investment risk.
This is not to single out any particular political party as none of Saskatchewans political parties have introduced a motion for debate in the legislative assembly on the wisdom of keeping the Regina Manifesto as a publicly displayed document. Every government in Saskatchewan, regardless of political stripe, has used the "central planning" economic interventionist model to deliver economic growth and for 50 years the results have been less than encouraging.
If Saskatchewan is to capitalize on its immense economic potential, it needs to attract investment capital. If it is to provide employment opportunities to our young people and prosperity to its citizens, the Regina Manifesto must be publicly condemned and free market ideals renewed.
The seeds of a free and prosperous society, once planted, must be carefully nurtured, protected and defended.
Ken Dillen sits on the Board of Directors of the Prairie Centre Policy Institute.
web posted October 14, 2002
By Ken Dillen
Thirteen courageous Alberta farmers will surrender themselves to provincial authorities near the end of October to begin serving jail sentences for refusing to pay fines imposed by the courts of Alberta for selling their own grain. These men are not criminals. They do not deserve to go to jail. They are just average citizens. They teach Sunday school, coach little league ball, and hockey, drive their kids to dance lessons, sing in the church choir, and perform hours of volunteer work trying to make their communities a better place to live. These men are the real heart and soul of rural Alberta.
Why are they being jailed? At least for these brave souls, the choice and the vision is clear. They are going to jail because they are willing to stand for freedom and their conviction that they never relinquished their right to market their own grain. Like farmers in Ontario who are able to market their own grain without having to buy it back from the Canadian Wheat Board, they believe Western farmers should have that same freedom.
The fines imposed on them could have been avoided if the practice, described
by the Western Report Magazine as "judge shopping", had not
been used. This is a custom used by defense lawyers and prosecutors alike
to "shop" for a judge or judges who may be ideologically predisposed
to their clients cause. The Manitoba government is discouraging
the practice, however, too late to help prairie farmers who were the victims
of the practice and not the beneficiaries.
The records show that provincial court judge Connor, who acquitted David Sawatsky never presided over another trial involving farmers. The Connor decision to acquit was upheld by the Manitoba Court of Appeal and that should have established the precedent upon which all future cases were judged. Not so.
By judge shopping" the prosecutors were able to find a judge or judges who disagreed with the Connor decision and the Court of Appeal.
The prosecutors must have been confident that they had shopped successfully for the right judge in order to be able to point to the prisoners box and bellow, "Look at him your Honor. He even looks like a criminal." The judge agreed. If he looks like a criminal, he must be a criminal, and if he is a criminal he must be guilty. "Jurisprudence that did not previously exist" is now entrenched and will soon be enforced against the Alberta farmers as well.
The manslaughter conviction of Alpna Patel was rightfully overturned in a Baltimore, Maryland court on Monday, October 7, 2002 because the prosecutor made "improper prejudicial statements". In his summation, the prosecutor referred to Ms. Patel as "poor little rich girl." Just imagine what the consequences would have been had the prosecutor said, Look at her your Honor. She even looks like a criminal. Perhaps that is only allowed in Manitoba.
Ken Dillen sits on the Board of Directors of the Prairie Centre Policy Institute.
web posted October 7, 2002
Ethanol Subsidies: The promise and the peril
Ethanol's the rage not just with environmentalists, but with Prairie governments, too. Both Manitoba and Saskatchewan support the fledgling industry with tax reductions on ethanol-blended gasoline (EBG) and now want to require universal use of the fuel. Such a radical step is, at best, premature and, at worst, a step backwards for rural economies.
Does EBG show promise, in terms of lowering air pollution and increasing energy efficiency? Yes. Do the currently known advantages of the alternative fuel justify subsidies or mandates that force everyone to use it? No. What's more, a rapid expansion of ethanol production may risk the health of the burgeoning livestock industry by exacerbating an existing shortage of feed grain. Before the province buys a permanent seat on the EBG subsidy bandwagon some sober thinking is required.
Supported by government policy, the ethanol industry has expanded rapidly. EBG now represents nearly 10 per cent of gasoline sales in the United States, where a similar combination of subsidies and mandated blending of ethanol, as well as "free" allocations of surplus corn, have distorted both fuel and grain markets. The Prairie governments openly state that they are taking their cue from progressive Minnesota, where a 20 cents a US gallon "producer incentive" pushed the state's ethanol output from under 4 million litres in 1986 to 757 million in 2000. Although Canada was much slower to legislate favours for the ethanol industry, about 1,000 gas bars now hawk it across the country.
In a polity pervasively "greenwashed" by the media and the school system, it is no surprise that governments have rushed to make political hay with ethanol.
How "green" is EBG compared to regular gasoline? The answer to that question depends on the process used to distill the ethanol from grain. In the United States, where ethanol plants rely on electricity from coal-fired generators, the outcome for air pollution can be negative. In Manitoba, with cleaner hydroelectric generation, that is not a problem.
The issue of energy efficiency is more contentious. Ethanol's critics have long maintained that, when all factors are considered, the energy used to produce the fuel and the inputs used to grow corn and wheat and to distill them add up to more than the energy it releases when burned. However, some recent data suggests that technical improvements in processing and the economies of scale implicit in newer, large-scale plants have tipped the energy balance. It now appears that there may be a slight net gain of energy in ethanol production.
Does that fact justify subsidies? Not in Manitoba and Saskatchewan where ethanol plants are quite small and therefore, unable to attain that energy advantage. Manitoba forgives its single ethanol producer in Minnedosa, which like its counterpart in Lanigan, Saskatchewan distills wheat instead of the most common source, corn by gas tax reductions of 2.5 cents a litre, a subsidy that costs the provincial treasury $2.25 million a year. The best argument for ethanol, that it diversifies rural economies and makes them more sustainable, fades when you consider that each job created in Minnedosa costs about $75,000 in taxpayer subsidies.
Mandating EBG in all gasoline sold would cost Manitoba and ultimately its citizens about $35 million a year. Premier Gary Doer says he likes the idea, but his government plans more study and public consultation before it proceeds. Saskatchewan passed its Ethanol Fuel Act in June, which allows the Province to force subsidized EBG on all consumers. The province has also indicated an interest in spending up to $100 million to foster Saskatchewan ethanol production.
The risks are all too obvious, here - easy, ultimately subsidized, money is a known recipe for taxpayer boondoggles. Is the promise really worth the peril?
Reprinted from The Frontier Centre for Public Policy. Some editing has been carried out by the Prairie Centre. The entire report can be viewed at www.fcpp.org.
web posted September 30, 2002
Sufficient grounds for self-congratulations?
By Ken Dillen
The Prairie Centre Policy Institute has received a copy of a congratulatory letter written by the Deputy Minister for Canada Customs and Revenue Canada which reads as follows:
"On behalf of our Minister and myself, I would like to express our sincere appreciation to all of you for your exemplary efforts with respect to the ongoing wheat and barley investigations... Successful prosecutions, the effective control of unlawful exports at the border, and exceptional two-way communications between Headquarters and regional personnel are measures of your success... Your efforts are greatly appreciated by the Minister and myself and we applaud your accomplishments to date".
The job that Canada Customs is congratulating itself for may just be the final act that contributes to the demise of the Canadian Wheat Board.
Revenue Canada is the agency responsible for the prosecution of prairie grain producers. To date there have been 211 civil cases and 216 criminal cases, either completed or winding their way through the courts. That is 427 farmers who have openly opposed the CWB monopoly. Behind the scenes are the many who quietly express their opposition. Dissatisfaction with CWB control combined with low commodity prices for wheat and barley have attributed to many farmers changing their production to crops that either eliminate or decrease the acres of cereal grains grown. It's quite easy to see why the CWB is rationing grain to foreign customers. Recent reports conclude that the CWB is having difficulty filling orders.
Analysts who trace patterns in agriculture confirm that the greatest switch in agriculture has been from cereals to forage. On a somewhat smaller scale, organic crops are gaining in popularity. Land that once produced wheat and barley for the CWB is now grazing land for cattle, elk, deer, and bison.
Immense areas have been converted to forage to support the thousands of horses who produce pregnant mare urine for the pharmaceutical industry. Where wheat and barley once grew the land is now producing pulses, oilseed, flax, rye, oats, canola, sunflowers, and lentils.
While Revenue Canada is congratulating itself for its "exemplary efforts", the Saskatchewan economy continues a rapid downward spiral. In 2001 it had a total of 136,295 net taxpayers supporting just over a million people and had a 7 to 1 dependency ratio (one positive net tax contributor for every seven people). Without positive policy changes, the dependency ratio is expected to become 17 to 1 by the year 2026.
On July 1st 2001, Saskatchewan's population was only 1,023,000. A total of 10,453 had left the province to seek opportunity elsewhere, including many MLA's and former cabinet Ministers. Between 1996 and 2000, investment growth in Saskatchewan was only 1/5 the national average (30.6 per cent compared to the national average of 151.6 per cent).
In a free and democratic country, the free market is the basic pillar of a free and prosperous society. The government's role should be to protect individual liberties, primarily, by setting and enforcing the rules of the free market for the delivery of high quality service, rather than participating in the delivery. How can accountability be maintained if the government is both the delivery and regulatory agent? The evidence is clear that it cannot.
This is hardly sufficient grounds for a congratulatory letter.
Ken Dillen sits on the Board of Directors of the Prairie Centre Policy
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