Urban Renaissance Institute

Lawrence Solomon
National Post
April 25, 2002

Andrew Coyne
National Post
October 11, 2002

The tendency of Hollywood studios to deliver several films on the same theme at the same time is well known. But how odd to observe the same behaviour among publishers of monographs on Canadian public policy.

In the past two weeks, no fewer than three such publications have crossed my desk, all making essentially – no, exactly – the same point: Canada is admitting too many immigrants, of the wrong kind, with consequences too dreadful to contemplate.

The similarities among the three – by Diane Francis, Martin Collacott, and Daniel Stoffman – are remarkable. The same arguments are repeated, the same factoids cited, the same authorities quoted. Nevertheless, Mr. Stoffman’s Who Gets In is clearly the pick of the litter, and so I will focus on it here.

Mr. Stoffman makes three types of argument. There are the usual ad hominems: If you disagree with Mr. Stoffman’s call for radical cuts in immigration, you must either be self-interested (Liberals trawling for ethnic votes, employers seeking cheap labour, realtors hoping to boost land prices) or a fanatic. Of the latter group, Mr. Stoffman discerns two kinds, each with their own "hidden agenda": right-wingers, who see immigration as a way to force government "to eliminate the minimum wage and disband the welfare state," and left-wingers, "cultural radicals" who "look forward to the day when people of European ancestry are a minority in Canada."

A second preferred mode of argument is to beat up on straw men. Mr. Stoffman mounts an impressive case against two "myths" about immigration: that it will make us all rich – indeed, that without it our economy would collapse – and that it can reverse the aging process. With magisterial command of fact and logic, he is able to disprove the notion that Canada’s prosperity depends on ever-accelerating population growth.

There is just one thing to mar the perfection of this tour de force: I don’t know anyone who thinks such a thing, or has ever argued it. There may be some people who believe that, without immigration, Canada could not prosper, but no serious advocate of immigration has ever said so. Indeed, many of us have made the opposite point, to counter the fears of "over-population" alarmists: namely, that every individual is, not only a consumer, but also a potential creator of wealth, and that the standard of living any country enjoys does not depend on how many people it has in it, so much as how their talents are combined.

Likewise, while popular accounts have perhaps overstated immigration’s role in offsetting those familiar demographic forces that have conspired to increase the proportion of the elderly in the population, it has never been maintained that it could prevent this altogether. The most any serious immigration advocate has said is that it would help. And it would: the projected "dependency ratio" (retired plus children, as a percentage of the working-age population) is significantly lower, even at current rates of immigration, than it would be without.

While there are some economic and other benefits from a larger population – potentially large ones – the best reason to open the doors is that there’s no good reason not to: If there are no great costs to the current population, we should lean in the direction of human freedom. Ah, but there are, Mr. Stoffman replies. And here we get to the third and best of his arguments. I hope he will not object if I call it by its proper name: protectionism.

The effect of admitting so many unskilled immigrants (actually, the proportion of the unskilled is falling, but never mind), he argues, is similar to what happens when we trade with other countries. Workers among the host population, especially those lacking skills, find themselves under competitive pressure, forcing wages down. Sure, he’ll concede, that might mean higher profits for their employers, or lower prices for consumers, but the distributional impact is perverse. He cites figures – based, it appears, not on observation but the application of a dubious-sounding formula – showing that immigration results in a loss to existing workers of $30.7-billion, while boosting the incomes of the rest of the population by $33.8-billion. Even though that’s a net gain of $3-billion to the country as a whole, in Mr. Stoffman’s view it is nothing more than an "income redistribution scheme that benefits the wealthiest members of society."

There are several possible responses to this. One, "redistribution" is usually thought of as resulting from some act of government intervention, not the absence of it. It is in fact Mr. Stoffman who proposes to redistribute income, by government intervention to prevent immigrants from coming. Two, if people lack the skills to earn a good living, the usual approach is to improve their skills, not to forbid others from earning a living at all. Three, it is not clear the transfer is as regressive as Mr. Stoffman makes out. Suppose we slashed immigration, as he advises. Wages in immigrant-hiring industries go up, and so do prices. Who is hurt most by higher prices? The poor.

Four, nothing attracts capital like the smell of fat profits. If lower wages mean higher profits, capital should flood into those industries, from here and abroad, raising the amount of capital per worker and bidding up wages. Five, immigrants often bring capital with them. Six, most workers in this country themselves own capital, whether directly or through their company pension plan. The stark conflict between labour and capital Mr. Stoffman draws is as simplistic as the one between workers and consumers.

Seven – well, you get the idea. In the best of the recent books, the best argument offered for cutting immigration is rank protectionism, the oldest and grossest economic fallacy. It’s all downhill from there.

Andrew Coyne is a regular columnist with the National Post and is a member of Energy Probe Research Foundation‘s board of directors – the umbrella organization for the Urban Renaissance Institute.

Guy Crittenden
HazMat Magazine
September 30, 2003

When the media interview "environmentalists" such as Elizabeth May (Sierra Club of Canada), Paul Muldoon (Canadian Environmental Law Association) or David Suzuki (David Suzuki Foundation), they invariably obtain quotes or sound bites that suggest the solution to almost any problem is regulation, more intrusive government, and larger budgets and staff for environment ministries. These pundits usually play up the most sensational aspects of environmental scares such as global warming, and their ideas often fit with what could loosely be characterized as a left-wing political ideology (often shared with the environment beat reporters themselves). Business and capitalism are vilified, public ownership is the only virtuous model, and complex issues tend to be dumbed down for public consumption, then politically spun. (For instance, we were told that the drinking-water contamination tragedy in Walkerton that left several people dead and hundreds ill resulted from budget cuts at Ontario’s environment ministry and that the incident illustrates the danger of privatizing water utilities, whereas the tragedy arguably shows the danger of public ownership in the absence of competition.)

So, it’s reassuring to learn that another brand of environmental activists not only approve of free markets and private property, but see these as part of the solution to many environmental problems.

Tom Adams, Elizabeth Brubaker and Lawrence Solomon are three leading intellectuals in an umbrella organization – Energy Probe Research Foundation (EPRF) – that is influencing the views of a new generation of policymakers about a host of interrelated issues that include environmental protection, energy, urban planning and foreign aid. These folks can’t be dismissed as politically left or right of centre; they’re comfortable with free markets, property rights, competition and smaller government, about which they talk in a fresh way.

If you don’t know about them you need to get up to speed as their ideas will eventually impact many aspects of business and the environment.

Energy

Tom Adams is executive director of the Energy Probe division that deals exclusively with energy-related issues. He joined the organization in the 1980s shortly after leaving grad school at York University where he studied public policy as it relates to siting nuclear facilities. At Energy Probe he first worked on issues related to Ontario Hydro’s supply/demand hearings in which the giant utility sought to justify a huge publicly-underwritten nuclear expansion. Adams learned that the planned expansion was unwarranted, and something else.

"I saw the cozy arrangements that can develop between regulators and public utilities, and how these work against the public good," he says. In the 1990s the organization increasingly advocated accountability.

After Margaret Thatcher privatized energy utilities in the United Kingdom, nuclear plants demonstrated that they couldn’t compete in a real market. Ontario is now struggling with middle-aged nuclear plants that have become more and more expensive to operate, if they can be operated at all. Adams’ insights stem from his observation of the giant utility, and also fit with the ideas of Julian Simon, the professor who won a famous bet against Paul Ehrlich about the limits of growth. Simon argued that human ingenuity is the overwhelming variable in sustainability.

"The energy monopolies are non-ingenious organizational structures," says Adams. "Energy Probe favors policies that allow decision-making and choice at the level closest to the individual, where decisions tend to be complex and nuanced."

Adams distinguishes his group’s ideology from that of other activists who subscribe to the Paul Ehrlich model who seek to limit population and economic growth. He also cites Jane Jacobs, the famous urban planning critic (who has sat on Energy Probe’s board for twenty years), who advocates "using your own eyes" in place of received academic wisdom. Doing this while studying destructive practices in Canada’s forests led Adams and his co-workers to discover that government policy and public ownership was fundamental to the problem.

"It’s the ‘tragedy of the commons’," says Adams, referring to a famous essay which demonstrated that people are encouraged to pillage resources in which they have no ownership stake. "We found the most sustainable forestry model in Northern Europe where private owners have an economic stake in protecting the renewable resource."

Adams thinks that Ontario and most of Canada is experiencing a kind of "tragedy of the commons" with respect to energy, with the price of dwindling natural gas reserves climbing ever upward, and Ontario’s rate freeze blocking the evolution of a true energy market. (The province has teetered on the edge of brownouts for two summers in a row, and imports large amounts of high-priced electricity from south of the border). He sees the solution in cogeneration (which captures heat as well as power from fuel), distributed generation, new technologies for stationary fuel cells, and certain "biofuel" applications. He’s skeptical of government programs to subsidize energy efficiency and create a hydrogen economy.

"There’s a role for renewables like wind, solar and geothermal," he says, "and for alternative energy systems, but the consumer must be brought meaningfully into the equation. In the absence of markets, the potential for misallocation of resources remains enormous."

Adams believes that electricity is about to become permanently more expensive in Canada, and that energy-intensive industries like smelting, steel making, and certain kinds of food and chemical production will pack their bags and move to other countries where energy is cheap.

Water

Elizabeth Brubaker has excellent activist credentials, having worked in the United States in the 1970s on social housing and peace campaigns such as the Committee for a Sane Nuclear Policy. Yet her philosophy has evolved into one that is very different from that, say, of Maude Barlow and her Council of Canadians.

Brubaker joined EPRF in 1987 and worked as a researcher, government liaison, newsletter editor and coordinator of nuclear campaigns. She’s now executive director of the EPRF’s Environment Probe division, which evolved from the organization’s work on environment issues related to the founding of the NAFTA. Like Adams, she worked on hearings for Ontario Hydro and developed expertise in dam and water issues. She’s written two fascinating books: Property Rights in the Defence of Nature and Liquid Assets: Privatizing and Regulating Canada’s Water Utilities.

"I agree that property rights don’t cover everything, like cumulative effects," says Brubaker, "but people don’t realize the extent to which regulations can be a ‘right to pollute.’"

Her books spell out how regulation can actually interfere with people’s right to a clean environment, the quiet enjoyment of their property and freedom from nuisance and trespass.

Brubaker’s most recent work promotes privatization and competition in Canada’s water utilities; these exhibit the same kind of "non-ingenious" monopoly thinking as the energy utilities. Like Adams, she points to the benefits of the U.K.’s privatization experience where investment has reduced pollution dramatically and public beaches are clean enough for swimming for the first time in living memory. She notes that Canada’s provincial and federal governments are reluctant to take action against cash-strapped municipal water utilities that may be significant polluters, and that involving the individual in a real market is central to requisite changes.

"Customers must be metered and water consumption and wastewater treatment must be properly priced," she says. "If people aren’t able to pay the full true cost, subsidies should flow to the consumer, not to the [wasteful use of] resources."

Brubaker believes that property rights should be enshrined in the constitution. In the meantime, she points to another division of the EPRF – the Environmental Bureau of Investigation – as a resource that individuals can use to protect the environment and hold government and corporations accountable. Through the Bureau, individuals can initiate site cleanups and prosecutions of polluters where government has not been effective. (Several prosecutions under the federal Fisheries Act have been successful, and the law allows for individuals or groups initiating the actions to share in cash awards.)

Urban matters

Lawrence Solomon described pollution as an infringement of people’s property rights back in 1978 in his book The Conserver Solution, published when Energy Probe was still part of Pollution Probe. (The groups parted company over administrative differences, including fundraising, and, no doubt, differences of philosophy. Under the leadership of Dr. Donald Chant, Pollution Probe spent the next 20 years pursuing a futile central-planner’s dream to build a large toxic waste treatment plant that no community wanted.) The Conserver Solution identified the use of the courts as a way to make polluters pay (or to internalize costs). Such arguments were continued in Solomon’s later book, Energy Shock.

Solomon believes that ordinary citizens around the world passionately defend their lands, waters, forests, and fisheries – if they have the tools to do so. These days Solomon heads up the Urban Renaissance Institute division of EPRF and writes a regular column for the editorial pages of the Financial Post. His articles have effectively skewered government folly on a range of issues, including ludicrous schemes to subsidize ethanol production. One article series that was as original as it was devastating, exposed the way agricultural subsidies sustain uneconomic farms in rural areas that should be allowed to return to the wild.

Removal of subsidies and the opening up of protected markets to competition is a major theme in Solomon’s work and his ideas permeate across all the EPRF divisions. Solomon is currently working on a monograph that he says will demonstrate how urban sprawl is the direct result of government policy and hidden subsidies.

"Without the subsidies," Solomon says, "cities would evolve with greater density and efficiency."

Asked about other areas the EPRF is addressing, Solomon points to the ongoing work of Patricia Adams, executive director of the organization’s Probe International division, the work is an extrapolation from the ideas Adams presented in her 1991 book Odious Debts which exposed problems in foreign aid and recommended remedies for various loose government lending practices.

Asked whether he feels discouraged by society’s slow pace in adopting the EPRF’s ground-breaking ideas, Solomon replies that he feels quite the opposite.

"I’ve been around long enough to see many of our ideas take root and have an effect," he says. "I’d say we’re a pretty optimistic group."

Guy Crittenden is editor-in-chief of HazMat Management Magazine.

World Bank
Global Policy Forum
June 10, 2004

The Group of Eight leaders joined hands Wednesday in helping lower remittance charges for migrant workers as part of their efforts to eradicate poverty, reports Kyodo (Japan). Remittances can play an increasing role in the economic development of poor countries because income earned by migrant workers enables their families back home to receive needed capital for education, housing and business start-ups, the G8 leaders said in an action plan on eradicating poverty issued after their second-day meeting on Sea Island, Georgia. But the cost of sending such remittances "can be high – as much as 10 to 15 percent even for flows to large, urban markets," the statement said.

The action plan the G-8 countries are considering includes promoting competition, using innovative payment instruments and enhancing access to formal financial systems in sending and receiving countries, the statement said. The flow of remittances across international borders is growing rapidly with migrant workers sending roughly $100 billion a year from developed countries to their families and friends back home. The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States were committed to working closely with international organizations, including the World Bank and IMF, to update data on remittance flows and develop standards for data collection in sending and receiving countries. The leaders said the proposed action plans are designed to encourage cooperation between banks in advanced countries offering remittance services to migrant workers and financial institutions in their home countries.

The Associated Press adds proponents of the [plan] say it will pour billions of dollars into Third World economies, while drying up conduits of funding to terror groups. The leaders provided few details on how they plan to persuade financial institutions to cut remittance rates, but some officials and economic experts suggest governments could use tax incentives or reduce paperwork for wiring money. Another way to dramatically bring down remittance rates is for G8 governments to cooperate with Third World countries to create more institutions, such as post offices, where family members can collect funds. Diplomats speaking on condition of anonymity said France is particularly interested in building up a network of credit unions in former colonies in North Africa. That would allow remittances to go into investments, rather than simply be spent.

Agence France Presse further adds that in addition to facilitating the transfer of remittances, the action plan also aims at improving the business climate for businesses and investors. G8 leaders encouraged developing countries to cut red tape, blamed for stifling attempts to start new businesses or invest. Developing local financial markets, such as local bond markets, to support housing and clean water supplies, as well as encouraging more small loans for people in developing countries, were also cited as means to fight poverty. Lawrence Solomon, executive director of Urban Renaissance Institute, a Toronto-based think-tank, comments in The National Post (Canada) that in many developing countries foreign aid is either negligible or entirely absent. Remittances, in contrast, have been life-savers. In Latin America and the Caribbean, remittances represent 50 to 80 percent of the recipients’ household income, depending on the country. A World Bank study last year of 74 low- and middle-income countries found remitters reduce the proportion of people living in poverty in a Third World country by about 1.2 percent for every 10 percent increase in the country’s remittances. Other studies estimate that every dollar of remittance injected into a local economy leads to an increase in local GDP of $2 to $3, as recipients spend the money buying local goods and services and meeting their basic needs. Yesterday, the Indian Overseas Bank showed the G8 how to do it: It launched "e-Cash Home," an Internet-based online remittance service that will allow Indians abroad to remit money back home – to any bank account in India – for as little as $4. Rather than the 40- to 60-day wait that is now customary, Indian recipients will now receive their remittances in just four days.

The Financial Times further writes that while most media attention is focused on debt forgiveness and official aid, remittances to developing countries are far larger than both put together. Workers in developed economies sent $93 billion to their home countries last year through official channels, and an estimated 20 to 50 percent more by unofficial means. This dwarfs the $58 billion the world’s richest economies gave in government aid. Research by the World Bank has suggested that money sent home has a favorable effect on long-term economic growth, and may be used to finance education and health. "Even when they are used for consumption, remittances generate a multiplier effect, especially in poor countries with high unemployment," says Dilip Rapha, a senior economist at the World Bank. Another benefit of remittances is that they tend to go up during hard times when other forms of private capital inflow often flee a country.

Les Echos (France) meanwhile reports that G8 countries have not yet agreed on the means to provide development aid to poor countries. French President Jacques Chirac has been pushing his idea of an international tax on capital: in a letter to sixty of his counterparts, he advocated for a three-way approach with fiscal incentives to encourage companies to contribute to development aid, fight against tax evasion and introduce an international tax to help fund public development aid. A wrap-up report on the French initiative will be made public during the IMF/World Bank annual meetings next Fall. France also backs the development of wide-scale microcredit programs, which allow poor individuals and women to have access to loans. The US is willing to improve the investment climate in developing countries, make business creation easier and promote loans to small and medium-sized firms, following the model of the EBRD, which allowed for 500,000 loans to small and medium-sized firms in the last decade.

Elbert van Donkersgoed
Corner Post
October 25, 2004

If you buy into the rhetoric that globalization is all there is, countryside does not matter much. If the technology treadmill to ever lower production costs is all there is, the countryside’s historical resources: food, lumber, energy and minerals do not matter much. If global capitalism is all there is, the countryside may be waiting a long time for some benefits to trickle down. If life – human beings included – is just so much DNA caught in a vast and remorseless evolution beyond our control, there is not much the countryside can do about its fate.

Some have bought in. Back in April, Lawrence Solomon wrote an essay in the National Post in which he gloats over what he calls a "prominent government panel," that recommends that unsustainable rural areas in Canada’s heartland be taken off life support and allowed to die a natural death. The headline on the essay reads: "Rural phase out: In a major turning point, an Ontario government report suggests a restructuring and eventual abandonment of much of the provincial hinterland."

I have not bought in. But globalization has a way of getting into our thinking and doing without realizing it – and undermining the future of countryside.

In London, last week, Avi Lewis came to the seventh rural development conference sponsored by the Ontario Rural Council with a message about constructive resistance to globalization. Lewis has just returned from Argentina where he has been engrossed in producing a documentary, The Take, a passionate tale of workers wresting control of the means of production from the global capitalism that has failed them.

The conference sparked some fresh thoughts about our circumstances.

Globalization creates distance between decisions and effects. Head office is somewhere else than in rural Ontario. Laws are for the benefit of others. Solution: welcome more local decision-making. Downloading more responsibilities to municipalities is the right agenda. It’s high time the resources are there to do the tasks well.

Globalization is top down. The management structure is a pyramid where CEOs rake in vast rewards. Solution: favour cooperatives, partnerships, networks and local democratic decision-making.

Globalization favours "one size fits all." It reduces us to "units" and consumers. Solution: make every community different. Build on the uniqueness of our local countryside. Capitalize on the strengths of local people.

Globalization wants governments to stay out of the way of markets and be an ambassador for trade expansion and the profit principle. Solution: demand that governments return to first principles – public service and fairness for competing interests.

Finally, globalization wants us all to shrug: there is no other way. Solution: stand up to the shrug and set an example.

For details about The Ontario Rural Council, visit http://www.torc.on.ca/index.shtml

Elbert van Donkersgoed P. Ag. (Hon.) is the Strategic Policy Advisor of the Christian Farmers Federation of Ontario, Canada. Corner Post has been heard weekly on CFCO Radio, Chatham and CKNX Radio, Wingham, Ontario since 1997.

Click here to read "Rural phase out," by Lawrence Solomon