Dr. Dominic Maclaine
November 1, 2005
Platts
To many, Stephen Littlechild is regarded as one of the founding fathers of electricity liberalization. But as power prices shoot up, the prospect of a fully liberalized pan-European power market seems to be shrinking by the day.
Lawrence Solomon
National Post
October 18, 2005
Urban life realizes environmental ideals. The city resident drives less, burns less home heating fuel, more often patronizes neighbourhood establishments and more often consumes locally made products, all the while producing more wealth using fewer resources. To live lightly on the land, it’s best to look to the urban village.
Yet environmentalists, failing to understand the underlying causes of despoliation, have traditionally blamed the city, sometimes disquietingly so. As David Suzuki put it: “We can’t eradicate cities. Nor would we want to. But we must recognize that cities disconnect us from nature and each other. They exist by draining resources from the planet while spreading toxic materials and debris. And if we regard all living things on Earth as an immense supra-organism (which some have called Gaia), then cities must be seen as the Gaian equivalent of cancer.”
Now the Green Party of Ontario has broken ranks with this old-style environmental thinking. In a refreshing set of policies released last week, the Green Party unveiled a pro-development agenda “to drive new construction and the province-wide redesign of existing sprawl toward ‘downtown-style’ communities.” The Green Party wants to turn virtually every empty urban lot into one with a building, virtually every under-developed lot into one with bigger and better buildings. The goal: high-density communities that make “efficient and intensive use of land.” The Green Party rightly recognizes that suburban sprawl is expensive while infilling cities is not, and rightly attempts to deal with the root causes that prevent sensible outcomes from occurring.
The Green Party would redesign society by changing the way the property tax works. Many, if not most, economists in the field have argued for the abolishment of this most retrograde of taxes because of its inequities. In the case of sprawl, the property tax acts to discourage high-density cities by especially taxing downtown properties – typically the most highly prized properties and thus the most expensive. In effect, the property tax is a tax on density, with the tax diminishing with the distance from the central city. This tax encourages the development of suburban and rural lands, and creates the sprawl that so many abhor.
But while the Green Party has correctly identified the property tax as a source of unenvironmental development, the reform that it proposes would backfire. Rather than abolish the property tax, which now applies to both land and buildings, the Green Party would revamp it to base it entirely, or almost entirely, on the value of land alone. By removing the tax on buildings, it reasons, people and industries will not be punished when they add an addition to their home, or build a higher office tower. The Green Party’s plan is designed to be revenue neutral – every dollar that municipalities lose from the exemption on buildings would be recovered from the extra taxes heaped on land.
The plan to remove the property tax on buildings is sensible, but transferring it to a property tax on land would only magnify the extent to which city land is overtaxed. Buildings have about the same value whether they are located in cities or suburbs – it is the value of the land under them that varies greatly, and leads to great disparities in property tax. With the tax on buildings transferred to land, the gap between the tax on an urban lot and a suburban lot would increase. A developer, presented with the choice of building on an inexpensively taxed lot or one with sky-high taxes, would tilt even more toward building outside cities than now.
If the property tax must be kept, it would be fairer to eliminate the tax on land and tax only the buildings – that way, the tax would at least have some relation to the cost of service, since larger buildings would tend to require more service than smaller ones. But the fairest system – and the one most beneficial to the environment – would replace the property tax with user fees, to have property owners fully bear the cost of the services they require. The effect would be to discourage sprawling, low-density developments, which tend to be costly to service, and widen the economic advantages of urban developments. Downtown properties would end up paying much less in user fees than they had in property taxes. Developers would avoid unserviced rural lands and overwhelmingly prefer to infill urbanized areas, as the Green Party desires. The country would remain country. The city would be compact and prosperous, and greener, than ever.
Lawrence Solomon, author of the forthcoming book Toronto Sprawls, is executive director of Urban Renaissance Institute and Consumer Policy Institute, divisions of Energy Probe Research Foundation.; www.urban.probeinternational.org
Property taxes, National Post, October 22, 2005
Mr. Solomon’s notion that property taxes are retrograde and should be abolished is dead wrong. While I argue that taxing the market value of buildings is counterproductive to good urban design, taxing the market value of land is a superior tax since it doesn’t discourage economic growth, productivity or investment like corporate, income and consumption taxes do.
If Ontario municipalities adopted “land value taxation,” preferred sites – whether downtown, commercial, residential, waterfront or hilltop – would incur increased taxation and less desired sites would be taxed less. This makes perfect sense. There should be a fee for the privilege of occupying choice sites since you are denying others the option.
If only the buildings were taxed, as Mr. Solomon suggests, then sprawl would worsen since there would be no cost to owning excessive, poorly used amounts of land. People would keep land out of efficient use for sub-optimal reasons like speculation, parking lots or car washes at prime intersections, thus aggravating sprawl.
Mr. Solomon says that taxing only land values would increase the gap between a downtown and suburban lot. This is correct and desirable. There will always be a gap between marginal land and preferred land both downtown and in the suburbs. Just like downtown, some suburban land is preferable to other suburban land. Preferred lots produce higher economic rent, so people will always compete for them and hold on to them by utilizing them as efficiently as possible. Tax gaps everywhere will improve design of both downtown and in the suburbs by encouraging the redesign into walkable communities linked by rail where cars will become mostly redundant.
Frank de Jong, leader, Green Party of Ontario, Toronto
Ottawa MP Ed Broadbent blasts cynical betrayal. New Democratic Party (NDP) October 6/2005
Ottawa: In a letter delivered to Mauril Bélanger today, Ed Broadbent was strongly critical of the delay in the government’s response to the report tabled by the Standing Committee on Procedure and House Affairs recommending a process that engages citizens and parliamentarians in an examination of our electoral system with a review of all options.
“I am writing about my concern that the government has broken a commitment to implement a process of electoral reform in the coming session of Parliament. This is a serious betrayal of dealing with Canadians’ desires for a new kind of politics, politics that is beyond cynicism. Because your government has failed to act over the summer it is now impossible to meet promised deadlines for electoral reform,” wrote Broadbent to Minister Bélanger.
“The government is fully aware that work needed to begin during the early part of the summer if there were to be any hope in meeting the report’s deadlines, deadlines that you yourself approved of,” stated Broadbent in reference to the fact that the government would have had to start the tendering process for the citizens’ consultation work at the latest in July. Nothing has been done.
Broadbent also criticized Belinda Stronach, who has joined Bélanger as Minister responsible for Democratic renewal.
“Both Ministers have failed in their responsibilities on this matter.”
Broadbent emphasized that the timeframe, October 1, 2005 – February 28, 2006 was proposed by the committee only after consultations with Minister Bélanger.
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For more information contact:
Ed Broadbent, MP Ottawa Centre 996-5322
Catherine McKenney, Legislative and Communications Assistant 796-3840
Stephen Littlechild
October 5, 2005
IEA/LBS Beesley Lectures on Regulation series XV
The title ‘Beyond Regulation’ is not intended to suggest that in future there is no need for regulation, but rather to suggest that we should look beyond its presently accepted role.
Lawrence Solomon
National Post
October 4, 2005
Jake Brunott has sharpened figure skates for a living over the last 31 years. He’s good at it, so good that figure skaters will often drive two hours to get to his little workshop in an industrial mall just north of Toronto’s city limits. Some who live too far away to drive have FedExed their skates to him, from across Canada, from across the United States, even from Japan.
Jake learned his craft from his dad, Rene, a mechanical engineer, professional figure skater and skate sharpener in his native Holland. When Rene immigrated to Canada in 1955, along with so many others in the aftermath of the Second World War, he resolved not to sharpen skates for a living in his new land. But fate, in the form of a former skating-club chum from Holland, intervened.
Ellen Burka, a Dutch figure-skating champion turned coach who had immigrated to Canada four years earlier, persuaded Rene to change his mind. Ellen wanted him to sharpen the skates of her students, who would include eight world champions, including her daughter Petra and Toller Cranston.
Rene contributed to the immense success of Ellen and her students, and to those of other greats in the glamourous world of Canadian figure skating. Rene, and the Canadian-born son who inherited his drive for excellence, may not make it into the Canadian Figure Skating Hall of Fame, but these extraordinary skate sharpeners have nevertheless made Olympian contributions, sometimes providing the difference between winning and not.
Although Ellen, Rene and their respective children have done Canada proud over the half century that they’ve been in Canada, this country wouldn’t want their kind today. Under the bean-counting, central-planning immigration rules of today, bureaucrats treat immigrants as commodities, to be imported from abroad when our domestic stocks are low and then shipped to the processing centres that report a shortfall.
Abbotsford, B.C., needs 1,000 computer engineers for graphic and video-game design, Joe Volpe, Canada’s Immigration Minister, stated recently. New Brunswick needs truckers to move some 6,000 long-haul trucks now sitting empty in parking lots. Saskatoon put in a request to him for 5,000 immigrants to fill job needs; Sault Ste. Marie for 6,000. No one put in a request for figure-skate sharpeners, or the numerous other niche occupations that are on no bureaucrat’s radar screen. Even if these niche occupations were known, immigration officials would have no ability to locate the people to fill them from abroad. Because the niches can’t be managed from here, they’re ignored in favour of commodity imports, in the process paying short shrift to Canada’s potential.
Immigrants once came here and made something of themselves. The mass waves of largely unchecked immigration 50 and 100 years ago, in fact, created great periods of prosperity. The winning formula? Immigrants selected themselves when they thought Canada held opportunities for themselves and their families. Upon arriving here, they decided for themselves where to make their home.
That’s a wrong-headed approach, Prime Minster Paul Martin has decided. Instead, Canada should develop a master plan, vetted by bureaucrats, politicians, union bosses, profs and other experts, to decide whom to let in, and where in Canada to let them reside. We need to become “more active in recruiting immigrants who meet Canada’s evolving needs – needs that are identified in consultation with provinces, communities and those in labour, business and academia.”
You can not only be sure that Paul Martin and his experts will eschew figure-skate sharpeners, you can also be confident that no bureaucrat in the 1950s would have had figure-skate sharpening on his priorities list. No one, in fact, could ever have anticipated the fortuitous melding of Rene’s unusual talents – that his background in figure skating and mechanical engineering would lead him to devise and then utilize equipment peculiarly suited to the sport of figure skating.
Likewise, none of those experts that Mr. Martin and his immigration bureaucracy tout can be up to the task of identifying the other fine-grained needs of the Canadian economy. Rather than seeking potential greats such as Rene and Ellen, who carved their own distinctive career paths and imbued their children with the same spirit, immigration officials instead seek a society of sheep – people to go where they are told to go, to fill jobs that the federal government tells them to fill. People who need not strive, as does Jake, to give his customers and his country the edge that makes the difference between good and great.
Urban Renaissance Institute 